THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED HEREBY
ARE RESTRICTED AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR
OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY, IS OBTAINED STATING THAT SUCH DISPOSITION IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
Dated as of , 2004 No. W
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21ST CENTURY HOLDING COMPANY
(INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA)
REDEEMABLE WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, 21st Century Holding Company, a Florida corporation
(the "Company"), hereby certifies that _________________________________, its
successors and assigns (the "Holder"), is the owner of such number of warrants
(the "Warrants") as set forth in Section 1 hereof. Each Warrant initially
entitles the Holder, subject to the provisions hereof, to purchase from the
Company at any time and from time to time on and after the date hereof until
5:00 p.m. Florida local time on the Expiration Date (as described in Section 3
herein), one fully paid and non-assessable share of Common Stock (as defined
below) at the Exercise Price per share of Common Stock (as described in Section
2 herein) on the terms and conditions hereinafter set forth.
The term "Common Stock" means the Common Stock, par value $0.01 per share,
of the Company as constituted on the date hereof (the "Base Date"). The number
of shares of Common Stock to be received upon the exercise of this warrant
certificate may be adjusted from time to time as hereinafter set forth. The
shares of Common Stock deliverable upon such exercise, and as adjusted from time
to time, are hereinafter referred to as "Warrant Shares." The term "Other
Securities" means any other equity or debt securities that may be issued by the
Company in addition thereto or in substitution for the Warrant Shares. The term
"Company" means and includes the corporation named above as well as any
immediate successor corporation resulting from a reorganization.
Upon receipt by the Company of documentation reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this warrant certificate, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this warrant
certificate, if mutilated, the Company shall execute and deliver a new warrant
certificate of like tenor and date. Any such new warrant certificate executed
and delivered shall constitute an additional contractual obligation on the part
of the Company, whether or not this warrant certificate so lost, stolen,
destroyed or mutilated shall be at any time enforceable by anyone.
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The Holder agrees with the Company that this warrant certificate is
issued, and all the rights hereunder shall be held subject to, all of the
conditions, limitations and provisions set forth herein.
1. NUMBER OF WARRANTS. The Holder is the owner of a number of warrants
equal to the aggregate principal amount of the 6% Senior Subordinated Notes the
Holder has purchased pursuant to the terms of the Unit Purchase Agreement (as
hereinafter defined) divided by the Exercise Price.
2. EXERCISE PRICE. The Exercise Price shall equal 115% of the
weighted-average volume price for the Common Stock on Nasdaq as reported by
Bloomberg Financial Markets ("Bloomberg") for the 5 consecutive trading days
prior to the date of the Closing as set forth in the Unit Purchase Agreement;
provided, however, that in no event shall the Exercise Price be lower than
$12.75 per share.
3. EXERCISE OF WARRANT. This warrant certificate may be exercised in whole
or in part, at any time, or from time to time during the period commencing on
the date hereof and expiring three years after the date hereof (the "Expiration
Date"). The Warrants must be exercised so as to purchase one full Warrant Share.
4. NOTICE OF EXERCISE. Exercise of the Warrants shall be effected in any
such case by presentation and surrender of this warrant certificate to the
Company at its principal office, at the office of its stock transfer agent or
any other warrant agent designated by the Company (the "Warrant Agent") if any,
with the Warrant Exercise Form, a form of which is attached hereto as Exhibit A,
duly executed and accompanied by payment (either in cash or by certified or
official bank check, payable to the order of the Company) of the Exercise Price
for the number of Warrant Shares specified in such form and instruments of
transfer, if appropriate, duly executed by the Holder or its duly authorized
attorney. If this warrant certificate should be exercised in part only, the
Company shall, upon surrender of this warrant certificate for cancellation,
execute and deliver a new warrant certificate evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this warrant certificate, together
with the Exercise Price, at its office, or by the Warrant Agent at its office,
in proper form for exercise, the Holder shall be deemed to be the Holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this warrant
certificate, but in no event shall the Company be responsible or liable for
income taxes or transfer taxes upon the issuance or transfer of the Warrants or
the Warrant Shares.
5. REDEMPTION RIGHTS. The Warrants may be redeemed, in whole or in part,
at any time or from time to time, at the Company's sole option, commencing a
year from the date hereof at a redemption price of $0.01 per Warrant Shares;
provided, however, that before any such call for redemption of the Warrants the
weighted-average volume price for the Company's Common Stock quoted on the
Nasdaq National Market ("Nasdaq") shall have for 20 consecutive trading days
ending not more than 10 days prior to the notice of redemption been in excess of
150% of the Exercise Price, as such may be adjusted from time to time.
Redemption of the Warrants may only occur upon 30 days' prior written notice to
the Holder, such notice to include certification of the trading price of the
Company's Common Stock on Nasdaq as reported by Bloomberg. If the Company
exercises its right to redeem the Warrants, in whole or in part, it shall mail a
notice of redemption to the Holder, first class, postage prepaid, not later than
the 30th day before the date fixed for redemption, at such Holder's last address
as shall appear on the records of the Company or the Company's Warrant Agent, if
any. Any notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the Holder receives such notice.
The notice of redemption shall specify the redemption price, the date fixed for
redemption, the place where the warrant certificate shall be delivered and the
redemption price shall be paid, and that the right to exercise the Warrants
shall terminate at 5:00 p.m. Florida local time on the business day immediately
preceding the date fixed for redemption. The date fixed for the redemption of
the Warrants shall be the Redemption Date. Any right to exercise a Warrant shall
terminate at 5:00 p.m. Florida local time on the business day immediately
preceding the Redemption Date. On and after the Redemption Date, the Holder
shall have no further rights except to receive, upon surrender of a certificate
evidencing Warrants duly endorsed or accompanied by a written instrument or
instruments of redemption in form satisfactory to the Company, the redemption
price of $0.01, without interest, per Warrant Shares.
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6. RESERVATION OF SHARES. The Company will at all times reserve for
issuance and delivery upon exercise of this warrant certificate all shares of
Common Stock or other shares of capital stock of the Company (and Other
Securities) from time to time receivable upon exercise of this warrant
certificate. All such shares (and Other Securities) shall be duly authorized
and, when issued upon such exercise, shall be validly issued, fully paid and
non-assessable and free of all preemptive rights.
7. FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of the Warrants, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share of Common Stock in lieu of each fraction of a share otherwise
called for upon any exercise of the Warrants, as determined by the Board of
Directors of the Company.
8. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This warrant
certificate is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its Warrant
Agent, if any, for other warrant certificates of different denominations,
entitling the Holder to purchase in the aggregate the same number of shares of
Common Stock purchasable hereunder. Upon surrender of this warrant certificate
to the Company or at the office of its Warrant Agent, if any, with an
appropriate form of assignment duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
warrant certificate in the name of the assignee named in such instrument of
assignment and this warrant certificate shall promptly be canceled. This warrant
certificate may be divided or combined with other warrant certificates that
carry the same rights upon presentation hereof at the office of the Company or
at the office of its Warrant Agent, if any, together with a written notice
specifying the names and denominations in which new warrant certificates are to
be issued and signed by the Holder hereof.
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9. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
warrant certificate.
10. ANTI-DILUTION PROVISIONS.
10.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any
time subdivide its outstanding shares of Common Stock (or Other Securities at
the time receivable upon the exercise of the Warrants) by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common Stock to its shareholders, the number of
shares of Common Stock subject to this warrant certificate immediately prior to
such subdivision shall be proportionately increased and the Exercise Price shall
be proportionately decreased, and if the Company shall at any time combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock or Other Securities
subject to this warrant certificate immediately prior to such combination shall
be proportionately decreased and the Exercise Price shall be proportionately
increased. Any such adjustments pursuant to this Section 10.1 shall be effective
at the close of business on the effective date of such subdivision or
combination or if any adjustment is the result of a stock dividend or
distribution then the effective date of such adjustment based thereon shall be
the record date therefor.
10.2 ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In
the case of a reorganization of the Company after the Base Date, the Holder,
upon the exercise thereof as provided in Section 1, at any time after the
consummation of such reorganization, shall be entitled to receive, in lieu of
the securities and property receivable upon the exercise of this warrant
certificate prior to such consummation, the securities or property to which such
Holder would have been entitled upon such consummation if such Holder had
exercised this warrant certificate immediately prior thereto; in each such case,
the terms of this warrant certificate shall be applicable to the securities or
property receivable upon the exercise of this warrant certificate after such
consummation.
10.3 ISSUANCES BELOW EXERCISE PRICE. Except in the case of the
issuance of Common Stock issued (i) pursuant to any employee benefit plan of the
Company now existing or to be implemented in the future, (ii) for consideration
other than cash pursuant to a merger, consolidation, acquisition or similar
business combination, (iii) in connection with any transaction referred to in,
or contemplated by, this Section 10 hereof, (iv) pursuant to any equipment
leasing or loan arrangement, or debt financing from a bank or similar financial
or lending institution, (v) issued by the Company pursuant to a registration
statement filed under the Securities Act, or (v) issued in connection with
strategic transactions involving the Company and other entities, including (a)
joint ventures, manufacturing, marketing or distribution arrangements or (b)
technology transfer or development arrangements, if the Company at any time
while the Warrants are outstanding, shall issue shares of Common Stock at a
price per share (an "Issuance Price") less than the Exercise Price (or in the
case of an issuance of Common Stock in a private placement at less than 80% of
the Exercise Price), then the Exercise Price shall be multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such Common Stock plus the number of shares
of Common Stock which the price paid for such shares of Common Stock would
purchase at the Exercise Price, and the denominator of which shall be the sum of
the number of shares of Common Stock outstanding immediately prior to such
issuance plus the number of shares of Common Stock so issued or issuable. Upon
each adjustment of the Exercise Price pursuant to the provisions of this Section
10.2, the number of Warrant Shares issuable upon the exercise of each Warrant
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable
upon exercise of the Warrant immediately prior to such adjustment and dividing
the product so obtained by the adjusted Exercise Price.
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10.4 NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or Other Securities at the time receivable upon the exercise of
the Warrants) for the purpose of entitling them to receive any dividend (other
than a cash dividend at the same rate as the rate of the last cash dividend
theretofore paid) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities,
or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, or any consolidation or
merger of the Company with or into another corporation; then, and in each such
case, the Company shall mail or cause to be mailed to the Holder at the time
outstanding a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification, consolidation or
merger is to take place, and the time, if any, is to be fixed, as to which the
holders of record of Common Stock (or such Other Securities at the time
receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such Other Securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation
or merger. Such notice shall be mailed at least 20 days prior to the date
therein specified and the Warrants may be exercised prior to said date during
the term of the Warrants.
10.5 LIMITATION ON ANTI-DILUTION ADJUSTMENTS. Notwithstanding
anything to the contrary contained herein, the Company shall not adjust the
number of Warrant Shares as provided in this Section 10, if such adjustment
would, either individually or together with one or more other adjustments or
together with one or more issuances of Transaction Shares (as defined in the
Unit Purchase Agreement dated as of ___________________, 2004 (the "Unit
Purchase Agreement") among the Company and the Purchasers named therein), cause
the issuance of shares of Common Stock to exceed the number of shares that the
Company could then issue under Section 4350(i) of the rules and regulations of
Nasdaq (the "Nasdaq Rules") or any successor rule or regulation. Under Section
4350(i) of the Nasdaq Rules, a company may not issue shares, and may not issue
securities convertible into shares, where the shares issued could in the
aggregate equal 20% or more of the voting power of the shares outstanding,
without obtaining shareholder approval. The foregoing limitation shall only
apply until such time as the Company obtains the requisite approval of its
shareholders for the issuance of the Transaction Shares, as required by Section
4350(i) of the Nasdaq Rules or any successor rule or regulation. The Company
covenants and agrees that it shall include a proposal for the approval of the
issuance of the Transaction Shares in the Company's proxy statement for its next
regular annual meeting of shareholders. If, due to the foregoing limitation, the
Company cannot adjust the Warrant Shares as provided in Section 10.3 above,
then, subject to NASD approval, the Company agrees that the Exercise Price
hereof shall be reduced to equal the Issuance Price(s) of the shares of Common
Stock that triggered the adjustment pursuant to Section 10.3.
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11. TRANSFER TO COMPLY WITH THE SECURITIES ACT. The Warrants and any
Warrant Shares or Other Securities may not be sold, transferred, pledged,
hypothecated or otherwise disposed of unless registered under the Securities Act
and any applicable state securities laws or pursuant to available exemptions
from such registration, provided that the transferor delivers to the Company an
opinion of counsel satisfactory to the Company confirming the availability of
such exemption.
12. REGISTRATION RIGHTS. The Warrants and the Warrant Shares issuable upon
exercise of the Warrants shall be subject to certain registration rights as
provided in the registration rights agreement (the "Registration Rights
Agreement") among the Company and the initial holders of the Warrants. If the
Company fails to comply with the terms of the Registration Rights Agreement, the
Exercise Price shall be reduced by 10% for each full period of 30 consecutive
days of such non-compliance (and there shall be no pro rata reduction of the
Exercise Price if a period of non-compliance is not a full 30-day period).
13. LEGEND. Unless the Warrant Shares or Other Securities have been
registered under the Securities Act, upon exercise of any of the Warrants and
the issuance of any of the Warrant Shares or Other Securities, all certificates
representing such securities shall bear on the face thereof substantially the
following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
or under applicable state securities laws and may not be sold,
offered for sale, assigned, transferred or otherwise disposed of,
unless registered pursuant to the provisions of the Act and any
applicable state securities laws or unless an opinion of counsel to
the Company is obtained stating that such disposition is in
compliance with an available exemption from such registration."
14. NOTICES. All notices required hereunder shall be in writing and shall
be deemed given when sent by facsimile, delivered personally or within two days
after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice hereunder.
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15. APPLICABLE LAW. The Warrants are issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Florida, without giving effect to the choice of law rules thereof.
IN WITNESS WHEREOF, the Company has caused this warrant certificate to be
signed on its behalf, in its corporate name, by its duly authorized officer, all
as of the day and year first above written.
21ST CENTURY HOLDING COMPANY,
a Florida corporation
By:
--------------------------------------
Xxxxxxx X. Xxxxxxxxxx,
Chief Executive Officer
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EXHIBIT A
WARRANT EXERCISE FORM
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)
To 21st Century Holding Company:
In accordance with the warrant certificate enclosed with this Warrant
Exercise Form, the undersigned hereby irrevocably elects to purchase________
shares of Common Stock, $0.01 par value per share ("Common Stock"), of 21st
Century Holding Company and, encloses herewith $__________ in cash, certified or
official bank check or checks, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Warrant Exercise Form relates, together with any applicable taxes payable
by the undersigned pursuant to the warrant certificate.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
-----------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock that the undersigned is entitled to
purchase in accordance with the enclosed warrant certificate, the undersigned
requests that a new warrant certificate evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
----------------------- -----------------------------------------
(Print name of holder)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
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