EXHIBIT 10.2
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LEXINGTON PRECISION CORPORATION
and
WILMINGTON TRUST COMPANY
--------------------------------
WARRANT AGENT AGREEMENT
Dated as of December 18, 2003
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WARRANT AGENT AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1. Appointment of Warrant Agent.................................................... 1
SECTION 2. Warrant Certificates............................................................ 2
SECTION 3. Execution of Warrant Certificates............................................... 2
SECTION 4. Registration and Countersignature............................................... 2
SECTION 5. Registration of Transfers and Exchanges......................................... 2
(a) Transfer.......................................................... 2
(b) Exchange.......................................................... 3
(c) Countersignature.................................................. 3
SECTION 6. Terms and Release of Warrants................................................... 3
(a) Terms of Warrants................................................. 3
(b) Exercise of Warrants.............................................. 3
(c) Cancellation of Warrants.......................................... 3
(d) Inspection by Holders............................................. 4
SECTION 7. Payment of Taxes................................................................ 4
SECTION 8. Mutilated or Missing Warrant Certificates....................................... 4
SECTION 9. Reservation of Warrant Shares................................................... 4
SECTION 10. Adjustment of Number of Warrant Shares.......................................... 4
(a) Notice of Adjustment.............................................. 4
(b) Warrant Agent's Disclaimer........................................ 5
SECTION 11. Fractional Interests........................................................... 5
SECTION 12. Notices to Warrant holders; No Rights as Shareholders.......................... 5
SECTION 13. Merger, Consolidation, or Change of Name of Warrant Agent...................... 5
SECTION 14. Warrant Agent.................................................................. 6
(a) Correctness of Statements......................................... 6
(b) Breach of Covenants............................................... 6
(c) Reliance on Counsel............................................... 6
(d) Reliance on Documents............................................. 6
(e) Compensation...................................................... 6
(f) Legal Proceedings................................................. 7
(g) Other Transactions in Securities of the Company................... 7
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(h) Liability of Warrant Agent........................................ 7
(i) Adjustment of Exercise Price...................................... 7
(j) Written Instructions.............................................. 8
(k) Proper Execution.................................................. 8
SECTION 15. Change of Warrant Agent........................................................ 8
SECTION 16. Notices to Company and Warrant Agent........................................... 8
SECTION 17. Supplements and Amendments..................................................... 9
SECTION 18. Successors..................................................................... 9
SECTION 19. Termination.................................................................... 9
SECTION 20. Governing Law.................................................................. 9
SECTION 21. Benefits of This Agreement..................................................... 10
SECTION 22. Counterparts................................................................... 10
Exhibits
Exhibit A Form of Warrant Certificate
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WARRANT AGENT AGREEMENT dated as of December 18, 2003 between
Lexington Precision Corporation, a Delaware corporation (the "COMPANY"), and
Wilmington Trust Company, a Delaware banking corporation, as Warrant Agent (the
"WARRANT AGENT").
WHEREAS, the Company intends to issue common stock purchase
warrants (the "WARRANTS") to holders of the Company's 12 3/4% Senior
Subordinated Notes due February 1, 2000 (the "OLD NOTES"), which, in the
aggregate, entitle the holders thereof to purchase up to [423,923] shares of
common stock of the Company, par value $.25 per share (the "COMMON STOCK"),
during the period from August 1, 2005, through August 1, 2009 (the Common Stock
issuable on exercise of the Warrants being referred to herein as the "WARRANT
SHARES"), in connection with an Exchange Offer (the "EXCHANGE OFFER"), whereby
the Company is seeking tenders of the Old Notes in exchange for units,
consisting of new 12% Senior Subordinated Notes due August 1, 2009 (the "NEW
NOTES"), and the Warrants (collectively with the New Notes, the "UNITS").
WHEREAS, the Company intends to issue Warrants to holders of
the Company's 14% Junior Subordinated Notes due August 1, 2001 (the "OLD JUNIOR
NOTES"), which in the aggregate, entitle the holders thereof to purchase up to
3,467 Warrant Shares during the period from August 1, 2005, through August 1,
2009, in connection with the Exchange Offer, whereby the Exchange Offer will not
be consummated unless, prior to or simultaneous therewith, as one of the
conditions to the Exchange Offer, the Company's Old Junior Notes have been
exchanged for units, consisting of new 13% Junior Subordinated Notes due
November 1, 2009 (the "NEW JUNIOR NOTES") and Warrants (collectively with the
New Junior Notes, the "JUNIOR NOTE UNITS").
WHEREAS, prior to August 1, 2005, the Warrants and the New
Notes or the New Junior Notes will be transferable only as a Unit or Junior Note
Unit. If any or all of the New Notes or the New Junior Notes are redeemed by the
Company prior to August 1, 2005, the Warrants attached to those New Notes or New
Junior Notes, respectively will revert to the Company for no further
consideration and will be cancelled.
WHEREAS, the terms and conditions of the Exchange Offer are as
set forth in an Amended Offering Circular dated March 7, 2003, as amended on
September 18, 2003, and as otherwise extended, amended or supplemented through
the date of this Warrant Agent Agreement (the "OFFERING CIRCULAR") and the
related Letter of Transmittal. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Offering Circular.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, transfer, exchange, and exercise of Warrants and other
matters as provided herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Warrant Certificates. The certificates evidencing
the Warrants (the "WARRANT CERTIFICATES") to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in Exhibit A attached hereto.
SECTION 3. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or a Vice President and by its Secretary or an Assistant
Secretary. Each such signature upon the Warrant Certificates may be in the form
of a facsimile signature of the present or any future Chairman of the Board,
President, Vice President, Secretary, or Assistant Secretary and may be
imprinted or otherwise reproduced on the Warrant Certificates and for that
purpose the Company may adopt and use the facsimile signature of any person who
shall have been Chairman of the Board, President, Vice President, Secretary, or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered he or she shall have ceased to
hold such office.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before such Warrant
Certificates shall have been countersigned by the Warrant Agent, such Warrant
Certificates nevertheless may be countersigned and delivered as though such
person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agent Agreement any such person was not such
officer.
SECTION 4. Registration and Countersignature. The Warrant
Agent shall number and register the Warrants in a Warrant Register, to be
maintained by the Warrant Agent as Warrants are issued.
Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President, a Vice President, the Treasurer, or the Chief Financial Officer
of the Company, initially countersign, issue, and deliver Warrant Certificates
collectively for all Warrants outstanding entitling the holders thereof to
purchase not more than the number of Warrant Shares referred to above in the
first recital hereof and shall countersign and deliver Warrants as otherwise
provided in this Agreement.
The Company and the Warrant Agent may deem and treat the
registered holder(s) of each Warrant Certificate as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for all purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.
SECTION 5. Registration of Transfers and Exchanges.
(a) Transfer. The Warrant Agent shall, subject to the
limitations of Section 6 hereof and upon satisfaction of the terms and
conditions set forth in the Warrant Certificate, register the transfer of any
outstanding Warrant Certificate in the Warrant Register. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the
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surrendered Warrant Certificate shall be cancelled by the Warrant Agent.
Cancelled Warrant Certificates shall thereafter be disposed of by the Warrant
Agent in its customary manner.
(b) Exchange. Subject to the terms of this Agreement,
Warrant Certificates may be exchanged at the option of the holder(s) thereof,
when surrendered to the Warrant Agent at its principal office, for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants. Any holder desiring to exchange a
Warrant Certificate shall deliver a written request to the Warrant Agent, and
shall surrender, duly endorsed or accompanied (if so required by the Warrant
Agent) by a written instrument or instruments of transfer in form satisfactory
to the Warrant Agent, the Warrant Certificate or Warrant Certificates to be so
exchanged. Warrant Certificates surrendered for exchange shall be cancelled by
the Warrant Agent. Such cancelled Warrant Certificates shall then be disposed of
by the Warrant Agent in its customary manner.
(c) Countersignature. The Warrant Agent is hereby
authorized to countersign, in accordance with the provisions of this Section 5
and of Section 4 hereof, the new Warrant Certificates required pursuant to the
provisions of this Section 5.
SECTION 6. Terms and Release of Warrants.
(a) Terms of Warrants. The terms of the Warrants shall be
as set forth in the Warrant Certificate.
(b) Exercise of Warrants. A Warrant may be exercised by
the holder thereof as set forth in the Warrant Certificate. In the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new Warrant Certificate evidencing the remaining
Warrant or Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant Certificate or
Certificates pursuant to the provisions of this Section 6 and of Section 4
hereof, and the Company, whenever required by the Warrant Agent, shall supply
the Warrant Agent with Warrant Certificates duly executed on behalf of the
Company for such purpose. The Warrant Agent may assume that any Warrant
presented for exercise is permitted to be so exercised under applicable law and
shall have no liability for acting in reliance on such assumption.
(c) Cancellation of Warrants. (i) All Warrant
Certificates surrendered upon exercise of Warrants shall be canceled by the
Warrant Agent. Such canceled Warrant Certificates shall then be disposed of by
the Warrant Agent in its customary manner. The Warrant Agent shall account to
the Company promptly with respect to Warrants exercised and concurrently pay to
the Company all monies received by the Warrant Agent for the purchase of the
Warrant Shares through the exercise of such Warrants.
(ii) Additionally, if any or all of the New Notes or the
New Junior Notes are redeemed by the Company prior to August 1, 2005, the
Warrants attached to those New Notes or New Junior Notes, respectively, will
revert to the Company for no further consideration and will be canceled.
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(d) Inspection by Holders. The Warrant Agent shall keep
copies of this Agreement and any notices given or received hereunder available
for inspection by the holders with reasonable prior written notice during normal
business hours at its office. The Company shall supply the Warrant Agent from
time to time with such number of copies of this Agreement as the Warrant Agent
may request.
SECTION 7. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue of any Warrant Certificates or any certificates for
Warrant Shares in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such Warrant Certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 8. Mutilated or Missing Warrant Certificates. In case
any of the Warrant Certificates shall be mutilated, lost, stolen, or destroyed,
the Company shall issue and the Warrant Agent shall countersign a new Warrant
Certificate upon the terms and conditions set forth in the Warrant Certificate.
SECTION 9. Reservation of Warrant Shares. The Company will
reserve and keep available, as set forth in the Warrant Certificate, a number of
shares of Common Stock sufficient for the exercise of the Warrants. The Warrant
Agent shall have no duty to verify availability of such shares set aside by the
Company.
The Company will keep a copy of this Agreement on file with
the transfer agent for the Common Stock (the "TRANSFER AGENT") and with every
subsequent transfer agent for the Common Stock. The Warrant Agent is hereby
authorized to requisition from time to time from the Transfer Agent the stock
certificates required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply the
Transfer Agent with duly executed certificates for such purpose and will provide
or otherwise make available any cash that may be payable as provided in Section
11 hereof. The Company will furnish to the Transfer Agent a copy of all notices
of adjustments and certificates related thereto, transmitted to each holder
pursuant to Section 13 hereof.
SECTION 10. Adjustment of Number of Warrant Shares. The number
of Warrant Shares issuable upon the exercise of each Warrant, the exercise price
(the "Exercise Price"), and the kind of securities purchasable upon exercise of
the Warrants is subject to adjustment from time to time as set forth in the
Warrant Certificate and upon the occurrence of the events seth forth therein.
(a) Notice of Adjustment. Whenever the number of shares
of Common Stock issuable upon exercise of each Warrant is adjusted, the Company
shall provide notices thereof as required by the Warrant Certificate.
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(b) Warrant Agent's Disclaimer. The Warrant Agent has no
duty to determine when an adjustment under this Section 10 should be made, how
it should be made, or what it should be. The Warrant Agent makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Section.
SECTION 11. Fractional Interests. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants except
as set forth in the Warrant Certificates.
SECTION 12. Notices to Warrant holders; No Rights as
Shareholders . Upon any adjustment of the Exercise Price pursuant to Section 10
herein, the Company shall give notice of such adjustment as set forth in the
Warrant Certificate. The Warrant Agent shall be fully protected in relying on
any such notice provided to it pursuant to this Section 12 and on any adjustment
therein contained and shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such notice.
In the event:
(a) the Company shall declare any dividend or
distribution payable to the holders of its Common Stock; or
(b) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation or
merger of the Company with, or sale of all or substantially all of the assets of
the Company to, another corporation or business organization; or
(c) of the voluntary or involuntary dissolution,
liquidation, or winding up of the Company,
then the Company shall provide notice to the Warrant Agent and the holders of
the Warrant Certificates as set forth in the Warrant Certificates.
The holders of the Warrants shall have no rights as
shareholders of the Company, except as set forth in the Warrant Certificates.
SECTION 13. Merger, Consolidation, or Change of Name 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, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the necessity for the execution or filing of any
document or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor warrant
agent under the provisions of Section 15. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, any of
the Warrant Certificates shall have been countersigned but not delivered, any
such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in
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the name of the successor to the Warrant Agent; and in all such cases such
Warrant Certificates shall have the full force and effect provided in the
Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign the Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 14. Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement (and no implied duties or
obligations shall be read into this Agreement against the Warrant Agent) upon
the following terms and conditions, by all of which the Company and the holders
of Warrants, by their acceptance thereof, shall be bound:
(a) Correctness of Statements. The statements contained
herein and in the Warrant Certificates shall be taken as statements of the
Company and the Warrant Agent assumes no responsibility for the correctness of
any of the same except such as describe the Warrant Agent or action taken or to
be taken by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrant Certificates except as otherwise provided herein.
(b) Breach of Covenants. The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to be complied with
by the Company.
(c) Reliance on Counsel. The Warrant Agent may consult at
any time with counsel of its own selection (who may be counsel for the Company)
and the Warrant Agent shall incur no liability or responsibility to the Company
or to any holder of a Warrant Certificate in respect of any action taken,
suffered, or omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
(d) Reliance on Documents. The Warrant Agent shall incur
no liability or responsibility to the Company or to any holder of any Warrant
Certificate for any action taken in reliance on any Warrant Certificate,
certificate of shares, notice, resolution, waiver, consent, order, certificate,
or other paper, document, or instrument (whether in its original or facsimile
form) believed by it to be genuine and to have been signed, sent, or presented
by the proper party or parties.
(e) Compensation. The Company agrees to pay to the
Warrant Agent such compensation for all services rendered by the Warrant Agent
while this Agreement is in effect in the administration and execution of this
Agreement as set forth in Schedule I attached hereto, to reimburse the Warrant
Agent for all expenses, taxes, and governmental charges and other charges of any
kind and nature incurred by the Warrant Agent in the execution of this Agreement
(including the reasonable fees and expenses of its counsel) and to indemnify the
Warrant Agent, defend it from and save it harmless against any and all claims
(whether asserted by the Company, a registered holder, or any other person),
damages, losses, expenses (including taxes
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other than taxes based on the income of the Warrant Agent), liabilities,
including judgments, costs, and reasonable counsel fees and expenses, for
anything done or omitted by the Warrant Agent in the execution of this Agreement
except as a result of the Warrant Agent's gross negligence or willful
misconduct. The provisions of this Section 14(e) shall survive the expiration of
the Warrants, the termination of this Agreement and the resignation or removal
of the Warrant Agent, such that the Warrant Agent shall continue to enjoy the
provisions of this Section 14(e) if it resigns or is removed.
(f) Legal Proceedings. The Warrant Agent shall be under
no obligation to institute any action, suit, or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more
registered holders of Warrant Certificates shall furnish the Warrant Agent with
security and indemnity reasonably satisfactory to it for any costs and expenses
that may be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as it may consider proper, with or without any
such security or indemnity. All rights of action under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the possession
of any of the Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit, or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrants, as their respective rights or interests may appear.
(g) Other Transactions in Securities of the Company. The
Warrant Agent, and any of its stockholders, directors, officers or employees,
may buy, sell, or deal in the Warrants or any other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company, or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) Liability of Warrant Agent. The Warrant Agent shall
act hereunder solely as agent for the Company, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not be
liable for anything that it may do or refrain from doing in connection with this
Agreement except for its own gross negligence or willful misconduct.
(i) Adjustment of Exercise Price. The Warrant Agent shall
not at any time be under any duty or responsibility to any holder of a Warrant
Certificate to make or cause to be made any adjustment of the Exercise Price or
the number of Warrant Shares or other securities or property deliverable as
provided in this Agreement, or to determine whether any facts exist that may
require any such adjustment, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value or the kind or amount of Warrant Shares or any other securities or
property that may at any time be issued or delivered upon the exercise of a
Warrant or with respect to whether any Warrant Shares or any such other
securities or property will, when issued, be validly issued, fully paid, and
nonassessable, and makes no representation with respect thereto.
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(j) Written Instructions. Any application by the Warrant
Agent for written instructions from the Company may, at the option of the
Warrant Agent, set forth in writing any action proposed to be taken or omitted
by the Warrant Agent under this Agreement and the date on and/or after which
such action shall be taken or such omission shall be effective. The Warrant
Agent shall not be liable for any action or any omission to act in accordance
with a proposal included in such application on or after the date specified in
such application (which date shall not be less than three Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to any earlier date) unless
prior to acting or omitting to take any action, the Warrant Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(k) Proper Execution. In addition to the foregoing, the
Warrant Agent shall be protected and shall incur no liability for, or in respect
of, any of its actions or omissions to act in connection with its administration
of this Agreement if such acts or omissions are in reliance upon (i) the proper
execution of the form of Notice of Exercise and the form of Investment
Representation Statement and attached as Exhibits 1 and 2, respectively, to
Exhibit A hereto, unless the Warrant Agent shall have actual knowledge that, as
executed, such certificate is untrue, or (ii) the non-execution of such
certificate including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution.
SECTION 15. Change of Warrant Agent. If the Warrant Agent
shall become incapable of acting as Warrant Agent, it may resign by giving 30
days written notice to the Company and the Company shall appoint a successor to
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 incapacity by
the Warrant Agent, the registered holder of any Warrant Certificate may apply to
any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor to the Warrant Agent, either
by the Company or by such a court, the duties of the Warrant Agent shall be
carried out by the Company. The Company shall be entitled, upon 30 days prior
written notice to the Warrant Agent, to remove the Warrant Agent and appoint a
successor to the Warrant Agent. After appointment, the successor to the Warrant
Agent shall be vested with the same powers, rights, duties, and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall promptly deliver and transfer to the
successor to the Warrant Agent any property at the time held by it hereunder and
execute and deliver any further assurance, conveyance, act, or deed necessary
for the purpose. Failure to give any notice provided for in this Section 15,
however, or any defect therein, shall not affect the legality or validity of the
appointment of a successor to the Warrant Agent.
SECTION 16. Notices to Company and Warrant Agent. Any notice
or demand authorized by this Agreement to be given to or made on the Company by
the Warrant Agent or by the registered holder of any Warrant Certificate shall
be sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
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Lexington Precision Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
The Company shall promptly notify the Warrant Agent in the
event the Company ceases to maintain such office or agency and of any change in
the location thereof. In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof to any registered holder, presentations may be made and notices
and demands may be served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given to the
Warrant Agent by the Company or by the registered holder(s) of any Warrant
Certificate shall be sufficiently given when and if deposited in the mail,
first-class or registered, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
SECTION 17. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of the holders of Warrant Certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder that the Company
and the Warrant Agent may deem necessary or desirable and that shall not in any
way adversely affect the interests of the holders of the Warrant Certificates.
Notwithstanding anything in this Agreement to the contrary, the prior written
consent of the Warrant Agent must be obtained in connection with any supplement
or amendment that alters the rights or duties of the Warrant Agent. The Company
and the Warrant Agent may amend any provision herein with the consent of the
holders of Warrants exercisable for a majority of the Warrant Shares issuable on
exercise of all outstanding Warrants.
SECTION 18. 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
hereunder.
SECTION 19. Termination. This Agreement will terminate on
August 1, 2009, or if earlier, the date on which all of the Warrants shall have
been exercised. The provisions of Section 14 hereof shall survive such
termination.
SECTION 20. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be construed in
accordance with the internal laws of said state.
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SECTION 21. Benefits of This Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company, the Warrant Agent, and the registered holders of the Warrant
Certificates any legal or equitable right, remedy, or claim under this
Agreement, and this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent, and the registered holders of the Warrant
Certificates.
SECTION 22. Counterparts. This Agreement may be executed in
any number of counterparts, 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
LEXINGTON PRECISION CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
WILMINGTON TRUST COMPANY
By: /s/ Xxxxx X. XxXxxxxx
-------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Authorized Signer
EXHIBIT A
CUSIP: 529529 12 5 WARRANT NO. LW- ___
[The following legend is to be inserted only in the Warrant to be
issued to Cede & Co.:
UNLESS THIS WARRANT IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO LEXINGTON PRECISION CORPORATION OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUIRED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[The following legend is to be inserted only upon issuance or transfer
of the warrant to an affiliate of the Company or upon receipt by the Warrant
Agent of documentation from the Company stating that the holder is believed to
be an affiliate of the Company:
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION. THIS WARRANT SHALL NOT BE TRANSFERRED OR PLEDGED EXCEPT IN
ACCORDANCE WITH SECTION 9 HEREOF.]
THIS WARRANT, AND THE NOTE ATTACHED HERETO, SHALL CONSTITUTE A UNIT.
THIS WARRANT WILL NOT BE DETACHABLE FROM THE NOTE UNTIL AUGUST 1, 2005, AND THIS
WARRANT AND THE NOTE WILL ONLY BE TRANSFERABLE AS A UNIT PRIOR TO THAT TIME. IF
THE NOTE IS REDEEMED BY THE COMPANY PRIOR TO AUGUST 1, 2005, THIS WARRANT WILL
REVERT TO THE COMPANY FOR NO FURTHER CONSIDERATION AND WILL BE CANCELED. THE
UNIT MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, HYPOTHECATED,
MORTGAGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 9 HEREOF.
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LEXINGTON PRECISION CORPORATION
WARRANT TO PURCHASE COMMON STOCK
($3.50 Per Share*)
This certifies that, for value received, ____________________ (the
"holder") is entitled to subscribe for and purchase up to __________ shares* of
fully paid and nonassessable Common Stock of Lexington Precision Corporation, a
Delaware corporation (the "Company"), at the price specified in Section 2 (the
"Warrant Price"), subject to the provisions and upon the terms and conditions
hereinafter set forth.
This Warrant is issued under and in accordance with a Warrant Agent
Agreement dated as of December __, 2003, between the Company and Wilmington
Trust Company, as Warrant Agent (the "Warrant Agent Agreement"), and is subject
to the terms and provisions contained in the Warrant Agent Agreement. By
acceptance of this Warrant the Holder hereof consents to all the terms and
provision contained in the Warrant Agent Agreement. A copy of the Warrant Agent
Agreement may be obtained by the Holder of the Warrant upon written request to
the Warrant Agent.
As used herein, the term "Common Stock" shall mean the Company's
presently authorized Common Stock, par value $0.25 per share, as adjusted from
time to time in accordance with Section 5.
SECTION 1. TERM OF WARRANT. The purchase right represented by
this Warrant is exercisable, in whole or in part, at any time subsequent to 9:30
a.m., New York City Time, on or after August 1, 2005 (the "Detachment Date"),
and prior to 5:00 p.m., New York City Time, on August 1, 2009; provided,
however, that if the 12% Senior Subordinated Note of the Company (the "Note")
with which this Warrant comprises a Unit or the 13% Junior Subordinated Note of
the Company (the "Junior Note") with which this Warrant comprises a Junior Note
Unit issued in connection with an exchange offer (the "Exchange Offer") made
pursuant to the Company's Offering Circular Supplement dated September 18, 2003,
as amended or supplemented, is redeemed prior to the Detachment Date, this
Warrant shall revert to the Company for no further consideration.
SECTION 2. WARRANT PRICE. The Warrant Price is $3.50 per
share, as adjusted from time to time pursuant to the provisions of Section 5;
provided, however, that in no event shall the Warrant Price be less than the par
value of the Company's presently authorized Common Stock.
SECTION 3. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW
WARRANT.
(a) Subject to Section 1 and Section 8, the purchase
right represented by this Warrant may be exercised by the holder, in whole or in
part, by the surrender of this Warrant together with the Notice of Exercise and
the Investment Representation Statement, each
----------------------
* Subject to adjustment from time to time pursuant to the provisions of
Section 5.
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completed and duly executed in the form attached hereto as Exhibit A and Exhibit
B, respectively, to the Company at the principal office of the Warrant Agent and
by the payment to the Warrant Agent, for the account of the Company, by
certified check or wire transfer of federal or other immediately available
funds, of an amount equal to the then applicable Warrant Price per share
multiplied by the number of shares then being purchased.
(b) The Company and Warrant Agent agree that the shares
so purchased shall be deemed to be issued to the holder as the record owner of
such shares as of the close of business on the date on which this Warrant,
together with the completed and duly executed Notice of Exercise and the
Investment Representation Statement, shall have been surrendered and payment
made for such shares as aforesaid. In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to the holder promptly thereafter and, unless this
Warrant has been fully exercised or expired, a new Warrant representing the
unexercised and unexpired portion of this Warrant, shall also be issued to the
holder promptly.
SECTION 4. STOCK FULLY PAID; RESERVATION OF SHARES. All shares
of Common Stock that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be fully paid and nonassessable, and free
from all taxes, liens, and charges with respect to the issue thereof, other than
restrictions upon transfer referred to herein or required under applicable
federal or state securities laws. During the period within which the rights
represented by this Warrant may be exercised, the Company will, at all times,
have authorized and reserved for the purpose of the issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of shares of
its Common Stock to provide for the exercise of the rights represented by this
Warrant.
SECTION 5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.
The kind of securities purchasable upon the exercise of this Warrant, the
Warrant Price, and the number of shares purchasable upon exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events as follows:
(a) Reclassification, Consolidation, or Merger. In case
of any reclassification or change of outstanding securities of the class
issuable upon exercise of this Warrant (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation, other than a merger with
another corporation in which the Company is the continuing corporation and that
does not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant, or in case of any sale of all or
substantially all of the assets of the Company, the Company, or such successor
or purchasing corporation, as the case may be, and the Warrant Agent shall
execute a new Warrant, providing that the holder of this Warrant shall have the
right to exercise such new Warrant and procure upon such exercise, in lieu of
each share of Common Stock theretofore issuable upon exercise of this Warrant,
the kind and amount of shares of stock, other securities, money, and/or property
receivable upon such reclassification, change, consolidation, merger, or sale by
a holder of one share of Common Stock. Such new Warrant shall provide for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 5. The
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provisions of this Section 5(a) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, and sales.
(b) Subdivision or Combination of Shares. If, at any time
while this Warrant remains outstanding and unexpired, the Company shall
subdivide or combine its Common Stock, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the case
of a combination.
(c) Stock Dividends. If, at any time while this Warrant
remains outstanding and unexpired, the Company shall pay a dividend with respect
to Common Stock payable in, or make any other distribution to holders of Common
Stock (except any distribution specifically provided for in Section 5(a) or
Section 5(b)) of, additional shares of Common Stock, the Warrant Price shall be
adjusted, from and after the record date for the determination of stockholders
entitled to receive such dividend or distribution, to that price determined by
multiplying the Warrant Price in effect immediately prior to such record date by
a fraction (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or distribution, and
(ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend or distribution and the number
of shares of Common Stock purchasable upon the exercise of the rights
represented by this Warrant shall be adjusted by dividing the number of shares
of Common Stock purchasable immediately prior to such record date by the same
fraction. In the case of issuance of shares of Common Stock as a dividend, the
shares shall be deemed to have been issued at the close of business on the
dividend record date. If no dividend record date is fixed, the day on which the
Board of Directors of the Company adopts the resolution authorizing the dividend
shall be treated as the dividend record date.
SECTION 6. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price
shall be adjusted pursuant to Section 5, the Company shall prepare promptly a
certificate signed by its chief financial officer setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, the Warrant Price after giving
effect to such adjustment and the number of shares then purchasable upon
exercise of this Warrant, and shall cause copies of such certificate to be
mailed (by first class mail, postage prepaid) to the Warrant Agent and to the
holder at the addresses specified in Section 10(d), or at such other address as
may be provided to the Company in writing by the holder.
SECTION 7. FRACTIONAL SHARES. The Company shall not be
required to issue any fractional shares of Common Stock in connection with any
exercise hereunder. In the event the Company elects not to issue such fractional
shares, the Company shall make a cash payment in lieu of such fractional shares
upon the basis of the Warrant Price then in effect.
SECTION 8. COMPLIANCE WITH SECURITIES ACT. The holder, by
acceptance hereof, agrees that (a) the shares of Common Stock issuable upon
exercise hereof and, (b) this Warrant are being acquired solely for the holder's
own account and not as a nominee for any other party, for investment purposes
only, and that it will not offer, sell, assign, transfer, pledge, hypothecate,
mortgage, encumber, or otherwise dispose of any of the shares of Common Stock
issuable upon exercise hereof or, if the holder is an "affiliate" (as defined in
Rule 144(a) promulgated under the
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Securities Act of 1933, as amended (the "Act")) of the Company, this Warrant
except under circumstances that will not result in a violation of the Act, or
any applicable state securities laws. Upon exercise of this Warrant, the holder
shall, if requested by the Company or the Warrant Agent, confirm in writing, in
a form satisfactory to the Company and the Warrant Agent, that the shares of
Common Stock so purchased are being acquired solely for the holder's own account
and not as a nominee for any other party, for investment, and not with a view
toward distribution or resale in any transaction that would be in violation of
the Act or any applicable state securities laws, subject, however, to the
disposition of the holder's property being at all times within their control.
All shares of Common Stock issued upon exercise of this Warrant (unless
registered under the Act) shall be stamped or imprinted with a legend
substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE. NO SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
FOR THE HOLDER, SATISFACTORY TO THE COMPANY, THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR RECEIPT OF A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION STATING THAT SUCH REGISTRATION IS NOT
REQUIRED. THIS SECURITY AND ANY SECURITY RECEIVED
UPON THE EXERCISE HEREOF SHALL NOT BE TRANSFERRED OR
PLEDGED EXCEPT IN ACCORDANCE WITH SECTION 9 OF A
CERTAIN WARRANT ISSUED BY THE COMPANY AS OF DECEMBER
__, 2003.
SECTION 9. TRANSFER.
(a) The holder shall not offer, sell, assign, transfer,
pledge, hypothecate, mortgage, encumber, or otherwise dispose of (a) all or any
of the securities issuable upon exercise of this Warrant, or (b) if the holder
is an affiliate of the Company, this Warrant, except in compliance with
applicable federal and state securities laws (including the delivery by the
transferor and the transferee of investment representation letters and legal
opinions reasonably satisfactory to the Company and the Warrant Agent, if such
are requested by the Company or the Warrant Agent).
(b) Subject to compliance with the terms of Section 8 and
Section 9(a), this Warrant and all rights hereunder are transferable, in whole
or in part, at the office of the Warrant Agent by the holder in person or by its
duly authorized attorney, upon surrender of this Warrant properly endorsed;
provided, however, that prior to August 1, 2005, this Warrant shall only be
transferable together with the Note or Junior Note with which this Warrant
comprises a Unit or a Junior Note Unit, respectively issued in connection with
the Exchange Offer. Each taker and holder of this Warrant, by taking or holding
the same, consents and agrees that this Warrant, when endorsed in blank, shall
be deemed negotiable; provided, however, that the last holder of
A-5
this Warrant, as registered on the warrant register (the "Warrant Register")
maintained by the Warrant Agent, may be treated by the Company, the Warrant
Agent, and all other persons dealing with this Warrant as the absolute owner
hereof for any purposes and as the person entitled to exercise the rights
represented by this Warrant, any notice to the contrary notwithstanding, unless
and until such holder seeks to transfer registered ownership of this Warrant on
the Warrant Register and such transfer is effected.
SECTION 10. MISCELLANEOUS.
(a) No Rights as Stockholder. No holder of a Warrant
shall be entitled to vote or receive dividends on or be deemed for any other
purpose the holder of any Common Stock or any other securities of the Company
that may at any time be issuable upon the exercise hereof, nor shall anything
contained herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights, or otherwise until this Warrant shall have
been exercised and the shares purchasable upon the exercise hereof shall have
become deliverable, as provided herein.
(b) Replacement. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of loss, theft, or destruction, upon delivery of
an indemnity agreement or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, upon surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, and the Warrant
Agent will countersign, in lieu of this Warrant, a new Warrant of like tenor.
(c) Notice of Capital Changes. In the event:
(i) The Company shall declare any dividend or
distribution payable to the holders of its Common Stock;
(ii) There shall be any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation or
merger of the Company with, or sale of all or substantially all of its assets
to, another corporation or business organization; or
(iii) There shall be a voluntary or involuntary
dissolution, liquidation, or winding up of the Company;
then, in any one or more of said cases, the Company shall give the holder and
the Warrant Agent written notice, in the manner set forth in Section 10(d), of
the date on which a record shall be taken for such dividend or distribution or
for determining stockholders entitled to vote upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding up and of the date on which any such transaction shall take place, as
the case may be. Such written notice shall be given at least 20 days prior to
the transaction in question and not less than 10 days prior to the record date
in respect thereof.
A-6
(d) Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by a
nationally recognized overnight courier, as follows:
If to the Company:
Lexington Precision Corporation
000 Xxxxx XXX
Xxx Xxxx, XX 00000
Attention: President
If to the holder:
at the address of the registered
holder then maintained on the Warrant
Register.
If to the Warrant Agent:
(i) by registered or certified mail:
Wilmington Trust Company
DC-1615
Reorg Services
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
(ii) by hand delivery or overnight courier:
Wilmington Trust Company
Reorg Services
0000 Xxxxx Xxxxxx XX
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
All such notices (other than notices of exercise of this Warrant, which shall be
deemed to have been received only upon actual receipt thereof by the Warrant
Agent) and communications shall be deemed to have been received (i) in the case
of personal delivery, on the date of such delivery, (ii) in the case of a
nationally recognized overnight courier, on the next business day after the date
when sent, and (iii) in the case of mailing, on the third business day following
the date on which the piece of mail containing such communication has been
deposited in a regularly maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid.
(e) No Impairment. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger,
A-7
dissolution, issuance or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions in this Warrant.
(f) Governing Law. Except to the extent that the General
Corporation Law of the State of Delaware may govern this Warrant by virtue of
the fact that the Company is incorporated under the laws of the State of
Delaware, this Warrant shall be governed by and construed under the laws of the
State of New York without regard to its conflict of laws rules or principles.
(g) Countersignature. This Warrant shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Warrant
Agent.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated: _____________
LEXINGTON PRECISION CORPORATION
By:___________________________________
Name:_________________________________
Title: _______________________________
- and -
By:___________________________________
Name:_________________________________
Title: _______________________________
COUNTERSIGNED:
WILMINGTON TRUST COMPANY
as Warrant Agent
By: _______________________________
Name: _____________________________
Title: ____________________________
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Exhibit A to Warrant to Purchase Common Stock
NOTICE OF EXERCISE
TO: Lexington Precision Corporation
1. The undersigned hereby elects to purchase ________
shares of the Common Stock of Lexington Precision Corporation pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. Please issue a certificate or certificates
representing said shares of Common Stock in the name of the undersigned or in
such other name as is specified below:
______________________________
(Name)
______________________________
______________________________
(Address)
3. The undersigned represents that the aforesaid shares
of Common Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares.
_____________________________ ________________________________
(Date) (Name of Warrant Holder)
By:_____________________________
Title:__________________________
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Exhibit B to Warrant to Purchase Common Stock
INVESTMENT REPRESENTATION STATEMENT
The undersigned hereby represents to Lexington Precision
Corporation (the "Company") and to Wilmington Trust Company, as Warrant Agent,
as follows:
The securities to be received upon the exercise of the Warrant
to which this Statement is an exhibit (the "Warrant") will be acquired for
investment for its own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and the undersigned has no
present intention of offering, selling, granting participation in, or otherwise
distributing the same in any transaction that would be in violation of
applicable federal or state securities laws, but subject to any requirement of
law that the disposition of its property shall at all times be within its
control. By executing this Statement, the undersigned further represents that it
does not have any contract, undertaking, agreement, or arrangement with any
person to offer, sell, transfer, grant participations in, or otherwise
distribute to such person or to any third person any securities issuable upon
exercise of the Warrant.
The undersigned acknowledges that the securities issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Securities Act of 1933, as amended (the "Act"), or any applicable state
securities laws on the ground that the issuance of such securities is exempt
pursuant to Section 4(2) of the Act and state law exemptions relating to offers
and sales not by means of a public offering, and that the Company's reliance on
such exemptions is predicated on the undersigned's representations set forth
herein. The undersigned represents that it is an "accredited investor" within
the meaning of Rule 501 of Regulation D under the Act as presently in effect or
a "qualified institutional buyer" within the meaning of Rule 144A under the Act
as presently in effect.
The undersigned agrees that in no event will it make a
disposition of any securities acquired upon the exercise of the Warrant unless
and until (a) it shall have notified the Company of the proposed disposition and
shall have furnished to the Company a statement of the circumstances surrounding
the proposed disposition, and (b) it shall have furnished the Company with an
opinion of counsel satisfactory to the Company to the effect that (i)
appropriate action necessary for compliance with the Act and any applicable
state securities laws has been taken and an exemption from the registration
requirements of the Act and such laws is available, and (ii) the proposed
transfer will not violate any of said laws.
The undersigned acknowledges that an investment in the Company
is highly speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, that it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of their investments, and that it has the ability to bear the
economic risks (including the risk of a total loss) of its investment. The
undersigned represents that it has had the opportunity to ask questions of the
Company concerning the Company's business and assets and to obtain any
additional information that it considered necessary to verify the accuracy of or
to amplify on the Company's disclosures, and that it has had all questions asked
by it satisfactorily answered by the Company.
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The undersigned acknowledges that the securities issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Act or an exemption from such registration is available. The
undersigned is aware of the provisions of Rule 144 promulgated under the Act
that permit limited resale of securities purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for such securities, the availability
of certain current public information about the Company, the resale occurring
not less than one year after a party has purchased and paid for the securities,
the sale being executed through a "broker's transaction" or in transactions
directly with "market makers" (as provided by Rule 144(f)) and the number of
securities being sold during any three-month period not exceeding specified
limitations.
_____________________________ ________________________________
(Date) (Name of Warrant Holder)
By:_____________________________
Title:__________________________
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SCHEDULE I
COMPENSATION OF WARRANT AGENT
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