Exhibit 10(a)(i)
THE WARRANTS GRANTED BY THIS WARRANT AGREEMENT AND THE SECURITIES ISSUABLE UPON
THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE TRANSFER OF SUCH WARRANTS AND THE SECURITIES ISSUABLE UPON
THEIR EXERCISE ARE SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND PURSUANT TO THE TERMS OF THIS WARRANT AGREEMENT.
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of March 22, 2001 (this "AGREEMENT"),
between X.X. Xxxxx Corporation, an Ohio corporation (together with its
successors, the "COMPANY") and Hills & Company (the "HOLDER").
RECITALS
WHEREAS, the Company and the Holder are entering into an agreement
pursuant to which the Holder will provide certain consulting services to the
Company; and
WHEREAS, as a condition and inducement to the Holder's willingness to
provide consulting services, the Company agreed to issue to the Holder the
Warrants (as defined below) as part of the consideration for such services;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations and warranties set forth herein, the Company and the Holder
agree as follows:
1. ISSUANCE OF WARRANTS. Subject to the terms and conditions
set forth herein, the Holder hereby purchases and the Company hereby sells and
issues to the Holder warrants (the "WARRANTS") representing the right to
purchase from time to time as further set forth in Section 2 hereof an aggregate
of 25,000 Common Shares, $1.00 par value per share, of the Company (together
with any common shares into which the Common Shares may be converted in
connection with any merger or consolidation of the Company, the "COMMON SHARES")
at a purchase price of $2.70 per share (the "EXERCISE PRICE"). A warrant
certificate will be issued in registered form as the definitive warrant
certificate, substantially in the form of EXHIBIT A, which is hereby
incorporated in and expressly made a part of this Agreement.
2. EXERCISE OF WARRANT. (a) The Holder may exercise the
Warrants, in whole or in part, at any time and from time to time after the date
of this Agreement; PROVIDED that, this Agreement and the Warrants shall
terminate and be of no further force and effect after March 22, 2004 (the
"EXPIRATION DATE"); PROVIDED, that any purchase of Common Shares upon exercise
of the Warrants shall be subject to compliance with applicable laws. The
termination of the Warrants shall not affect any rights hereunder which by their
terms extend beyond the date of such termination.
(b) In the event the Holder elects to exercise the Warrants,
it shall send to the Company a written notice, substantially in the form of
EXHIBIT B (the date on which such notice is given being herein referred to as
the "NOTICE DATE"), specifying (i) the total number of Common Shares the Holder
intends to purchase pursuant to such exercise and (ii) a place and date not
earlier than five (5) business days nor later than twenty (20) business days
from the Notice Date for the closing of such purchase (the "WARRANT CLOSING
DATE") provided that if the closing of the purchase and sale pursuant to the
Warrants (the "Warrant Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation, the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which such restriction on consummation has expired or been terminated.
3. PAYMENT AND DELIVERY OF CERTIFICATES. (a) On each Warrant
Closing Date, the Holder shall pay to the Company the Exercise Price for the
Common Shares in respect of which the Warrants are being exercised by delivery
to the Company of a bank check or by wire transfer of immediately available
funds to a bank account designated by the Company.
(b) At each Warrant Closing, simultaneously with the delivery
of the Exercise Price, (i) the Company shall deliver to the Holder (A) a
certificate or certificates representing the Common Shares to be purchased at
such Warrant Closing, which Common Shares shall be free and clear of all liens,
claims, charges and encumbrances of any kind whatsoever ("LIENS") other than
Liens arising from the actions of the Holder, and (B) if the Warrants are being
exercised in part only, an executed new Warrant Agreement with the same terms as
this Agreement evidencing the right to purchase the balance of the Common Shares
purchasable hereunder, and (ii) the Holder shall deliver to the Company a letter
agreeing that the Holder shall not offer to sell or otherwise dispose of such
Common Shares in violation of applicable federal or state securities laws or the
provisions of this Agreement.
(c) Certificates for the Common Shares delivered at each
Warrant Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED. THE TRANSFER OF SUCH SHARES IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE TERMS OF A WARRANT AGREEMENT DATED AS OF
MARCH 22, 2001, BETWEEN THE COMPANY AND THE INITIAL HOLDER OF THE
WARRANTS ISSUED THEREUNDER. THE COMPANY WILL MAIL A COPY OF THE WARRANT
AGREEMENT TO THE HOLDER WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. SUCH TRANSFER RESTRICTIONS ARE
BINDING ON TRANSFEREES OF THESE SHARES.
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It is understood and agreed that (i) the reference to restrictions arising under
the Securities Act of 1933, as amended (the "SECURITIES ACT") in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the Holder shall have delivered to the Company a copy of a letter
from the staff of the United States Securities and Exchange Commission, or an
opinion of counsel in form and substance reasonably satisfactory to the Company
and its counsel, to the effect that such legend is not required for purposes of
the Securities Act and (ii) the reference to restrictions pursuant to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the Common Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do not
require the retention of such reference.
(d) Upon the giving by the Holder to the Company of the
written notice of exercise of the Warrants provided for under Section 2(b), the
tender of the applicable Exercise Price in immediately available funds and the
tender of this Agreement to the Company, such Holder shall be deemed to be the
holder of record of the Common Shares issuable upon such exercise,
notwithstanding that the share transfer books of the Company shall then be
closed or that certificates representing such Common Shares shall not then be
actually delivered to the Holder. The Company shall pay all expenses, and any
and all United States federal, state, and local taxes and other charges that may
be payable in connection with the preparation, issuance and delivery of share
certificates under this Section 3(d) in the name of the Holder; if such share
certificates are to be in the name of an assignee, transferee, or designee of
the Holder, the Holder shall pay all transfer charges and all United States
federal, state and local taxes in respect thereof.
(e) The Company agrees (i) that it shall at all times
maintain, free from preemptive rights, sufficient authorized but unissued or
treasury Common Shares so that the Warrants may be exercised without additional
authorization of Common Shares after giving effect to any other options,
warrants, convertible securities and other rights to purchase Common Shares,
(ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
the Company under this Agreement and (iii) that it shall promptly take all
reasonable action as may from time to time be required in order to permit the
Holder to exercise the Warrants and the Company to duly and effectively to issue
Common Shares pursuant thereto.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Holder as follows:
(a) Due Authorization. All corporate action on the part of the
Company necessary for the authorization, execution and delivery of this
Agreement and the delivery of the Warrants, the performance of all obligations
of the Company hereunder and the authorization, issuance (or reservation for
issuance), sale, and delivery of the Common Shares issuable upon exercise hereof
has been taken, and this Agreement constitutes, and the Warrants when delivered
will constitute, valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms except (i) as limited by
applicable bankruptcy, insolvency,
3
reorganization, moratorium and other statutes, laws, regulations, ordinances,
orders, judgments, decrees or rules of any local, state or federal or
governmental authority ("LAWS") of general application affecting enforcement of
creditors' rights generally and (ii) as limited by Laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.
(b) Authorized Common Shares. The Company has taken all
necessary corporate action to authorize and reserve and, subject to obtaining
the governmental and other approvals and consents referred to herein, to permit
it to issue, and, at all times from the date hereof until the obligation to
deliver Common Shares upon the exercise of the Warrants terminates, will have
reserved for issuance, upon exercise of the Warrants, Common Shares necessary
for the Holder to exercise the Warrants. The Common Shares to be issued upon due
exercise of the Warrants, upon issuance pursuant hereto, shall be duly and
validly issued, fully paid and nonassessable, and shall be delivered free and
clear of all Liens, including any preemptive rights of any shareholder of the
Company.
(c) No Conflicts. The execution, delivery, and performance by
the Company of this Agreement and the delivery of the Warrants, and the
consummation of the transactions contemplated hereby and thereby, will not (i)
conflict with or violate any provision of the Company's articles of
incorporation or regulations, (ii) violate any Law applicable to the Company,
which would reasonably be expected to have a material adverse effect on the
assets, business, properties or financial condition of the Company or (iii)
result in any breach of or be in conflict with or constitute a default under any
material contract, lease or other agreement to which the Company is a party or
give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a benefit under, or to increased, additional,
accelerated or guaranteed rights or entitlements of any person under any
material contract, lease or other agreement to which the Company is a party.
(d) Board Approval. The execution and delivery of this
Agreement and the delivery of the Warrants to the Holder hereunder have been
authorized and approved by all requisite action of the Board of Directors of the
Company.
5. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder
hereby represents and warrants to the Company that:
(a) Due Authorization. The Holder has full power and authority
to enter into this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement have been duly and validly
approved and no other proceedings on the part of the Holder is necessary to
authorize the execution, delivery and performance of this Agreement.
(b) No Conflicts. The execution and delivery by the Holder of
this Agreement do not, and the performance by the Holder of its obligations
under this Agreement will not, (i) conflict with or violate any provision of the
certificate of incorporation, bylaws or other governing documents of the Holder
or (ii) violate any Law applicable to the Holder, the effect of which, would
reasonably be expected to have a materially adverse effect on the ability of the
4
Holder to consummate the transactions contemplated hereby or would material
hinder or delay such consummation.
(c) Purchase Not for Distribution. The Warrants will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act. This Agreement is made with
the Holder in reliance upon the Holder's representation to the Company, which by
the execution of this Agreement the Holder hereby confirms, that the Warrants
and the Common Shares will be acquired for investment for the Holder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Holder has no present intention
of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, the Holder further represents that the Holder does
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Warrants or the Common Shares.
(d) Reliance Upon Holder's Representations. The Holder
understands that the Warrants are not, and the Common Shares may not be,
registered under the Securities Act on the ground that the sale provided for in
this Agreement and the issuance of such securities hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof, and that
the Company's reliance on such exemption is predicated on the Holder's
representations set forth herein.
(e) Receipt of Information. Prior to exercising the Warrants
the Holder will request and obtain all the information the Holder considers
necessary or appropriate for deciding whether to purchase the Common Shares. The
Holder has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the Warrants and the assets,
business, properties and financial condition of the Company and to obtain
additional information (to the extent the Company possessed such information)
necessary to verify the accuracy of any information furnished to the Holder or
to which the Holder had access.
(f) Accredited Investor; Investment Experience. The Holder is
an accredited investor within the definition of Regulation D of the Securities
Act. The Holder is experienced in evaluating and investing in private placement
transactions of securities of companies and acknowledges that the Holder is able
to fend for itself, can bear the economic risk of the Holder's investment in the
Common Shares, and has such knowledge and experience in financial and business
matters that the Holder is capable of evaluating the merits and risks of the
investment in the Warrants and Common Shares and can afford a complete loss of
its investment. The Holder has not been organized for the purpose of acquiring
the Warrants.
(g) Restricted Securities. The Holder understands that the
Common Shares may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Common Shares or an
available exemption from registration under the Securities Act, the Common
Shares must be held indefinitely. In particular, the Holder is aware that the
Common Shares may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are met.
5
6. ADJUSTMENT OF WARRANT. (a) Adjustments for Subdivisions,
Combinations or Consolidation of Common Shares. In the event the outstanding
Common Shares shall be subdivided (by share split, or otherwise), into a greater
number of Common Shares, the number of Common Shares for which the Warrants may
be exercised shall, concurrently with the effectiveness of such subdivision, be
proportionately increased. In the event the outstanding Common Shares shall be
combined or consolidated, by reclassification or otherwise, into a lesser number
of Common Shares, the number of Common Shares for which the Warrants may be
exercised shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately decreased.
(b) Adjustments for Other Distributions. In the event the
Company at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Shares entitled to receive any distribution
payable in securities of the Company other than Common Shares and other than as
otherwise adjusted in this Section 6, then, and in each such event, provision
shall be made so that the Holder of the Warrants shall receive upon exercise
thereof, in addition to the number of Common Shares receivable thereupon, the
amount of securities of the Company which the Holder would have received had the
Warrants been exercised into Common Shares on the date of such event, subject to
all other adjustments called for during such period under this Section 6 with
respect to the rights of the Holder of the Warrants.
(c) Adjustments for Reclassification, Exchange and
Substitution. If the Common Shares issuable upon exercise of the Warrants shall
be changed into the same or a different number of shares of any other class or
classes of shares, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares provided for
above), the number of Common Shares for which the Warrants may be exercised
shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted such that the Warrants shall be
exercised into, in lieu of the number of Common Shares which the Holder would
otherwise have been entitled to receive, a number of shares of such other class
or classes of shares equivalent to the number of Common Shares that would have
been subject to receipt by the Holder upon exercise of the Warrants immediately
before that change.
(d) Reorganization, Mergers, Consolidations, or Sales of
Assets. If at any time or from time to time there shall be a capital
reorganization of the Common Shares (other than a subdivision, combination,
reclassification, or exchange of shares provided for elsewhere in this Section
6) or a merger or consolidation of the Company with or into another corporation,
or the sale of all or substantially all of the Company's and its subsidiaries'
consolidated properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, provision shall be made so that
the Holder of the Warrants shall thereafter be entitled to receive upon exercise
of the Warrants, the number of shares or other securities or property, including
cash, of the Company, or of the successor corporation resulting from such merger
or consolidation or sale, to which a holder of Common Shares deliverable upon
exercise of the Warrants would have been entitled upon such capital
reorganization, merger, consolidation, or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions
6
of this Section 6 with respect to the rights of the Holder of the Warrants after
the reorganization, merger, consolidation, or sale to the end that the
provisions of this Section 6 (including adjustment of the number of Common
Shares for which the Warrants may be exercised) shall be applicable after that
event as nearly equivalent as may be practicable.
7. DIVISION OF WARRANT. This Agreement (and the Warrants
granted hereby) are exchangeable, without expense, at the option of the Holder,
upon presentation and surrender of this Agreement at the principal office of the
Company for other agreements providing for Warrants of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
Common Shares purchasable hereunder. The terms "AGREEMENT" and "WARRANT" as used
herein include any other agreements and related Warrants for which this
Agreement (and the Warrants granted hereby) may be exchanged. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, the Company will execute and
deliver a new agreement of like tenor and date. Any such new agreement executed
and delivered shall constitute an additional contractual obligation on the part
of the Company, whether or not the agreement so lost, stolen, destroyed or
mutilated shall at any time be enforceable by anyone.
8. MISCELLANEOUS. (a) Expenses. All costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring
such expenses.
(b) Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary;
Severability. This Agreement (i) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or a federal or state regulatory
agency to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. If
for any reason such court or regulatory agency determines that the Warrants do
not permit the Holder to acquire the full number of Common Shares as provided in
Section 1, it is the express intention of the Company to allow the Holder to
acquire such lesser number of shares as may be permissible without any amendment
or modification hereof.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Ohio.
(e) Descriptive Headings. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
7
(f) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to the Company to:
X.X. Xxxxx Corporation
00000 Xxxxxxxx Xxxx X.X.
Xxxxxxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
If to the Holder, to the address provided to the Company
(which the Company agrees to disclose to other parties upon request).
(g) Counterparts. This Agreement and any amendments hereto may
be executed in counterparts, each of which shall be considered one and the same
agreement and shall become effective when all counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
(h) Transfer; Assignment. The Warrants shall not be
transferred, sold, conveyed, hypothecated, pledged or otherwise disposed of,
whether voluntarily or by operation of law ("TRANSFERRED"), by the Holder to any
person or entity other than an Affiliate of the Holder without the prior written
consent of the Company. Neither this Agreement, nor any of the rights, interests
or obligations hereunder shall be assigned without the prior written consent of
the other parties. Notwithstanding the foregoing, the Holder may assign all of
its rights hereunder to any of its Affiliates without the prior written consent
of the Company. It shall be a condition precedent to any Transfer or assignment
of this Agreement or of the Warrants that (i) the assignee shall agree to be
bound by all the obligations of assignor under this Agreement and shall make all
of the representations and warranties made by the Holder in this Agreement and
(ii) if requested by the Company, the Holder shall furnish the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such Transfer
or assignment will comply with all applicable federal and state securities laws.
Upon any assignment of this Agreement and the Warrants in compliance with this
Section 8(h), the assignee shall become the "Holder" for all purposes of this
Agreement and the Warrants. Any attempt by the Holder or any subsequent Holder
to Transfer or assign this Agreement, any rights, interests or obligations
hereunder or any Warrants in violation of this Section 8(h) shall be null and
void. Subject to the preceding sentences, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns. As used herein, "AFFILIATE" shall mean, with respect to
any person or entity, any other person or entity that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such person or entity. For purposes of the foregoing
sentence, "control" (including, with correlative
8
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any person or entity, means the direct or indirect possession of
the power to direct or cause the direction of the management or policies of such
person or entity, whether through the ownership of voting securities, by
contract or otherwise.
(i) Further Assurances. In the event of any exercise of the
Warrants by the Holder, the Company and the Holder shall execute and deliver all
other documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
(j) Stock Exchange Listing; Registration. Anything contained
in this Agreement or elsewhere to the contrary notwithstanding, the Company may
postpone the issuance and delivery of the Common Shares upon any exercise of the
Warrants until completion of any stock exchange listing or registration or other
qualification of such Common Shares under any state or federal law, rule or
regulation as the Company may consider appropriate; and may require the Holder
when exercising the Warrants to make such representation and furnish such
information as the Company may reasonably consider appropriate in connection
with the issuance of the Common Shares in compliance with applicable law.
9. OHIO CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE DIVISION
OF SECURITIES OF THE STATE OF OHIO AND THE ISSUANCE OF SUCH SECURITIES OR THE
PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM
QUALIFICATION BY CHAPTER 1707 OF THE OHIO REVISED CODE. THE RIGHTS OF ALL
PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION
BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
9
IN WITNESS WHEREOF, the Company and the Holder have caused
this Warrant Agreement to be signed by their respective officers thereunto duly
authorized as of the day and year first written above.
X.X. XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President - Finance,
Chief Financial Officer
HILLS & COMPANY
By: /s/ Xxxxx X. Hills
-------------------------
Name: Xxxxx X. Hills
Title: Chair & CEO
10
EXHIBIT A
TO WARRANT AGREEMENT
FORM OF FACE OF WARRANT CERTIFICATE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED. THE TRANSFER OF
SUCH SHARES IS SUBJECT TO RESTRICTIONS ARISING UNDER THE TERMS OF A WARRANT
AGREEMENT DATED AS OF MARCH 22, 2001, BETWEEN THE COMPANY AND THE INITIAL HOLDER
OF THE WARRANTS ISSUED THEREUNDER. THE COMPANY WILL MAIL A COPY OF THE WARRANT
AGREEMENT TO THE HOLDER WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT OF A
WRITTEN REQUEST THEREFOR. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES
OF THIS WARRANT AND ANY SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT.
No .1 Certificate for 25,000 Warrants
WARRANTS TO PURCHASE COMMON
SHARES OF X.X. XXXXX CORPORATION
THIS CERTIFIES THAT Hills & Company, or its registered assigns, is the
registered holder of the number of Warrants set forth above (the "WARRANTS").
Each Warrant entitles the registered holder thereof (the "HOLDER"), at its
option and subject to the provisions contained herein and in the Warrant
Agreement referred to below, to purchase from X.X. Xxxxx Corporation, an Ohio
corporation (the "COMPANY"), one common share of the Company (the "COMMON
SHARES") at the per share exercise price of $2.70 per share (the "EXERCISE
PRICE"). This Warrant Certificate shall terminate and become void (i) as of the
close of business on March 22, 2004 (the "EXPIRATION DATE"), or (ii) upon the
exercise hereof as to all the Common Shares subject hereto.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of March 22, 2001 (the "WARRANT AGREEMENT"), between
the Company and Hills & Company (the "INITIAL HOLDER") and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Warrant Agreement for a full
statement of the respective rights, limitations of rights, duties and
obligations of the Company and the Holder of the Warrants. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Warrant Agreement. A copy of the Warrant Agreement may be
obtained for inspection by the Holder hereof upon written request to the
Company, 00000 Xxxxxxxx Xxxx X.X., Xxxxxxxxxxxx, Xxxx 00000, Attention: Chief
Executive Officer.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part in accordance with the exercise provisions in the
Warrant Agreement, the surrender of this Warrant Certificate and with the
payment of the Exercise Price to the Company by wire transfer of funds to an
account designated by the Company for such purpose.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time or
from time to time on or after the date hereof under the terms of the Warrant
Agreement; PROVIDED, HOWEVER, that no Warrant shall be exercisable after the
Expiration Date.
Generally, in the event of any reclassification or change of
outstanding Common Shares, the Holder of a Warrant shall be deemed for purposes
of such reclassification or change to have been a holder of Common Shares as of
the date of the Warrant Agreement.
Upon any partial exercise of the Warrants, there shall be issued to the
Holder hereof a new Warrant Certificate in respect of the Common Shares as to
which the Warrants shall not have been exercised. This Warrant Certificate may
be exchanged at the office of the Company by presenting this Warrant Certificate
properly endorsed with a request to exchange this Warrant Certificate for other
Warrant Certificates evidencing an equal number of Warrants.
Except as provided in the Warrant Agreement, the Warrants do not
entitle the Holder hereof to any of the rights of a shareholder of the Company.
All Common Shares issuable by the Company upon the exercise of the Warrants
shall, upon such issue, be duly and validly issued and fully paid and
non-assessable.
The Holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company as the absolute owner of the Warrant
Certificate for all purposes whatsoever and the Company shall not be affected by
notice to the contrary.
X.X. XXXXX CORPORATION
By:
-----------------------------------
Name:
Title:
2
EXHIBIT B
TO WARRANT AGREEMENT
FORM OF ELECTION TO EXERCISE WARRANTS
(to be executed only upon exercise of Warrants)
[ ]
1. The undersigned hereby irrevocably elects to exercise [ ] Warrants
at an exercise price per Warrant (subject to adjustment) of $________ to acquire
an equal number of Common Shares, $1.00 par value per share, of X.X. Xxxxx
Corporation (the "Shares"), on the terms and conditions specified in the within
Warrant Certificate and the Warrant Agreement therein referred to, and directs
that the Common Shares deliverable upon the exercise of such Warrants be
registered or placed in the name and at the address specified below and
delivered thereto.
2. The undersigned is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the Shares. The
undersigned is acquiring these Shares for investment for the undersigned's own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). The undersigned is an accredited investor as
that term is defined in Regulation D the Securities Act.
3. The undersigned acknowledges and understands that the Shares
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona fide
nature of the undersigned's investment intent as expressed herein. In this
connection, the undersigned understands that, in the view of the Securities and
Exchange Commission (the "SEC"), the statutory basis for such exemptions may be
unavailable if the undersigned's representation was predicated solely upon a
present intention to hold these Shares for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Shares or for a period of one year or any
other fixed period in the future. The undersigned further understands that the
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. The
undersigned further acknowledges and understands that the Company is under no
obligation to register the Shares. The undersigned understands that the
certificate evidencing the Shares will be imprinted with a legend which
prohibits the transfer of the Shares unless they are registered or such
registration is not required in the opinion of counsel satisfactory to the
Company.
4. The undersigned is generally familiar with the provisions of SEC
Rule 144, promulgated under the Securities Act, which, in substance, permit
limited resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a nonpublic offering subject to the satisfaction of
certain conditions.
5. The undersigned further understands that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act or some other exemption from registration will be required; and
that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
SEC has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. The undersigned understands that no assurance can be given
that any such other registration exemption will be available in such event.
Date: ,
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1
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(Signature of Owner)
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(Street Address)
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(City) (State) (Zip Code)
Signature Guaranteed by:
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Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
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1 The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national bank or
trust company or by a member firm of any national securities exchange.
2
Any unexercised Warrants evidenced by the Warrant Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
3
