EXHIBIT 4.5
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WARRANT AGREEMENT
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AGREEMENT, dated as of the ____ day of ______, 1998, by and
among AMERICAN COUNTRY HOLDINGS INC., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as Warrant
Agent (the "Warrant Agent").
W I T N E S S E T H
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WHEREAS, the Company plans to make an offer (the "Offer") to
the holders of its Redeemable Common Stock Purchase Warrants (the "Old
Warrants") to exchange each of their Old Warrants (up to a maximum
aggregate number to be determined by the Company) and $4.00 in cash
for 2.19 shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), and 2.19 new Class A Redeemable Common
Stock Purchase Warrants (the "Class A Warrants"), as more fully
described in an Offering Circular - Prospectus contained in a
Registration Statement on Form S-3 (Reg. No. 333-____) filed with the
Securities and Exchange Commission; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act, in
connection with the issuance, registration, transfer, exchange and
redemption of the Class A Warrants, the issuance of certificates
representing the Class A Warrants, the exercise of the Class A
Warrants, and the rights of the holders thereof.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth and for the purpose of
defining the terms and provisions of the Class A Warrants and the
certificates representing the Class A Warrants and the respective
rights and obligations thereunder of the Company, the holders of
certificates representing the Class A Warrants and the Warrant Agent,
the parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:
(a) "Class A Warrant Expiration Date" shall mean 5:00 P.M.
(New York time) on August 31, 2001, or the Redemption Date as defined
in Section 8, whichever is earlier; provided that if such date shall
in the State of New York be a holiday or a day on which banks are
authorized or required to close, then 5:00 P.M. (New York time) on the
next following day which in the State of New York is not a holiday or
a day on which banks are authorized or required to close. Upon notice
to all Class A Warrantholders the Company shall have the right to
extend the Class A Warrant Expiration Date.
(b) "Class A Warrant Proceeds" shall have the meaning set
forth in Section 4(a) below.
(c) "Class A Warrants" shall have the meaning set forth in
the recitals above.
(d) "Common Stock" shall have the meaning set forth in the
recitals above.
(e) "Company" shall have the meaning set forth in the
preface above.
(f) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal
business shall be administered, which office is located at the date
hereof at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(g) "Exercise Date" shall mean, as to any Class A Warrant,
the date on which the Warrant Agent shall have received both (i) the
Class A Warrant Certificate representing such Class A Warrant, with
the exercise form thereon duly executed by the Registered Holder
thereof or his, her or its attorney duly authorized in writing, and
(ii) payment in cash, or by official bank or certified check made
payable to the Company, of an amount in lawful money of the United
States of America equal to the applicable Purchase Price.
(h) "Initial Class A Warrant Exercise Date" shall mean,
with respect to any Class A Warrant, the date of issuance thereof by
the Warrant Agent pursuant to Section 2(b) of this Agreement.
(i) "Market Price" shall have the meaning set forth in
Section 8(a) below.
(j) "Offer" shall have the meaning set forth in the
recitals above.
(k) "Old Warrants" shall have the meaning set forth in the
recitals above.
(l) "Purchase Price" shall mean the purchase price per
share of Common Stock to be paid upon exercise of each Class A Warrant
in accordance with the terms hereof, which price shall be $3.25 per
share for each Class A Warrant exercised on and after the Initial
Class A Warrant Exercise Date, subject to adjustment from time to time
pursuant to the provisions of Section 9 hereof, and subject to the
Company's right to reduce the Purchase Price, without the consent of
any Class A Warrantholders, upon at least 15-days' prior notice to all
Class A Warrantholders.
(m) "Redemption Date" shall have the meaning set forth in
Section 8(c) below.
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(n) "Redemption Price" shall mean the price at which the
Company may, at its option, redeem the Class A Warrants, in accordance
with the terms hereof, which price shall be $0.50 per Class A Warrant.
(o) "Registered Holder" shall mean as to any Class A
Warrant and as of any particular date, the person in whose name the
certificate representing the Class A Warrant shall be registered on
the date on the books maintained by the Warrant Agent pursuant to
Section 6.
(p) "Target Price" shall have the meaning set forth in
Section 8(a) below.
(q) "Transfer Agent" shall mean American Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized
successor, as such.
(r) "Warrant Agent" shall have the meaning set forth in the
preface above.
SECTION 2. CLASS A WARRANTS AND ISSUANCE OF CLASS A
WARRANT CERTIFICATES.
(a) A Class A Warrant initially shall entitle the
Registered Holder of the Class A Warrant to purchase one share of
Common Stock upon the exercise thereof, in accordance with the terms
hereof, subject to modification and adjustment as provided in Section
9.
(b) Class A Warrant Certificates representing the number of
Class A Warrants to be issued pursuant to the Offer shall be executed
by the Company and delivered to the Warrant Agent. Upon written order
of the Company signed by its President or any Vice President and by
its Secretary or an Assistant Secretary, the Class A Warrant
Certificates shall be countersigned, issued and delivered by the
Warrant Agent.
(c) From time to time, up to the Class A Warrant Expiration
Date, the Transfer Agent shall countersign and deliver stock
certificates in required whole number denominations representing one
share of Common Stock for each Class A Warrant exercised, subject to
adjustment as described herein, upon the exercise of Class A Warrants
in accordance with this Agreement.
(d) From time to time, up to the Class A Warrant Expiration
Date, the Warrant Agent shall countersign and deliver Class A Warrant
Certificates in required whole number denominations to the persons
entitled thereto in connection with any transfer or exchange permitted
under this Agreement; provided that no Class A Warrant Certificates
shall be issued except (i) those initially issued hereunder, (ii)
those issued on or after the Initial Class A Warrant Exercise Date,
upon the exercise of fewer than all Class A Warrants represented by
any Class A Warrant Certificate, to evidence any unexercised Class A
Warrants held by the exercising Registered Holder, (iii) those issued
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upon any transfer or exchange pursuant to Section 6; (iv) those issued
in replacement of lost, stolen, destroyed or mutilated Class A Warrant
Certificates pursuant to Section 7; and (v) at the option of the
Company, in such form as may be approved by its Board of Directors, to
reflect any adjustment or change in the Purchase Price, the number of
shares of Common Stock purchasable upon exercise of the Class A
Warrants or the Redemption Price therefor made pursuant to Section 9
hereof.
SECTION 3. FORM AND EXECUTION OF CLASS A WARRANT
CERTIFICATES.
(a) The Class A Warrant Certificates shall be substantially
in the form annexed hereto as Exhibit A (the provisions of which are
hereby incorporated herein) and may have such letters, numbers or
other marks of identification or designation and such legends,
summaries or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Class A Warrants
may be listed, or to conform to usage or to the requirements of
Section 2 (b). The Class A Warrant Certificates shall be dated the
date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen, or destroyed Class A
Warrant Certificates) and issued in registered form. Class A Warrant
Certificates shall be numbered serially with the letters [____].
(b) Class A Warrant Certificates shall be executed on
behalf of the Company by its President or any Vice President and by
its Secretary or an Assistant Secretary, by manual signatures or by
facsimile signatures printed thereon, and shall have imprinted thereon
a facsimile of the Company's seal. Class A Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be valid
for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Class A Warrant Certificates
shall cease to be an officer of the Company or to hold the particular
office referenced in the Class A Warrant Certificate before the date
of issuance of the Class A Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof,
such Class A Warrant Certificates may nevertheless be countersigned by
the Warrant Agent, issued and delivered with the same force and effect
as though the person who signed such Class A Warrant Certificates had
not ceased to be an officer of the Company or to hold such office.
After countersignature by the Warrant Agent, Class A Warrant
Certificates shall be delivered by the Warrant Agent to the Registered
Holder without further action by the Company, except as otherwise
provided by Section 4 hereof.
SECTION 4. EXERCISE.
(a) Each Class A Warrant may be exercised by the Registered
Holder thereof at any time on or after the Initial Class A Warrant
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Exercise Date, but not after the Class A Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein and in the
applicable Class A Warrant Certificate. A Class A Warrant shall be
deemed to have been exercised immediately prior to the close of
business on the Exercise Date and the person entitled to receive the
securities deliverable upon such exercise shall be treated for all
purposes as the holder of those securities upon the exercise of the
Class A Warrant as of the close of business on the Exercise Date. As
soon as practicable on or after the Exercise Date the Warrant Agent
shall deposit the proceeds received from the exercise of a Class A
Warrant and shall notify the Company in writing of the exercise of the
Class A Warrants. Promptly following, and in any event within five
days after the date of such notice from the Warrant Agent, the Warrant
Agent, on behalf of the Company, shall cause to be issued and
delivered by the Transfer Agent, to the person or persons entitled to
receive the same, a certificate or certificates for the securities
deliverable upon such exercise (plus a certificate for any remaining
unexercised Class A Warrants of the Registered Holder), unless prior
to the date of issuance of such certificates the Company shall
instruct the Warrant Agent to refrain from causing such issuance of
certificates pending clearance of checks received in payment of the
Purchase Price pursuant to such Class A Warrants. Upon the exercise
of any Class A Warrant and clearance of the funds received, the
Warrant Agent shall promptly remit the payment received for the Class
A Warrant (the "Class A Warrant Proceeds") to the Company or as the
Company may direct in writing, subject to the provisions of Section 4
hereof.
(b) In the event that Class A Warrants have not been
exercised or redeemed on or before the Class A Warrant Expiration
Date, the Company promptly shall issue to the Registered Holders of
such Class A Warrants shares of Common Stock in exchange for such
expired Class A Warrants in the ratio of one (1) share of Common Stock
for each one thousand (1000) expired Class A Warrants. The Company
shall not be required to issue fractions of shares of Common Stock and
shall not be required to pay cash in lieu thereof under this paragraph
(b) in respect of amounts of Class A Warrants less than one thousand
(1000).
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF
TAXES; ETC. (a) The Company covenants that it will at all times
reserve and keep available out of its authorized Common Stock, solely
for the purpose of issue upon exercise of Class A Warrants, such
number of shares of Common Stock as shall then be issuable upon the
exercise of all outstanding Class A Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise
of the Class A Warrants shall, at the time of delivery, be duly and
validly issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issue thereof (other than those
which the Company shall promptly pay or discharge), and that upon
issuance such shares shall be listed on each national securities
exchange or eligible for inclusion in each automated quotation system,
if any, on which the other shares of outstanding Common Stock of the
Company are then listed or eligible for inclusion.
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(b) The Company covenants that if any securities to be
reserved for the purpose of exercise of Class A Warrants hereunder
require registration with, or approval of, any governmental authority
under any federal securities law before such securities may be validly
issued or delivered upon such exercise, then the Company will in good
faith and as expeditiously as reasonably possible, endeavor to secure
such registration or approval. The Company will use reasonable
efforts to obtain appropriate approvals or registrations under state
"blue sky" securities laws. With respect to any such securities,
however, Class A Warrants may not be exercised by, or shares of Common
Stock issued to, any Registered Holder in any state in which such
exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect
to the issuance of Class A Warrants, or the issuance, or delivery of
any shares upon exercise of the Class A Warrants; provided, however,
that if the shares of Common Stock are to be delivered in a name other
than the name of the Registered Holder of the Class A Warrant
Certificate representing any Class A Warrant being exercised, then no
such delivery shall be made unless the person requesting the same has
paid to the Warrant Agent the amount of transfer taxes or charges
incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for
certificates representing shares of Common Stock issuable upon
exercise of the Class A Warrants, and the Company will authorize the
Transfer Agent to comply with all such proper requisitions. The
Company will file with the Warrant Agent a statement setting forth the
name and address of the Transfer Agent of the Company for shares of
Common Stock issuable upon exercise of the Class A Warrants if the
Transfer Agent is other than that named in Section 1(q).
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Class A Warrant Certificates may be exchanged for other
Class A Warrant Certificates representing an equal aggregate number of
Class A Warrants of the same class or may be transferred in whole or
in part. Class A Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent at its Corporate Office, and upon
satisfaction of the terms and provisions hereof, the Company shall
execute and the Warrant Agent shall countersign, issue and deliver in
exchange therefor the Class A Warrant Certificate or Certificates
which the Registered Holder making the exchange shall be entitled to
receive.
(b) The Warrant Agent shall keep at its office books in
which, subject to such reasonable regulations as it may prescribe, it
shall register Class A Warrant Certificates and the transfer thereof
in accordance with its regular practice. Upon due presentment for
registration of transfer of any Class A Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue
and deliver to the transferee or transferees a new Class A Warrant
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Certificate or Certificates representing an equal aggregate number of
Class A Warrants.
(c) With respect to all Class A Warrant Certificates
presented for registration or transfer, or for exchange or exercise,
the subscription form on the reverse thereof shall be duly endorsed,
or be accompanied by a written instrument or instruments of transfer
and subscription, in form satisfactory to the Company and the Warrant
Agent, duly executed by the Registered Holder or his attorney-in-fact
duly authorized in writing.
(d) A service charge may be imposed by the Warrant Agent
for any exchange or registration of transfer of Class A Warrant
Certificates. In addition, the Company may require payment by such
holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) All Class A Warrant Certificates surrendered for
exercise or for exchange in case of mutilated Class A Warrant
Certificates shall be promptly cancelled by the Warrant Agent and
thereafter retained by the Warrant Agent until termination of this
Agreement or resignation as Warrant Agent, or, disposed of or
destroyed, at the direction of the Company.
(f) Prior to due presentment for registration of transfer
thereof, the Company and the Warrant Agent may deem and treat the
Registered Holder of any Class A Warrant Certificate as the absolute
owner thereof and of each Class A Warrant represented thereby
(notwithstanding any notations of ownership or writing thereon made by
anyone other than a duly authorized officer of the Company or the
Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary.
(g) Notwithstanding anything to the contrary in this
Agreement, until such time as any Class A Warrant and the shares of
Common Stock issuable upon the exercise of such Class A Warrant have
been sold pursuant to an effective registration statement under the
Securities Act of 1933, as amended, such Class A Warrant and the share
of Common Stock issuable upon the exercise of such Class A Warrant
shall not be sold, transferred, assigned, hypothecated or otherwise
disposed of, in whole or in part, except pursuant to an opinion of
counsel reasonably satisfactory to the Company to the effect that an
exemption from registration under the Securities Act of 1933, as
amended, is available.
(h) The Company agrees to use its reasonable best efforts
to maintain the effectiveness of a current registration statement and
prospectus under the Securities Act of 1933, as amended, covering the
shares of Common Stock issuable upon the exercise of the Class A
Warrants for a period of at least two years from the date of the
original issuance of the Class A Warrants.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the
Company and the Warrant Agent of evidence satisfactory to them of the
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ownership of and loss, theft, destruction or mutilation of any Class A
Warrant Certificate and (in case of loss, theft or destruction) of
indemnity satisfactory to them, and (in the case of mutilation) upon
surrender and cancellation thereof, the Company shall execute and the
Warrant Agent shall (in the absence of notice to the Company and/or
Warrant Agent that the Class A Warrant Certificate has been acquired
by a bona fide purchaser) countersign and deliver to the Registered
Holder in lieu thereof a new Class A Warrant Certificate of like tenor
representing an equal aggregate number of Class A Warrants.
Applicants for a substitute Class A Warrant Certificate shall comply
with such other reasonable regulations and pay such other reasonable
charges as the Warrant Agent may prescribe.
SECTION 8. REDEMPTION.
(a) The Class A Warrants may be redeemed in whole at the
Company's option at a price of $0.50 per Class A Warrant upon thirty
days' written notice following a period of thirty (30) consecutive
trading days (ending the third day prior to the date such notice is
given) during which period the Market Price of the Common Stock
receivable upon exercise of such Class A Warrant shall be at least
$5.00 (the "Target Price"), subject to adjustment as set forth in
Section 8(f), below. "Market Price" for the purpose of this Section 8
shall mean the closing price of publicly traded shares of Common Stock
on the national securities exchange on which the Common Stock is
listed (if the Common Stock is so listed) or the average of the high
closing bid prices of the Common Stock on The Nasdaq National Market
or The Nasdaq SmallCap Market (if the Common Stock is regularly quoted
thereon), or, if not so listed or regularly quoted, the average of the
high closing bid prices of publicly traded shares of Common Stock in
the over-the-counter market, or, if such bid prices shall not be
available, as reported by the National Quotation Bureau, Inc. or any
other nationally recognized quotation service selected by the Company.
(b) If the conditions set forth in Section 8(a) are met,
and the Company desires to exercise its right to redeem the Class A
Warrants, it shall mail a notice of redemption to each of the
Registered Holders of the Class A Warrants to be redeemed, first
class, postage prepaid, not later than the thirtieth day before the
date fixed for redemption, at their last address as shall appear on
the records maintained pursuant to Section 6(b). Any notice mailed in
the manner provided herein shall be conclusively presumed to have been
duly given whether or not the Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the
Redemption Price, (ii) the date fixed by the Company for the
redemption of the Class A Warrants (the "Redemption Date"), (iii) the
place where the Class A Warrant Certificates shall be delivered and
(iv) that the right to exercise the Class A Warrant shall terminate at
5:00 P.M. (New York time) on the business day immediately preceding
the Redemption Date. No failure to mail such notice nor any defect
therein or in the mailing thereof shall affect the validity of the
proceedings for such redemption except as to a Registered Holder (i)
to whom notice was not mailed or (ii) whose notice was defective. An
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affidavit of the Warrant Agent or of the Secretary or an Assistant
Secretary of the Company that notice of redemption has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(d) Any right to exercise a Class A Warrant shall terminate
at 5:00 P.M. (New York time) on the business day immediately preceding
the Redemption Date. On and after the Redemption Date, holders of the
Class A Warrants shall have no further rights except to receive, upon
surrender of the Class A Warrants, the Redemption Price.
(e) From and after the Redemption Date, the Company shall,
at the place specified in the notice of redemption, upon presentation
and surrender to the Company by or on behalf of the Registered Holder
thereof of one or more Class A Warrant Certificates evidencing Class A
Warrants to be redeemed, deliver or cause to be delivered to or upon
the written order of such Registered Holder a sum in cash equal to the
Redemption Price of each such Class A Warrant. From and after the
Redemption Date and upon the deposit or setting aside by the Company
of a sum sufficient to redeem the Class A Warrants when called for
redemption, such Class A Warrants shall expire and become void and all
rights hereunder and under the Class A Warrant Certificates, except
the right to receive payment of the Redemption Price, shall cease.
(f) If the Common Stock is subdivided or combined into a
greater or smaller number of shares of Common Stock, the Target Price
shall be proportionally adjusted by the ratio which the total number
of shares of Common Stock outstanding immediately prior to such event
bears to the total number of shares of Common Stock to be outstanding
immediately after such event.
SECTION 9. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
SHARES OF COMMON STOCK OR CLASS A WARRANTS.
(a) In case of any reclassification, capital reorganization
or other change of outstanding shares of Common Stock, or in case of
any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as,
or substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause
effective provision to be made so that each holder of a Class A
Warrant then outstanding shall have the right thereafter, by
exercising such Class A Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization or other
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock that might have been purchased upon
exercise of such Class A Warrant immediately prior to such
reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance. Any such provision shall
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include provision for adjustments that shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section
9. The Company shall not effect any such consolidation, merger or
sale unless prior to or simultaneously with the consummation thereof
the successor (if other than the Company) resulting from such
consolidation or merger or the corporation purchasing assets or other
appropriate corporation or entity shall assume, by written instrument
executed and delivered to the Warrant Agent, the obligation to deliver
to the holder of each Class A Warrant such shares of stock, securities
or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase and the other obligations under
this Agreement. The foregoing provisions shall similarly apply to
successive reclassifications, capital reorganizations and other
changes of outstanding shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
(b) Irrespective of any adjustments or changes in the
Purchase Price or the number of shares of Common Stock purchasable
upon exercise of the Class A Warrants, the Class A Warrant
Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Class A Warrant
Certificates pursuant to Section 2(d) hereof, continue to express the
Purchase Price per share, the number of shares purchasable thereunder
and the Redemption Price therefor as the Purchase Price per share, and
the number of shares purchasable and the Redemption Price therefore
were expressed in the Class A Warrant Certificates when the same were
originally issued.
(c) After each adjustment of the Purchase Price pursuant to
this Section 9, the Company will promptly prepare a certificate signed
by the President or any Vice President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, of the
Company setting forth: (i) the Purchase Price as so adjusted, (ii) the
number of shares of Common Stock purchasable upon exercise of each
Class A Warrant after such adjustment, and, if the Company shall have
elected to adjust the number of Class A Warrants, the number of Class
A Warrants to which the registered holder of each Class A Warrant
shall then be entitled, and the adjustment in Redemption Price
resulting therefrom, and (iii) a brief statement of the facts
accounting for such adjustment. The Company will promptly file such
certificate with the Warrant Agent and cause a brief summary thereof
to be sent by ordinary first class mail to each Registered Holder of
Class A Warrants at his, her or its last address as it shall appear on
the registry books of the Warrant Agent. No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect
the validity thereof except as to the holder to whom the Company
failed to mail such notice, or except as to the holder whose notice
was defective. The affidavit of an officer of the Warrant Agent or
the Secretary or an Assistant Secretary of the Company that such
notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(d) For purposes of Section 9(a) hereof, no adjustment of
the Purchase Price shall be made unless such adjustment would require
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an increase or decrease of at least $0.10 in such price; provided that
any adjustments which by reason of this clause (d) are not required to
be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any
adjustment(s) so carried forward, shall require an increase or
decrease of at least $0.10 in the Purchase Price then in effect
hereunder.
(e) Any determination as to whether an adjustment in the
Purchase Price in effect hereunder is required pursuant to Section 9,
or as to the amount of any such adjustment, if required, shall be
binding upon the holders of the Class A Warrants and the Company if
made in good faith by the Board of Directors of the Company.
SECTION 10. FRACTIONAL CLASS A WARRANTS AND FRACTIONAL
SHARES.
(a) If the number of shares of Common Stock purchasable
upon the exercise of each Class A Warrant is adjusted pursuant to
Section 9 hereof, the Company nevertheless shall not be required to
issue fractions of shares, upon exercise of the Class A Warrants or
otherwise, or to distribute certificates that evidence fractional
shares. With respect to any fraction of a share called for upon any
exercise hereof, the Company shall pay to the Registered Holder an
amount in cash equal to such fraction multiplied by the current market
value of such fractional share, determined as follows:
(i) If the Common Stock is listed on a national
securities exchange or on The Nasdaq National Market or The
Nasdaq SmallCap Market, the current value shall be the last
reported sale price of the Common Stock on such exchange or
on The Nasdaq National Market or The Nasdaq SmallCap Market
on the last business day prior to the date of exercise of
the Class A Warrant or if no such sale is made on such day,
the average of the closing bid and asked prices for such day
on such exchange or on The Nasdaq National Market or The
Nasdaq SmallCap Market; or
(ii) If the Common Stock is not listed on a national
securities exchange or listed for trading on The Nasdaq
National Market or The Nasdaq SmallCap Market, the current
value shall be the average of the last reported bid and
asked prices reported by the National Quotation Bureau, Inc.
on the last business day prior to the date of the exercise
of the Class A Warrant; or
(iii) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked
prices are not so reported, the current value shall be an
amount determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
SECTION 11. CLASS A WARRANTHOLDERS NOT DEEMED
STOCKHOLDERS. No holder of Class A Warrants shall, as such, be
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entitled to vote or to receive dividends or be deemed the holder of
Common Stock that may at any time be issuable upon exercise of such
Class A Warrants for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the holder of Class A
Warrants, 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, issue or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or
conveyance or otherwise), or to receive notice of meetings, or to
receive dividends or subscription rights, until such holder shall have
exercised such Class A Warrants and been issued shares of Common Stock
in accordance with the provisions hereof.
SECTION 12. RIGHTS OF ACTION. All rights of action with
respect to this Agreement are vested in the respective Registered
Holders of the Class A Warrants, and any Registered Holder of a Class
A Warrant, without consent of the Warrant Agent or of the holder of
any other Class A Warrant, may, in his, her or its own behalf and for
his, her or its own benefit, enforce against the Company such
Registered Holder's right to exercise his, her or its Class A Warrants
for the purchase of shares of Common Stock in the manner provided in
the Class A Warrant Certificate and this Agreement.
SECTION 13. AGREEMENT OF CLASS A WARRANTHOLDERS. Every
holder of a Class A Warrant, by such holder's acceptance thereof,
consents and agrees with the Company, the Warrant Agent and every
other holder of a Class A Warrant that:
(a) The Class A Warrants are transferable only on the
registry books of the Warrant Agent by the Registered Holder thereof
in person or by his, her or its attorney duly authorized in writing
and only if the Class A Warrant Certificates representing such Class A
Warrants are surrendered at the office of the Warrant Agent, duly
endorsed or accompanied by a proper instrument of transfer
satisfactory to the Warrant Agent and the Company in their sole
discretion, together with payment of any applicable transfer taxes;
and
(b) The Company and the Warrant Agent may deem and treat
the person in whose name the Class A Warrant Certificate is registered
as the Registered Holder and as the absolute, true and lawful owner of
the Class A Warrants represented thereby for all purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice or
knowledge to the contrary, except as otherwise expressly provided in
Section 6 hereof.
SECTION 14. CANCELLATION OF CLASS A WARRANT CERTIFICATES.
If the Company shall purchase or acquire any Class A Warrant or Class
A Warrants, the Class A Warrant Certificate or Class A Warrant
Certificates evidencing the same shall thereupon be delivered to the
Warrant Agent and cancelled by it and retired. The Warrant Agent
shall also cancel the Class A Warrant Certificates following exercise
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of any or all of the Class A Warrants represented thereby or delivered
to it for transfer, split-up, combination or exchange.
SECTION 15. CONCERNING THE WARRANT AGENT. The Warrant
Agent acts hereunder as agent and in a ministerial capacity for the
Company, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not, by issuing and delivering Class
A Warrant Certificates or by any other act hereunder be deemed to make
any representations as to the validity, value or authorization of the
Class A Warrant Certificates or the Class A Warrants represented
thereby or of any securities or other property delivered upon exercise
of any Class A Warrant or whether any stock issued upon exercise of
any Class A Warrant is fully paid and nonassessable.
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Class A Warrant Certificates to make
or cause to be made any adjustment of the Purchase Price or the
Redemption Price provided in this Agreement, or to determine whether
any fact exists which may require any such adjustments, or with
respect to the nature or extent of any such adjustment, when made, or
with respect to the method employed in making the same. It shall not
(a) be liable for any recital or statement of facts contained herein
or for any action taken, suffered or omitted by it in reliance on any
Class A Warrant Certificate or other document or instrument believed
by it in good faith to be genuine and to have been signed or presented
by the proper party or parties, (b) be responsible for any failure on
the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Class A Warrant
Certificate, or (c) be liable for any act or omission in connection
with this Agreement except for its own negligence or wilful
misconduct.
The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall
incur no liability or responsibility for any action taken, suffered or
omitted by it in good faith in accordance with the opinion or advice
of such counsel.
Any notice, statement, instruction, request, direction,
order or demand of the Company shall be sufficiently evidenced by an
instrument signed by the President, any Vice President, its Secretary,
or Assistant Secretary (unless other evidence in respect thereof is
herein specifically prescribed). The Warrant Agent shall not be
liable for any action taken, suffered or omitted by it in accordance
with such notice, statement, instruction, request, direction, order or
demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its
reasonable expenses hereunder; it further agrees to indemnify the
Warrant Agent and save it harmless against any and all losses,
expenses and liabilities, including judgments, costs and counsel fees,
for anything done or omitted by the Warrant Agent in the execution of
its duties and powers hereunder except losses, expenses and
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liabilities arising as a result of the Warrant Agent's negligence or
wilful misconduct.
The Warrant Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or wilful
misconduct), after giving 30 days' prior written notice to the
Company. At least 15 days prior to the date such resignation is to
become effective, the Warrant Agent shall cause a copy of such notice
of resignation to be mailed to the Registered Holder of each Class A
Warrant Certificate at the Company's expense. Upon such resignation,
or any inability of the Warrant Agent to act as such hereunder, the
Company shall appoint a new warrant agent in writing. If the Company
shall fail to make such appoint within a period of 15 days after it
has been notified in writing of such resignation by the resigning
Warrant Agent, then the Registered Holder of any Class A Warrant
Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether
appointed by the Company or by such a court, shall be a bank or trust
company having a capital and surplus, as shown by its last published
report to its stockholders, of not less than $10,000,000 or a stock
transfer company. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, such new warrant
agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the
Warrant Agent, without any further assurance, conveyance, act or deed;
but if for any reason it shall be necessary or expedient to execute
and deliver any further assurance, conveyance, act or deed, the same
shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not
later than the effective date of any such appointment the Company
shall file notice thereof with the resigning Warrant Agent and shall
forthwith cause a copy of such notice to be mailed to the Registered
Holder of each Class A Warrant Certificate.
Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation resulting
from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party or any corporation succeeding to the trust
business of the Warrant Agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation
is eligible for appointment as successor to the Warrant Agent under
the provisions of the preceding paragraph. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent
to be mailed to the Company and to the Registered Holder of each Class
A Warrant Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any
of its or their officers or directors, may buy and hold or sell Class
A Warrants or other securities of the Company and otherwise deal with
the Company in the same manner as to the same extent and with like
effects as though it were not Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
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SECTION 16. MODIFICATION OF AGREEMENT. Subject to the
provisions of Section 4(b), the Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this
Agreement (a) that they shall deem appropriate to cure any ambiguity
or to correct any defective or inconsistent provision or manifest
mistake or error herein contained; or (b) that they may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of Class A Warrant Certificates; provided, however, that this
Agreement shall not otherwise be modified, supplemented or altered in
any respect except with the consent in writing of the Registered
Holders of Class A Warrant Certificates representing not less than 50%
of the Class A Warrants then outstanding; and provided, further, that
no change in the number or nature of the securities purchasable upon
the exercise of any Class A Warrant, or the Purchase Price therefor,
or the acceleration of the Class A Warrant Expiration Date, shall be
made without the consent in writing of the Registered Holder of the
Class A Warrant Certificate representing such Class A Warrant, other
than such changes as are specifically prescribed by this Agreement as
originally executed or are made in compliance with applicable law.
SECTION 17. NOTICES. All notices, requests, consents and
other communications hereunder shall be in writing and shall be deemed
to have been made when delivered or mailed first class registered or
certified mail, postage prepaid as follows: if to the Registered
Holder of a Class A Warrant Certificate, at the address of such holder
as shown on the registry books maintained by the Warrant Agent; if to
the Company, at 000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: President, with a copy to Xxxxxx Xxxxxx & Xxxxx, 0000 Xxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq., or
at such other address as may have been furnished to the Warrant Agent
in writing by the Company; and, if to the Warrant Agent, at its
Corporate Office.
SECTION 18. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New York, without reference to principles of conflict of laws.
SECTION 19. BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the Company and the Warrant
Agent and their respective successors and assigns, and the holders
from time to time of Class A Warrant Certificates. Nothing in this
Agreement is intended or shall be construed to confer upon any other
person any right, remedy or claim, in equity or at law, or to impose
upon any other person any duty, liability or obligation.
SECTION 20. TERMINATION. This Agreement shall terminate
at the close of business on the Expiration Date of all the Class A
Warrants or such earlier date upon which all Class A Warrants have
been exercised, except that the Warrant Agent shall account to the
Company for cash held by it and the provisions of Section 4(b) and 15
hereof shall survive such termination.
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SECTION 21. COUNTERPARTS. This Agreement may be executed
in several counterparts, which take together shall constitute a single
document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
AMERICAN COUNTRY HOLDINGS INC.
By:_________________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:_________________________________________
Name:
Title:
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