Warrant Holder
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
-----------------------
WARRANT AGREEMENT
This Agreement (the "Agreement") dated August 3, 2001 between Equitex,
Inc., a Delaware corporation (the "Company" and the "Initial Warrant Agent") and
the Warrant Holder or its registered assigns (the "Warrant Holder").
WITNESSETH:
WHEREAS, for value received by the Company, the Company has agreed to
issue warrants to the Warrant Holder (the "Warrants") enabling the Warrant
Holder to acquire up to ___________ shares of the Company's $.02 par value
common stock (the "Common Stock") at an exercise price of $5.65 per share;
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Warrants (a "Warrant Certificate" or collectively
the "Warrant Certificates");
WHEREAS, the Company desires to act as the warrant agent in connection
with the issuance, registration, transfer and exchange of certificates and the
exercise of the Warrants, until such time as a successor warrant agent is
appointed;
NOW, THEREFORE, in consideration of the above and foregoing premises
and the mutual promises and agreements hereinafter set forth, it is agreed that:
1. WARRANT CERTIFICATES.
--------------------
(a) Each Warrant shall entitle the holder in whose name the
certificate shall be registered on the books maintained by the Company (the
"Warrant Holder," or, in the aggregate, the "Warrant Holders") to purchase one
share of Common Stock on the exercise thereof (each a "Warrant Share" or
collectively the "Warrant Shares"), subject to modification and adjustment as
provided in Section 8 hereof. Warrant Certificates shall be executed by the
Company's Chairman or President and attested to by the Company's Secretary.
(b) Subject to the provisions of Sections 3 and 8 hereof, the
Company shall deliver Warrant Certificates in required whole number
denominations to Warrant Holders in connection with any transfer or exchange
permitted under this Agreement. Except as provided in Section 7 hereof, no
certificates shall be issued except: (i) certificates initially issued
hereunder; (ii) certificates issued on or after their initial issuance date upon
the exercise of any Warrant to evidence the unexercised Warrants held by the
exercising Warrant Holder; and, (iii) Warrant Certificates issued after their
initial issuance date, upon any transfer or exchange of certificates or
replacements of lost or mutilated certificates.
2. FORM AND EXECUTION OF CERTIFICATES.
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(a) The Warrant Certificates shall be dated the date of their
issuance, whether on initial transfer or exchange or in lieu of mutilated, lost,
stolen or destroyed certificates. The form of Warrant Certificate is attached
hereto as Exhibit "A."
(b) Each Warrant Certificate shall be numbered serially in
accordance with the Common Stock initially attached thereto. Each Warrant
Certificate shall have set forth thereon the designation "WAA-___."
(c) The Warrant Certificates shall be manually signed on
behalf of the Company by a proper officer thereof and shall not be valid for any
purpose unless so signed. If any officer of the Company who executed
certificates shall cease to be an officer of the Company, such certificates may
be issued and delivered by the Company or transferred by the Warrant Holders
with the same force and effect as though the person who signed such certificate
had not ceased to be an officer of the Company; and any certificate signed on
behalf of the Company by any person, who at the actual date of the execution of
such certificate was a proper officer of the Company, shall be proper
notwithstanding that at the date of execution of this Agreement any such person
was not such an officer.
3. EXERCISE.
--------
(a) Subject to the provisions of Section 8 hereof, the
Warrants as they may be adjusted as set forth herein, may be exercised at $5.65
per share (the "Exercise Price"). The Warrants may be exercised in whole or in
part at any time during the period (the "Warrant Exercise Period") commencing on
their issuance and ending at 12:00 midnight Mountain Time on November 10, 2004,
unless extended by a majority vote of the Company's Board of Directors for such
length of time as they, in their sole discretion, deem reasonable and necessary.
(b) Each Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date (each, an "Exercise
Date") of the surrender for exercise of the Warrant
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Certificate. The exercise form shall be executed by the Warrant Holder thereof
or his attorney duly authorized in writing and shall be delivered together with
payment to the Company at its corporate offices located at 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Corporate Office"), or at any such other
office or agency as the Company may designate, in cash, by official bank or
certified check or other immediately available funds, of an amount equal to the
aggregate Exercise Price, in lawful money of the United States of America.
(c) Unless Warrant Shares may not be issued as provided
herein, the person entitled to receive the number of Warrant Shares deliverable
on exercise shall be treated for all purposes as the holder of such Warrant
Shares as of the close of business on the Exercise Date. The Company shall not
be obligated to issue any fractional share interest in Warrant Shares issuable
or deliverable on the exercise of any Warrant or scrip or cash therefor and such
fractional shares shall be of no value whatsoever.
(d) Within ten days after the Exercise Date and, in any event,
prior to the Warrant Expiration Date, the Company, at its own expense, shall
cause to be issued and delivered to the person or persons entitled to receive
the same, a certificate or certificates in the name requested by the Warrant
Holder for the number of Warrant Shares deliverable on such exercise. No
adjustment shall be made in respect of cash dividends on Warrant Shares
delivered on exercise of any Warrant.
(e) The Warrants shall not entitle the holder thereof to any
of the rights of shareholders or to any dividend declared on the Common Stock
unless such holder or holders shall have exercised the Warrants prior to the
record date fixed by the Board of Directors for the determination of holders of
Common Stock entitled to such dividends or other rights.
4. REGISTRATION RIGHTS.
-------------------
The Warrant Shares underlying the Warrants will be registered
pursuant to the Registration Rights Agreement executed by and among Equitex,
Inc. and the Warrant Holder dated August 3, 2001.
5. RESERVATION OF SHARES AND PAYMENT OF TAXES.
------------------------------------------
(a) The Company covenants that it shall at all times reserve
and have available from its authorized Common Stock such number of shares as
shall then be issuable on the exercise of all outstanding Warrants. The Company
covenants that all Warrant Shares upon issuance in accordance with the terms of
the Warrant shall be duly and validly issued, fully paid and nonassessable, and
shall be free from all taxes, liens and charges with respect to the issuance
thereof.
(b) No Warrants may be exercised by the Warrant Holder, nor
may any Warrant Shares be issued or delivered by the Company unless on the
Exercise Date (i) there is an effective registration statement covering the
issuance of the securities being acquired under the Securities Act and
applicable "Blue Sky" statutes; or (ii) an exemption is available from
registration thereunder.
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(c) The Company shall pay all documentary, stamp or similar
taxes and other government charges that may be imposed with respect of the
issuance of the Warrants, and/or the issuance, transfer or delivery of any
Common Stock constituting the Warrant Shares on the exercise or redemption of
the Warrants. If the shares of Common Stock constituting the Warrant Shares are
to be delivered in a name other than the name of the registered Warrant Holder
of the certificate, no such delivery shall be made unless the person requesting
the same has paid to the Company the amount of any such taxes, charges, or
transfer fees incident thereto.
6. REGISTRATION OF TRANSFER.
------------------------
(a) The Warrant Certificates may, subject to provisions of
Federal and state securities laws, be transferred in whole or in part.
Certificates to be exchanged shall be surrendered to the Company at its
Corporate Office. The Company shall execute, issue and deliver in exchange
therefor the Warrant Certificates that the holder making the transfer shall be
entitled to receive.
(b) The Company shall keep transfer books at its Corporate
Office which shall register certificates and the transfer thereof. On due
presentment for registration of transfer of any certificate at the Corporate
Office, the Company shall execute, issue and deliver to the transferee or
transferees a new certificate or certificates representing an equal aggregate
number of securities. All such certificates shall be duly endorsed or be
accompanied by a written instrument or instruments of transfer in form
reasonably satisfactory to the Company. The established transfer fee for any
registration of transfer of certificates shall be paid by the Warrant Holder or
the person presenting the certificate for transfer.
(c) Prior to due presentment for registration or transfer
thereof, the Company may treat the registered Warrant Holder of any certificate
as the absolute owner thereof (notwithstanding any notations of ownership or
writing thereon made by anyone) for all purposes, and the parties hereto shall
not be affected by any notice to the contrary.
7. LOSS OR MUTILATION.
------------------
On receipt by the Company of evidence satisfactory as to the ownership
of and the loss, theft, destruction or mutilation of any Warrant Certificate,
the Company shall execute and deliver in lieu thereof a new certificate
representing an equal number of Warrants. In the case of loss, theft or
destruction of any certificate, the individual requesting reissuance of a new
certificate shall be required to indemnify the Company and also to post an
open-penalty insurance or indemnity bond. If a certificate is mutilated, such
certificate shall be surrendered and canceled by the Company prior to delivery
of a new certificate. Applicants for a new certificate shall also comply with
such other regulations and pay such other reasonable charges as the Company may
prescribe.
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8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE.
-------------------------------------------------------------
For purposes hereof, the term "Exercise Price" shall mean,
with respect to the Warrants, the price determined in accordance with Section
3(a), above. The Exercise Price and the number of shares of Common Stock
purchasable pursuant to the Warrants shall be subject to adjustment from time to
time as hereinafter set forth in this Section 8; PROVIDED, HOWEVER, that no
adjustment shall be made unless by reason of the happening of any one or more of
the events hereinafter specified, the Exercise Price then in effect shall be
changed by one percent or more, but any adjustment that would otherwise be
required to be made but for this provision shall be carried forward and shall be
made at the time of and together with any subsequent adjustment which, together
with any adjustment or adjustments so carried forward, amounts to one percent or
more.
(a) ADJUSTMENT OF EXERCISE PRICE IN THE EVENT OF STOCK
DIVIDENDS, STOCK SPLITS AND REVERSE STOCK SPLITS. In case the Company shall at
any time issue Common Stock or securities convertible into Common Stock by way
of dividend or other distribution on any stock of the Company or effect a stock
split or reverse stock split of the outstanding shares of Common Stock, the
Exercise Price then in effect shall be proportionately decreased in the case of
such issuance (on the day following the date fixed for determining shareholders
entitled to receive such dividend or other distribution) or decreased in the
case of such stock split or increased in the case of such reverse stock split
(on the date that such stock split or reverse stock split shall become
effective), by multiplying the Exercise Price in effect immediately prior to the
stock dividend, stock split or reverse stock split by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately prior
to such stock dividend, stock split or reverse stock split, and the denominator
of which is the number of shares of Common Stock outstanding immediately after
such stock dividend, stock split or reverse stock split.
(b) RIGHT TO REDUCE EXERCISE PRICE. The Company shall have the
right to reduce the Exercise Price at any time and from time to time that such
appears in the Company's best interests to do so.
(c) SUBDIVISION OR COMBINATIONS. In case the Company shall at
any time change as a whole, by subdivision or combination in any manner or by
the making of a stock dividend, the number of outstanding shares of Common Stock
into a different number of shares, with or without par value, (i) the number of
shares of Common Stock which immediately prior to such change the Warrant
Holders shall have been entitled to purchase pursuant to this Agreement shall be
increased or decreased, as the case may be, in direct proportion to the increase
or decrease, respectively, in the number of shares outstanding immediately prior
to such change, and (ii) the Exercise Price in effect immediately prior to such
change shall be increased or decreased, as the case may be, in inverse
proportion to such increase or decrease in the number of such shares outstanding
immediately prior to such change.
(d) REORGANIZATION; ASSETS SALES; ETC. In case of any capital
reorganization or any reclassification of the capital stock of the Company or in
case of a non-surviving combination or a
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disposition of the assets of the Company other than in the ordinary course of
the Company's business, the Warrant Holders shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, non-surviving combination or disposition that
appropriate provision shall be made so that such Warrant Holder shall thereafter
be entitled to purchase) the kind and amount of shares of stock and other
securities and property receivable in such transaction by a holder of the number
of shares of Common Stock of the Company into which this Agreement entitled the
holder to purchase immediately prior to such capital reorganization,
reclassification of capital stock, non-surviving combination or disposition; and
in any such case appropriate adjustments shall be made in the application of the
provisions of this Section 8 with respect to rights and interests thereafter or
the holder to the end that the provisions of this Section 8 shall thereafter be
applicable, as near as reasonably may be, in relation to any shares or other
property thereafter purchasable upon the exercise of a Warrant.
(e) TERMINOLOGY OF "COMMON STOCK". Whenever reference is made
in this Section 8 to the issue or sale of shares of Common Stock, or simply
shares, such term shall mean any stock of any class of the Company other than
preferred stock with a fixed limit on dividends and a fixed amount payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company. The Warrant Shares shall, however, be shares of Common Stock of
the Company, with a par value of $0.02, as constituted at the date hereof,
except as otherwise provided in Sections 8(d).
(f) ADJUSTMENT STATEMENT. Whenever the Exercise Price is
adjusted as herein provided, the Company shall forthwith deliver to each Warrant
Holder a statement signed by the President of the Company and by its Treasurer
or Secretary stating the adjusted Exercise Price and number of shares for which
such Warrant is exercisable, determined as specified herein. The statement shall
show in detail the facts requiring such adjustment.
(g) PRIOR NOTICE TO WARRANT HOLDERS. If at any time:
(1) The Company shall pay any dividend payable in
stock upon its Common Stock or make any distribution (other than cash
dividends) to the holders of its Common Stock; or
(2) The Company shall offer for subscription pro rata
to the holders of its Common Stock any additional shares of stock of
any class or any other rights; or
(3) The Company shall effect any capital
reorganization or any reclassification of or change in the outstanding
capital stock of the Company (other than a change in par value, or a
change from par value to no par value, or a change from no par value to
par value, or a change resulting solely from a subdivision or
combination of outstanding shares), or any consolidation or merger, or
any sale, transfer or other disposition of all or substantially all of
its property, assets, business and goodwill as an entirety, or the
liquidation, dissolution or winding up of the Company; or
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(4) The Company shall declare a dividend upon its
Common Stock payable otherwise than out of earnings or earned surplus
or otherwise than in shares or any stock or obligations directly or
indirectly convertible into or exchangeable for shares;
then, in any such event, the Company shall cause at least thirty (30) days'
prior written notice to be mailed to each Warrant Holder at the address of such
holder shown on the books of the Company. The notice shall also specify the date
on which the books of the Company shall close or a record be taken for such
stock dividend, distribution or subscription rights, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer,
disposition, liquidation, dissolution, winding up, or dividend, as the case may
be, shall take place, and the date of participation therein by the holders of
shares of Common Stock if any such date is to be fixed, and shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action on the rights of the holder.
(h) DISPUTES. If there is any dispute as to the computation of
the Exercise Price or the number of shares of Common Stock required to be issued
upon the exercise of the Warrants, the Company will retain an independent and
nationally recognized accounting firm to conduct an audit of the computations
pursuant to the terms hereof involved in such dispute, including the financial
statements or other information upon which such computations were based. The
determination of such nationally recognized accounting firm shall, in the
absence of manifest error, be binding. If there shall be a dispute as to the
selection of such nationally recognized accounting firm, such firm shall be
appointed by the American Institute of Certified Public Accountants ("AICPA") if
willing, otherwise the American Arbitration Association ("AAA"). If the Exercise
Price or number of shares of Common Stock as determined by such accounting firm
is one percent or more higher or lower than the calculations thereof computed by
the Company, the expenses of such accounting firm and, if any, of AICPA and AAA,
shall be borne completely by the Company. In all other cases, they shall be
borne by the complaining Warrant Holders, as applicable.
(i) CORPORATE ACTION. Before taking any action which would
cause an adjustment reducing the Exercise Price below the then par value of the
Warrant Shares, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of Common Stock at the
adjusted Exercise Price.
9. WARRANT AGENT.
-------------
The Company shall act as the Initial Warrant Agent in connection with
the issuance, registration, transfer and exchange of certificates and the
exercise of the Warrants. The Company may, without the consent or prior approval
of the Warrant Holders, appoint a successor Warrant Agent, provided such
successor Warrant Agent is a registered transfer agent under Section 17A(c) of
the Securities Exchange Act of 1934. Notice of the appointment of a successor
Warrant Agent shall be promptly given by the Company to all registered Warrant
Holders.
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10. NOTICES.
-------
All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by confirmed telex, telegram,
facsimile transmission or cable to, in the case of the Company:
Xxxxxx X. Xxxxx
Equitex, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
and if to the Warrant Holder at the address of such holder as set forth on the
books maintained by or on behalf of the Company.
11. BINDING AGREEMENT.
-----------------
This Agreement shall be binding upon and inure to the benefit of the
Company and the Warrant Holders. Nothing in this Agreement is intended or shall
be construed to confer upon any other person any right, remedy or claim or to
impose on any other person any duty, liability or obligation.
12. FURTHER INSTRUMENTS.
-------------------
The parties shall execute and deliver any and all such other
instruments and take any and all other actions as may be reasonably necessary to
carry out the intention of this Agreement.
13. SEVERABILITY.
------------
If any provision of this Agreement shall be held, declared or
pronounced void, voidable, invalid, unenforceable, or inoperative for any reason
by any court of competent jurisdiction, government authority or otherwise, such
holding, declaration or pronouncement shall not affect adversely any other
provision of this Agreement, which shall otherwise remain in full force and
effect and be enforced in accordance with its terms, and the effect of such
holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
14. WAIVER.
------
No delay or failure on the part of any party in the exercise of any
right or remedy arising from a breach of this Agreement shall operate as a
waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement.
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15. GENERAL PROVISIONS.
------------------
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE. This Agreement may not be
modified or amended or any term or provision hereof waived or discharged except
in
writing by the party against which such amendment, modification, waiver or
discharge is sought to be enforced; except that, this agreement may be amended
in connection with the appointment of a successor Warrant Agent without the
consent or prior notice to the Warrant Holders, provided no such amendment
adversely effects the interests of the Warrant Holders and the Company obtains
an opinion of independent legal counsel to that effect. The headings of this
Agreement are for convenience and reference only and shall not limit or
otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first set forth above.
EQUITEX, INC.
By_________________________________
Xxxxx Xxxx, President
[CORPORATE SEAL]
ATTEST:________________________
Xxxxxx X. Xxxxx, Secretary
WARRANT HOLDER:
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Name
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