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EXHIBIT 4.1
THIS WARRANT HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
AND IS NOT TRANSFERABLE
EXCEPT AS PROVIDED HEREIN
UNIT
PURCHASE WARRANTS
Issued to:
XXXXXXX INVESTMENT COMPANY, INC.
Exercisable to Purchase
150,000 Units
of
LEGACY BRANDS, INC.
Void after _____________, 2003
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This is to certify that, for value received and subject to the terms and
conditions set forth below, the Warrantholder (hereinafter defined) is entitled
to purchase, and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after _____________, 1999 and on or before
______________, 2003, up to 150,000 Units (hereinafter defined) at the Exercise
Price (hereinafter defined).
This Warrant Certificate is issued subject to the following terms and
conditions:
1. Definitions of Certain Terms. Except as may be otherwise clearly
required by the context, the following terms have the following meanings:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Closing Date" means the date on which the Offering is
closed.
(c) "Commission" means the Securities and Exchange Commission.
(d) "Common Stock" means the common stock, no par value, of
the Company.
(e) "Company" means Legacy Brands, Inc., a California
corporation.
(f) "Company's Expenses" means any and all expenses payable by
the Company or the Warrantholder in connection with an offering described in
Section 6 hereof, except Warrantholder's Expenses.
(g) "Effective Date" means the date on which the Registration
Statement is declared effective by the Commission.
(h) "Exercise Price" means the price at which the
Warrantholder may purchase one complete Unit (or Securities obtainable in lieu
of one complete Unit) upon exercise of Warrants as determined from time to time
pursuant to the provisions hereof. The initial Exercise Price is $____ per Unit
(120% of the initial public offering price of a Unit). If a Warrant is exercised
for a component of a Unit or Units, then the price payable in connection with
such exercise shall be determined by allocating $0.001 to the Unit Warrant and
the balance of the Exercise Price to the share of Common Stock, or, in each
case, to any securities obtainable in addition to or in lieu of such share of
Unit Warrant or Common Stock by virtue of the application of Section 3 of this
Warrant.
(i) "Offering" means the public offering of Units made
pursuant to the Registration Statement.
(j) "Participating Underwriter" means any underwriter
participating in the sale of the Securities pursuant to a registration under
Section 6 of this Warrant Certificate.
(k) "Registration Statement" means the Company's registration
statement (File
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No.333-________), as amended on the Closing Date.
(l) "Rules and Regulations" means the rules and regulations of
the Commission adopted under the Act.
(m) "Securities" means the securities obtained or obtainable
upon exercise of the Warrant or securities obtained or obtainable upon exercise,
exchange, or conversion of such securities.
(n) "Unit" means one of the Units offered to the Public
pursuant to the Registration Statement.
(o) "Unit Warrant" means a Common Stock purchase warrant
included as a component of a Unit.
(p) "Warrant Certificate" means a certificate evidencing the
Warrant.
(q) "Warrantholder" means a record holder of the Warrant or
Securities. The initial Warrantholder is Xxxxxxx Investment Company, Inc.
(r) "Warrantholder's Expenses" means the sum of (i) the
aggregate amount of cash payments made to an underwriter, underwriting
syndicate, or agent in connection with an offering described in Section 6 hereof
multiplied by a fraction the numerator of which is the aggregate sales price of
the Securities sold by such underwriter, underwriting syndicate, or agent in
such offering on behalf of the Warrantholder and the denominator of which is the
aggregate sales price of all of the securities sold by such underwriter,
underwriting syndicate, or agent in such offering and (ii) all out-of-pocket
expenses of the Warrantholder, except for the reasonable fees and disbursements
of one firm retained as legal counsel on behalf of all of the Warrantholders
that will be paid by the Company.
(s) "Warrant" means the warrant evidenced by this certificate,
any similar certificate issued in connection with the Offering, or any
certificate obtained upon transfer or partial exercise of the Warrant evidenced
by any such certificate.
2. Exercise of Warrants. All or any part of the Warrant may be
exercised commencing on the first anniversary of the Effective Date and ending
at 5 p.m. Pacific Time on the fifth anniversary of the Effective Date by
surrendering this Warrant Certificate, together with appropriate instructions,
duly executed by the Warrantholder or by its duly authorized attorney, at the
office of the Company, 0000 Xxxxxxxxxxxx Xxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxxx
00000, or at such other office or agency as the Company may designate. Upon
receipt of notice of exercise, the Company shall immediately instruct its
transfer agent to prepare certificates for the Securities to be received by the
Warrantholder upon completion of the Warrant exercise. When such certificates
are prepared, the Company shall notify the Warrantholder and deliver such
certificates to the Warrantholder or as per the Warrantholder's instructions
immediately upon payment in full by the Warrantholder, in lawful money of the
United States, of the Exercise Price payable with respect to the Securities
being
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purchased. If the Warrantholder shall represent and warrant that all applicable
registration and prospectus delivery requirements for their sale have been
complied with upon sale of the Securities received upon exercise of the Warrant,
such certificates shall not bear a legend with respect to the Securities Act of
1933.
If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form and
tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised. The Securities to be obtained on exercise of the Warrant
will be deemed to have been issued, and any person exercising the Warrants will
be deemed to have become a holder of record of those Securities, as of the date
of the payment of the Exercise Price.
3. Adjustments in Certain Events. The number, class, and price of
Securities for which this Warrant Certificate may be exercised are subject to
adjustment from time to time upon the happening of certain events as follows:
(a) If the outstanding shares of the Company's Common Stock
are divided into a greater number of shares or a dividend in stock is paid on
the Common Stock, the number of shares of Common Stock for which the Warrant is
then exercisable will be proportionately increased and the Exercise Price will
be proportionately reduced; and, conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the number
of shares of Common Stock for which the Warrant is then exercisable will be
proportionately reduced and the Exercise Price will be proportionately
increased. The increases and reductions provided for in this subsection 3(a)
will be made with the intent and, as nearly as practicable, the effect that
neither the percentage of the total equity of the Company obtainable on exercise
of the Warrants nor the price payable for such percentage upon such exercise
will be affected by any event described in this subsection 3(a).
(b) In case of any change in the Common Stock through merger,
consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company, or other
change in the capital structure of the Company, then, as a condition of such
change, lawful and adequate provision will be made so that the holder of this
Warrant Certificate will have the right thereafter to receive upon the exercise
of the Warrant the kind and amount of shares of stock or other securities or
property to which he would have been entitled if, immediately prior to such
event, he had held the number of shares of Common Stock obtainable upon the
exercise of the Warrant. In any such case, appropriate adjustment will be made
in the application of the provisions set forth herein with respect to the rights
and interest thereafter of the Warrantholder, to the end that the provisions set
forth herein will thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the exercise of the Warrant. The Company will not permit any change in its
capital structure to occur unless the issuer of the shares of stock or other
securities to be received by the holder of this Warrant Certificate, if not the
Company, agrees to be bound by and comply with the provisions of this Warrant
Certificate.
(c) When any adjustment is required to be made in the number
of shares of Common Stock, other securities, or the property purchasable upon
exercise of the Warrant, the
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Company will promptly determine the new number of such shares or other
securities or property purchasable upon exercise of the Warrant and (i) prepare
and retain on file a statement describing in reasonable detail the method used
in arriving at the new number of such shares or other securities or property
purchasable upon exercise of the Warrant and (ii) cause a copy of such statement
to be mailed to the Warrantholder within thirty (30) days after the date of the
event giving rise to the adjustment.
(d) No fractional shares of Common Stock or other securities
will be issued in connection with the exercise of the Warrant, but the Company
will pay, in lieu of fractional shares, a cash payment therefor on the basis of
the mean between the bid and asked prices of the Common Stock in the
over-the-counter market or the last sale price on a national securities exchange
or on The Nasdaq National Market on the day immediately prior to exercise.
(e) If securities of the Company or securities of any
subsidiary of the Company are distributed pro rata to holders of Common Stock,
such number of securities will be distributed to the Warrantholder or his
assignee upon exercise of his rights hereunder as such Warrantholder or assignee
would have been entitled to if this Warrant Certificate had been exercised prior
to the record date for such distribution. The provisions with respect to
adjustment of the Common Stock provided in this Section 3 will also apply to the
securities to which the Warrantholder or his assignee is entitled under this
subsection 3(e).
(f) Notwithstanding anything herein to the contrary, there
will be no adjustment made hereunder on account of the sale of the Common Stock
or other Securities purchasable upon exercise of the Warrant.
4. Reservation of Securities. The Company agrees that the number of
shares of Common Stock, Unit Warrants or other Securities sufficient to provide
for the exercise of the Warrant upon the basis set forth above will at all times
during the term of the Warrant be reserved for issuance upon exercise of the
Warrant.
5. Validity of Securities. All Securities delivered upon the
exercise of the Warrant will be duly and validly issued in accordance with their
terms, and the Company will pay all documentary and transfer taxes, if any, in
respect of the original issuance thereof upon exercise of the Warrant.
6. Registration of Securities Issuable on Exercise of Warrant
Certificate.
(a) The Company will register the Securities with the
Commission pursuant to the Act so as to allow the unrestricted sale of the
Securities to the public from time to time commencing on the first anniversary
of the Effective Date and ending at 5:00 p.m. Pacific Time on the fifth
anniversary of the Effective Date (the "Registration Period"). The Company will
also file such applications and other documents necessary to permit the sale of
the Securities to the public during the Registration Period in those states in
which the Units were qualified for sale in the Offering or such other states as
the Company and the Warrantholder agree to. In order to comply with the
provisions of this Section 6(a), the Company is not required to file more than
one registration statement. No registration right of any kind, "piggyback" or
otherwise, will last longer than five years
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from the Closing Date.
(b) The Company will pay all of the Company's Expenses and
each Warrantholder will pay its pro rata share of the Warrantholder's Expenses
relating to the registration, offer, and sale of the Securities.
(c) Except as specifically provided herein, the manner and
conduct of the registration, including the contents of the registration, will be
entirely in the control and at the discretion of the Company. The Company will
file such post-effective amendments and supplements as may be necessary to
maintain the currency of the registration statement during the period of its
use. In addition, if the Warrantholder participating in the registration is
advised by counsel that the registration statement, in their opinion, is
deficient in any material respect, the Company will use its best efforts to
cause the registration statement to be amended to eliminate the concerns raised.
(d) The Company will furnish to the Warrantholder the number
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Act, and such other documents as it may reasonably
request in order to facilitate the disposition of Securities owned by it.
(e) The Company will, at the request of Warrantholders holding
at least 50 percent of the then outstanding Warrants, (i) furnish an opinion of
the counsel representing the Company for the purposes of the registration
pursuant to this Section 6, addressed to the Warrantholders and any
Participating Underwriter, (ii) furnish an appropriate letter from the
independent public accountants of the Company, addressed to the Warrantholders
and any Participating Underwriter, and (iii) make representations and warranties
to the Warrantholders and any Participating Underwriter. A request pursuant to
this subsection (e) may be made on three occasions. The documents required to be
delivered pursuant to this subsection (e) will be dated within ten days of the
request and will be, in form and substance, equivalent to similar documents
furnished to the underwriters in connection with the Offering, with such changes
as may be appropriate in light of changed circumstances.
7. Indemnification in Connection with Registration.
(a) If any of the Securities are registered, the Company will
indemnify and hold harmless each selling Warrantholder, any person who controls
any selling Warrantholder within the meaning of the Act, and any Participating
Underwriter against any losses, claims, damages, or liabilities, joint or
several, to which any Warrantholder, controlling person, or Participating
Underwriter may be subject under the Act or otherwise; and it will reimburse
each Warrantholder, each controlling person, and each Participating Underwriter
for any legal or other expenses reasonably incurred by the Warrantholder,
controlling person, or Participating Underwriter in connection with
investigating or defending any such loss, claim, damage, liability, or action,
insofar as such losses, claims, damages, or liabilities, joint or several (or
actions in respect thereof), arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained, on the effective
date thereof, in any such registration statement or any preliminary prospectus
or final prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make
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the statements therein not misleading; provided, however, that the Company will
not be liable in any case to the extent that any loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any registration statement,
preliminary prospectus, final prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
by a Warrantholder for use in the preparation thereof. The indemnity agreement
contained in this subparagraph (a) will not apply to amounts paid to any
claimant in settlement of any suit or claim unless such payment is first
approved by the Company, such approval not to be unreasonably withheld.
(b) Each selling Warrantholder, as a condition of the
Company's registration obligation, will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed any registration
statement or other filing or any amendment or supplement thereto, and any person
who controls the Company within the meaning of the Act, against any losses,
claims, damages, or liabilities to which the Company or any such director,
officer, or controlling person may become subject under the Act or otherwise,
and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, or action,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in said registration statement, any preliminary
or final prospectus, or other filing, or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in said registration statement, preliminary or final prospectus, or other
filing, or amendment or supplement, in reliance upon and in conformity with
written information furnished by such Warrantholder for use in the preparation
thereof; provided, however, that the indemnity agreement contained in this
subparagraph (b) will not apply to amounts paid to any claimant in settlement of
any suit or claim unless such payment is first approved by the Warrantholder,
such approval not to be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under
subparagraphs (a) or (b) above of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, notify the indemnifying party of the commencement thereof;
but the omission to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party otherwise than under
subparagraphs (a) and (b).
(d) If any such action is brought against any indemnified
party and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party;
and after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
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8. Restrictions on Transfer. This Warrant Certificate and the
Warrant may not be sold, transferred, assigned or hypothecated for a one-year
period after the Effective Date except to underwriters of the Offering or to
individuals who are either a partner or an officer of such an underwriter or by
will or by operation of law. The Warrant may be divided or combined, upon
request to the Company by the Warrantholder, into a certificate or certificates
evidencing the same aggregate number of Warrants.
9. No Rights as a Shareholder. Except as otherwise provided herein,
the Warrantholder will not, by virtue of ownership of the Warrant, be entitled
to any rights of a shareholder of the Company but will, upon written request to
the Company, be entitled to receive such quarterly or annual reports as the
Company distributes to its stockholders.
10. Notice. Any notices required or permitted to be given hereunder
will be in writing and may be served personally or by mail; and if served will
be addressed as follows:
If to the Company:
0000 Xxxxxxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: President
If to the Warrantholder:
at the address furnished by the
Warrantholder to the Company for the
purpose of notice.
Any notice so given by mail will be deemed effectively given 48 hours
after mailing when deposited in the United States mail, registered or certified
mail, return receipt requested, postage prepaid and addressed as specified
above. Any party may by written notice to the other specify a different address
for notice purposes.
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11. Applicable Law. This Warrant Certificate will be governed by and
construed in accordance with the laws of the State of Oregon, without reference
to conflict of laws principles thereunder. All disputes relating to this Warrant
Certificate shall be tried before the courts of Oregon located in Multnomah
County, Oregon to the exclusion of all other courts that might have
jurisdiction.
Dated as of ________________, 1998
LEGACY BRANDS, INC.
By: ____________________________________
Its: ___________________________________
Agreed and Accepted as of _________, 1998.
XXXXXXX INVESTMENT COMPANY, INC.
By: ____________________________
Its: ___________________________
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