MAC FILMWORKS, INC.
FORM OF CLASS F
WARRANT AGREEMENT
____________, 2003
[NAME OF INVESTOR]
[ADDRESS OF INVESTOR]
Dear _________________:
Mac Filmworks, Inc., a Delaware corporation (the "Company"), for value
received, hereby agrees to issue a Class F Warrant entitling you to purchase
______________ shares of the Company's common stock (the "Common Stock"). Such
warrants are evidenced by warrant certificates in the form attached hereto as
Exhibit A (each such instrument being hereinafter referred to as a "Warrant,"
and each Warrant and all instruments hereafter issued in replacement,
substitution, combination or subdivision thereof being hereinafter collectively
referred to as the "Warrants"). The Warrants will be issued in consideration of
an investment in the Company by you. The number of shares of Common Stock
purchasable upon exercise of the Warrants is subject to adjustment as provided
in Section 5 below. The Warrants will be exercisable by each you or any other
Warrant holder (as defined below) as to all or any lesser number of shares of
Common Stock covered thereby, at an initial Purchase Price of $7.00 per share,
subject to adjustment as provided in Section 5 below, for the exercise period
defined in Section 3(a) below. The term "Warrant holder" refers to each person
whose name appears on the signature page of this agreement and any transferee or
transferees of any of them permitted by Section 2(a) below. Such term, when used
in this Warrant Agreement in reference to or in the context of a person who
holds or owns shares of Common Stock issued upon exercise of a Warrant, refers
where appropriate to such person who holds or owns such shares of Common Stock.
1. Representations and Warranties.
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The Company represents and warrants to you as follows:
(a) Corporate and Other Action. The Company has all requisite power and
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Purchase Price, to issue, sell and deliver, the shares
of the Common Stock issuable upon exercise of the Warrants (the "Shares"), and
to perform all of its obligations under this Warrant Agreement and the Warrants.
The Shares, when issued in accordance with this Agreement, will be duly
authorized and validly issued and outstanding, fully paid and nonassessable and
free of all liens, claims, encumbrances and preemptive rights. This Warrant
Agreement and, when issued, each Warrant issued pursuant hereto, has been or
will be duly executed and delivered by the Company and is or will be a legal,
valid and binding agreement of the Company, enforceable in accordance with its
terms. No authorization, approval, consent or other order of any governmental
entity, regulatory authority or other third party is required for such
authorization, execution, delivery, performance, issue or sale.
(b) No Violation. The execution and delivery of this Warrant Agreement, the
consummation of the transactions herein contemplated and the compliance with the
terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument, judgment, decree, order, statute, rule or
regulation to which the Company is a party or by which it is or may be bound.
2. Transfer.
(a) Transferability of Warrants. You agree that the Warrants are being acquired
as an investment and not with a view to distribution thereof and that the
Warrants may not be transferred, sold, assigned or hypothecated except as
provided herein and in compliance with all applicable securities and other laws.
(b) Registration of Shares. You agree not to make any sale or other disposition
of the Shares except pursuant to a registration statement which has become
effective under the Securities Act of 1933, as amended (the "Act"), setting
forth the terms of such offering, the underwriting discount and commissions and
any other pertinent data with respect thereto, unless you have provided the
Company with an opinion of counsel reasonably acceptable to the Company that
such registration is not required. Certificates representing the Shares, which
are not registered as provided in Section 2, shall bear an appropriate legend
and be subject to a "stop-transfer" order.
3. Exercise of Warrants; Partial Exercise; Redemption.
(a) Exercise Period. This Warrant is exercisable from the date hereof and
expires three years from the date of issuance.
(b) Exercise in Full. Subject to Section 3(a), Warrants may be exercised in full
by the Warrant holder by surrender of the Warrants, with the form of
subscription at the end thereof duly executed by such Warrant holder, to the
Company at its principal office at 0000 Xxxxxxxxx Xxxx, Xxxxx X-0, Xxxxxxxxxx,
Xxxxxxxxx 00000, Attention: Chief Executive Officer, accompanied by payment, in
cash or by certified or bank cashier's check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of the
Common Stock represented by the respective Warrant or Warrants by the Purchase
Price per share (after giving effect to any adjustments as provided in Section 5
below).
(c) Partial Exercise. Subject to Section 3(a), each Warrant may be exercised in
part by the Warrant holder by surrender of the Warrant, with the form of
subscription at the end thereof duly executed by such Warrant holder, in the
manner and at the place provided in Section 3(b) above, accompanied by payment,
in cash or by certified or bank cashier's check payable to the order of the
Company, in amount obtained by multiplying the number of shares of the Common
Stock designated by the Warrant holder in the form of subscription attached to
the Warrant by the Purchase Price per share (after giving effect to any
adjustments as provided in Section 5 below). Upon any such partial exercise, the
Company at its expense will forthwith issue and deliver to or upon the order of
the Warrant holder a new Warrant of like tenor, in the name of the Warrant
holder thereof or as the Warrant holder (upon payment by such Warrant holder of
any applicable transfer taxes) may request, subject to Section 2(a), calling in
the aggregate for the purchase of the number of shares of the Common Stock equal
to the number of such shares called for on the face of the respective Warrant
(after giving effect to any adjustment herein as provided in Section 5 below)
minus the number of such shares designated by the Warrant holder in the
aforementioned form of subscription.
(d) Company to Reaffirm Obligations. The Company will, at the time of any
exercise of any Warrant, upon the request of the Warrant holder, acknowledge in
writing its continuing obligation to afford to such Warrant holder any rights to
which such Warrant holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant Agreement; provided, however,
that if the Warrant holder shall fail to make any such request, such failure
shall not affect the continuing obligation of the Company to afford to such
Warrant holder any such right.
(e) Method of Redemption. If the closing bid price of the Common Stock
shall have equaled or exceeded the Purchase Price, as adjusted, for a period of
at least twenty (20) of the last thirty trading days at any time during the term
hereof and the Company has in effect a current registration statement
registering the sale of shares of Common Stock underlying the Warrant, the
Company may, in its sole discretion, redeem the Warrants by paying Warrant
holders $.01 per Warrant, provided such notice is mailed to all Warrant holders
not later than thirty (30) days after the end of such period and prescribes a
redemption date at least thirty (30) days but not more than sixty (60) days
thereafter. Warrant holders will be entitled to exercise Warrants at any time up
to the business day next preceding the redemption date.
4. Delivery of Stock Certificates on Exercise.
Any exercise of the Warrants pursuant to Section 3 shall be deemed to
have been effected immediately prior to the close of business on the date on
which the Warrants together with the subscription form and the payment for the
aggregate Purchase Price shall have been received by the Company. At such time,
the person or persons in whose name or names any certificate or certificates
representing the Shares or Other Securities (as defined below) shall be issuable
upon such exercise shall be deemed to have become the holder or holders of
record of the Shares or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within 10
days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of, and delivered to
the purchasing Warrant holder, a certificate or certificates representing the
number of fully paid and nonassessable shares of Common Stock or Other
Securities to which such Warrant holder shall be entitled upon such exercise,
plus in lieu of any fractional share to which such Warrant holder would
otherwise be entitled, cash in an amount determined pursuant to Section 6(h),
together with any other stock or other securities and property (including cash,
where applicable). The term "Other Securities" refers to any stock (other than
Common Stock), other securities or assets (including cash) of the Company or any
other person (corporate or otherwise) which the holders of the Warrants at any
time shall be entitled to receive, or shall have received, upon the exercise of
the Warrants, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 5 below or otherwise.
5. Adjustment of Purchase Price and Number of Shares Purchasable.
The Purchase Price and the number of Shares are subject to adjustment
from time to time as set forth in this Section 5.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital
stock, (ii) subdivide the outstanding Shares, (iii) combine the
outstanding Common Stock into a smaller number of Common Stock, or (iv)
issue any shares of its capital stock by reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation), then in each case the Purchase Price, and the number and
kind of Shares receivable upon exercise, in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination, or reclassification shall be proportionately
adjusted so that the holder of any Warrant exercised after such time
shall be entitled to receive the aggregate number and kind of Shares
which, if such Warrant had been exercised immediately prior to such
time, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively whenever
any event listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if such
adjustment is less than $.05; provided, however, that any adjustments
which by reason of this subsection (h) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 5 shall be made to the
nearest cent or to the nearest one-thousandth of a share, as the case
may be.
(c) Upon each adjustment of the Purchase Price as a result of the
calculations made in any of subsection (a) of this Section 5, each
Warrant outstanding prior to the making of the adjustment in the
Purchase Price shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of Shares (calculated to the
nearest thousandth) obtained by (i) multiplying the number of Shares
purchasable upon exercise of a Warrant immediately prior to adjustment
of the number of Shares by the Purchase Price in effect prior to
adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(d) In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock (other than a reclassification of
the Common Stock referred to in subsection (a) of this Section 5), or
in the case of the consolidation of the Company with or the merger of
the Company into any other corporation or of the sale, transfer, or
lease of the properties and assets of the Company as, or substantially
as, an entirety to any other corporation, each Warrant shall after such
capital reorganization, reclassification of the Common Stock,
consolidation, merger, sale, transfer, or lease be exercisable, upon
the terms and conditions specified in this Agreement, for the number of
shares of stock or other securities, assets, or cash to which a holder
of the number of shares of Common Stock purchasable (at the time of
such capital reorganization, reclassification of shares, consolidation,
merger, sale, transfer, or lease) upon exercise of such Warrant would
have been entitled upon such capital reorganization, reclassification
of the Common Stock, consolidation, merger, sale, transfer, or lease;
and in any such case, if necessary, the provisions set forth in this
Section 5 with respect to the rights and interests thereafter of the
holders of the Warrants shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock or
other securities, assets, or cash thereafter deliverable upon the
exercise of the Warrants. The subdivision or combination of the Common
Stock at any time outstanding into a greater or lesser number of shares
shall not be deemed to be a reclassification of the Common Stock for
the purposes of this paragraph. The Company shall not effect any such
consolidation, merger, transfer, or lease, unless prior to or
simultaneously with the consummation thereof, the successor corporation
(if other than the Company) resulting from such consolidation or merger
or the corporation purchasing, receiving, or leasing such assets or
other appropriate corporation or entity shall assume, by written
instrument executed and delivered to the Warrant holder, the obligation
to deliver to the Warrant holder such shares of stock, securities, or
assets as, in accordance with the foregoing provisions, such holders
may be entitled to purchase, and to perform the other obligations of
the Company under this Warrant Agreement.
6. Further Covenants of the Company.
(a) Dilution or Impairments. The Company will not, by amendment of its
certificate or articles of incorporation 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 the Warrants or of
this Warrant Agreement, 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 Warrant holders against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely for issuance and
delivery upon the exercise of the Warrants, all shares of Common Stock
(or Other Securities) from time to time issuable upon the exercise of
the Warrants and shall take all necessary actions to ensure that the
par value per share, if any, of the Common Stock (or Other Securities)
is at all times equal to or less than the then effective Purchase Price
per share;
(ii) will take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock or Other Securities upon the
exercise of the Warrants from time to time outstanding;
(iii) will not issue any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or
involuntary dissolution, liquidation or winding-up, unless the rights
of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such
distribution of assets; and
(iv) will not transfer all or substantially all of its properties and assets
to any person (corporate or otherwise), or consolidate with or merge
into any other person or permit any such person to consolidate with or
merge into the Company (if the Company is not the surviving
corporation), unless such other person shall expressly assume in
writing and will be bound by all the terms of this Warrant Agreement
and the Warrants.
(b) Title to Stock. All shares of Common Stock delivered upon the exercise
of the Warrants shall be validly issued, fully paid and nonassessable;
each Warrant holder shall, upon such delivery, receive good and
marketable title to the Shares, free and clear of all voting and other
trust arrangements, liens, encumbrances, equities and claims
whatsoever; and the Company shall have paid all taxes, if any, in
respect of the issuance thereof.
(c) Remedies. The Company stipulates that the remedies at law of the
Warrant holder or any holder of Shares in the event of any default or
threatened default by the Company in the performance of or compliance
with any of the terms of this Warrant Agreement or the Warrants are not
and will not be adequate and that such terms may be specifically
enforced by a decree for the specific performance of any agreement
contained herein or in the Warrants or by an injunction against a
violation of any of the terms hereof or thereof or otherwise.
(d) Exchange of Warrants. Subject to Section 2(a) hereof, upon surrender
for exchange of any Warrant to the Company, the Company at its expense
will promptly issue and deliver to or upon the order of the holder
thereof a new Warrant or like tenor, in the name of such holder or as
such holder (upon payment by such Warrant holder of any applicable
transfer taxes) may direct, calling in the aggregate for the purchase
of the number of shares of the Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered. The Warrants and all
rights thereunder are transferable in whole or in part upon the books
of the Company by the registered holder thereof, subject to the
provisions of Section 2(a), in person or by duly authorized attorney,
upon surrender of the Warrant, duly endorsed, at the principal office
of the Company.
(e) Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any
such mutilation, upon surrender and cancellation of such Warrant, the
Company, at the expense of the Warrant holder, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(f) Reporting by the Company. The Company agrees that during the term of
the Warrants it will use its best efforts to keep current in the filing
of all forms and other materials, if any, which it may be required to
file with the appropriate regulatory authority pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
all other forms and reports required to be filed with any regulatory
authority having jurisdiction over the Company.
(g) Fractional Shares. No fractional Shares are to be issued upon the
exercise of any Warrant, but the Company shall pay a cash adjustment in
respect of any fraction of a share which would otherwise be issuable in
an amount equal to such fraction multiplied by the closing price which
shall be the last reported sales price regular way or, in case no such
reported sales takes place on such day, the average of the closing bid
and asked prices regular way, on the principal national securities
exchange in the United States on which the Common Stock is listed or
admitted to trading, or if the Common Stock is not listed or admitted
to trading on any such national securities exchange, the average of the
highest reported bid and lowest reported asked price as furnished by
the National Association of Securities Dealers, Inc. through its
automated quotation system ("Nasdaq") or a similar organization if
Nasdaq is no longer reporting such information.
7. Other Warrant Holders: Holders of Shares.
The Warrants are issued upon the following terms, to all of which each
Warrant holder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by Section
2(a) hereof, of a Warrant properly endorsed shall take such Warrant subject to
the provisions of Section 2(a) hereof and thereupon shall be authorized to
represent himself as absolute owner thereof and, subject to the restrictions
contained in this Warrant Agreement, shall be empowered to transfer absolute
title by endorsement and delivery thereof to a permitted bona fide purchaser for
value; (b) any person who shall become a holder or owner of Shares shall take
such shares subject to the provisions of Section 2(b) hereof; (c) each prior
taker or owner waives and renounces all of his equities or rights in such
Warrant in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; and (d) until such time as the respective Warrant is
transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary.
8. Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to any Warrant holder shall be mailed by first class,
registered or certified mail, postage prepaid, to such address as may have been
furnished to the Company in writing by such Warrant holder, or, until an address
is so furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Warrant
Agreement are for purposes of reference only and shall not limit or otherwise
affect any of the terms hereof. This Warrant Agreement, together with the forms
of instruments annexed hereto as exhibits, constitutes the full and complete
agreement of the parties hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be
executed on this the ______ day of ______, 2003, in Shreveport, Louisiana, by
its proper corporate officers, thereunto duly authorized.
MAC FILMWORKS, INC.
By________________________
XXX XXXXXXXXXX, SR.
Chief Executive Officer
The above Warrant Agreement is confirmed
as of this ____ day of _______, 2003.
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By:_________________________________
Printed Name: ________________________
Title:________________________________
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Exhibit A
[FORM OF FACE OF CLASS F WARRANT CERTIFICATE]
Class F Warrant No. ____ To Purchase
____________ Shares of
Common Stock
CLASS F WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK
MAC FILMWORKS, INC.
Incorporated Under the Laws of Delaware
This certifies that, for value received, the hereafter named registered
owner is entitled, subject to the terms and conditions of this Warrant, until
the expiration date, to purchase the number of shares set forth above of the
common stock (the "Common Stock"), of Mac Filmworks, Inc. (the "Corporation")
from the Corporation at the purchase price per share hereafter set forth, on
delivery of this Warrant to the Corporation with the exercise form duly executed
and payment of the purchase price (in cash or by certified or bank cashier's
check payable to the order of the Corporation) for each share purchased. This
Warrant is subject to the terms of the Warrant Agreement between the parties
thereto dated as of ___________, 2003, the terms of which are hereby
incorporated herein. Reference is hereby made to such Warrant Agreement for a
further statement of the rights of the holder of this Warrant.
Registered Owner: _______________________ Date: ____________, 2003
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Purchase Price
Per Share: $_______
Expiration Date: Subject to Section 3(a) of the Warrant Agreement,
________, 2006.
WITNESS the signature of the Corporation's authorized officer:
MAC FILMWORKS, INC.
By________________________________________
XXX XXXXXXXXXX, SR.
Chief Executive Officer
3
[FORM OF REVERSE OF CLASS F WARRANT CERTIFICATE]
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To Mac Filmworks, Inc.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________* shares of Common Stock of Mac Filmworks, Inc.
and herewith makes payment of $_______________ therefor, and requests that the
certificate or certificates for such shares be issued in the name of and
delivered to the undersigned.
Dated:______________
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(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
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(Address)
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(*) Insert here the number of shares called for on the face of the Warrant or,
in the case of a partial exercise, the portion thereof as to which the Warrant
is being exercised, in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant Agreement pursuant to which
the Warrant was granted, may be delivered upon exercise.
3
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Name:
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Address:
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City/State:
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SSN:
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the right represented by the enclosed Warrant to purchase
_________________ shares of Common Stock of Mac
Filmworks, Inc. to which the enclosed Warrant relates, and appoints
_____________________ Attorney to transfer
such right on the books of Mac Filmworks, Inc. with full power of substitution
in the premises.
The undersigned represents and warrants that the transfer of the
enclosed Warrant is permitted by the terms of the Warrant Agreement pursuant to
which the enclosed Warrant has been issued, and the transferee hereof, by his
acceptance of this Agreement, represents and warrants that he is familiar with
the terms of said Warrant Agreement and agrees to be bound by the terms thereof
with the same force and effect as if a signatory thereto.
Dated:_________________________ ______________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the enclosed Warrant)
Signed in the presence of:
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