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EXHIBIT 4.6
AVIATION GROUP, INC.
AND
XXXXXXX X. XXXXXX
______________________
WARRANT AGREEMENT
DATED AS OF JUNE 30, 1996
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WARRANT AGREEMENT
This WARRANT AGREEMENT (the "AGREEMENT") is dated as of June 30, 1996
between AVIATION GROUP, INC., a Texas corporation (the "COMPANY"), and XXXXXXX
X. XXXXXX, a Texas resident, his heirs, personal representatives and assigns
(collectively, "XXXXXX").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Xxxxxx warrants ("WARRANTS")
to purchase up to an aggregate of 80,000 shares of Common Stock (as defined in
Section 8.5), $.01 par value, of the Company.
NOW, THEREFORE, in consideration of the premises, the agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. Effective herewith, Xxxxxx is hereby granted the right
to purchase, at any time prior to 5:00 p.m., New York time on February 28,
1999, 80,000 shares of Common Stock (the "SHARES"). One share of Common Stock
is hereinafter referred to as a "Warranty Security" and more than one
collectively referred to as the "Warrant Securities." The exercise price of
each Warrant shall equal (subject to adjustment as provided in Section 8) $2.50
per Warrant Security subject to the terms and conditions of this Agreement.
2. Warrant Certificates. The warrant certificates (the "WARRANT
CERTIFICATES") delivered and to be delivered pursuant to this Agreement shall
be in the form set forth in EXHIBIT A, attached hereto and made a part hereof,
with such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Warrants initially are
exercisable at an aggregate initial exercise price (subject to
adjustment as provided in Section 8 hereof) per Warrant Security set
forth in Section 6 hereof payable by certified or official bank check
in New York Clearing House funds, subject to adjustment as provided in
Section 8 hereof. Upon surrender of a Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with
payment of the Exercise Price (as hereinafter defined) for the Warrant
Securities purchased at the Company's principal offices (presently
located at 000 Xxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 75201) the
registered holder of a Warrant Certificate ("HOLDER" or "HOLDERS")
shall be entitled to receive a certificate or certificates for the
shares of Common Stock so purchased. The purchase rights represented
by each Warrant Certificate are exercisable at the option of the
Holders thereof, in whole or part
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(but not as to fractional shares of the Common Stock). In the case of
the purchase of less than all Warrant Securities purchasable under any
Warrant Certificate, the Company shall cancel said Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the Warrant Securities
purchasable thereunder.
3.2 Exercise by Surrender of Warrant. In addition to the
method of payment set forth in Section 3.1 and in lieu of any cash
payment required thereunder, the Holder(s) of the Warrants shall have
the right at any time and from time to time to exercise the Warrants
in full or in part by surrendering the Warrant Certificate in the
manner specified in Section 3.1. The number of shares of Common Stock
to be issued pursuant to this Section 3.2 shall be equal to the
difference between (a) the number of shares of Common Stock in respect
of which the Warrants are exercised and (b) a fraction, the numerator
of which shall be the number of shares of Common Stock in respect of
which the Warrants are exercised multiplied by the Exercise Price (as
hereinafter defined) and the denominator of which shall be the Market
Price (as defined in Section 3.3).
3.3 Definition of Market Price. As used herein, the
phrase "MARKET PRICE" at any date shall be deemed to be the last
reported sale price, or, in case no such reported sale takes place on
such day, the average of the last reported sale prices for the last
three (3) trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed or
admitted to trading or by the NASDAQ National Market ("NNM"), or, if
the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted by NNM, the average closing bid price as
furnished by the National Association of Securities Dealers, Inc.
("NASD") through NASDAQ or similar organization if NASDAQ is no longer
reporting such information, or if the Common Stock is not quoted on
NASDAQ, or such similar organization as determined in good faith by
resolution of the Board of Directors of the Company, based on the best
information available to it. Notwithstanding the foregoing, for
purposes of Section 8, the Market Price of a share of Common Stock
shall be determined by reference to the relevant information set forth
above during the thirty (30) trading days immediately preceding the
date of the event requiring the determination of the Market Price
(except that, in the event of a public offering of shares of Common
Stock, the Market Price of a share of Common Stock shall be determined
by reference to the trading day immediately preceding the effective
date of the public offering and not such thirty (30) trading day
period).
4. Issuance of Certificates. Upon the exercise of the Warrants,
the issuance of certificates for shares of Common Stock and/or other
securities, properties or rights underlying such Warrants shall be made
forthwith (and in any event within five (5) business days thereafter) without
charge to the Holder thereof including, without limitation, any tax which may
be payable in respect of the issuance thereof, and such certificates shall
(subject to the provisions of Sections 5 and 7 hereof) be issued in the name
of, or in such names as may be directed by, the Holder thereof; provided,
however, that the Company shall not be required to pay any tax which may be
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payable in respect of any transfer involved in the issuance and delivery of any
such certificates in a name other than that of the Holder and the Company shall
not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
(and/or other securities, property or rights issuable upon the exercise of the
Warrants) shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate
seal reproduced thereon, attested to by the manual or facsimile signature of
the then present Secretary or Assistant Secretary of the Company. Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof; that the Warrants may not be sold, transferred, assigned, hypothecated
or otherwise disposed of, in whole or in part, for a period of one (1) year
from the date hereof, except to direct family members or their affiliates. Any
such person or entity who acquires any Warrants shall be subject to the same
restrictions.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as
otherwise provided in Section 8 hereof, the initial exercise price of
each Warrant shall be $2.50 per Warrant Security. The adjusted
exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in
accordance with the provisions of Section 8 hereof.
6.2 Exercise Price. The term "EXERCISE PRICE" herein
shall mean the initial exercise price or the adjusted exercise price,
depending upon the context.
7. Registration Rights.
7.1 Piggyback Registration.
(a) If, at any time commencing after the
Termination Date and expiring on the seventh anniversary
thereafter, the Company proposes to register any of its
securities under the Securities Act of 1933, as amended (the
"ACT"), either for its own account or the account of any other
security holder or holders of the Company possessing
registration rights ("OTHER STOCKHOLDERS") (other than
pursuant to Form S-4, Form S-8 or comparable registration
statement), it shall give written
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notice, at least thirty (30) days prior to the filing of each
such registration statement, to Xxxxxx and to all other
Holders of Warrants and/or Shares, of its intention to do so.
If Xxxxxx or other such Holders notify the Company within
twenty-one (21) days after the receipt of any such notice of
its or their desire to include any Shares or shares of Common
Stock issuable upon the exercise of the Warrants
(collectively, the "REGISTRABLE SECURITIES") in such proposed
registration statement, the Company shall afford Xxxxxx and
such other Holders of such Registrable Securities the
opportunity to have any such securities registered under such
registration statement.
(b) If the registration of which the Company
gives notice is for a registered public offering involving an
underwriting, the Company shall so advise Xxxxxx and such
other Holders as part of the written notice given pursuant to
Section 7.1(a) hereof. The right of Xxxxxx or any such other
Holder to registration pursuant to this Section 7.1 shall be
conditioned upon their participation in such underwriting and
the inclusion of their Registrable Securities in the
underwriting to the extent hereinafter provided. Xxxxxx and
all other Holders proposing to distribute their securities
through such underwriting shall (together with the Company and
any officers, directors or Other Stockholders distributing
their securities through such underwriting) enter into an
underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by
the Company. Notwithstanding any other provision of this
Section 7.1, if the representative of the underwriter or
underwriters advises the Company in writing that marketing
factors require a limitation or elimination of the number of
shares of Common Stock or other securities to be underwritten,
the representative may limit the number of shares of Common
Stock or other securities to be included in the registration
and underwriting. The Company shall so advise Xxxxxx and all
other Holders of Registrable Securities requesting
registration, and the number of shares of Common Stock or
other securities that are entitled to be included in the
registration and underwriting shall be allocated among Xxxxxx
and other Holders requesting registration, in each case, in
proportion, as nearly as practicable, to the respective
amounts of securities which they had requested to be included
in such registration at the time of filing the registration
statement.
(c) Notwithstanding the provisions of this
Section 7.1, the Company shall have the right at any time
after it shall have given written notice pursuant to Section
7.1(a) hereof (irrespective of whether a written request for
inclusion of any such securities shall have been made) to
elect not to file any such proposed registration statement, or
to withdraw the same after the filing but prior to the
effective date thereof.
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7.2 Covenants of the Company with Respect to
Registration. In connection with any registration under Section 7.1
hereof, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to
file a registration statement within forty- five (45) days of
receipt of any demand therefor, shall use its best efforts to
have any registration statements declared effective at the
earliest practicable time, and shall furnish each Holder
desiring to sell Registrable Securities such number of
prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, expenses and
fees (excluding fees and expenses of Holder(s)' counsel and
any underwriting or selling commissions), in connection with
all registration statements filed pursuant to Section 7.1
hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, blue sky fees and
expenses. If the Company shall fail to comply with the
provisions of Section 7.2(a), the Company shall, in addition
to any other equitable or other relief available to the
Holder(s), extend the exercise period of the Warrants by such
number of days as shall equal the delay caused by the
Company's failure.
(c) The Company will take all necessary action
which may be required in qualifying or registering the
Registrable Securities included in a registration statement
for offering and sale under the securities or blue sky laws of
such states as reasonably are requested by the Holder(s);
provided that, the Company shall not be obligated to execute
or file any general consent to service of process or to
qualify as a foreign corporation to do business under the laws
of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of
the Registrable Securities to be sold pursuant to any
registration statement and each person, if any, who controls
such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as
amended ("EXCHANGE ACT"), against all loss, claim, damage,
expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject
under the Act, the Exchange Act or otherwise, arising from
such registration statement except for matters for which the
Company is indemnified under subsection 7.2(e) hereof.
(e) The Holder(s) of the Registrable Securities
to be sold pursuant to a registration statement, and their
successors and assigns, shall severally, and not jointly,
indemnify the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act,
against all loss, claim, damage or expense or liability
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(including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf
of such Holders, or their successors or assigns, for specific
inclusion in such registration statement.
(f) For a period of ninety (90) days after the
effectiveness of any registration statement filed pursuant to
Section 7.1 hereof, the Company shall not permit any other
registration statement (other than (1) a registration
statement relating to the securities for which the Company has
made available to the Holder(s) of the Registrable Securities
piggyback registration rights hereunder and (2) a registration
statement filed on Forms S-4 or S-8 or a shelf registration on
Form S-3) to be or remain effective during the effectiveness
of a registration statement or a shelf registration on Form
S-3 filed pursuant to Section 7.1 hereof, without the prior
written consent of the Holders of the Registrable Securities
representing a majority of such securities.
(g) The Company shall furnish to each Holder
participating in the offering and to each underwriter, if any,
a signed counterpart, addressed to such Holder or underwriter,
of (i) an opinion of counsel to the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, an
opinion dated the date of the closing under the underwriting
agreement), and (ii) a "cold comfort" letter dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting
agreement) signed by the independent public accountants who
have issued a report on the Company's financial statements
included in such registration statement, in each case covering
substantially the same matters with respect to such
registration statement (and the prospectus included therein)
and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten
public offerings of securities.
(h) The Company shall as soon as practicable
after the effective date of any registration statement filed
pursuant to Section 7.1 hereof, and in any event within
fifteen (15) months thereafter, make "generally available to
its security holders" (within the meaning of Rule 158 under
the Act) an earnings statement (which need not be audited)
complying with Section 11(a) of the act and covering a period
of at least twelve (12) consecutive months beginning after the
effective date of the registration statement.
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(i) The Company shall deliver promptly to each
Holder participating in the offering requesting the
correspondence and memoranda described below and to the
managing underwriters, copies of all written correspondence
between the Commission and the Company, its counsel or
auditors and all memoranda relating to discussions with the
Commission or its staff with respect to the registration
statement and permit each Holder and underwriters to do such
investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration
statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and
properties and opportunities to discuss the business of the
Company with its officers and independent auditors, all to
such reasonable extent and at such reasonable times and as
often as any such Holder or underwriter shall reasonably
request.
(j) Nothing contained in this Agreement shall be
construed as requiring the Holder(s) to exercise their
Warrants prior to the initial filing of any registration
statement or the effectiveness thereof.
(k) In addition to the Registrable Securities,
upon the written request therefor, by any Holder(s), the
Company shall include in the registration statement any other
shares of Common Stock of the Company held by such Holder(s)
as of the date of filing of such registration statement,
including without limitation restricted shares of Common
Stock.
7.3 Restrictive Legends. In the event that the Company
fails to maintain the effectiveness of the Registration Statement,
such that the exercise, in part or in whole, of the Warrants are not,
at the time of such exercise, registered under the Act, any
certificates representing the Shares underlying the Warrants and any
of the other securities issuable upon exercise of the Warrants shall
bear the following restrictive legend:
The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended ("Act"), and may not be offered or sold
except pursuant to (i) an effective registration
statement under the Act, (ii) to the extent
applicable, Rule 144 under the Act (or any similar
rule under such Act relating to the disposition of
securities), or (iii) an opinion of counsel, if such
opinion shall be reasonably satisfactory to counsel
to the issuer, that an exemption from registration
under such Act is available.
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8. Adjustments to Exercise Price and Number of Securities.
8.1 Computation of Adjusted Exercise Price. Except as
hereinafter provided, in the event the Company shall at any time after
the date hereof issue or sell any shares of Common Stock including
shares held in the Company's treasury (other than (i) the issuances or
sales referred to in Section 8.7 hereof, (ii) shares of Common Stock
issued upon the exercise of any options, rights or warrants to
subscribe for shares of Common Stock, or (iii) shares of Common Stock
issued upon the direct or indirect conversion or exchange of
securities for shares of Common Stock), for a consideration per share
less than the Market Price in effect immediately prior to the issuance
or sale of such shares, or without consideration, then forthwith upon
such issuance or sale, the Exercise Price shall (until another such
issuance or sale) be reduced to the price (calculated to the nearest
full cent) equal to the quotient derived by dividing (i) an amount
equal to the sum of (a) the total number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such shares,
multiplied by the Exercise Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all
consideration, if any, received by the Company upon such issuance or
sale, by (ii) the total number of shares of Common Stock outstanding
immediately after such issuance or sale; provided, however, that in no
event shall the Exercise Price be adjusted pursuant to this
computation to an amount in excess of the Exercise Price in effect
immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by
Section 8.3 hereof.
For the purposes of this Section 8 the term Exercise Price
shall mean the Exercise Price per share of Common Stock set forth in
Section 6 hereof, as adjusted from time to time pursuant to the
provisions of this Section 8.
For the purposes of any computation to be made in accordance
with this Section 8.1, the following provisions shall be applicable:
(a) In case of the issuance or sale of shares of
Common Stock for a consideration part or all of which shall be
cash, the amount of the cash consideration therefor shall be
deemed to be the amount of cash received by the Company for
such shares (or, if shares of Common Stock are offered by the
Company for subscription, the subscription price, or, if
either of such securities shall be sold to underwriters or
dealers for public offering without a subscription offering,
the initial public offering price) before deducting therefrom
any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or
others performing similar services, or any expenses incurred
in connection therewith.
(b) In case of the issuance or sale (other than
as a dividend or other distribution on any stock of the
Company) of shares of Common Stock for a
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consideration part or all of which shall be other than cash,
the amount of the consideration therefor other than cash shall
be deemed to be the value of such consideration as determined
in good faith by the Board of Directors of the Company and
shall include any amounts payable to security holders or any
affiliates thereof including, without limitation, pursuant to
any employment agreement, royalty, consulting agreement,
covenant not to compete, earnout or contingent payment right
or similar arrangement, agreement or understanding, whether
oral or written; all such amounts being valued for the
purposes hereof at the aggregate amount payable thereunder,
whether such payments are absolute or contingent, and
irrespective of the period or uncertainty of payment, the rate
of interest, if any, or the contingent nature thereof;
provided, however, that if any Holder(s) does not agree with
such evaluation, a mutually acceptable independent appraiser
shall make such evaluation, the cost of which shall be borne
by the Company.
(c) Shares of Common Stock issuable by way of
dividend or other distribution on any stock of the Company
shall be deemed to have been issued immediately after the
opening of business on the day following the record date for
the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have
been issued without consideration.
(d) The reclassification of securities of the
Company other than shares of Common Stock into securities
including shares of Common Stock shall be deemed to involve
the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close
of business on the date fixed for the determination of
security holders entitled to receive such shares, and the
value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (ii) of
this Section 8.1.
(e) The number of shares of Common Stock at any
one time outstanding shall include the aggregate number of
shares issued or issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of options, rights,
warrants and upon the conversion or exchange of convertible or
exchangeable securities.
8.2 Options, Rights, Warrants and Convertible and
Exchangeable Securities. In case the Company shall at any time after
the date hereof issue options, rights or warrants to subscribe for
shares of Common Stock, or issue any securities convertible into or
exchangeable for shares of Common Stock, for a consideration per share
less than the Market Price in effect immediately prior to the issuance
of such options, rights or warrants, or such convertible or
exchangeable securities, or without consideration, the Exercise Price
in effect immediately prior to the issuance of such options, rights or
warrants, or such convertible or exchangeable securities, as the case
may be, shall be
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reduced to a price determined by making a computation in accordance
with the provisions of Section 8.1 hereof, provided that:
(a) The aggregate maximum number of shares of
Common Stock, as the case may be, issuable under such options,
rights or warrants shall be deemed to be issued and
outstanding at the time such options, rights or warrants were
issued, and for a consideration equal to the minimum purchase
price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration
(determined in the same manner as consideration received on
the issue or sale of shares in accordance with the terms of
the Warrants), if any, received by the Company for such
options, rights or warrants.
(b) The aggregate maximum number of shares of
Common Stock issuable upon conversion or exchange of any
convertible or exchangeable securities shall be deemed to be
issued and outstanding at the time of issuance of such
securities, and for a consideration equal to the consideration
(determined in the same manner as consideration received on
the issue or sale of shares of Common Stock in accordance with
the terms of the Warrants) received by the Company for such
securities, plus the minimum consideration, if any, receivable
by the Company upon the conversion or exchange thereof.
(c) If any change shall occur in the price per
share provided for in any of the options, rights or warrants
referred to in subsection (a) of this Section 8.2, or in the
price per share at which the securities referred to in
subsection (b) of this Section 8.2 are convertible or
exchangeable, such options, rights or warrants or conversion
or exchange rights, as the case may be, shall be deemed to
have expired or terminated on the date when such price change
became effective in respect of shares not theretofore issued
pursuant to the exercise or conversion or exchange thereof,
and the Company shall be deemed to have issued upon such date
new options, rights or warrants or convertible or exchangeable
securities at the new price in respect of the number of shares
issuable upon the exercise of such options, rights or warrants
or the conversion or exchange of such convertible or
exchangeable securities.
8.3 Subdivision and Combination. In case the Company
shall at any time subdivide or combine the outstanding shares of
Common Stock, the Exercise Price shall forthwith be proportionately
decreased in the case of subdivision or increased in the case of
combination.
8.4 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this
Section 8, the number of Warrant Securities issuable upon the exercise
at the adjusted exercise price of each Warrant shall be adjusted to
the nearest full amount by multiplying a number equal to the Exercise
Price in effect
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immediately prior to such adjustment by the number of Warrant
Securities issuable upon exercise of the Warrants immediately prior to
such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
8.5 Definition of Common Stock. For the purpose of this
Agreement, the term "COMMON STOCK" shall mean (i) the class of stock
designated as Common Stock in the Articles of Incorporation of the
Company as amended as of the date hereof, or (ii) any other class of
stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In the
event that the Company shall after the date hereof issue securities
with greater or superior voting rights than the shares of Common Stock
outstanding as of the date hereof, the Holder, at its option, may
receive upon exercise of any Warrant either shares of Common Stock or
a like number of such securities with greater or superior voting
rights.
8.6 Merger or Consolidation. In case of any
consolidation of the Company with, or merger of the Company with, or
merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any reclassification
or change of the outstanding Common Stock), the corporation formed by
such consolidation or merger shall execute and deliver to the Holder a
supplemental warrant agreement providing that the holder of each
Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Warrant) to receive, upon
exercise of such Warrant, the kind and amount of shares of stock and
other securities and property receivable upon such consolidation or
merger, by a holder of the number of shares of Common Stock of the
Company for which such Warrant might have been exercised immediately
prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which
shall be identical to the adjustments provided in Section 8. The
above provision of this subsection shall similarly apply to successive
consolidations or mergers.
8.7 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or
the shares of Common Stock issuable upon the exercise of the
Warrants; or
(b) If the amount of such adjustment shall be
less than two cents ($.02) per Warrant Security, provided,
however, that in such case any adjustment that would otherwise
be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried
forward, shall amount to at least two cents ($.02) per Warrant
Security; or
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(c) If the Exercise Price would be less than the
par value per share of Common Stock.
8.8 Dividends and Other Distributions. In the event that
the Company shall at any time prior to the exercise of all Warrants
declare a dividend (other than a dividend consisting solely of shares
of Common Stock) or otherwise distribute to its stockholders any
assets, property, rights, evidences of indebtedness, securities (other
than shares of Common Stock), whether issued by the Company or by
another, or any other thing of value, the Holders of the unexercised
Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities and property receivable upon the
exercise thereof, to receive, upon the exercise of such Warrants, the
same property, assets, rights, evidences of indebtedness, securities
or any other thing of value that they would have been entitled to
receive at the time of such dividend or distribution as if the
Warrants had been exercised immediately prior to such dividend or
distribution. At the time of any such dividend or distribution, the
Company shall make appropriate reserves to ensure the timely
performance of the provisions of this Section 8.8.
9. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company, for
a new Warrant Certificate of like tenor and date representing in the aggregate
the right to purchase the same number of Warrant Securities in such
denominations as shall be designed by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue fractional shares of Common Stock upon the exercise of
Warrants. Warrants may only be exercised in such multiples as are required to
permit the issuance by the Company of one or more whole shares of Common Stock.
If one or more Warrants shall be presented for exercise in full at the same
time by the same Holder, the number of whole shares of Common Stock which shall
be issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of shares of Common Stock purchasable on exercise of the
Warrants so presented. If any fraction of a share of Common Stock would,
except for the provisions provided herein, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall pay an amount in cash
equal to such fraction multiplied by the then current market value of a share
of Common Stock, determined as follows:
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(a) If the Common Stock is listed, or admitted to
unlisted trading privileges on the NYSE or the AMEX, or is traded on
the NNM, the current market value of a share of Common Stock shall be
the closing sale price of the Common Stock at the end of the regular
trading session on the last business day prior to the date of exercise
of the Warrants on whichever of such exchanges or NNM had the highest
average daily trading volume for the Common Stock on such day; or
(b) If the Common Stock is not listed or admitted to
unlisted trading privileges, on either the NYSE or the AMEX and is not
traded on NNM, but is quoted or reported on NASDAQ, the current market
value of a share of Common Stock shall be the average of the
representative closing bid and asked prices (or the last sale price,
if then reported by NASDAQ) of the Common Stock at the end of the
regular trading session on the last business day prior to the date of
exercise of the Warrants as quoted or reported on NASDAQ, as the case
may be; or
(c) If the Common Stock is not listed, or admitted to
unlisted trading privileges, on either of the NYSE or the AMEX, and is
not traded on NNM or quoted or reported on NASDAQ, but is listed or
admitted to unlisted trading privileges on the BSE or another national
securities exchange (other than the NYSE or the AMEX), the current
market value of a share of Common Stock shall be the closing sale
price of the Common Stock at the end of the regular trading session on
the last business day prior to the date of exercise of the Warrants on
whichever of such exchanges has the highest average daily trading
volume for the Common Stock on such day; or
(d) If the Common Stock is not listed or admitted to
unlisted trading privileges on any national securities exchange, or
listed for trading on NNM or quoted or reported on NASDAQ, but is
traded in the over-the-counter market, the current market value of a
share of Common Stock shall be the average of the last reported bid
and asked prices of the Common Stock reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of
exercise of the Warrants; or
(e) If the Common Stock is not listed, admitted to
unlisted trading privileges on any national securities exchange, or
listed for trading on NNM or quoted or reported on NASDAQ, and bid and
asked prices of the Common Stock is not reported by the National
Quotation Bureau, Inc., the current market value of a share of Common
Stock shall be an amount, not less than the book value thereof as of
the end of the most recently completed fiscal quarter of the Company
ending prior to the date of exercise, determined in accordance with
generally acceptable accounting principles, consistently applied.
11. Reservation and Listing of Securities. The Company shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants,
such number of shares of Common Stock or other securities, properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and
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agrees that, upon exercise of the Warrants and payment of the Exercise Price
therefor, all shares of Common Stock and other Securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder.
12. Notices to Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote
or to consent or to receive notice as a stockholder in respect of any meetings
of stockholders for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any
time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable other than in cash, or a cash
dividend or distribution payable other than out of current or retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and business
as an entirety shall be proposed;
then, in any one or more of such events, the Company shall give written notice
of such event to the Holders at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer book,
as the case may be. Failure to give such notice or any defect therein shall
not affect the validity of any action taken in connection with the declaration
or payment of any such dividend, or the issuance of any convertible or
exchangeable securities, or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:
(a) If to the registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company; or
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(b) If to the Company, to the address set forth in
Section 3 hereof or to such other address as the Company may designate
by notice to the Holders.
14. Supplements and Amendments. The Company and Xxxxxx may from
time to time supplement or amend this Agreement without the approval of any
Holders of the Warrant Certificates in order to cure any ambiguity, to correct
or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and Xxxxxx
may deem necessary or desirable and which the Company and Xxxxxx xxxx shall not
adversely affect the interests of the Holders of the Warrant Certificates.
15. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
16. Governing Law; Submission to Jurisdiction. This Agreement and
each Warrant Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of such State without giving effect to the rules of
such State governing the conflicts of laws.
The Company, Xxxxxx and any other registered Holders hereby agree that
any action, proceeding or claim against it arising out of, or relating in any
way to, this Agreement shall be brought and enforced in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, Xxxxxx and any other registered Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum. Any such process or summons to be served upon any of the Company,
Xxxxxx and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, Xxxxxx and any
other registered Holders agree that the prevailing party(ies) in any such
action or proceeding shall be entitled to recover from the other party(ies) all
of its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.
17. Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly
signed by the party against whom enforcement of the modification or amendment
is sought.
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18. Severability. If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.
19. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor shall
they be construed as, a part of this Agreement and shall be given no
substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and
Xxxxxx and any other registered Holder(s) of the Warrant Certificates or
Warrants Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole benefit of the Company and
Xxxxxx and any other registered Holders of Warrant Certificates or Warrant
Securities.
21. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
AVIATION GROUP, INC.
By:/s/ XXX XXXXXXX
------------------------------------
Xxx Xxxxxxx, President
---------------------------------------
Xxxxxxx X. Xxxxxx
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THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, February 28, 1999
No. W-011 Warrants to Purchase 80,000
Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that Xxxxxxx X. Xxxxxx, or
registered assigns, is the registered holder of 80,000 Warrants to purchase
initially, at any time from June 30, 1996 until 5:00 p.m. New York time on
February 28, 1999 ("Expiration Date"), up to 80,000 fully-paid and
non-assessable shares of common stock, $.01 par value ("Common Stock") of
AVIATION GROUP, INC. a Texas corporation (the "Company"), at the initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $2.50 per share of Common Stock upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Warrant Agreement dated
as of June 30, 1996 between the Company and Xxxxxxx X. Xxxxxx (the "Warrant
Agreement"). Payment of the Exercise Price shall be made by certified or
official bank check in New York Clearing House funds payable to the order of
the Company or by surrender of this Warrant Certificate.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of
this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.
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The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the
rights of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided herein and in the
Warrant Agreement, without any charge except for any tax or other governmental
charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of June 30, 1996
AVIATION GROUP, INC.
[SEAL] By: /s/ XXX XXXXXXX
-------------------------------------
Xxx Xxxxxxx, President
Attest:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
Warrant Securities
---------------------------------
and herewith tenders in payment for such securities a certified or official
bank check payable in New York Clearing House Funds to the order Aviation
Group, Inc. in the amount of $_______, all in accordance with the terms of
Section 3.1 of the Warrant Agreement dated as of June 30, 1996 between Aviation
Group, Inc. and Xxxxxxx X. Xxxxxx, a Texas resident. The undersigned request
that a certificate for such Securities be registered in the name of
___________________, whose address is
_____________________________________________ and that such Certificate be
delivered to ____________________, whose address is
______________________________.
Signature
------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
---------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
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[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns and ______________ unto ______________________________________________
______________________________________________________________________________.
(Please print name and address of transferee)
_______ Warrant Certificate, together with all right, title and interest
therein, and does hereby reasonably constitute and appoint
______________________, as Attorney, to transfer the within Warrant Certificate
on the books of the within- named Company, with full power of substitution.
Date:
------------------------
Signature:
-----------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
---------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
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