GULFSTREAM INTERNATIONAL GROUP, INC. WARRANT FOR THE PURCHASE OF COMMON STOCK
Exhibit 10.32
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE
REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE
SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
GULFSTREAM INTERNATIONAL GROUP, INC.
WARRANT FOR THE PURCHASE OF COMMON STOCK
This WARRANT (this “Warrant”) of Gulfstream International Group, Inc., a Delaware corporation
(the “Company”), is being issued pursuant to that certain Underwriting Agreement, dated as of
[ ], 2007, by and between the Company and Taglich Brothers, Inc., as representative of the
several underwriters (the “Underwriters”) relating to a firm commitment public offering (the
“Offering”) of 1,200,000 shares of common stock, par value $0.001 per share (the “Common Stock”),
of the Company underwritten by the Underwriters.
FOR VALUE RECEIVED, the Company hereby grants to [Taglich Brothers, Inc.] and its permitted
successors and assigns (collectively, the “Holder”) the right to purchase from the Company up to [
( )] shares of Common Stock (such shares underlying this Warrant, the
“Warrant Shares”), at a per share purchase price equal to $[ ] (the “Exercise Price”),
subject to the terms, conditions and adjustments set forth below in this Warrant.
1. Vesting of Warrant. This Warrant shall vest and become exercisable on the one (1) year
anniversary of the consummation of the Offering (the “Vesting Date”). Except as otherwise provided
for herein or as permitted by applicable rules of the National Association of Securities Dealers,
Inc., this Warrant shall not be sold, transferred, assigned, pledged or hypothecated prior to the
Vesting Date.
2. Expiration of Warrant. This Warrant shall expire on the five (5) year anniversary of the
effectiveness of the Offering (the “Expiration Date”).
3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the terms of this
Section 3.
3.1 Manner of Exercise.
(a) This Warrant may only be exercised by the Holder hereof on or after the Vesting
Date and on or prior to the Expiration Date, in accordance with the terms and conditions
hereof, in whole or in part (but not as to fractional shares) with respect to any portion of
this Warrant, during the Company’s normal business hours on any day other
than a Saturday or a Sunday or a day on which commercial banking institutions in New York,
New York are authorized or required by law to be closed (a “Business Day”), by surrender of
this Warrant to the Company at its office maintained pursuant to Section 10.2(a) hereof,
accompanied by a written exercise notice in the form attached as Exhibit A to this Warrant
(or a reasonable facsimile thereof) duly executed by the Holder, together with the payment
of the aggregate Exercise Price for the number of Warrant Shares purchased upon exercise of
this Warrant. Upon surrender of this Warrant, the Company shall cancel this Warrant document
and shall, in the event of partial exercise, replace it with a new Warrant document in
accordance with Section 3.3(b).
(b) Except as provided for below, each exercise of this Warrant must be accompanied by
payment in full of the aggregate Exercise Price in cash by wire transfer in immediately
available funds for the number of Warrant Shares being purchased by the Holder upon such
exercise. The aggregate Exercise Price for the number of Warrant Shares being purchased
may, however, also be paid in full or in part at the election of the Holder: (i) in the form
of Common Stock owned by the Holder (based on the Fair Market Value (as defined below) of
such Common Stock on the date of exercise), (ii) in the form of Warrant Shares withheld by
the Company from the Warrant Shares otherwise to be received upon exercise of this Warrant
having an aggregate Fair Market Value on the date of exercise equal to the aggregate
Exercise Price of the Warrant Shares being purchased by the Holder, or (iii) by a
combination of the foregoing, provided that the combined value of all cash and the Fair
Market Value of any shares surrendered to the Company is at least equal to the aggregate
Exercise Price for the number of Warrant Shares being purchased by the Holder.
(c) For purposes of this Warrant, the term “Fair Market Value” means, with respect to a
particular date, the average closing price of the Common Stock for the immediately preceding
ten (10) trading days on the principal securities exchange or market on which shares of
Common Stock are listed or quoted, if the shares of Common Stock are so listed or quoted or,
if not so listed or quoted, as determined by the Company in good faith and in a reasonable
manner, based on the information available to it.
3.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the Business Day on which this Warrant
shall have been duly surrendered to the Company as provided in Sections 3.1 and 12 hereof, and, at
such time, the Holder in whose name any certificate or certificates for Warrant Shares shall be
issuable upon exercise as provided in Section 3.3 hereof shall be deemed to have become the holder
or holders of record thereof of the number of Warrant Shares purchased upon exercise of this
Warrant.
3.3 Delivery of Common Stock Certificates and New Warrant. As soon as reasonably
practicable after each exercise of this Warrant, in whole or in part, and in any event within five
(5) Business Days thereafter, the Company, at its expense (including the payment by it of any
applicable issue taxes), will cause to be issued in the name of and delivered to the Holder hereof
or, subject to Sections 9 and 10 hereof, as the Holder (upon payment by the Holder of any
applicable transfer taxes) may direct:
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(a) a certificate or certificates (with appropriate restrictive legends, as applicable)
for the number of duly authorized, validly issued, fully paid and nonassessable Warrant
Shares to which the Holder shall be entitled upon exercise; and
(b) in case exercise is in part only, a new Warrant document of like tenor, dated the
date hereof, for the remaining number of Warrant Shares issuable upon exercise of this
Warrant after giving effect to the partial exercise of this Warrant (including the delivery
of any Warrant Shares as payment of the Exercise Price for such partial exercise of this
Warrant).
4. Certain Adjustments. For so long as this Warrant is outstanding:
4.1 Mergers or Consolidations. If at any time after the date hereof there shall be a
capital reorganization (other than a combination or subdivision of Common Stock otherwise provided
for herein) resulting in a reclassification to or change in the terms of securities issuable upon
exercise of this Warrant (a “Reorganization”), or a merger or consolidation of the Company with
another corporation, association, partnership, organization, business, individual, government or
political subdivision thereof or a governmental agency (a “Persons” or the “Persons”) (other than a
merger with another Person in which the Company is a continuing corporation and which does not
result in any reclassification or change in the terms of securities issuable upon exercise of this
Warrant or a merger effected exclusively for the purpose of changing the domicile of the Company)
(a “Merger”), then, as a part of such Reorganization or Merger, lawful provision and adjustment
shall be made so that the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities or property
receivable upon such Reorganization or Merger by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior to such
Reorganization or Merger. In any such case, appropriate adjustment shall be made in the application
of the provisions of this Warrant with respect to the rights and interests of the Holder after the
Reorganization or Merger to the end that the provisions of this Warrant (including adjustment of
the Exercise Price then in effect and the number of Warrant Shares) shall be applicable after that
event, as near as reasonably may be, in relation to any shares of stock, securities, property or
other assets thereafter deliverable upon exercise of this Warrant. The provisions of this Section
4.1 shall similarly apply to successive Reorganizations and/or Mergers.
4.2 Splits and Subdivisions; Dividends. In the event the Company should at any time or
from time to time effectuate a split or subdivision of the outstanding shares of Common Stock or
pay a dividend in or make a 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 the “Common Stock
Equivalents”) without payment of any consideration by such holder for the additional shares of
Common Stock or Common Stock Equivalents (including the additional shares of Common Stock issuable
upon conversion or exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share Exercise Price shall
be appropriately decreased and the number of Warrant Shares shall
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be appropriately increased in proportion to such increase (or potential increase) of outstanding
shares; provided, however, that no adjustment shall be made in the event the split, subdivision,
dividend or distribution is not effectuated.
4.3 Combination of Shares. If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the outstanding shares of Common Stock,
the per share Exercise Price shall be appropriately increased and the number of shares of Warrant
Shares shall be appropriately decreased in proportion to such decrease in outstanding shares.
4.4 Adjustments for Other Distributions. In the event the Company shall declare a
distribution payable in securities of other Persons, evidences of indebtedness issued by the
Company or other Persons, assets (excluding cash dividends or distributions to the holders of
Common Stock paid out of current or retained earnings and declared by the Company’s board of
directors) or options or rights not referred to in Sections 4.1, 4.2 or 4.3, then, in each such
case for the purpose of this Section 4.4, upon exercise of this Warrant, the Holder shall be
entitled to a proportionate share of any such distribution as though the Holder was the actual
record holder of the number of Warrant Shares as of the record date fixed for the determination of
the holders of Common Stock of the Company entitled to receive such distribution.
5. No Impairment. The Company will not, by amendment of its articles of incorporation or
by-laws or through any consolidation, merger, reorganization, transfer of assets, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all of the terms and in the taking of all actions necessary or appropriate in order
to protect the rights of the Holder against impairment.
6. Chief Financial Officer’s Report as to Adjustments. With respect to each adjustment
pursuant to Section 4 of this Warrant, the Company, at its expense, will promptly compute the
adjustment or re-adjustment in accordance with the terms of this Warrant and cause its Chief
Financial Officer to certify the computation (other than any computation of the fair value of
property of the Company) and prepare a report setting forth, in reasonable detail, the event
requiring the adjustment or re-adjustment and the amount of such adjustment or re-adjustment, the
method of calculation thereof and the facts upon which the adjustment or re-adjustment is based,
and the Exercise Price and the number of Warrant Shares or other securities purchasable hereunder
after giving effect to such adjustment or re-adjustment, which report shall be mailed by first
class mail, postage prepaid to the Holder. The Company will also keep copies of all reports at its
office maintained pursuant to Section 10.2(a) hereof and will cause them to be available for
inspection at the office during normal business hours upon reasonable notice by the Holder or any
prospective purchaser of the Warrant designated by the Holder thereof.
7. Reservation of Shares. The Company shall, solely for the purpose of effecting the exercise
of this Warrant, at all times during the term of this Warrant, reserve and keep available out of
its authorized shares of Common Stock, free from all taxes, liens and charges with respect to the
issue thereof and not subject to preemptive rights or other similar rights of shareholders of the
Company, such number of its shares of Common Stock as shall from time to
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time be sufficient to effect in full the exercise of this Warrant. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect in full the
exercise of this Warrant, in addition to such other remedies as shall be available to Holder, the
Company will promptly take such corporate action as may, in the opinion of its counsel, be
necessary to increase the number of authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes, including without limitation, using its best
efforts to obtain the requisite shareholder approval necessary to increase the number of authorized
shares of Common Stock. The Company hereby represents and warrants that all shares of Common Stock
issuable upon exercise of this Warrant shall be duly authorized and, when issued and paid for upon
exercise, shall be validly issued, fully paid and nonassessable.
8. Registration and Listing.
8.1 Definition of Registrable Securities; Majority. As used herein, the term
“Registrable Securities” means any shares of Common Stock issuable upon the exercise of this
Warrant, until the date (if any) on which such shares shall have been transferred or exchanged and
new certificates for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law then in force. For purposes
of this Warrant, the term “Majority”, in reference to the holders of Registrable Securities, shall
mean in excess of fifty percent (50%) of the then outstanding Warrant Shares (assuming the exercise
of the entire Warrant).
8.2 Required Registration.
(a) At any time on or after the Vesting Date and on or before the Expiration Date, but
in no event on not more than one (1) occasion, upon the written request of the holders of
the Registrable Securities representing a Majority of such securities, the Company will use
its best efforts to effect the registration of the respective shares of the holders of
Registrable Securities under the Securities Act to the extent requisite to permit the
disposition thereof as expeditiously as reasonably possible, but in no event later than 150
days from the date of such request.
(b) Registration of Registrable Securities under this Section 8.2 shall be on such
appropriate registration form: (i) as shall be selected by the Company, and (ii) as shall
permit the disposition of such Registrable Securities in accordance with this Section 8.2.
The Company agrees to include in any such registration statement all information which the
requesting holders of Registrable Securities shall reasonably request, which is required to
be contained therein. The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities pursuant to this Section 8.2.
(c) A registration requested pursuant to this Section 8.2 shall not be deemed to have
been effected: (i) unless a registration statement with respect thereto has become effective
or (ii) if, after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Securities and
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Exchange Commission (the “SEC”) or other governmental agency or court of competent
jurisdiction for any reason, other than by reason of some act or omission by a holder of
Registrable Securities.
8.3 Incidental Registration Rights.
(a) If the Company, at any time on or after the Vesting Date and on or before the five
(5) year anniversary of the effectiveness of the Offering, proposes to register any of its
securities under the Securities Act (other than in connection with a registration on Form
S-4 or S-8 or any successor forms) whether for its own account or for the account of any
holder or holders of its shares other than Registrable Securities (any shares of such holder
or holders (but not those of the Company and not Registrable Securities) with respect to any
registration are referred to herein as, “Other Shares”), the Company shall each such time
give prompt (but not less than thirty (30) days prior to the anticipated effectiveness
thereof) written notice to the holders of Registrable Securities of its intention to do so;
provided, however, that in no event shall the Company have the obligation to send any such
notice, and the holders of Registrable Securities will not have any registration rights
under this Section 8.3, if registration rights have been exercised two (2) times pursuant to
this Section 8.3 (except if the Company elected not to proceed with any such registrations,
withdrew such registrations or otherwise failed to effect the offerings covered by such
registrations). Upon the written request of any such holder of Registrable Securities made
within twenty (20) days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such holder), except as set forth
in Section 8.3(b), the Company will use its best efforts to effect the registration under
the Securities Act of all of the Registrable Securities which the Company has been so
requested to register by such holder, to the extent requisite to permit the disposition of
the Registrable Securities so to be registered, by inclusion of such Registrable Securities
in the registration statement which covers the securities which the Company proposes to
register; provided, however, that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall determine for any
reason in its sole discretion either to not register, to delay or to withdraw registration
of such securities, the Company may, at its election, give written notice of such
determination to such holder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of the holders
of Registrable Securities entitled to request that such registration be effected as a
registration under Section 8.2, (ii) in the case of a determination to delay registration,
shall be permitted to delay registering any Registrable Securities for the same period as
the delay in registering such other securities (including the Other Shares), without
prejudice, however, to the rights of the holders of Registrable Securities entitled to
request that such registration be effected as a registration under Section 8.2 and (iii) in
the case of a determination to withdraw registration, shall be permitted to withdraw
registration, without prejudice, however, to the rights of the holders of Registrable
Securities entitled to request that such registration be effected as a registration under
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Section 8.2. No registration effected under this Section 8.3 shall relieve the Company of
its obligation to effect any registration upon request under Section 8.2, nor shall any such
registration hereunder be deemed to have been effected pursuant to Section 8.2. The Company
will pay all Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 8.3.
(b) If the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by this Section 8.3 and such securities are to be distributed
by or through one or more underwriters, the Company will, if requested by a holder of
Registrable Securities, use its commercially reasonable efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters, provided that if the managing
underwriter of such underwritten offering shall inform the Company by letter of its belief
that inclusion in such distribution of all or a specified number of such securities proposed
to be distributed by such underwriters would interfere with the successful marketing of the
securities being distributed by such underwriters (such letter to state the basis of such
belief and the approximate number of such Registrable Securities, such Other Shares and
shares held by the Company proposed so to be registered which may be distributed without
such effect), then the Company may, upon written notice to such holder, the other holders of
Registrable Securities, and holders of such Other Shares, reduce pro rata in accordance with
the number of shares of Common Stock desired to be included in such registration (if and to
the extent stated by such managing underwriter to be necessary to eliminate such effect) the
number of such Registrable Securities and Other Shares the registration of which shall have
been requested by each holder thereof so that the resulting aggregate number of such
Registrable Securities and Other Shares so included in such registration, together with the
number of securities to be included in such registration for the account of the Company,
shall be equal to the number of shares stated in such managing underwriter’s letter.
8.4 Registration Procedures. Whenever the holders of Registrable Securities have
properly requested that any Registrable Securities be registered pursuant to the terms of this
Warrant, the Company shall use its best efforts to effect the registration of such Registrable
Securities in accordance with the intended method of disposition thereof, and pursuant thereto the
Company shall as expeditiously as possible:
(a) prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration statement to
become effective;
(b) notify such holders of the effectiveness of each registration statement filed
hereunder and prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be necessary
to (i) keep such registration statement effective and the prospectus included therein usable
for a period commencing on the date that such registration statement is initially declared
effective by the SEC and ending on the earlier of (A) the date that all of the Registrable
Securities covered by such registration statement have been sold pursuant
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to the registration statement, or (B) the date the holders thereof receive an opinion of
counsel to the Company that all of the Registrable Securities may be freely traded without
registration under the Securities Act, under Rule 144(k) promulgated under the Securities
Act or otherwise; provided that the Company shall in no event be required to keep any such
registration in effect for a period in excess of nine months from the date on which such
holders are first free to sell such Registrable Securities, and (ii) comply with the
provisions of the Securities Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement;
(c) furnish to such holders such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable Securities
owned by such holders;
(d) use its best efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as such holders reasonably request
and do any and all other acts and things which may be reasonably necessary or advisable to
enable such holders to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such holders; provided, however, that the Company shall not be required
to: (i) qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph; (ii) subject itself to taxation in any such
jurisdiction; or (iii) consent to general service of process in any such jurisdiction;
(e) notify such holders, at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of any event as a result of which
the prospectus included in such registration statement contains an untrue statement of a
material fact or omits any material fact necessary to make the statements therein, in light
of the circumstances in which they are made, not materially misleading, and, at the
reasonable request of such holders, the Company shall prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not materially misleading;
(f) Notwithstanding anything to the contrary in this Warrant, the Company, upon notice
to the Holders of Registrable Securities, may suspend the use of the prospectus included in
any registration statement in the event that and for a period of time (a “Blackout Period”)
not to exceed an aggregate of 60 days in any 180 day period if (1) the Board of Directors of
the Company determines that the disclosure of an event, occurrence or other item at such
time could reasonably be expected to have a material adverse effect on the business,
operations or prospects of the Company or (2) the disclosure otherwise relates to a material
business transaction which has not been
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publicly disclosed and the Board of Directors determines, in good faith, that any such
disclosure would jeopardize the success of such transaction or that disclosure of the
transaction is prohibited pursuant to the terms thereto; provided that, upon the termination
of such Blackout Period, the Company promptly shall notify the Holders of Registrable
Securities that such Blackout Period has been terminated. Each Holder of Registrable
Securities agrees that upon receipt of the notice referred to in this Section 8.4(f) (a
“Suspension Notice”), such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the applicable registration statement until (i) such Holder has
received copies of a supplemented or amended prospectus, or (ii) such Holder is advised in
writing by the Company that the use of the prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by reference in the
prospectus, except for those available on the SEC’s XXXXX website (in each case, the
“Recommencement Date”). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any prospectuses, other than permanent file copies, then in such Holder’s
possession which have been replaced by the Company with more recently dated prospectuses or
(ii) deliver to the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the prospectus covering such Registrable
Securities that was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such registration statement set forth in Section 8.4(b)
hereof shall be extended by a number of days equal to the number of days in the period from
and including the date of delivery of the Suspension Notice to the Recommencement Date;
(g) provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such registration statement;
(h) make available for inspection by any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other agent
retained by any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers, directors,
managers, employees and independent accountants to supply all information reasonably
requested by any such underwriter, attorney, accountant or agent in connection with such
registration statement;
(i) otherwise use its best efforts to comply with all applicable rules and regulations
of the SEC, and make available to its security holders, as soon as reasonably practicable,
an earnings statement of the Company, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and, at the option of the Company, Rule 158
thereunder;
(j) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Registrable Securities included in such
registration statement for sale in any jurisdiction, the Company shall use its best efforts
promptly to obtain the withdrawal of such order;
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(k) use its best efforts to cause any Registrable Securities covered by such
registration statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the sellers thereof to consummate the
disposition of such Registrable Securities; and
(l) if the offering is underwritten, use its best efforts to furnish on the date that
Registrable Securities are delivered to the underwriters for sale pursuant to such
registration, an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters covering such issues as are
reasonably required by such underwriters.
8.5 Listing. The Company shall secure the listing of the Common Stock underlying this
Warrant upon each national securities exchange or automated quotation system upon which shares of
Common Stock are then listed (subject to official notice of issuance) and shall maintain such
listing of shares of Common Stock. The Company shall at all times comply in all material respects
with the Company’s reporting, filing and other obligations under the by-laws or rules of the
American Stock Exchange (or such other national securities exchange or market on which the Common
Stock may then be listed, as applicable).
8.6 Expenses. The Company shall pay all Registration Expenses relating to the
registration and listing obligations set forth in this Section 8. For purposes of this Warrant, the
term “Registration Expenses” means: (a) all registration, filing and NASD fees, (b) all reasonable
fees and expenses of complying with securities or blue sky laws, (c) all word processing,
duplicating and printing expenses, (d) the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance, (e) premiums and other costs of
policies of insurance (if any) against liabilities arising out of the public offering of the
Registrable Securities being registered if the Company desires such insurance, if any, and (f)
reasonable fees and disbursements of one counsel for the selling holders of Registrable Securities
in an amount not to exceed $20,000; provided however, that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include (and such expenses shall be
borne by the Company): (i) salaries of Company personnel or general overhead expenses of the
Company, (ii) auditing fees, (iii) premiums or other expenses relating to liability insurance
required by underwriters of the Company, or (iv) other expenses for the preparation of financial
statements or other data, to the extent that any of the foregoing either is normally prepared by
the Company in the ordinary course of its business or would have been incurred by the Company had
no public offering taken place. Registration Expenses shall not include any underwriting discounts
and commissions which may be incurred in the sale of any Registrable Securities and transfer taxes
of the selling holders of Registrable Securities.
8.7 Indemnification.
(a) The Company shall indemnify the holder(s) of the Registrable Securities to be sold
pursuant to any registration statement and each person, if any, who controls such holders
within the meaning of Section 15 of the Securities Act or Section
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20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against all
loss, claim, damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to indemnify the Underwriters as
contained in the Underwriting Agreement; provided, however, that in no event shall the
Company be required to indemnify any holder of Registrable Securities for any liability
arising as a result of such holder failing to deliver a current version of the prospectus or
delivering a prospectus during a Blackout Period.
(b) Each of the holder(s) of the Registrable Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and not jointly,
indemnify the Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage or expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act, the Exchange Act or
otherwise, arising from written information furnished by such Holder, or their successors or
assigns, for specific inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in the Underwriting Agreement pursuant to which
the Underwriters have agreed to indemnify the Company, except that the maximum amount which
may be recovered from each Holder pursuant to this paragraph or otherwise shall be limited
to the amount of net proceeds received by the holder from the sale of the Registrable
Securities.
8.8 Information Provided by Holders. Any holder of Registrable Securities included in
any registration shall furnish to the Company such information as the Company may reasonably
request in writing to enable the Company to comply with the provisions hereof in connection with
any registration referred to in this Warrant. In the event that a holder of Registrable Securities
fails to provide such information on a timely basis, and in any event within seven (7) Business
Days of the Company’s written request, then the Company shall be entitled to exclude the
Registrable Securities of such holder from such registration and the Company shall nevertheless be
deemed to have satisfied its obligations hereunder with respect to such registration.
9. Restrictions on Transfer.
9.1 Restrictive Legends. This Warrant and each Warrant issued upon transfer or in
substitution for this Warrant pursuant to Section 10 hereof, each certificate for Common Stock
issued upon the exercise of the Warrant and each certificate issued upon the transfer of any such
Common Stock shall be transferable only upon satisfaction of the conditions specified in this
Section 9. Each of the foregoing securities shall be stamped or otherwise imprinted with a legend
reflecting the restrictions on transfer set forth herein and any restrictions required under the
Securities Act or other applicable securities laws.
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9.2 Notice of Proposed Transfer. Prior to any transfer of any securities which are not
registered under an effective registration statement under the Securities Act (“Restricted
Securities”), which transfer may only occur if there is an exemption from the registration
provisions of the Securities Act and all other applicable securities laws, the Holder will give
written notice to the Company of the Holder’s intention to effect a transfer (and shall describe
the manner and circumstances of the proposed transfer). The following provisions shall apply to any
proposed transfer of Restricted Securities:
(i) If in the opinion of counsel for the Holder reasonably satisfactory to the Company
the proposed transfer may be effected without registration of the Restricted Securities
under the Securities Act (which opinion shall state in detail the basis of the legal
conclusions reached therein), the Holder shall thereupon be entitled to transfer the
Restricted Securities in accordance with the terms of the notice delivered by the Holder to
the Company. Each certificate representing the Restricted Securities issued upon or in
connection with any transfer shall bear the restrictive legends required by Section 9.1
hereof.
(ii) If the opinion called for in (i) above is not delivered, the Holder shall not be
entitled to transfer the Restricted Securities until either (x) receipt by the Company of a
further notice from such Holder pursuant to the foregoing provisions of this Section 9.2 and
fulfillment of the provisions of clause (i) above, or (y) such Restricted Securities have
been effectively registered under the Securities Act.
9.3 Certain Other Transfer Restrictions. Notwithstanding any other provision of this
Section 9, prior to the Vesting Date, this Warrant or the Restricted Securities thereunder may only
be transferred or assigned to the persons permitted under NASD Rule 2710(g).
9.4 Termination of Restrictions. Except as set forth in Section 9.3 hereof, the
restrictions imposed by this Section 9 upon the transferability of Restricted Securities shall
cease and terminate as to any particular Restricted Securities: (a) which shall have been
effectively registered under the Securities Act, or (b) when, in the opinions of both counsel for
the holder thereof and counsel for the Company, such restrictions are no longer required in order
to insure compliance with the Securities Act or Section 10 hereof. Whenever such restrictions
shall cease and terminate as to any Restricted Securities, the Holder thereof shall be entitled to
receive from the Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section 9.1 hereof.
10. Ownership, Transfer and Substitution of Warrant.
10.1 Ownership of Warrant. The Company may treat any Person in whose name this Warrant
is registered in the Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner
and holder thereof for all purposes, notwithstanding any notice to the contrary, except that, if
and when any Warrant is properly assigned in blank, the Company may (but shall not be obligated to)
treat the bearer thereof as the owner of such Warrant for all purposes, notwithstanding any notice
to the contrary. Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first
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having been issued.
10.2 Office; Exchange of Warrant.
(a) The Company will maintain its principal office at the location identified in the
prospectus relating to the Offering or at such other offices as set forth in the Company’s
most current filing (as of the date notice is to be given) under the Exchange Act or as the
Company otherwise notifies the Holder.
(b) The Company shall cause to be kept at its office maintained pursuant to Section
10.2(a) hereof a Warrant Register for the registration and transfer of the Warrant. The name
and address of the holder of the Warrant, the transfers thereof and the name and address of
the transferee of the Warrant shall be registered in such Warrant
Register. The Person in whose name the Warrant shall be so registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Warrant, and the Company
shall not be affected by any notice or knowledge to the contrary.
(c) Upon the surrender of this Warrant, properly endorsed, for registration of transfer
or for exchange at the office of the Company maintained pursuant to Section 10.2(a) hereof,
the Company at its expense will (subject to compliance with Section 9 hereof, if applicable)
execute and deliver to or upon the order of the Holder thereof a new Warrant of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face thereof for the number of
shares of Common Stock called for on the face of the Warrant so surrendered (after giving
effect to any previous adjustment(s) to the number of Warrant Shares).
10.3 Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, upon delivery of indemnity reasonably satisfactory to
the Company in form and amount or, in the case of any mutilation, upon surrender of this Warrant
for cancellation at the office of the Company maintained pursuant to Section 10.2(a) hereof, the
Company, at its expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor and
dated the date hereof.
11. No Rights or Liabilities as Stockholder. No Holder shall be entitled to vote or receive
dividends or be deemed the holder of any shares of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, 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, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until the Warrant shall have been exercised
and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable,
as provided herein. The Holder will not be
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entitled to share in the assets of the Company in the event of a liquidation, dissolution or the
winding up of the Company.
12. Notices. Any notice or other communication in connection with this Warrant shall be given
in writing and directed to the parties hereto as follows: (a) if to the Holder, c/o Taglich
Brothers, Inc., 000 Xxxxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxxx X.
Xxxxxxxxx, Fax No: (000) 000-0000; or (b) if to the Company, to the attention of its Chief
Executive Officer at its office maintained pursuant to Section 10.2(a) hereof; provided, that the
exercise of the Warrant shall also be effected in the manner provided in Section 3 hereof. Notices
shall be deemed properly delivered and received when delivered to the notice party (i) if
personally delivered, upon receipt or refusal to accept delivery, (ii) if sent via facsimile, upon
mechanical confirmation of successful transmission thereof generated by the sending telecopy
machine, (iii) if sent by a commercial overnight courier for delivery on the next Business Day, on
the first Business Day after deposit with such courier service, or (iv) if sent by registered or
certified mail, five (5) Business Days after deposit thereof in the U.S. mail.
13. Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the
issuance of shares of Common Stock underlying this Warrant upon exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the transfer or registration of this Warrant or any certificate for shares
of Common Stock underlying this Warrant in a name other that of the Holder. The Holder is
responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving shares of Common Stock underlying this Warrant upon exercise hereof.
14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of the State of New York. The section headings in this
Warrant are for purposes of convenience only and shall not constitute a part hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the date
first above written.
| GULFSTREAM INTERNATIONAL GROUP, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
[Signature Page to Underwriters’ Warrant]
15
EXHIBIT A
FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
To Gulfstream International Group, Inc.
The undersigned registered holder of the within Warrant hereby irrevocably exercises the
Warrant pursuant to Section 3.1 of the Warrant with respect to Warrant Shares, at an
exercise price per share of $ , and requests that the certificates for such Warrant Shares be
issued, subject to Sections 9 and 10, in the name of, and delivered to:
The undersigned is hereby making payment for the Warrant Shares in the following manner:
[describe desired payment method as provided for in 3.1 of the Warrant].
The undersigned hereby represents and warrants that it is, and has been since its acquisition
of the Warrant, the record and beneficial owner of the Warrant.
Dated:
Print or Type Name
(Signature must conform in all respects
to name of holder as specified on the
face of Warrant)
(Street Address)
(City) (State) (Zip Code)
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EXHIBIT B
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within Warrant hereby sells,
assigns and transfers unto [include name and addresses] the rights
represented by the Warrant to purchase shares of Common Stock of GULFSTREAM
INTERNATIONAL GROUP, INC. to which the Warrant relates, and appoints Attorney
to make such transfer on the books of GULFSTREAM INTERNATIONAL GROUP, INC. maintained for the
purpose, with full power of substitution in the premises.
Dated
(Signature must conform in all respects
to name of holder as specified on the face of Warrant)
(Street Address)
(City) (State) (Zip Code)
Signed in the presence of:
(Signature of Transferee)
(Street Address)
(City) (State) (Zip Code)
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