UNDERWRITERS’ WARRANT AGREEMENT
THIS
UNDERWRITER’S WARRANT AGREEMENT (the “Agreement”), dated as of [DATE], is made
and entered into by and between Xxxx’x, Inc., a Delaware corporation (the
“Company”), and Brookstreet Securities Corporation, a California corporation
(“Brookstreet”) and US EURO Securities, Inc., a California Corporation (“US
EURO”) (collectively, the “Underwriters” and, once they have received the
Warrants, each of them, a “Warrantholder”).
Concurrently
herewith, the Company is offering for sale, in a public offering (the
“Offering”) up to 2,000,000 shares of its Common Stock at a purchase price of
$4.00 per share. Brookstreet was the Managing Underwriter of the Offering
pursuant to an Underwriting Agreement dated approximately August 23, 2005 (the
“Brookstreet Underwriting Agreement”) between the Company and Brookstreet. The
Company sold 333,156 shares under the Brookstreet Underwriting Agreement. The
Brookstreet Underwriting Agreement was terminated on April 18, 2006. On
[DATE], the
Company entered into an Underwriting Agreement with the Underwriters with US
EURO becoming the Lead Managing Underwriter and Brookstreet becoming a
Co-Managing Underwriter (the “US EURO Underwriting Agreement” and collectively
with Brookstreet Underwriting Agreement, the “Underwriting Agreements”). The
Underwriting Agreements provide that, on consummation of the Offering, the
Company shall issue to the Underwriters warrants (the “Warrants”) entitling the
Underwriters to purchase, on the terms and conditions hereinafter set forth,
the
number of shares of Company common stock (the “Shares”) equal to 10% of the
shares sold by them in the Offering.
In
consideration of the foregoing and in satisfaction of the Company’s obligations
contained in the Underwriting Agreement and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
with respect thereto, the Company and the Underwriters, for value received,
hereby agree as follows:
Section
1.
Issuance
of Warrants; Transferability and Form of Warrants.
1.1 Issuance
of the Warrants.
The
Company agrees that on the Closing Date (as defined in the Underwriting
Agreements), the Company shall issue to the Underwriters the Warrants entitling
each of the Underwriters to purchase, on the terms and conditions hereinafter
set forth, the number of Shares equal to 10% of the Shares sold in the Offering,
subject to adjustment as set forth in Section 9 hereof. Each Warrant will
entitle the Warrantholder to purchase one share of the Company’s common stock,
at the Warrant Price (as defined in Section 7 hereof). The Warrants being sold
and issued pursuant to this Agreement shall be evidenced by a Warrant
Certificate substantially in the form of Exhibit A hereto (the “Warrant
Certificate”).
1.2 Registration.
The
Warrants shall be numbered and shall be registered on the books of the Company
when issued.
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1.3 Transferability.
The
Warrants may not be transferred other than to officers and employees of the
Underwriters who are also shareholders of the Underwriters, or by will, pursuant
to the laws of descent and distribution, or by the operation of
law.
1.4 Form
of Warrants.
The
text of the Warrants and of the form of election to purchase Shares shall be
substantially as set forth in Exhibit A attached hereto. The number of Shares
issuable upon exercise of the Warrants is subject to adjustment upon the
occurrence of certain events, all as hereinafter provided. The Warrants shall
be
executed on behalf of the Company by its President or by a Vice President.
A
Warrant bearing the signature of an individual who was at the time of signature
the proper officer of the Company shall bind the Company, notwithstanding that
such individual shall have ceased to hold such office prior to the delivery
of
such Warrant or did not hold such office on the date of this Agreement. The
Warrants shall be dated as of the date of signature thereof by the Company
either upon initial issuance or upon division, exchange, substitution or
transfer.
Section
2. Exchange
of Warrant Certificate.
Any
Warrant certificate may be exchanged for another certificate or certificates
entitling the Warrantholder to purchase a like aggregate number of Shares as
the
certificate or certificates surrendered then entitled such Warrantholder to
purchase. Any Warrantholder desiring to exchange a Warrant certificate shall
make such request in writing delivered to the Company, and shall surrender,
properly endorsed, with signatures guaranteed, the certificate evidencing the
Warrant to be so exchanged. Thereupon, the Company shall execute and deliver
to
the person or persons entitled thereto a new Warrant certificate as so
requested.
Section
3.
Term
of Warrants; Exercise of Warrants.
3.1 Subject
to the terms of this Agreement, each Warrantholder shall have the right, at
any
time during a five-year period commencing at 9:00 a.m., Los Angeles Time, on
the
date which is one year from the Closing Date and terminating on the fifth year
anniversary date of the Closing Date (the “Termination Date”), to purchase from
the Company up to the number of fully paid and nonassessable Shares to which
the
Warrantholder may at the time be entitled to purchase pursuant to this
Agreement, upon surrender to the Company, at its principal office, of the
certificate evidencing the Warrants to be exercised, together with the purchase
form on the reverse thereof duly filled in and signed, with signatures
guaranteed, and upon payment to the Company of the Warrant Price (as defined
in
and determined in accordance with the provisions of this Section 3 and
Section 7 hereof), for the number of Shares in respect of which such
Warrants are then exercised.
3.2 Payment
of the aggregate Warrant Price shall be made pursuant to Section 3.3 hereof.
Upon surrender of the Warrants and payment of such Warrant Price as aforesaid,
the Company shall issue and cause to be delivered with all reasonable dispatch
to or upon the written order of the Warrantholder, and in such name or names
as
the Warrantholder may designate in writing, a certificate or certificates for
the number of full Shares so purchased upon the exercise of the Warrant,
together with cash, as provided in Section 8 hereof, in respect of any
fractional Shares otherwise issuable upon such surrender. Such certificate
or
certificates shall be deemed to have been issued and any person so designated
to
be named therein shall be deemed to have become a holder of record of such
securities as of the date of surrender of the Warrants and payment of the
Warrant Price, notwithstanding that the certificate or certificates representing
such securities shall not actually have been delivered or that the stock
transfer books of the Company shall then be closed. The Warrants shall be
exercisable, at the election of each Warrantholder, either in full or from
time
to time in part and, in the event that a certificate evidencing the Warrants
is
exercised in respect of less than all of the Shares specified therein at any
time prior to the Termination Date, a new certificate evidencing the remaining
portion of the Warrants shall be issued by the Company to such
Warrantholder.
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3.3 Manner
of Exercising Warrant.
(a) In
order
to exercise this Warrant with respect to all or any part of the Shares for
which
this Warrant is at the time exercisable, Warrantholder (or any other person
or
persons exercising the Warrant) must take the following actions:
(i) Execute
and deliver to the Company a written notice of exercise stating the number
of
Shares being purchased (in whole shares only) and such other information set
forth on the form of Notice of Exercise attached hereto as Appendix A;
and
(ii) Pay
the
aggregate Exercise Price for the Shares in one or more of the following
forms:
(A) Cash
or
check made payable to the Company; or
(B) A
promissory note payable to the Company, but only to the extent authorized in
writing by the Company;
(C) In
shares
of common stock held by the Warrantholder (or any other person or persons
exercising the Warrant) for the requisite period necessary to avoid a charge
to
the Company’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(D) Through
a
special sale and remittance procedure pursuant to which the Warrantholder (or
any other person or persons exercising the Warrant) shall concurrently provide
irrevocable written instructions (a) to a Company-approved brokerage firm to
effect the immediate sale of the purchased shares and remit to the Company,
out
of the sale proceeds available on the settlement date, sufficient funds to
cover
the aggregate Exercise Price payable for the purchased shares plus all
applicable Federal, State and local income and employment taxes required to
be
withheld by the Company by reason of such exercise and (b) to the Company to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.
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(b) As
soon
as practical after the Exercise Date, the Company shall issue to or on behalf
of
the Warrantholder (or any other person or persons exercising this Warrant)
a
certificate for the purchased Shares, with the appropriate legends affixed
thereto.
(c) In
no
event may this Warrant be exercised for any fractional Shares.
Section
4.
Payment
of Taxes.
The
Company will pay all documentary stamp taxes, if any, attributable to the
initial issuance of the Warrants or the securities comprising the Shares;
provided, however, the Company shall not be required to pay any tax which may
be
payable in respect of any secondary transfer of the Warrants or the securities
comprising the Shares.
Section
5.
Mutilated
or Missing Warrants.
In case
the certificate or certificates evidencing the Warrants shall be mutilated,
lost, stolen or destroyed, the Company shall, at the request of the
Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed,
a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
and payment of the reasonable out of pocket expenses incurred by the Company
in
issuing a replacement Warrant Certificate.
Section
6.
Reservation
of Shares.
There
has been reserved, out of its authorized Capital Stock, such number of shares
of
common stock as shall be subject to purchase under the Warrants, and the Company
shall at all times keep reserved, for so long as any of the Warrants remain
outstanding, such shares of common stock that from time to time are, and such
additional Shares or other securities that, pursuant to Section 10 hereof,
become issuable on exercise of the Warrants.
Section
7. Warrant
Price.
The
price per Share at which Shares shall be purchasable upon the exercise of the
Warrants shall be $6.60, subject to any adjustments thereto required by this
Agreement (and as so adjusted, the “Warrant Price”).
Section
8.
Anti-dilution
Provisions.
The
Exercise Price of the Warrants shall be subject to adjustment from time to
time
as follows:
8.1 Stock
Splits and Dividends.
In the
event the Company should at any time or from time to time after the Purchase
Date, fix a record date for the effectuation of a split or subdivision of the
outstanding shares of common stock or the determination of holders of common
stock entitled to receive a dividend or other distribution payable in additional
shares of common stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of common stock (hereinafter referred to as “Common Stock Equivalents”)
without payment of any consideration by such holder for the additional shares
of
common stock or the Common Stock Equivalents (including the additional shares
of
common stock issuable upon exercise thereof), then, as of such record date
(or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Exercise Price of the Warrants shall be appropriately decreased
and the number of shares of common stock issuable on exercise of each Warrant
shall be increased in proportion to such increase of the aggregate number of
shares of common stock outstanding and those issuable with respect to such
Common Stock Equivalents.
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8.2 Reverse
Stock Splits. If
the
number of shares of common stock outstanding at any time after the Purchase
Date
is decreased by a combination of the outstanding shares of common stock, then,
following the record date of such combination, the Exercise Price for the
Warrants shall be appropriately increased and the number of shares of common
stock issuable on exercise of the Warrants shall be decreased in proportion
to
such decrease in outstanding shares.
Section
9.
Adjustment
of Number of Shares.
Unless
otherwise set forth in Section 8 of this Agreement, the number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant Price
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:
9.1 Par
Value of Shares of Common Stock.
Before
taking any action which would cause an adjustment effectively reducing the
portion of the Warrant Price allocable to each Share below the then par value
(if any) per share of the common stock issuable upon exercise of the Warrants,
the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable common stock upon exercise of the
Warrants.
9.2 Independent
Public Accountants.
The
Company may retain a firm of independent public accountants of recognized
national standing (which may be any such firm regularly employed by the Company)
to make any computation required under this Section 9, and a certificate signed
by such firm shall be conclusive evidence of the correctness of any computation
made under this Section 9.
9.3 Statement
on Warrant Certificates.
Irrespective of any adjustments in the number of Shares or other securities
issuable upon exercise of Warrants, Warrant certificates theretofore or
thereafter issued may continue to express the same number of securities as
are
stated in the similar Warrant certificates initially issuable pursuant to this
Agreement. However, the Company may, at any time in its sole discretion (which
shall be conclusive), make any change in the form of Warrant certificate that
it
may deem appropriate and that does not affect the substance thereof; and any
Warrant certificate thereafter issued, whether upon registration of transfer
of,
or in exchange or substitution for, an outstanding Warrant certificate, may
be
in the form so changed.
Section
10.
Fractional
Interests; Current Market Price.
The
Company shall not be required to issue fractional Shares on the exercise of
any
of the Warrants. If any fraction of a Warrant Share would, except for the
provisions of this Section 10, be issuable on the exercise of the Warrants
(or
any specified portion thereof being exercised), the Company shall pay to the
Warrantholder, in lieu of the issuance of such fractional Warrant Share, an
amount in cash equal to the then Current Market Price multiplied by such
fraction. For purposes of this Agreement, the term “Current Market Price” shall
mean (i) if the common stock is traded in the over-the-counter market and not
in
the Nasdaq National Market System nor on any national securities exchange,
the
average of the per share closing bid prices of the common stock on the 30
consecutive trading days immediately preceding the date in question, as reported
by Nasdaq or an equivalent generally accepted reporting service, or (ii) if
the
common stock is traded in the Nasdaq National Market System or on a national
securities exchange, the average for the 30 consecutive trading days immediately
preceding the date in question of the daily per share closing prices of the
common stock in the Nasdaq National Market System or on the principal stock
exchange on which it is listed, as the case may be. For purposes of clause
(i)
above, if trading in the common stock is not reported by Nasdaq, the bid price
referred to in said clause shall be the lowest bid price as reported in the
“pink sheets” published by National Quotation Bureau, Incorporated. The closing
price referred to in clause (ii) above shall be the last reported sale price
or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in either case in the Nasdaq National
Market System or on the national securities exchange on which the common stock
is then listed.
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Section
11.
No
Rights as Shareholder; Notices to Warrantholder.
Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or its transferees any rights as a shareholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter, unless and until
the
Warrantholder or such transferee (as the case may be) exercises the Warrants,
in
whole or in part, and pays the Warrant Price thereof to the Company.
Notwithstanding the foregoing, however, if at any time prior to the earlier
of
the expiration of the Warrants and or their exercise in full, any one or more
of
the following events shall occur:
(a) any
action which would require an adjustment pursuant to Sections 8.1 and 8.2;
or
(b) a
dissolution, liquidation or winding up of the Company (other than in connection
with a consolidation, merger or sale of its property, assets and business as
an
entirety or substantially as an entirety) shall be proposed;
then,
the
Company shall give notice in writing of such event to the Warrantholder, in
the
manner provided in Section 14 hereof, at least 20 days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to any relevant dividend, distribution,
subscription rights or other rights or for the determination of shareholders
entitled to vote on such proposed dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of closing of the transfer
books, as the case may be.
Section
12.
Indemnification.
12.1 Indemnification
of Warrantholder.
The
Company agrees to indemnify and hold harmless each Warrantholder and any holder
of Shares directly acquired from the Company by exercise of this Warrant (the
“Warrant Shareholder”) and each person, if any, who controls the Warrantholder
or any Warrant Shareholder within the meaning of the Act, against any losses,
claims, damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, reasonable costs of defense
and investigation and reasonable attorneys’ fees), to which such Warrantholder
or any Warrant Shareholder or such controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Company’s
registration statement, preliminary prospectus, final prospectus or 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 the statements therein not misleading; provided, however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in
such registration statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Warrantholder or any
Warrant Shareholder specifically for inclusion therein. This indemnity will
be
in addition to any liability which the Company may otherwise have.
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12.2
Indemnification
of the Company.
The
Warrantholder and the Warrant Shareholders agree that they will indemnify and
hold harmless the Company, each other person referred to in subparts (1), (2)
and (3) of Section 11(a) of the Act in respect of the registration statement
and
each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include but not be limited to, all costs of defense
and investigation and all attorneys’ fees) to which the Company or any such
director, officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
or any related preliminary prospectus, final prospectus or 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 in each case
only to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such registration statement,
preliminary prospectus, final prospectus or amendment or supplement thereto
in
reliance upon, and in conformity with, written information furnished to the
Company by the Warrantholder or such Warrant Shareholder specifically for
inclusion therein. This indemnity agreement will be in addition to any liability
which the Warrantholder or such Warrant Shareholder may otherwise
have.
12.3
Indemnification
Procedures.
Promptly after receipt by an indemnified party under this Section 12 of notice
of the commencement of any action, such indemnified party will, if a claim
in
respect thereof is to be made against the indemnifying party under this Section
12, notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve the indemnifying party
from
any liability which it may have to any indemnified party. In case any such
action is brought against any indemnified party, and it notifies the
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, reasonably assume the defense
thereof, subject to the provisions herein stated, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 12 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless the indemnifying party shall
not
pursue the action to its final conclusion. The indemnified party shall have
the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall not be at
the
expense of the indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the indemnified
party; provided, however, that if the indemnified party is a Warrantholder
or a
Warrant Shareholder or a person who controls a Warrantholder or a Warrant
Shareholder within the meaning of the Act, the reasonable fees and expenses
of
such counsel shall be at the expense of the indemnifying party if (i) the
employment of such counsel has been specifically authorized in writing by the
indemnifying party or (ii) the named parties to any such action, including
any
impleaded parties, include both a Warrantholder or a Warrant Shareholder or
such
controlling person and the indemnifying party and a Warrantholder or a Warrant
Shareholder or such controlling person shall have been advised by such counsel
that there may be one or more legal defenses available to a Warrantholder or
a
Warrant Shareholder or controlling person which are not available to or in
conflict with any legal defenses which may be available to the indemnifying
party (in which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of a Warrantholder or a Warrant Shareholder
or such controlling person, it being understood, however, that the indemnifying
party shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of
the same general allegations or circumstances, be liable for the reasonable
fees
and expenses of more than one separate firm of attorneys for the Warrantholder,
the Warrant Shareholders and controlling persons, which firm shall be designated
in writing by a majority in interest of such holders and controlling persons
based upon the value of the securities included in the registration statement).
No settlement of any action against an indemnified party shall be made without
the written consent of the indemnified and the indemnifying parties, which
shall
not be unreasonably withheld in light of all factors of importance to such
parties.
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Section
13.
Contribution.
In
order to provide for just and equitable contribution under the Act in any case
in which (i) a Warrantholder, a Warrant Shareholder or controlling person makes
a claim for indemnification pursuant to Section 12 hereof but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 12 hereof
provide for indemnification in such case or (ii) contribution under the Act
may
be required on the part of any Warrantholder, Warrant Shareholder or controlling
person, then the Company and any Warrantholder, Warrant Shareholder or
controlling person shall contribute to the aggregate losses, claims, damages
or
liabilities to which they may be subject (which shall, for all purposes of
this
Agreement, include, but not be limited to, all reasonable costs of defense
and
investigation and all reasonable attorneys’ fees), in either such case (after
contribution from others) on the basis of relative fault as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by the Company on the one hand or a
Warrantholder, Warrant Shareholder or controlling person on the other and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and such
Warrantholder or Warrant Shareholder or controlling persons agree that it would
not be just and equitable if contribution pursuant to this Section 13 were
determined by pro rata allocation or by any other method which does not take
account of the equitable considerations referred to in this Section 13. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above
in this Section 13 shall be deemed to include legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8
Section
14.
Notices.
Any
notice pursuant to this Agreement by the Company or by a Warrantholder or a
holder of Shares shall be in writing and shall be deemed to have been duly
given
on the date of delivery or refusal indicated on the return receipt if delivered
or mailed by certified mail, return receipt requested:
14.1
Warrantholder
Address.
If to
the Warrantholder or a holder of Shares, addressed to the holder listed on
the
transfer letter for the warrants at the final closing.
14.2
Company
Address.
If to
the Company, addressed to it at Xxxx’x, Inc., 00000 Xxxxx Xxxxxx Xxxxxx, Xxx
Xxxxxxx, XX 00000, Attn: Xxxxxxxxxxx X. Xxxx.
Each
party may from time to time change the address to which notices to it are to
be
delivered or mailed hereunder by notice in accordance herewith to the other
party.
Section
15.
Survival
of Representations and Warranties.
All
statements contained in any schedule, exhibit, certificate or other instrument
delivered by or on behalf of the parties hereto, or in connection with the
transactions contemplated by this Agreement, shall be deemed to be
representations and warranties hereunder. Notwithstanding any investigations
made by or on behalf of the parties to this Agreement, all representations,
warranties and agreements made by the parties to this Agreement or pursuant
hereto shall survive.
Section
16.
Miscellaneous.
16.1
Applicable
Law.
This
Agreement shall be deemed to be a contract made under the laws of the State
of
California and for all purposes shall be construed in accordance with the laws
of said State.
16.2
Jurisdiction.
The
parties submit to the jurisdiction of the Courts of the County of Orange, State
of California or a Federal Court empanelled in the Central District of the
State
of California for the resolution of all legal disputes arising under the terms
of this Agreement, including, but not limited to, enforcement of any arbitration
award.
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16.3
Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company,
or the Warrantholder or Warrant Shareholder shall bind and inure to the benefit
of their respective successors and assigns hereunder. Notwithstanding the
foregoing, however, nothing in this Agreement shall be construed to give to
any
person or corporation other than the Company, the Warrantholder, the Warrant
Shareholder and their respective permitted transferees (other than transferees
who acquire any Shares that are free of restrictions on transfer under this
Agreement and under the Act), any legal or equitable right, remedy or claim
under this Agreement. This Agreement shall be for the sole and exclusive benefit
of the Company, the Warrantholder and the Warrant Shareholder and such permitted
transferees (other than transferees who acquire any Shares that are free of
restrictions on transfer under this Agreement and under the Act).
16.4
Amendments.
This
Agreement may be amended only by a written instrument executed by duly
authorized representatives of the Company and the Warrantholder.
16.5
Severability.
In the
event any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision, but only to
the
extent necessary to cure the infirmity that caused such provision to be held
illegal, unenforceable or void.
16.6
Interpretation.
This
Agreement is the result of arms’-length negotiations between the parties hereto
and no provision hereof, because of any ambiguity found to be contained in
any
of the provisions hereof, shall be construed against a party by reason of the
fact that such party or its legal counsel was the draftsman of those provisions.
Unless otherwise indicated elsewhere in this Agreement, (i) the term “or” shall
not be exclusive, (ii) the term “including” shall mean “including, but not
limited to,” and (iii) unless the context indicates otherwise the terms
“herein,” “hereof,” “hereto,” “hereunder” and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific section,
subsection, paragraph or clause where such terms may appear.
16.7
Attorney
Fees.
In the
event any Party hereto shall commence legal proceedings against the other to
enforce the terms hereof, or to declare rights hereunder, as the result of
a
breach of any covenant or condition of the Agreement, the prevailing party
in
any such proceeding shall be entitled to recover from the losing party its
costs
of suit, including reasonable attorneys’ fees, as may be fixed by the
court.
16.8
Headings.
The
captions or headings of the sections and subsections of this Agreement are
for
convenience of reference only and shall be disregarded in interpreting,
construing or applying any of the provisions of this Agreement.
16.9
Counterparts.
This
Agreement may be executed in separate counterparts, each of which shall be
an
original of and all of which together shall constitute one and the same
instrument.
10
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed,
all
as of the day and year first above written.
| XXXX’X, INC. | ||
|
By: Xxxxxxxxxxx X. Xxxx |
||
| Its: President, CEO and Chairman of the Board | ||
| US EURO SECURITIES, INC. | BROOKSTREET SECURITIES CORPORATION | |
|
By: Xxxxxxx Xxx Xxxxxx |
By: Xxxxxxxx X. XxXxxxxxx |
|
|
Its:
President
|
Its: Executive Vice President |
11
Exhibit
A
Warrant
Certificate No. _____
UNDERWRITER
WARRANTS TO PURCHASE ___________ SHARES OF COMMON STOCK
XXXX’X,
INC.,
A
DELAWARE CORPORATION
This
certifies that, for value received, ________________________,
a California corporation, the registered holder hereof or assigns (the
“Warrantholder”), is entitled to purchase from Xxxx’x, Inc. (the “Company”), at
any time prior to [DATE],
at the
purchase price per share of $6.60 (the “Warrant Price”), the number of Shares of
Common Stock of the Company set forth above (the “Shares”). The number of Shares
issuable upon exercise of each Warrant evidenced hereby and the Warrant Price
shall be subject to adjustment from time to time as set forth in the
Underwriter’s Warrant Agreement referred to below.
The
Warrants evidenced hereby represent the right to purchase an aggregate of up
to
__________ Shares, subject to certain adjustments, and are issued under
and in accordance with a Underwriters’ Warrant Agreement, dated as of [DATE]
(the “Underwriters’ Warrant Agreement”), among the Company, Brookstreet
Securities Corporation and US EURO Securities, Inc. and are subject to the
terms
and provisions contained in the Underwriters’ Warrant Agreement, all of which
the Warrantholder by acceptance hereof consents. All capitalized terms in this
Warrant Certificate, to the extent not otherwise defined herein, shall have
the
meaning assigned to such terms in the Underwriters’ Warrant
Agreement.
The
Warrants evidenced hereby may be exercised in whole or in part by presentation
of this Warrant Certificate with the Purchase Form attached hereto duly executed
(with a signature guarantee as provided thereon) and simultaneous payment of
the
Warrant Price at the principal office of the Company. Payment of such price
shall be made by the Warrantholder in cash, by check, or any combination
thereof.
Upon
any
partial exercise of the Warrants evidenced hereby, there shall be signed and
issued to the Warrantholder a new Warrant Certificate in respect of the Shares
as to which the Warrants evidenced hereby shall not have been exercised. These
Warrants may be exchanged at the office of the Company by surrender of this
Warrant Certificate properly endorsed for one or more new Warrants of the same
aggregate number of Shares as evidenced by the Warrant or Warrants exchanged.
No
fractional Shares of Common Stock will be issued upon the exercise of rights
to
purchase hereunder, but the Company shall pay the cash value of any fraction
upon the exercise of one or more Warrants. These Warrants are transferable
at
the office of the Company in the manner and subject to the limitations set forth
in the Underwriters’ Warrant Agreement.
This
Warrant Certificate does not entitle any Warrantholder to any of the rights
of a
stockholder of the Company unless and until the Warrantholder exercises its
rights to purchase Shares hereunder.
Dated:
____________
Xxxx’x,
Inc.
_____________________________________
By:
__________________________________
Its:
__________________________________
12
PURCHASE
FORM
Xxxx’x,
Inc.
00000
Xxxxx Xxxxxx Xxxxxx
Xxx
Xxxxxxx, XX 00000
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
____________ Shares of Common Stock (the “Shares”) provided for therein, and
requests that certificates for the Shares be issued in the name of:
(Please
Print or Type Name)
(Address,
including zip code)
(Social
Security No. or Tax I.D. No.)
and,
if
said number of Shares shall not be all the Shares purchasable hereunder, that
a
new Warrant Certificate for the balance of the Shares purchasable under the
within Warrant Certificate be registered in the name of the undersigned
Warrantholder or his Assignee as below indicated and delivered to the address
stated below.
| Name of Warrantholder | ||
| or Assignee: |
(Please Print) |
|
| Address: |
|
|
|
|
||
| Signature: |
|
Dated:
|
|
|
Note:
The
above signature must correspond with the name as written upon the face of this
Warrant Certificate in every particular, without alteration or enlargement
or
any change whatever, unless these Warrants have been assigned.
13
ASSIGNMENT
(To
be
signed only upon assignment of Warrants)
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto the assignee
named below all of the rights of the undersigned represented by the attached
Warrant with respect to the number of Shares covered by the Warrant set forth
below:
(Name
and
Address of Assignee Must Be Printed or Typewritten)
| Name of Assignee |
Social Security No.
or Tax ID No.
|
Address |
No. of
Shares
|
and
does
hereby irrevocably constitute and appoint _________________________________
Attorney to transfer said Warrants on the books of the Company, with full power
of substitution in the premises.
| Dated: _____________________________ | _______________________________ | |
|
|
Signature
of Registered Holder
|
|
Note: The
signature on this assignment must correspond with the name as it appears upon
the face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
14
