FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED OR EXERCISED UNLESS AND UNTIL SUCH WARRANT
AND/OR SHARES OF COMMON STOCK IS REGISTERED UNDER SUCH ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH IN SECTIONS 4 AND 10 OF THIS WARRANT.
Warrant No. 1 Number of Shares: _______
(subject to adjustment)
Date of Issuance: ______________, 2000
[ISSUER]
Common Stock Purchase Warrant
(Void after [three years])
[Issuer], a ________________ corporation (the "Company"), for value
received, hereby certifies that Ladenburg Xxxxxxxx & Co. Inc., or its
registered assigns (the "Registered Holder"), is entitled, subject to
the terms and conditions set forth below, to purchase from the Company,
at any time or from time to time on or after the date of issuance and on
or before 5:00 p.m. (Eastern time) on________, 200_, ________________ shares
of Common Stock, of the Company, at a purchase price of $__________ per share.
The shares purchasable upon exercise of this Warrant, and the purchase price
per share, each as adjusted from time to time pursuant to the provisions of
this Warrant, are hereinafter referred to as the "Warrant Shares" and the
"Purchase Price," respectively.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or
in part, by surrendering this Warrant, with the purchase form appended
hereto as Exhibit I duly executed by the Registered Holder or by the
Registered Holder's duly authorized attorney, at the principal office of
the Company, or at such other office or agency as the Company may
designate, accompanied by payment in full, in lawful money of the United
States, of the Purchase Price payable in respect of the number of
Warrant Shares purchased upon such exercise.
(b) The Registered Holder may, at its option, elect to pay some or all
of the Purchase Price payable upon an exercise of this Warrant by
canceling all or a portion of this Warrant. If the Registered Holder
wishes to exercise this Warrant by this method, the number of Warrant
Shares purchaseable (which shall in no event exceed the total number of
Warrant Shares purchasable under this Warrant as set forth above),
subject to adjustment under Section 2 of this Warrant) shall be
determined as follows:
X=Y[(A-B)/A]; where
X= the number of Warrant Shares to be issued to the Holder.
Y= the number of Warrant Shares with respect to which this Warrant is
being exercised.
A= the Fair Market Value of one share of Common Stock.
B= the Purchase Price of one share of Common Stock.
The Fair Market Value per share of Common Stock shall be determined as
follows:
(i) If the Common Stock is listed on a national securities exchange, the
Nasdaq National Market or another nationally recognized trading system
(including, without limitation, the OTC Bulletin Board and, if the
average daily trading volume for the preceding 10 days has been at least
100,000 shares, the Pink Sheets) as of the Exercise Date, the Fair
Market Value per share of Common Stock shall be deemed to be the average
of the high and low reported sale prices per share of Common Stock
thereon on the trading day immediately preceding the Exercise Date
(provided that if no such price is reported on such day, the Fair Market
Value per share of Common Stock shall be determined pursuant to clause
(ii)).
(ii) If the Common Stock is not listed on a national securities
exchange, the Nasdaq National Market or another nationally recognized
trading system as of the Exercise Date, the Fair Market Value per share
of Common Stock shall be deemed to be the amount most recently
determined by the Board of Directors to represent the fair market value
per share of the Common Stock (including without limitation a
determination for purposes of granting Common Stock options or issuing
Common Stock under an employee benefit plan of the Company); and, upon
request of the Registered Holder, the Board of Directors (or a
representative thereof) shall promptly notify the Registered Holder of
the Fair Market Value per share of Common Stock. Notwithstanding the
foregoing, if the Board of Directors has not made such a determination
within the three-month period prior to the Exercise Date, then (A) the
Board of Directors shall make a determination of the Fair Market Value
per share of the Common Stock within 15 days of a request by the
Registered Holder that it do so, and (B) the exercise of this Warrant
pursuant to this subsection 1(b) shall be delayed until such
determination is made.
(c) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in
subsection 1(a) above accompanied by payment in full of the Purchase
Price (the "Exercise Date"). At such time, the person or persons in
whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise as provided in subsection 1(d) below shall
be deemed to have become the holder or holders of record of the Warrant
Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within 5 business days thereafter, the
Company, at its expense, will cause to be issued in the name of, and
delivered to, the Registered Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full Warrant Shares
to which the Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which the Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to
Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or warrants
(dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of remaining Warrant Shares.
2. Adjustments.
(a) Adjustment for Stock Splits and Combinations. If the Company shall
at any time or from time to time after the date on which this Warrant
was first issued (the "Original Issue Date") effect a subdivision of the
outstanding Common Stock, the Purchase Price then in effect immediately
before that subdivision shall be proportionately decreased. If the
Company shall at any time or from time to time after the Original Issue
Date combine the outstanding shares of Common Stock, the Purchase Price
then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time, or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in additional shares of Common Stock, then and in
each such event the Purchase Price then in effect immediately before
such event shall be decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Purchase Price then in
effect by a fraction:
(i) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution;
provided, however, if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on
the date fixed therefor, the Purchase Price shall be recomputed
accordingly as of the close of business on such record date and
thereafter the Purchase Price shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or
distributions.
(c) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to subsections 2(a)
or 2(b), the number of Warrant Shares purchasable upon the exercise of
this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the
Purchase Price in effect immediately prior to such adjustment, by
(ii) the Purchase Price in effect immediately after such adjustment.
(d) Adjustments for Other Dividends and Distributions. In the event the
Company at any time or from time to time after the Original Issue Date
shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other
distribution payable in securities of the Company (other than shares of
Common Stock) or in cash or other property (other than cash out of
earnings or earned surplus, determined in accordance with generally
accepted accounting principles), then and in each such event provision
shall be made so that the Registered Holder shall receive upon exercise
hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company and/or cash
and other property which the Registered Holder would have been entitled
to receive had this Warrant been exercised into Common Stock on the date
of such event and had the Registered Holder thereafter, during the
period from the date of such event to and including the Exercise Date,
retained any such securities receivable, giving application to all
adjustments called for during such period under this Section 2 with
respect to the rights of the Registered Holder.
(e) Adjustment for Mergers or Reorganizations, etc. If there shall
occur any reorganization, recapitalization, consolidation or merger
involving the Company in which the Common Stock is converted into or
exchanged for securities, cash or other property (other than a
transaction covered by subsections 2(a), 2(b) or 2(d)), then, following
any such reorganization, recapitalization, consolidation or merger, the
Registered Holder shall receive upon exercise hereof the kind and amount
of securities, cash or other property which the Registered Holder would
have been entitled to receive if, immediately prior to such
reorganization, recapitalization, consolidation or merger, the
Registered Holder had held the number of shares of Common Stock subject
to this Warrant. Notwithstanding the foregoing sentence, if (x) there
shall occur any reorganization, recapitalization, consolidation or
merger involving the Company in which the Common Stock is converted into
or exchanged for anything other than solely equity securities, and
(y) the common stock of the acquiring or surviving company is publicly
traded, then, as part of any such reorganization, recapitalization,
consolidation or merger, (i) the Registered Holder shall have the right
thereafter to receive upon the exercise hereof such number of shares of
common stock of the acquiring or surviving company as is determined by
multiplying (A) the number of shares of Common Stock then subject to
this Warrant by (B) a fraction, the numerator of which is the Fair
Market Value per share of Common Stock as of the effective date of such
transaction, as determined pursuant to subsection 1(b), and the
denominator of which is the fair market value per share of common stock
of the acquiring or surviving company as of the effective date of such
transaction, as determined in good faith by the Board of Directors of
the Company (using the principles set forth in subsection 1(b) to the
extent applicable), and (ii) the exercise price per share of common
stock of the acquiring or surviving company shall be the Purchase Price
divided by the fraction referred to in clause (B) above. In any such
case, appropriate adjustment (as determined in good faith by the Board
of Directors of the Company) shall be made in the application of the
provisions set forth herein with respect to the rights and interests
thereafter of the Registered Holder, to the end that the provisions set
forth in this Section 2 (including provisions with respect to changes in
and other adjustments of the Purchase Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any
securities, cash or other property thereafter deliverable upon the
exercise of this Warrant.
(e) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Purchase Price pursuant to this
Section 2, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and
furnish to the Registered Holder a certificate setting forth such
adjustment or readjustment (including the kind and amount of securities,
cash or other property for which this Warrant shall be exercisable and
the Purchase Price) and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the
written request at any time of the Registered Holder, furnish or cause
to be furnished to the Registered Holder a certificate setting forth
(i) the Purchase Price then in effect and (ii) the number of shares of
Common Stock and the amount, if any, of other securities, cash or
property which then would be received upon the exercise of this Warrant.
3. Fractional Shares.
The Company shall not be required upon the exercise of this Warrant to
issue any fractional shares, but shall make an adjustment therefor in
cash on the basis of the Fair Market Value per share of Common Stock, as
determined pursuant to subsection 1(b) above.
4. Requirements for Transfer.
(a) This Warrant and the Warrant Shares shall not be sold or transferred
unless either (i) they first shall have been registered under the
Securities Act of 1933, as amended (the "Act"), or (ii) the Company
first shall have been furnished with an opinion of legal counsel,
reasonably satisfactory to the Company, to the effect that such sale or
transfer is exempt from the registration requirements of the Act.
(b) Notwithstanding the foregoing, no registration or opinion of counsel
shall be required for (i) a transfer by a Registered Holder which is a
corporation to a wholly owned subsidiary of such corporation, a transfer
by a Registered Holder which is a partnership to a partner of such
partnership or a retired partner of such partnership or to the estate of
any such partner or retired partner, a transfer by a Registered Holder
which is a limited liability company to a member of such limited
liability company or a retired member or to the estate of any such
member or retired member, or a transfer by a Registered Holder which is
a member of the National Association of Securities Dealers (the "NASD")
to an officer or employee of the Registered Holder as permitted by NASD
rules, provided that the transferee in each case agrees in writing to be
subject to the terms of this Section 4, or (ii) a transfer made in
accordance with Rule 144 under the Act.
(c) Each certificate representing Warrant Shares shall bear a legend
substantially in the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be offered,
sold or otherwise transferred, pledged or hypothecated unless and until
such securities are registered under such Act or an opinion of counsel
satisfactory to the Company is obtained to the effect that such
registration is not required."
The foregoing legend shall be removed from the certificates representing
any Warrant Shares, at the request of the holder thereof, at such time
as they become eligible for resale pursuant to Rule 144(k) under the Act
or if an effective registration statement is then in effect permitting
the resale of the Warrant Shares.
(d) The Registered Holder shall have "piggyback" registration rights to
have the Warrant Shares (but not the Warrants) registered for resale on
any registration statement which the Company files for any purpose on a
form available for such registration, after the Original Issue Date Such
registration shall be subject to customary obligations by the Registered
Holder to provide information to the Company and by the Company to
indemnify the Registered Holder against Securities Act liabilities.
5. No Impairment.
The Company will not, by amendment of its charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of
this Warrant against impairment.
6. Notices of Record Date, etc.
In the event:
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to
subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right; or
of any capital reorganization of the Company, any reclassification of
the Common Stock of the Company, any consolidation or merger of the
Company with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity and its Common Stock
is not converted into or exchanged for any other securities or
property), or any transfer of all or substantially all of the assets of
the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or winding-
up of the Company, then, and in each such case, the Company will mail or
cause to be mailed to the Registered Holder a notice specifying, as the
case may be, (i) the record date for such dividend, distribution or
right, and the amount and character of such dividend, distribution or
right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to
be fixed, as of which the holders of record of Common Stock (or such
other stock or securities at the time deliverable upon the exercise of
this Warrant) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice
shall be mailed at least ten days prior to the record date or effective
date for the event specified in such notice.
7. Reservation of Stock.
The Company will at all times reserve and keep available, solely
for issuance and delivery upon the exercise of this Warrant, such number
of Warrant Shares and other securities, cash and/or property, as from
time to time shall be issuable upon the exercise of this Warrant.
8. Exchange of Warrants.
Upon the surrender by the Registered Holder, properly endorsed, to the
Company at the principal office of the Company, the Company will,
subject to the provisions of Section 4 hereof, issue and deliver to or
upon the order of such Holder, at the Company's expense, a new Warrant
or Warrants of like tenor, in the name of the Registered Holder or as
the Registered Holder (upon payment by the Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock (or other
securities, cash and/or property) then issuable upon exercise of this
Warrant.
9. Replacement of Warrants.
Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and (in the case
of loss, theft or destruction) upon delivery of an indemnity agreement
(with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in
lieu thereof, a new Warrant of like tenor.
10. Transfers, etc.
(a) The Company will maintain a register containing the name and address
of the Registered Holder of this Warrant. The Registered Holder may
change its or his address as shown on the warrant register by written
notice to the Company requesting such change.
(b) Subject to the provisions of Section 4 hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender
of this Warrant with a properly executed assignment (in the form of
Exhibit II hereto) at the principal office of the Company.
(c) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Registered Holder as the absolute owner hereof
for all purposes; provided, however, that if and when this Warrant is
properly assigned in blank, the Company may (but shall not be obligated
to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
11. Representations of the Registered Holder.
The Registered Holder of this Warrant represents and warrants to the
Company as follows:
(a) Investment. The Registered Holder is acquiring this Warrant and the
Warrant Shares issuable upon the exercise of this Warrant, for its own
account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of
distributing or selling the same, except as otherwise may be permitted
under applicable securities laws.
(b) Authority. The Registered Holder has full power and authority to
enter into and to perform this Warrant in accordance with its terms.
The Registered Holder has not been organized specifically for the
purpose of investing in the Company.
(c) Accredited Investor. The Registered Holder is an Accredited
Investor within the definition set forth in Rule 501(a) promulgated
under the Securities Act.
12. Mailing of Notices, etc.
All notices and other communications from the Company to the Registered
Holder shall be mailed by first-class certified or registered mail,
postage prepaid, to the address last furnished to the Company in writing
by the Registered Holder. All notices and other communications from the
Registered Holder or in connection herewith to the Company shall be
mailed by first-class certified or registered mail, postage prepaid, to
the Company at its principal office set forth below. If the Company
should at any time change the location of its principal office to a
place other than as set forth below, it shall give prompt written notice
to the Registered Holder and thereafter all references in this Warrant
to the location of its principal office at the particular time shall be
as so specified in such notice.
13. No Rights as Stockholder.
Until the exercise of this Warrant, the Registered Holder shall not have
or exercise any rights by virtue hereof as a stockholder of the Company.
Notwithstanding the foregoing, in the event (i) the Company effects a
split of the Common Stock by means of a stock dividend and the Purchase
Price of and the number of Warrant Shares are adjusted as of the date of
the distribution of the dividend (rather than as of the record date for
such dividend), and (ii) the Registered Holder exercises this Warrant
between the record date and the distribution date for such stock
dividend, the Registered Holder shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of
Common Stock acquired upon such exercise, notwithstanding the fact that
such shares were not outstanding as of the close of business on the
record date for such stock dividend.
14. Change or Waiver.
Any term of this Warrant may be changed or waived only by an instrument
in writing signed by the party against which enforcement of the change
or waiver is sought.
15. Section Headings.
The section headings in this Warrant are for the convenience of the
parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
16. Governing Law.
This Warrant will be governed by and construed in accordance with the
internal laws of the State of New York (without reference to the
conflicts of law provisions thereof).
EXECUTED as of the Date of Issuance indicated above.
[ISSUER]
By:________________________________
Title:_______________________________
ATTEST:
_________________________
EXHIBIT I
PURCHASE FORM
To:_________________ Dated:____________
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase (check
applicable box):
_____ shares of the Common Stock covered by such Warrant; or
the maximum number of shares of Common Stock covered by such
Warrant pursuant to the cashless exercise procedure set forth in
Section 1(b).
The undersigned herewith makes payment of the full purchase price for
such shares at the price per share provided for in such Warrant, which
is $________. Such payment takes the form of (check applicable box or
boxes):
$______ in lawful money of the United States; and/or
the cancellation of such portion of the attached Warrant as is
exercisable for a total of _____ Warrant Shares (using a Fair Market
Value of $_____ per share for purposes of this calculation); and/or
the cancellation of such number of Warrant Shares as is necessary,
in accordance with the formula set forth in Section 1(b), to exercise
this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
Section 1(b).
Signature:_____________________
Address:______________________
______________________
EXHIBIT II
ASSIGNMENT FORM
FOR VALUE RECEIVED, ________________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant (No. ____) with respect to the number of shares of
Common Stock covered thereby set forth below, unto:
Name of Assignee Address No. of Shares
Dated:_____________________
Signature:________________________________
Signature Guaranteed:
By: _______________________
The signature should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions
with membership in an approved signature guarantee medallion program)
pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.
