WARRANT AGREEMENT
This
Warrant Agreement (the “Agreement”) made as of April 16, 2007, between Handheld
Entertainment, Inc., a Delaware corporation, with offices at 000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (“Company”), and American Stock
Transfer & Trust Company, a New York corporation, with offices at 00 Xxxxxx
Xxxx, Xxxxx Xxxxx, Xxx Xxxx, XX 00000 (“Warrant Agent”).
WHEREAS,
the Company has determined to register on behalf of certain selling security
holders 957,500 warrants (the “Warrants”), each of such Warrants evidencing the
right of the holder thereof to purchase one share of the Company’s common stock,
par value $0.0001 per share (“Common Stock”), for $4.00, subject to adjustment
as described herein; and
WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form S-3, (File No. 333-140332) (the “Reg-istration
Statement”), which Registration Statement was declared effective by the SEC on
April 13, 2007 (the “Effective Date”), for the registration, under the
Securities Act of 1933, as amended (the “Act”) of, among other securities, the
Warrants and the Common Stock issuable upon exercise of the Warrants;
and
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance,
regis-tration, transfer, exchange, redemption and exercise of the Warrants;
and
WHEREAS,
the Company desires to provide for the form and provisions of the Warrants,
the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and
the
holders of the Warrants; and
WHEREAS,
all acts and things have been done and performed which are necessary to make
the
Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of
this
Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
1. Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company for
the Warrants, and the Warrant Agent hereby accepts such appointment and agrees
to perform the same in accordance with the terms and conditions set forth in
this Agreement.
2. Warrants.
2.1. Form
of Warrant.
Each
Warrant shall be issued in registered form only, shall be in substantially
the
form of Exhibit
A
hereto,
the provisions of which are incorporated herein, and may have such letters,
numbers or other marks of identification or designation and such legends
summaries or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any law or with any rule
or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed. Each Warrant shall be dated the
date of issuance thereof and shall be signed by, or bear the facsimile signature
of, the Chairman of the Board or President and Treasurer, Secretary or Assistant
Secretary of the Company and shall bear a facsimile of the Company’s seal. In
the event the person whose facsimile signature has been placed upon any Warrant
shall have ceased to serve in the capacity in which such person signed the
Warrant before such Warrant is issued, it may be issued with the same effect
as
if he or she had not ceased to be such at the date of issuance.
2.2. Effect
of Countersignature.
Unless
and until countersigned by the Warrant Agent pursuant to this Agreement, a
Warrant shall be invalid and of no effect and may not be exercised by the holder
thereof. After countersignature by the Warrant Agent, each Warrant shall be
delivered by the Warrant Agent to the Registered Holder (as defined herein)
without further action by the Company, except as otherwise provide
herein.
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2.3. Registration.
2.3.1. Warrant
Register.
The
Warrant Agent shall maintain books (“Warrant Register”), for the registration of
original issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register
the
Warrants in the names of the respective holders thereof in such denom-inations
and otherwise in accordance with instructions delivered to the Warrant Agent
by
the Company.
2.3.2. Registered
Holder.
Prior
to due presentment for registration of transfer of any Warrant, the Company
and
the Warrant Agent may deem and treat the person in whose name such Warrant
shall
be registered upon the Warrant Register (“Registered Holder”), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant Certificate made
by
anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
3. Terms
and Exercise of Warrants.
3.1. Warrant
Price.
Each
Warrant shall, when counter-signed by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Warrant and of this Warrant
Agreement, to purchase from the Company the number of shares of Common Stock
stated therein, at the price of $4.00 per share, subject to the adjustments
provided in Section 4 hereof (the “Warrant Price”).
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3.2. Duration
of Warrants.
A
Warrant may be exercised only during the period (“Exercise Period”) commencing
on July 17, 2007 and terminating at 5:00 p.m., New York City time on January
17,
2012 (the “Expiration Date”), provided that if either such date shall in The
State of New York be a holiday or a day on which banks are authorized to close,
then 5:00PM New York City time, on the next following day which in the State
of
New York is not a holiday or a day on which banks are authorized to close.
Each
Warrant not exercised on or before the Expiration Date shall become void, and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease at the close of business on the Expiration Date.
3.3. Exercise
of Warrants.
3.3.1. Payment.
Subject
to the provisions of the Warrant and this Warrant Agreement, a Warrant, when
countersigned by the Warrant Agent, may be exercised in whole or in part so
long
as any exercise in part hereof would not involve the issuance of fractional
shares of Common Stock by the registered holder thereof by surrendering it,
at
the office of the Warrant Agent, or at the office of its successor as Warrant
Agent, in the Borough of Manhattan, City and State of New York, with the form
of
exercise, as set forth in the Warrant, duly executed, and by paying in full,
in
lawful money of the United States, in good certified check or good bank draft
payable to the order of the Company (or as otherwise agreed to by the Company),
the Warrant Price for each full share of Common Stock as to which the Warrant
is
exercised and any and all applicable taxes due in connection with the exercise
of the Warrant, the exchange of the Warrant for the Common Stock, and the
issuance of the Common Stock.
3.3.2. Issuance
of Certificates.
As soon
as practicable on or after the Exercise Date, the Warrant Agent shall deposit
the proceeds received from the exercise of any Warrant and upon clearance of
the
funds in payment of the Warrant Price shall notify the Company in writing,
by
mail or telecopy of the exercise of the Warrant. Promptly following, and in
any
event within three days of such notice from the Warrant Agent, the Warrant
Agent, on behalf of the Company, shall cause to be issued and delivered by
the
transfer agent for the Common Stock a certificate or certificates for the number
of full shares of Common Stock to the person or persons entitled to receive
the
same, registered in such name or names as may be directed by him, her or it,
and
if such Warrant shall not have been exercised in full, a new countersigned
Warrant for the number of shares as to which such Warrant shall not have been
exercised. Warrants may not be exercised by, or securities issued to, any
Registered Holder in any state in which such exercise would be
unlawful.
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3.3.3. Valid
Issuance.
All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued, fully paid and
nonassessable.
3.3.4. Date
of Issuance.
Each
person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant was surrendered and payment of the
Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall
be
deemed to have become the holder of such shares at the close of business on
the
next succeeding date on which the stock transfer books are open.
4. Adjustments.
4.1. Recapitalization,
Reclassification and Succession.
If any
recapitalization of the Company or reclassification of its Common Stock or
any merger or consolidation of the Company into or with a Person (as defined
herein), or the sale or transfer of all or substantially all of the Company’s
assets or of any successor corporation’s assets to any Person (any such Person
being included within the meaning of the term “successor corporation”) shall be
effected, at any time while any of the Warrants remain outstanding and
unexpired, then, as a condition of such recapitalization, reclassification,
merger, consolidation, sale or transfer, lawful and adequate provision shall
be
made whereby the Warrant holders thereafter shall have the right to receive,
upon the basis and upon the terms and conditions specified in the Warrants
and
in lieu of the shares of Common Stock immediately theretofore issuable upon
the
exercise of the rights represented thereby, such shares of capital stock,
securities or other property as may be issued or payable with respect to or
in
exchange for a number of outstanding shares of Common Stock equal to the number
of shares of Common Stock immediately theretofore issuable upon the exercise
of
the Warrants had such recapitalization, reclassification, merger, consolidation,
sale or transfer not taken place, and in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such consummation.
“Person” shall mean any corporation, division of a corporation, partnership,
limited liability company, trust, joint venture, association, company,
unincorporated organization, or any other entity.
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4.2. Subdivision
or Combination of Shares.
If
after the date hereof, the Company shall subdivide or combine its Common Stock,
the number of shares of Common Stock issuable upon exercise of each Warrant
and
the Warrant Price shall be proportionately adjusted.
4.3. Stock
Dividends and Distributions.
If
after the date hereof, the Company shall issue or pay the holders of its Common
Stock, or take a record of the holders of its Common Stock for the purpose
of
entitling them to receive, a dividend payable in, or other distribution of,
Common Stock, then (i) the Warrant Price shall be adjusted in accordance with
Section 4.5 and (ii) the number of shares of Common Stock issuable upon exercise
of each Warrant shall be adjusted to the number of shares of Common Stock that
such Warrant holder would have owned immediately following such action had
this
Warrant been exercised immediately prior thereto.
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4.4. Stock
and Rights Offering to Stockholders.
If the
Company shall at any time after the date hereof, distribute to all holders
of
its Common Stock any shares of capital stock of the Company (other than Common
Stock) or evidences of its indebtedness or assets (excluding cash dividends
or
distributions paid from retained earnings or current year’s or prior year’s
earnings of the Company) or rights or warrants to subscribe for or purchase
any
of its securities (excluding those referred to in the immediately preceding
paragraph) (any of the foregoing being hereinafter in this paragraph called
the
“Securities”), then in each such case, the Company shall reserve shares or other
units of such Securities for distribution to the Warrant holders upon exercise
of each Warrant so that, in addition to the shares of the Common Stock to which
such Warrant holder is entitled, such Warrant holder will receive upon such
exercise the amount and kind of such Securities which such Warrant holder would
have received if such Warrant holder had, immediately prior to the record date
for the distribution of the Securities, exercised this Warrant.
4.5. Warrant
Price Adjustment.
Whenever the number of shares of Common Stock issuable upon exercise of each
Warrant is adjusted, as herein provided, the Warrant Price payable upon the
exercise of each Warrant shall be adjusted to that price determined by
multiplying the Warrant Price immediately prior to such adjustment by a fraction
(i) the numerator of which shall be the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately prior to such adjustment,
and (ii) the denominator of which shall be the number of shares of Common Stock
purchasable upon exercise of each Warrant immediately thereafter.
4.6. Certain
Shares Excluded.
The
number of shares of Common Stock outstanding at any given time for purposes
of
the adjustments set forth in this Section 4 shall exclude any shares then
directly or indirectly held in the treasury of the Company.
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4.7. Deferral
and Cumulation of De Minimis Adjustments.
No
adjustment shall be required pursuant to this Section 4 if the amount of any
adjustment would be less than one percent (1%) of the Warrant Price in effect
immediately before the event that would otherwise have given rise to such
adjustment. In such case, however, any adjustment that would otherwise have
been
required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than one percent (1%) of the Warrant
Price in effect immediately before the event giving rise to such next subsequent
adjustment.
4.8. Duration
of Adjustment.
Following each computation or readjustment as provided in this Section 4, the
new adjusted Warrant Price and number of shares of Common Stock issuable upon
exercise of each Warrant shall remain in effect until a further computation
or
readjustment thereof is required.
4.9. Notice
of Record Date.
In
case:
4.9.1. the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for
the
purpose of entitling them to receive any dividend (other than a cash dividend
payable out of earned surplus of the Company) or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any
other
securities, or to receive any other right;
4.9.2. of
any
capital reorganization of the Company, any reclassification of the capital
stock
of the Company, any consolidation with or merger of the Company into another
Person, or any conveyance of all or substantially all of the assets of the
Company to another Person; or
4.9.3. of
any
voluntary dissolution, liquidation or winding-up of the Company;
then,
and
in each such case, the Warrant Agent will mail or cause to be mailed to each
Warrant holder hereof 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, merger, conveyance, dissolution, liquidation
or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the
time receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up.
Such
notice shall be mailed at least twenty (20) days prior to the record date
therein specified, or if no record date shall have been specified therein,
at
least twenty (20) days prior to the date of such action, provided, however,
failure to provide any such notice shall not affect the validity of such
transaction.
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4.10. Certificate
of Adjustment.
Whenever any adjustment shall be made pursuant to Section 4 hereof, the Company
shall promptly make a certificate setting forth in reasonable detail the event
requiring the adjustment, the amount of the adjustment, the method by which
such
adjustment was calculated and the Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant after giving
effect to such adjustment, and shall promptly cause copies of such certificate
to be mailed (by first class mail, postage prepaid) to the Warrant holders
and
to the Warrant Agent.
4.11. Form
of Warrant.
The
Warrant Certificate need not be changed because of any adjustment pursuant
to
this Section 4, and Warrants issued after such adjustment may state the same
Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any
time in its sole discretion make any change in the Warrant Certificate that
the
Company may deem appropriate and that does not affect the substance thereof,
and
any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form as
so
changed.
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5. Transfer
and Exchange of Warrants.
5.1. Registration
of Transfer.
The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the
old
Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
shall
be delivered by the Warrant Agent to the Company from time to time upon
request.
5.2. Procedure
for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and there-upon the Warrant Agent shall issue
in exchange therefor one or more new Warrants as requested by the registered
holder of the Warrants so surrendered, representing an equal aggregate number
of
Warrants; provided, however, that in the event that a Warrant surrendered for
transfer bears a restrictive legend, the Warrant Agent shall not cancel such
Warrant and issue new Warrants in exchange therefor until the Warrant Agent
has
received an opinion of counsel for the Company stating that such transfer may
be
made and indicating whether the new Warrants must also bear a restrictive
legend.
5.3. Fractional
Warrants.
The
Warrant Agent shall not be required to effect any registration of transfer
or
exchange which will result in the issuance of a Warrant Certificate for a
fraction of a warrant.
5.4. Service
Charges.
No
service charge shall be made for any exchange or registration of transfer of
Warrants.
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5.5. Warrant
Execution and Countersignature.
The
Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
6. Redemption.
6.1. Redemption.
Subject
to Section 6.4 hereof, not less than all of the outstanding Warrants may be
redeemed, at the option of the Company, at any time after July 17, 2007, and
prior to their expiration, at the office of the Warrant Agent, upon the notice
referred to in Section 6.2, at the price of $.01 per Warrant (“Redemption
Price”), provided that (i) the Company’s Common Stock has had a closing sales
price greater than $5.20 per share for five (5) consecutive trading days and
(ii) at the date of redemption notice and during the entire Redemption Period
(as defined herein) (A) there is an effective registration statement covering
the resale of the underlying Common Stock and (B) the Common Stock remains
listed on The Nasdaq Stock Market.
6.2. Date
Fixed for, and Notice of, Redemption.
In the
event the Company shall elect to redeem all of the Warrants, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first
class mail, postage prepaid, by the Company not less than 15 days prior to
the
date fixed for redemption (the “Redemption Period”) to the registered holders of
the Warrants to be redeemed at their last addresses as they shall appear on
the
registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the registered
holder received such notice.
6.3. Exercise
After Notice of Redemption.
The
Warrants may be exercised, for cash at any time during the Redemption Period
and
prior to the time and date fixed for redemption. On and after the redemption
date, the record holder of the Warrants shall have no further rights except
to
receive, upon surrender of the Warrants, the Redemption Price.
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6.4. Outstanding
Warrants Only.
The
Company understands that the redemption rights provided for by this Section
6
apply only to outstanding Warrants. To the extent a person holds rights to
purchase Warrants, such purchase rights shall not be extinguished by redemption.
However, once such purchase rights are exercised, the Company may redeem the
Warrants issued upon such exercise provided that the criteria for redemption
is
met.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1. No
Rights as Stockholder.
A
Warrant does not entitle the registered holder thereof to any of the rights
of a
stockholder of the Company, including, without limitation, the right to receive
divi-dends, or other distributions, exercise any preemptive rights to vote
or to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or the election of directors of the Company or any other
matter.
7.2. Lost,
Stolen, Mutilated, or Destroyed Warrants.
If any
Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include
the
surrender thereof), issue a new Warrant of like denomination, tenor, and date
as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time
enforceable by anyone.
7.3. Reservation
of Common Stock.
The
Company shall at all times reserve and keep available a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this
Agreement.
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7.4. Registration
of Common Stock.
The
Company shall maintain the effectiveness of the Registration Statement from
the
Effective Date until 18 months after that date, and it shall take such other
action as is necessary to qualify for sale, the Warrants and the Common Stock
issuable upon exercise of the Warrants; provided,
however,
that,
if at any time or from time to time after the date of effectiveness of the
Registration Statement, the Company notifies the Warrant Agent in writing of
the
existence of a Potential Material Event (as defined below), the Warrant Agent
shall stop all transfers of, or other transactions involving, the Warrants
and
the Shares of Common Stock issuable upon exercise of the Warrants from the
time
of the giving of notice with respect to a Potential Material Event until the
Company notifies the Warrant Agent that such Potential Material Event either
has
been disclosed to the public or no longer constitutes a Potential Material
Event; provided,
further
that,
the Company may not stop transfer of the Warrants or the shares of Common Stock
issuable upon exercise of the Warrants pursuant to this Section 7.4 for more
than 45 days in the aggregate. Notwithstanding the foregoing, the Warrant Agent
shall be under no obligation to allow transfer of the Warrants or the shares
of
Common Stock issuable upon exercise of the Warrants in the absence of an
effective registration statement or an exemption from registration under the
Act. No provision of this Section 7.4 shall prevent the Holders from exercising
the Warrants pursuant to Section 3.3 hereof in the event that Company gives
notice to the Warrant Agent with respect to a Potential Material Event.
“Potential
Material Event”
means
the possession by the Company of material information regarding a potential
transaction not ripe for disclosure in a registration statement, which shall
be
evidenced by determinations in good faith by the board of directors of the
Company that disclosure of such information in the registration statement would
be detrimental to the business and affairs of the Company.
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7.5. Price
Protection.
Until
July 17, 2007, the Company shall not issue any warrants or options to purchase
shares of capital stock of the Company having an exercise price lower than
$4.00
per share, except for issuances to employees or service providers in the
Company’s normal course of business.
7.6. Maximum
Exercise.
No
Warrant holder shall be entitled to exercise this Warrant on an exercise date,
in connection with that number of shares of Common Stock which would be in
excess of the sum of (i) the number of shares of Common Stock beneficially
owned
by such Warrant holder and its affiliates on an exercise date, and (ii) the
number of shares of Common Stock issuable upon the exercise of each Warrant
with
respect to which the determination of this limitation is being made on an
exercise date, which would result in beneficial ownership by such Warrant holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock
on such date. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject
to
the foregoing, the Warrant holder shall not be limited to aggregate exercises
which would result in the issuance of more than 4.99%. The restriction described
in this paragraph may be waived, in whole or in part, upon sixty-one (61) days
prior notice from the Warrant holder to the Company to increase such percentage
to up to 9.99%, but not in excess of 9.99%.
8. Concerning
the Warrant Agent and Other Matters.
8.1. Payment
of Taxes.
The
Company will from time to time promptly pay all taxes and charges that may
be
im-posed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of Warrants, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.
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8.2. Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1. Appointment
of Successor Warrant Agent.
The
Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving
sixty (60) days’ notice in writing to the Company. If the office of the Warrant
Agent becomes vacant by resignation or incapacity to act or otherwise, the
Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation
or
incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
with
such notice, submit his Warrant for inspection by the Company), then the holder
of any Warrant may apply to the Supreme Court of the State of New York for
the
County of New York for the appoint-ment of a successor Warrant Agent at the
Company’s cost. Any successor Warrant Agent, whether appointed by the Company or
by such court, shall be a corporation organized and existing under the laws
of
the State of New York, in good standing and having its principal office in
the
Borough of Manhattan, City and State of New York, and authorized under such
laws
to exercise corporate trust powers and subject to supervision or examination
by
federal or state authority. After appointment, any successor Warrant Agent
shall
be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed; but if for
any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent here-under; and upon request of any
successor Warrant Agent the Company shall make, exe-cute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
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8.2.2. Notice
of Successor Warrant Agent.
In the
event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the predecessor Warrant Agent and the transfer agent for
the
Common Stock not later than the effective date of any such
appointment.
8.2.3. Merger
or Consolidation of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
8.3. Fees
and Expenses of Warrant Agent.
8.3.1. Remuneration.
The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as such Warrant Agent hereunder and will xxxx-xxxxx the Warrant Agent upon
demand for all expenditures that the Warrant Agent may reasonably incur in
the
execution of its duties hereunder.
8.3.2. Further
Assurances.
The
Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reason-ably be required by the Warrant
Agent for the carrying out or performing of the provisions of this
Agreement.
8.4. Liability
of Warrant Agent.
8.4.1. Reliance
on Company Statement.
Whenever in the performance of its duties under this Warrant Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter
be
proved or estab-lished by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President or Chairman of the Board
of
the Company and delivered to the Warrant Agent. The Warrant Agent may rely
upon
such statement for any action taken or suffered in good faith by it pursuant
to
the provisions of this Agreement.
16
8.4.2. Indemnity.
The
Warrant Agent shall be liable hereunder only for its own negligence, willful
mis-conduct or bad faith. The Company agrees to indemnify the Warrant Agent
and
save it harmless against any and all liabilities, including judgments, costs
and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent’s
negligence, willful miscon-duct, or bad faith.
8.4.3. Exclusions.
The
Warrant Agent shall have no respons-ibility with respect to the validity of
this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by
the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under
the
provisions of Section 4 hereof or responsible for the manner, method, or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make
any represen-tation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant
or
as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.
8.5. Acceptance
of Agency.
The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and condi-tions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of shares of Common Stock through
the exercise of Warrants.
17
9. Miscellaneous
Provisions.
9.1. Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2. Notices.
Any
notice, statement or demand authorized by this Warrant Agreement to be given
or
made by the Warrant Agent or by the holder of any Warrant to or on the Company
shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as
follows:
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief
Executive Officer
Any
notice, statement or demand authorized by this Agreement to be given or made
by
the holder of any Warrant or by the Company to or on the Warrant Agent shall
be
sufficiently given when so delivered if by hand or overnight delivery or if
sent
by certified mail or private courier service within five days after deposit
of
such notice, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx, Xxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Compliance
Department
with
a
copy in each case to:
Xxxxxx
and Xxxxx, LLP
000
Xxxx
00xx Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
18
and
Grushko
& Xxxxxxx, P.C.
000
Xxxxx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X.
Xxxxxxx, Esq.
9.3. Applicable
law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The Company hereby
agrees 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 the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company 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
9.2 hereof. Such mailing shall be deemed personal service and shall be legal
and
binding upon the Company in any action, proceeding or claim.
9.4. Persons
Having Rights under this Agreement.
Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the parties here-to and the registered
holders of the Warrants any right, remedy, or claim under or by reason of this
Warrant Agreement or of any covenant, condition, stipulation, promise, or
agreement hereof. All covenants, conditions, stipulations, promises, and
agreements contained in this Warrant Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors and assigns and
of
the registered holders of the Warrants.
19
9.5. Examination
of the Warrant Agreement.
A copy
of this Agreement shall be available at all reason-able times at the office
of
the Warrant Agent in the Borough of Manhattan, City and State of New York,
for
inspection by the registered holder of any Warrant. The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.
9.6. 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 all such
counterparts shall together constitute but one and the same
instrument.
9.7. Effect
of Headings.
The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the inter-pretation thereof.
9.8. Amendments. This
Agreement may not be altered, amended, or modified, nor may any provision hereof
be waived except in a written instrument signed by the Company and the Warrant
Agent.
20
IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as
of the day and year first above written.
|
Attest:
|
|||
|
By:
|
/s/ Xxxxxxx X. Xxxx | ||
|
Name:
Xxxxxxx X. Xxxx
|
|||
|
Title: Chief
Financial Officer
|
|||
|
Attest:
|
AMERICAN
STOCK TRANSFER & TRUST COMPANY
|
||
|
By:
|
/s/ Xxxxxxx X. Xxxxxx | ||
|
Name:
Xxxxxxx X. Xxxxxx
|
|||
|
Title:
Vice President
|
|||
21
