EXHIBIT 4.5
INDUSTRIAL HOLDINGS, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES
AS WARRANT AGENT
WARRANT AGREEMENT
FOR CLASS D COMMON STOCK PURCHASE WARRANTS
DATED AS OF ______________, 1997
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TABLE OF CONTENTS
Page
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PARTIES...................................................................
RECITALS..................................................................
ARTICLE I ISSUANCE AND EXECUTION OF WARRANTS............................ 1
Section 1.01 Appointment of Warrant Agent..................... 1
Section 1.02 Form of Warrant.................................. 1
ARTICLE II EXERCISE PRICE, TERM, AND METHOD OF EXERCISE.................. 2
Section 2.01 Exercise Price................................... 2
Section 2.02 Warrant Rights and Term.......................... 2
Section 2.03 Expiration....................................... 2
Section 2.04 Method of Exercise............................... 2
Section 2.05 Extension of Expiration Date..................... 3
Section 2.06 Method of Call................................... 3
Section 2.07 Reduction of Exercise Price...................... 3
ARTICLE III ADJUSTMENTS TO WARRANTS UPON CERTAIN EVENTS................... 3
Section 3.01 Subdivision or Combination of Common Stock....... 3
Section 3.02 Adjustment to Exercise Price..................... 3
Section 3.03 Proportionate Adjustment in Shares of
Common Stock Per Warrant...................... 4
Section 3.04 Adjustment for De Minimus Changes................ 4
Section 3.05 Election to Increase Warrants Instead of
Shares of Common Stock Per Warrant............ 4
Section 3.06 Effect on Sale, Merger or Consolidation.......... 5
Section 3.07 Notice of Adjustment............................. 5
Section 3.08 Notice of Certain Events......................... 6
Section 3.09 Effect of Adjustment on Warrant Certificates..... 7
Section 3.10 Warrant Agent Not Responsible for Adjustment..... 7
ARTICLE IV RIGHTS OF WARRANT HOLDERS..................................... 7
Section 4.01 No Rights of Stockholders........................ 7
Section 4.02 Lost Warrants.................................... 8
Section 4.03 Maintenance of Sufficient and Proper Shares
of Common Stock............................... 8
Section 4.04 Fractional Shares and Warrants................... 9
Section 4.05 Registered Holder as Owner....................... 10
Section 4.06 Exchange and Transfer of Warrants................ 10
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ARTICLE V THE WARRANT AGENT............................................. 10
Section 5.01 Resignation, Removal, and Succession............. 10
Section 5.02 Additional Warrant Agents........................ 11
Section 5.03 Compensation..................................... 11
Section 5.04 Responsibility and Indemnity..................... 12
Section 5.05 Dealing for Own Account. ........................ 13
Section 5.06 Accounting to Company............................ 13
ARTICLE VI GENERAL....................................................... 13
Section 6.01 Canceled Warrants................................ 13
Section 6.02 Taxes on Issuance of Shares of Common Stock...... 13
Section 6.03 Dates and Times.................................. 13
Section 6.04 Amendments to Warrant Agreement.................. 14
Section 6.05 Binding Agreement................................ 14
Section 6.06 Copies of Agreement with Warrant Agent........... 14
Section 6.07 Notices.......................................... 14
Section 6.08 Governing Law.................................... 15
Section 6.09 Headings......................................... 15
Section 6.10 Counterparts..................................... 15
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WARRANT AGREEMENT
THIS AGREEMENT is dated as of ______________, 1997, by and between
INDUSTRIAL HOLDINGS, INC., a Texas corporation ("Company"), and CHASEMELLON
SHAREHOLDER SERVICES (herein with any successor or alternate agent called the
"Warrant Agent"), with reference to the following recitals:
W I T N E S S E T H:
WHEREAS, pursuant to an S-2 Registration Statement, the Company is
making a tender offer to holders of Class B Common Stock purchase warrant
("Class A Warrant"), whereby Class B Warrant holders who exercise such warrants
pursuant to the terms of the tender offer receive one share of Common Stock, one
Class C Common Stock purchase warrant and one Class D Common Stock purchase
warrant.
WHEREAS, Owners of the Class D Warrants (referred to hereafter as
"Warrant") shall have certain rights as specified herein; and
WHEREAS, each Warrant issued under this Agreement entitles the holder
thereof to purchase one share of Common Stock at the price designated as the
"Exercise Price" herein (subject to adjustment hereunder);
NOW THEREFORE, in consideration of the mutual agreements contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
ISSUANCE AND EXECUTION OF WARRANTS
Section 1.01 APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant as Agent to act as its agent in accordance with the instructions
hereinafter set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
Section 1.02 FORM OF WARRANT. Each Warrant shall be evidenced by a
certificate ("Warrant Certificate"). The text of each Warrant Certificate (and
the related forms of exercise and assignment) shall be substantially in the form
attached hereto as Exhibit "A" and may have such identification, designation,
and information 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 the National Association of Securities Dealers, Inc.,
or any stock exchange on which the Warrants may be listed, or to conform to
usage.
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
and delivered to the Warrant Agent, and shall be countersigned and delivered by
the Warrant Agent upon the written order of the Company signed by any such
officer of the Company. Each Warrant Certificate shall be dated the date of its
initial issuance. Warrant Certificates shall be executed on behalf of the
Company either manually or by facsimile signature printed thereon and shall have
the Company's seal or a facsimile thereof affixed or imprinted thereon. The
Warrant Agent shall countersign the Warrant Certificate manually, and no Warrant
Certificate shall be valid for any
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purpose unless so countersigned. In case any officer whose signature has been
placed upon any Warrant Certificate ceases to be such before such Warrant
Certificate is issued, it may be issued with the same effect as if such officer
had not ceased to be such at the date of issuance.
ARTICLE II
EXERCISE PRICE, TERM, AND METHOD OF EXERCISE
Section 2.01 EXERCISE PRICE. Unless adjusted as otherwise provided
herein, the exercise price ("Exercise Price") of each Warrant issued hereunder
shall be $22.50. The Exercise Price may be adjusted by the Company upon any
extension of the Expiration Date (as hereinafter defined) pursuant to Section
2.05 and shall be adjusted upon the occurrence of certain events as set forth in
Article III hereof.
Section 2.02 WARRANT RIGHTS AND TERM. Each Warrant shall entitle the
person in whose name the Warrant Certificate shall then be registered on the
books maintained by the Warrant Agent ("Warrant Holder"), upon exercise thereof
and subject to the provisions thereof and of this Agreement, including
provisions relating to adjustments, to purchase from the Company one fully paid
and non-assessable share of Common Stock at the then Exercise Price, at any time
on and after the date hereof until the expiration of the Warrant at 5:00 p.m.,
New York City time, on January 14, 2000, or such later date as may be
established pursuant to Section 2.05 ("Expiration Date").
Section 2.03 EXPIRATION. Each Warrant not exercised by 5:00 p.m., New
York City time, on the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall
thereupon cease.
Section 2.04 METHOD OF EXERCISE. The Warrant Holder may exercise his
rights with respect to all or any whole number of Warrants evidenced by a
Warrant Certificate, provided that (except as provided in Section 4.04),
Warrants shall not be exercisable for other than a whole number of shares of
Common Stock. Exercise shall be effected by surrender of the Warrant
Certificate, with the exercise form thereon duly executed, to the Warrant Agent
at its offices as designated in Section 6.07 hereof, together with the Exercise
Price for each share of Common Stock to be purchased. Payment of the Exercise
Price shall be made in lawful money of the United States of America by certified
check, payable to the order of the Warrant Agent.
Upon receipt of a Warrant Certificate with the exercise form duly
executed and accompanied by full and proper payment of the Exercise Price for
the shares of Common Stock purchased thereby, the Warrant Agent (after
requisitioning any certificates for shares of Common Stock from the Company's
transfer agent, if necessary) shall deliver to the Warrant Holder certificates
for the total number of whole shares of Common Stock for which the Warrants
evidenced by such Warrant Certificate are being exercised in such names and
denominations as the Warrant Holder has directed; provided, however, that if, on
the date of surrender of such Warrant Certificate and payment of the Exercise
Price, the transfer books for the Common Stock shall be closed, the certificate
for the shares of Common Stock shall be issuable as of the date on which such
books shall next be open (whether before, on, or after the Expiration Date) at
the Exercise Price and upon the other conditions in effect on the date of such
surrender.
Section 2.05 EXTENSION OF EXPIRATION DATE. At any time or from time to
time prior to the Expiration Date then in effect, the Company may, in its sole
discretion, by delivery of notice to the Warrant Agent, extend the Expiration
Date to provide for an additional period or periods during which the Warrants
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may be exercised as the Company, in its sole discretion, may elect. In
connection with any such extension of the Expiration Date, the Company may, in
its sole discretion, increase or decrease the Exercise Price payable during any
such extension.
Section 2.06 METHOD OF CALL. The Company, may in its sole discretion,
call the Warrants at any time by paying Warrant Holders $.05 per Warrant, if the
shares of Common Stock have traded at $25.00 per share for 20 consecutive
trading days. Notice of the call will be mailed to all Warrant Holders at least
30 days but no more than sixty days before the date in which the Warrants have
been called.
Section 2.07 REDUCTION OF EXERCISE PRICE. The Board of Directors
retains the right, upon giving written notice to the Warrant Agent, to reduce
the Exercise Price or extend the Expiration Date of the Warrants.
ARTICLE III
ADJUSTMENTS TO WARRANTS UPON CERTAIN EVENTS
Section 3.01 SUBDIVISION OR COMBINATION OF COMMON STOCK. Except as
provided in Section 3.04, if at any time after the date of this Agreement and so
long as any Warrant is outstanding, there is a stock split, stock dividend,
subdivision, or similar distribution with respect to the Common Stock, or a
combination of the Common Stock, then, in such event, the Exercise Price shall
be adjusted in accordance with Section 3.02.
Section 3.02 ADJUSTMENT TO EXERCISE PRICE. Immediately upon the
effective date of any event requiring adjustment pursuant to Section 3.01, the
Company shall adjust the Exercise Price then in effect (to the nearest whole
cent) as follows:
(a) in the event such adjustment is caused by a stock split, stock
dividend, subdivision, or other similar distribution of shares of Common Stock,
the Exercise Price in effect immediately prior to the effective date of such
event shall be decreased to an amount which shall bear the same relation to the
Exercise Price in effect immediately prior to such event as the total number of
shares of Common Stock outstanding immediately prior to such event bears to the
total number of shares of Common Stock outstanding immediately after such event;
(b) in the event such adjustment is caused by a combination of shares
of Common Stock, the Exercise Price in effect immediately prior to the close of
business on the effective date of such event shall be increased to an amount
which shall bear the same relation to the Exercise Price in effect immediately
prior to such event as the total number of shares of Common Stock outstanding
immediately prior to such event bears to the total number of shares of Common
Stock outstanding immediately after such event.
Section 3.03 PROPORTIONATE ADJUSTMENT IN SHARES OF COMMON STOCK PER
WARRANT. Unless the Company shall have exercised its election as provided in
Section 3.05, upon each adjustment of the Exercise Price pursuant to Section
3.02, each Warrant outstanding prior to such adjustment in the Exercise Price
shall thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of shares of Common Stock (calculated to the nearest hundredth)
obtained by (i) multiplying the number of shares of Common Stock issuable upon
exercise of a Warrant prior to adjustment of the number of shares of Common
Stock by
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the Exercise Price in effect prior to adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect after such
adjustment of the Exercise Price.
Section 3.04 ADJUSTMENT FOR DE MINIMUS CHANGES. Anything in this
Article III to the contrary notwithstanding, the Company shall not be required,
except as hereinafter provided in this Section 3.04, to make any adjustment of
the Exercise Price in any case in which the amount by which the then Exercise
Price would be reduced or increased would be less than one percent; provided,
however, that an adjustments which by reason of this Section 3.04 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
Section 3.05 ELECTION TO INCREASE WARRANTS INSTEAD OF SHARES OF COMMON
STOCK PER WARRANT. The Company may elect, on or after the date of any adjustment
of the Exercise Price, to adjust the number of Warrants in substitution for any
adjustment in the number of shares of Common Stock pursuant to Section 3.03.
Each Warrant held of record immediately prior to such adjustment of the number
of Warrants shall become that number of Warrants (calculated to the nearest
hundredth) obtained by (i) multiplying the number of Warrants held of record
prior to adjustment of the number of Warrants by the Exercise Price in effect
prior to adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect after adjustment of the Exercise Price.
The Company shall make an announcement of its election to adjust the number of
Warrants, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. Such record date may be the date
on which the Exercise Price is adjusted or any date thereafter, but shall be at
least 10 days later than the date of the announcement of the Company's election.
Upon each adjustment of the number of Warrants pursuant to this Section, the
Company shall, as promptly as practicable, distribute to holders of record on
such record date Warrant Certificates evidencing the additional Warrants to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall distribute to such holders of record in
substitution and replacement for the Warrant Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Warrant Certificates evidencing all the Warrants to which such
holders shall be entitled after such adjustment. Warrant Certificates so
distributed shall be issued, executed, and countersigned in the manner specified
in this Agreement and shall be registered in the name of the holders of record
of the Warrant Certificates on the record date specified in the public
announcement.
Section 3.06 EFFECT ON SALE, MERGER OR CONSOLIDATION. In the event of
any capital reorganization of the Company, or of any reclassification (other
than a change in par value) of the Common Stock, or of any conversion of the
Common Stock into securities of another corporation, or the consolidation of the
Company with, or the merger of the Company into, any other corporation where the
Company is not the surviving corporation or in the event of the sale of all or
substantially all of the properties and assets of the Company to any other
corporation (each such event hereinafter being referred to as a "Capital
Change"), each Warrant shall be exercisable after such Capital Change, upon the
terms and conditions specified in this Agreement, for the amount of shares of
stock or other securities, property, or cash of the Company, or of the
corporation into which shares of Common Stock are converted or resulting from
such consolidation or surviving such merger or to which such sale shall be made,
as the case may be, to which the shares of Common Stock issuable (at the time of
such Capital Change)upon exercise of such Warrant would have been entitled if
such shares had been outstanding at the relevant record date for participating
in such Capital Change. In any such case, if necessary, the provisions set forth
in this Article III with respect to the rights and interests thereafter of the
holders of the Warrants shall be appropriately adjusted so as to be reasonably
applicable to any shares of stock or other securities or property thereafter
deliverable on the exercise of the Warrants.
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The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock shall not
be deemed to be a reclassification of the Common Stock of the Company for the
purpose of this Section. The Company shall not effect any consolidation, merger
or sale resulting in a Capital Change, unless prior to or simultaneously with
the consummation thereof, any successor corporation or corporation purchasing
such assets shall assume, by written instrument executed and delivered to the
Warrant Agent, the obligation to deliver to the holder of each Warrant any such
shares of stock, securities, or assets as the Warrant Holders may be entitled to
receive upon exercise of the Warrants in accordance with the foregoing
provisions, and the other obligations of the Company under this Warrant
Agreement.
Section 3.07 NOTICE OF ADJUSTMENT. Whenever the Exercise Price is
adjusted as provided in this Warrant Agreement:
(a) the Company shall compute the adjusted Exercise Price and the
number of shares of Common Stock issuable upon exercise of a Warrant and shall
prepare a notice signed by its Treasurer or Secretary setting forth the adjusted
Exercise Price and the adjusted number of shares of Common Stock issuable upon
the exercise of a Warrant or the number of Warrants into which each outstanding
Warrant will be changed, if applicable. Such notice shall show in reasonable
detail the facts (and computations) upon which such adjustments are based and
shall be delivered promptly to the Warrant Agent pursuant to the provisions of
Section 6.07; and
(b) the Company shall cause to be mailed to each Warrant Holder in
accordance with the provisions of Section 6.07 a notice stating that the
Exercise Price has been adjusted and setting forth the adjusted Exercise Price
and the adjusted number of shares of Common Stock issuable upon the exercise of
a Warrant or the number of Warrants into which each outstanding Warrant will be
changed, if applicable.
Section 3.08 NOTICE OF CERTAIN EVENTS. In the event that any time after
the date of this Agreement:
(a) the Company shall adopt a dividend policy, change a previously
adopted dividend policy, or declare a dividend in the absence of, or in conflict
with, a dividend policy or declare any distribution with respect to the Common
Stock; or
(b) the Company shall offer for subscription to the holders of the
Common Stock any additional shares of stock of any class or any other securities
convertible into Common Stock or any rights to subscribe thereto; or
(c) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number of
shares of Common Stock; or
(d) there shall be any Capital Change in the Company or any merger of
the Company with another corporation (other than a merger with a subsidiary in
which merger the Company is the continuing corporation and which does not result
in any reclassification or change of the shares of Common Stock issuable upon
exercise of the Warrant); or
(e) there shall be a voluntary or involuntary dissolution, liquidation,
or winding up on the Company;
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(each such event hereinafter being referred to as "Notification Event"), the
Company shall cause to be mailed to each Warrant Holder, not later than the
earlier of the date public announcement of the Notification Event is first made
or the date 20 days prior to the record date, if any, in connection with such
Notification Event, written notice specifying the nature of such event and the
effective date of, or the date on which the books of the Company shall close or
a record shall be taken with respect to, such event. Such notice shall also set
forth facts indicating the effect of such action (to the extent such effect may
be known at the date of such notice) on the Exercise Price and the kind and
amount of the shares of stock or other securities or property deliverable upon
exercise of the Warrants. The failure to give the notice required by this
Section 3.08 shall not affect the legality or validity of any such Notification
Event.
Section 3.09 EFFECT OF ADJUSTMENT ON WARRANT CERTIFICATES. Except as
provided in Section 3.05, the form of Warrant Certificate need not be changed
because of any change in the Exercise Price, the number of shares of Common
Stock issuable upon the exercise of a Warrant, or the number of Warrants
outstanding pursuant to this Article, and, subject to Section 3.05, Warrant
Certificates issued before or after such change may state the same Exercise
Price, the same number of Warrants, and the same number of shares of Common
Stock issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance therefor, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substituted for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
Section 3.10 WARRANT AGENT NOT RESPONSIBLE FOR ADJUSTMENT. The Warrant
Agent shall have the right, but shall not at any time be under any duty or
responsibility to any Warrant Holder, to determine whether such facts exist
which may require any adjustment in the Exercise Price of, or the shares of
Common Stock issuable upon exercise of, the Warrants or to make inquiry or take
other action with respect to the nature or extent of any such adjustments, when
made, or with respect to the method employed in making the same. The Warrant
Agent shall not be accountable with respect to the validity or value or the kind
or amount of any shares of Common Stock or of any securities or property which
may at any time be issued or delivered upon the exercise of any Warrant, and
makes no representation with respect thereto.
ARTICLE IV
RIGHTS OF WARRANT HOLDERS
Section 4.01 NO RIGHTS OF STOCKHOLDERS. No Warrant Holder, as such,
shall be entitled to vote or to receive dividends or shall otherwise be deemed
to be the holder of shares of Common Stock for any purpose, nor shall anything
contained herein or in any Warrant Certificate be construed to confer upon any
Warrant Holder, as such, any of the rights of a stockholder of the Company or
any right to vote upon or give or withhold consent to any action of the Company
(whether upon any reorganization, issuance of securities, reclassification or
conversion of Common Stock, consolidation, merger, sale, release, conveyance, or
otherwise), receive notice of meetings or other action affecting stockholders
(except for notices expressly provided for in this Agreement) or receive
dividends or subscription rights, until such Warrant Certificate shall have been
surrendered for exercise accompanied by full and proper payment of the Exercise
Price as provided in this Agreement and shares of Common Stock thereunder shall
have become issuable and until such person shall have been deemed to have become
a holder of record of such shares. If, the date of surrender of such Warrant
Certificate and payment of such Exercise Price, the transfer books for the
Common Stock shall be closed, certificates for the shares of Common Stock shall
be issuable on the date on which
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such books shall next be open (whether before, on, or after the Expiration Date)
and until such date, the Company shall be under no duty to deliver any
certificate for such shares of Common Stock. No Warrant Holder shall, upon the
exercise of Warrants, be entitled to any dividends if the record date with
respect to payment of such dividends shall be a date prior to the date such
shares of Common Stock became issuable upon the exercise of such Warrants.
Section 4.02 LOST WARRANTS. If any Warrant Certificate is lost, stolen,
mutilated, or destroyed, the Company and the Warrant Agent may, upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such loss, theft,
mutilation, or destruction and on such terms as to indemnity or otherwise as the
Company and the case of a mutilated Warrant Certificate, include the surrender
thereof), issue a new Warrant Certificate of like denomination and tenor as the
lost, stolen, mutilated, or destroyed Certificate. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay any such reasonable charges as the Company or the Warrant
Agent may prescribe. In the event any Warrant Certificate is lost, stolen,
mutilated, or destroyed, and the owner thereof desires to exercise the Warrants
evidenced thereby, the Company may, in lieu of issuing a substitute Warrant
Certificate, exercise or authorize the exercise thereof upon receipt of the
above evidence and on such terms of indemnity as it may require.
Section 4.03 MAINTENANCE OF SUFFICIENT AND PROPER SHARES OF COMMON
STOCK.
(a) The Company shall at all times reserve and keep available a number
of authorized shares of Common Stock sufficient to permit the exercise in full
of all outstanding Warrants and will cause to be available to the Warrant Agent
a sufficient number of certificates therefor.
(b) Prior to the issuance of any shares of Common Stock upon the
exercise of Warrants, the Company shall use its best efforts to secure the
listing of such shares of Common Stock upon any and all such securities
exchanges.
(c) If at any time the taking of any action would cause an adjustment
in the Exercise Price so that the exercise of a Warrant while such Exercise
Price is in effect would cause a share of Common Stock to be issued at a price
below its then par value, the Company shall take such action as may, in the
opinion of its counsel, be necessary in order that it may validly and legally
issue fully paid and non-assessable shares of Common Stock upon the exercise of
the Warrants at such Exercise Price.
(d) Subject to the restrictions on transfer referred to in Section
4.06, if any shares of Common Stock issuable upon the exercise of the Warrants
require registration or approval of any governmental authority, or the taking of
any other action under the laws of the United States or any political
subdivision thereof or any other jurisdiction before such shares of Common Stock
may be legally and validly issued, then the Company shall in good faith and with
reasonable diligence endeavor to secure such registration or approval or to take
such other actions as may be appropriate to allow for the lawful issuance of
shares of Common Stock upon exercise of the Warrants, provided that no shares of
Common Stock shall be issued for the period during which the Company is
endeavoring to obtain such registration or approval or is taking such other
action. Warrant Holders may exercise Warrants during any such period as provided
herein and shall be entitled to the issuance of the shares of Common Stock on
such date as the shares of Common Stock may be legally and validly issued, at
the Exercise Price and upon the other conditions in effect on the date of
surrender of the Warrant Certificates accompanied by full and proper payment for
the shares of Common Stock.
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Section 4.04 FRACTIONAL SHARES AND WARRANTS.
(a) Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this Section) in the
issuance of a fraction of a share of Common Stock, unless the Warrant Holder is
presenting for exercise Warrant Certificates representing all Warrants then
owned of record by such Warrant Holder. In such event, the Company shall, upon
the exercise of all of such Warrants, issue to such Warrant Holder the largest
aggregate whole number of shares of Common Stock called for thereby upon receipt
of the Exercise Price for all of such Warrants and pay a sum in cash equal to
the remaining fraction of a share of Common Stock, multiplied by its fair market
value as of the first business day preceding the date on which the Warrants are
presented for exercise. Such fair market value shall be (1) the average of the
high and low bid prices of the Common Stock, as reported by the National
Association of Securities Dealers Automated Quotation System on such date, or
(2) if the Common Stock is then listed on a national securities exchange or the
national market system of the over-the-counter market, the closing price of the
Common Stock on such exchange on such date. Every Warrant Holder, by the
acceptance of the Warrant Certificate, expressly waives any right to exercise
Warrants for a fractional share of Common Stock except as provided in this
subsection.
(b) Anything herein to the contrary notwithstanding, the Company shall
not be required to issue fractions of Warrants on any distribution of Warrants
to Warrant Holders or to distribute Warrant Certificates that evidence
fractional Warrants nor shall the Company be required to make any cash
adjustment with respect to a fractional interest in a Warrant. Any person
entitled to a fractional interest in a Warrant may elect, during such period of
time (not in excess of 90 days) from the date such fractional interest is
acquired, as the Company shall determine, to purchase the additional fractional
interest required to make up a full Warrant or to sell the fractional interest
to which such person is entitled. Such election shall be made on the form
provided for such purpose by the Company. If such election is not made in the
time prescribed by the Company, the fractional interest to which such person is
entitled shall be sold. Such purchase or sale shall be effected in the manner
set forth in subsection (c) of this Section by the Warrant Agent, acting as
agent for the person entitled to such fractional interest.
(c) The Warrant Agent shall xxxx each person entitled to a fractional
interest in Warrants for the cost of any such fractional interest purchased by
it as agent for such person or shall remit to such person the proceeds of the
sale of any such fractional interest sold by it as such agent. In the case of a
purchase, the Warrant Agent may sell the Warrant to which such person is
entitled if payment is not received by the Warrant Agent within 30 days after
the mailing of such xxxx and, after deducting the amount of such xxxx and any
other charges, shall remit the balance, if any, to such person. Fractional
interests in Warrants shall be nontransferable except by or to the Warrant Agent
acting as herein authorized. The Warrant Agent may purchase or sell fractional
interests on the basis of market prices of the Warrants, as determined by the
Warrant Agent in its sole discretion, and such Agent is expressly authorized to
value fractional interests without actual purchase or sale on the basis of the
market price of the Warrants as determined by it in its sole discretion.
Purchase and sales of fractional interests by the Warrant Agent may, in its sole
discretion, be set of against each other on the basis of market prices of the
Warrants, as determined by the Warrant Agent in its sole discretion.
Section 4.05 REGISTERED HOLDER AS OWNER. Every holder of a Warrant
Certificate, by accepting the same, consents and agrees with the Company, the
Warrant Agent, and every subsequent holder of such Warrant Certificate that
until the Warrant Certificate is transferred on the books of the Warrant Agent,
the
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Company and the Warrant Agent may treat the registered Warrant Holder as the
absolute owner thereof for all purposes, notwithstanding any notice to the
contrary.
Section 4.06 EXCHANGE AND TRANSFER OF WARRANTS. Warrant Certificates
may be split-up, combined, or exchanged at any time for other Warrant
Certificates evidencing a like aggregate whole number of Warrants and may be
transferred in whole or in part. Any Warrant Holder desiring to split-up,
combine, or exchange Warrant Certificates shall make such request in writing
delivered to the Warrant Agent as provided by Section 6.07 and shall surrender
therewith the Warrant Certificate or Certificates to be so split-up, combined,
or exchanged. Subject to the restrictions on transfer of the Warrants contained
in the Registration Statement, transfers of outstanding Warrant Certificates may
be effected by the Warrant Agent, from time to time, upon the books to be
maintained by the Warrant Agent for that purpose, upon surrender of the Warrant
Certificates to the Warrant Agent as provided by Section 6.07, which
Certificates must be properly endorsed or accompanied by appropriate instruments
of transfer and written instructions for transfer, all in form satisfactory to
the Company and the Warrant Agent. Upon any such surrender for a split-up,
combination, exchange, or transfer, the Warrant Agent shall countersign and
deliver to the person entitled thereto a Warrant Certificate or Warrant
Certificates as so requested. The Warrant Agent shall not be required to effect
any transfer, split-up, or exchange that will result in the issuance of a
Warrant Certificate evidencing other than a whole number of Warrants.
ARTICLE V
THE WARRANT AGENT
Section 5.01 RESIGNATION, REMOVAL, AND SUCCESSION. The Warrant Agent
may resign and be discharged from its duties under this Agreement after giving
60 days prior written notice to the Company and the Warrant Holder as provided
by Section 6.07, except that such shorter notice as the Company shall accept in
writing, may be given. The Warrant Agent may be removed by the Company by like
notice to the Warrant Agent. If the office of the Warrant Agent becomes vacant
by resignation, removal, incapacity to act, or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 60 days after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or within 60 days after the Warrant
Agent has been removed by the Company, then any Warrant Holder may apply to any
court of a competent jurisdiction for t he appointment of a successor Warrant
Agent. Any successor Warrant Agent, whether appointed by the Company or by such
a court, shall be a corporation organized, in good standing, and doing business
under the laws of the United States of America or of any state, and authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by Federal or state authority and having a combined capital and
surplus of not less than $1,000,000. After appointment, any successor Warrant
Agent shall be vested with all authority, powers, rights, immunities, duties,
and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed;
provided, however, that if for any reason it becomes necessary or appropriate,
the predecessor Warrant Agent shall execute and deliver an instrument
transferring to such successor Warrant Agent with authority, powers, and rights
of such predecessor Warrant Agent hereunder and any property held by it
hereunder; and, provided further, upon request of any successor Warrant Agent,
the Company shall make, execute, acknowledged, and deliver any and all written
instruments in order more fully and effectually to vest in and confirm to such
successor Warrant Agent all such authority, powers, rights, immunities, duties,
and obligations. Failure to give any notice provided for in this Section
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or any defect therein shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation succeeding to substantially all
the business of the Warrant Agent, shall be the successor Warrant Agent under
this Agreement without any further act.
Section 5.02 ADDITIONAL WARRANT AGENTS. The Company may designate one
or more corporations satisfying the qualifications for a successor Warrant Agent
as set forth in Section 5.01 as additional Warrant Agents to perform, either
jointly or in place of the Warrant Agent, such functions as may be specified in
written notice of such designation filed with the Warrant Agent, which notice
shall include acceptance by such additional Warrant Agent(s) of such functions.
Section 5.03 COMPENSATION. The Company agrees (a) that it will pay the
Warrant Agent reasonable remuneration for its services as Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenditures
(including reasonable counsel fees) that the Warrant Agent may reasonably incur
in the execution of its duties hereunder; and (b) that it will perform or cause
to be performed such further acts and execute, acknowledge, and deliver or cause
to be executed, acknowledged, and delivered all such further instruments and
assurances as may reasonably be required by the Warrant Agent for the execution
or performance of the provisions of this Agreement.
Section 5.04 RESPONSIBILITY AND INDEMNITY.
(a) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, any Vice President, or the Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties.
(b) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect hereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President, any Vice President, or the
Treasurer of the Company and delivered to the Warrant Agent, and such statement
shall be full warranty to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such
statement. In its discretion, the Warrant Agent may in lieu thereof accept other
evidence of such fact or matter or may require such further or additional
evidence as it may deem reasonable.
(c) The Warrant Agent shall not be responsible for (i) the validity or
execution of any Warrant Certificate (except its countersignature thereof); (ii)
any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; (iii) any change in the Exercise Price
required under the provisions of Article III, the manner, the method, or amount
of any such change, or ascertaining the existence of facts that would require
any such change. No act of the Warrant Agent hereunder shall be deemed to be a
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant
Certificate or as to whether any shares of Common Stock will, when issued, be
validly issued, fully paid, and nonassessable shares of Common Stock.
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(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any Warrant Holder for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document, or
instrument believed by it to be genuine and to have been signed, sent, or
presented by the proper party or parties.
(e) The Company agrees to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs, and
reasonable attorney fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement, except as a result of the Warrant Agent's
negligence or willful misconduct.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit, or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Warrant Holders shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and expenses
that may be so incurred. This provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper, with
or without any such security or indemnity.
Section 5.05 DEALING FOR OWN ACCOUNT. The Warrant Agent and any
stockholder, director, officer, or employee of the Warrant Agent may buy, sell,
or deal in any of the Warrants or other securities of the Company or acquire a
pecuniary interest in any transaction in which the Company may be involved, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company
(including acting as the Company's registrar and transfer agent) or for any
other entity.
Section 5.06 ACCOUNTING TO COMPANY. The Warrant Agent shall account
promptly to the Company with respect to Warrants exercised and concurrently pay
to the Company all moneys received by the Warrant Agent for the purchase of
shares of Common Stock upon the exercise of such Warrants. The Warrant Agent
shall, upon request of the Company from time to time, deliver to the Company
such complete reports of registered ownership of the Warrants and such complete
records of transactions with respect to the Warrants and the shares of Common
Stock as the Company may request. The Warrant Agent shall also make available to
the Company for inspection by the Company's agents or employees, from time to
time as the Company may request, such original books of accounts and records
maintained by the Warrant Agent in connection with the issuance and exercise of
Warrants hereunder, such inspections to occur at the Warrant Agent's office as
specified in Section 6.07, during normal business hours.
ARTICLE VI
GENERAL
Section 6.01 CANCELED WARRANTS. The Warrant Agent shall cancel any
Warrant Certificate delivered to it for exercise, in whole or in part, or
delivered to it for transfer, or for split-up, combination, exchange, or
substitution and shall deliver to the Company, in a manner satisfactory to the
Company, such canceled Warrant Certificates.
Section 6.02 TAXES ON ISSUANCE OF SHARES OF COMMON STOCK. The Company
shall from time to time promptly pay all taxes and charges that may be imposed
upon the Company or the Warrant Agent with respect to the issuance or delivery
or shares of Common Stock upon the exercise of Warrants, but the
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Company shall not be obligated to pay any transfer taxes with respect to the
issuance or delivery of the Warrant Certificates or shares of Common Stock in a
name other than that of the Warrant Holder. The Warrant Agent shall be
authorized to charge Warrant Holders a transfer fee of up to $7.50 per
certificate.
Section 6.03 DATES AND TIMES. If any date set forth in this Warrant
Agreement shall fall on a day other than a full business day in New York City,
said date shall be deemed to be the next business day succeeding that date. All
times shall be the legal time then in effect in New York City.
Section 6.04 AMENDMENTS TO WARRANT AGREEMENT. The Company and the
Warrant Agent may jointly, without the consent or concurrence of the Warrant
Holders, by supplemental agreement or otherwise, make any amendments,
alterations, deletions, or corrections in this Agreement that they deem
necessary or desirable: (a) to cure any ambiguity or correct any defect,
inconsistency, clerical omission or mistake, or manifest error contained herein;
(b) to confer additional rights upon the Warrant Holders; or (c) in any other
respect that does not adversely affect the rights of the Warrant Holders
hereunder.
Section 6.05 BINDING AGREEMENT. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of the respective successors and assigns
hereunder. Nothing expressed in this Agreement and nothing that may be implied
from any of the provisions hereof is intended, or shall be construed, to confer
upon or give to any person or corporation, other than the Company, the Warrant
Agent and the Warrant Holders, any legal or equitable right, remedy, or claim
under or by reason of this Agreement or of any covenant, condition, stipulation,
promise, or agreement herein, and all covenants, conditions, stipulations,
promises, and agreements contained in this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent, the Warrant Holders, and
their respective successors and assigns.
Section 6.06 COPIES OF AGREEMENT WITH WARRANT AGENT. A copy of this
Agreement, as such may be amended from time to time, shall be available for
inspection by any Warrant Holder at the office of the Warrant Agent, as
designated in Section 6.07, during normal business hours. As a condition of such
inspection, the Warrant Agent may require any such Warrant Holder to submit his
or her Warrant Certificate for inspection.
Section 6.07 NOTICES. Any communication, notice, or demand to be given
hereunder shall be duly given if in writing and delivered, or sent by first
class mail, certified or registered, postage prepaid and addressed as follows:
(a) If to the Company:
Xxxxxx X. Xxxx, President
Industrial Holdings, Inc.
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
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(b) If to the Warrant Agent:
ChaseMellon Shareholder Services
Stock Transfer Department
85 Challenger Road, Overpeck Centre
Xxxxxxxxxx Xxxx, XX 00000
(c) If to a Warrant Holder: at such person's last known address as such
shall appear on the registration books maintained by the Warrant Agent.
Any party may change the address to which any communication, notice, or
demand shall be given by giving notice of such change in conformity with the
provisions of this Section.
Section 6.08 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 6.09 HEADINGS. The Article and Section headings herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
Section 6.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original and
all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
INDUSTRIAL HOLDINGS, INC.
By ________________________________
XXXXXX X. XXXX, President
CHASEMELLON SHAREHOLDER SERVICES
As Warrant Agent
By ________________________________
Office: ________________________
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---------
EXHIBIT A
---------
(Form of Class D Warrant Certificate)
No.
___________ Number of Warrants
____________
VOID AFTER 5:00 P.M., NEW YORK CITY TIME
JANUARY 14, 2000 (UNLESS EXTENDED OR UNLESS
AN EARLIER REDEMPTION DATE IS ESTABLISHED)
INDUSTRIAL HOLDINGS, INC.
WARRANT TO PURCHASE COMMON STOCK
This Warrant Certificate certifies that
_______________________________________________, or, subject to certain
restrictions on transfer described in the Warrant Agreement (as hereinafter
defined), registered assigns, is the registered holder of the number indicated
above of warrants ("Warrants") to purchase shares of common stock, $.01 par
value ("Common Stock"), of Industrial Holdings, Inc., a Texas corporation
("Company"). Each Warrant entitles the holder thereof to purchase from the
Company), on or before January 14, 2000 (subject to extension by the Company,
one fully paid and nonassessable share of Common Stock, upon presentation and
surrender of this Warrant Certificate, with the Form of Election to Purchase
duly executed, at the corporate trust office of the Warrant Agent (as defined
below) and upon proper payment of the Exercise Price. Subject to adjustment as
provided in the warrant agreement between the Company and ChaseMellon
Shareholder Services, dated as of __________, 1997 ("Warrant Agreement"), the
exercise price ("Exercise Price") for each Warrant evidenced hereby shall be
$22.50. Payment of the Exercise Price shall be made in lawful money of the
United States of America by certified check payable to the Warrant Agent. This
Warrant may be called by the Company as provided for in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Price and the number of
shares of Common Stock purchasable upon the exercise of the Warrants are, upon
the happening of certain events, subject to modification or adjustment.
References to the Warrant Agent herein shall mean ChaseMellon
Shareholder Services and any successor or additional Warrant Agent designated as
provided in the Warrant Agreement.
This Warrant Certificate is subject to all of the terms, provisions,
and conditions of the Warrant Agreement, including the provisions of such
Agreement relating to the amendment thereof, which Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full description of the rights, limitations
of rights, obligations, duties, and immunities of the Warrant Agent, the
Company, and the holder of this Warrant Certificate. Copies of the Warrant
Agreement, as such may be amended from time to time, are available for
inspection at the offices of the Warrant Agent.
This Certificate, with or without other Warrant Certificates, upon
surrender to the Warrant Agent or any successor or additional Warrant Agent, may
be exchanged for another Warrant Certificate or Warrant Certificates evidencing
a like aggregate number of Warrants. If this Warrant Certificate shall be
exercised
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in part, the holder hereof shall be entitled to receive upon surrender hereof
another Warrant Certificate or Warrant Certificates evidencing the number of
Warrants not exercised.
No holder of this Warrant Certificate shall be deemed to be the holder
of Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained in
the Warrant Agreement or herein be construed to confer upon the holder of this
Warrant Certificate, 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 reorganization, issuance or stock,
reclassification or conversion of stock, change of par value, or exchange of
stock to no par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise, until this Warrant Certificate shall have been exercised and the
Common Stock purchasable upon the exercise hereof shall have become issuable as
provided in the Warrant Agreement.
Every holder of this Warrant Certificate, by accepting the same,
consents and agrees with the Company, the Warrant Agent, and with every other
holder of a Warrant Certificate that:
(a) subject to the restrictions on transfer described in the Warrant
Agreement, this Warrant Certificate is transferable by the registered holder
hereof in person or by attorney duly authorized in writing, at the principal
corporate trust office of the Warrant Agent, in whole or in part;
(b) anything herein to the contrary notwithstanding, in no event shall
the Company or the Warrant Agent be obliged to issue Warrant Certificates
evidencing other than a whole number of Warrants or issue certificates
evidencing other than a whole number of shares of Common Stock upon the exercise
of this Warrant Certificate; and
(c) the Company and the Warrant Agent may deem and treat the person in
whose name this Warrant Certificate is registered as the absolute, true, and
lawful owner hereof for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
This Warrant Certificate shall not be valid or binding for any purpose
until it shall have been countersigned by the Warrant Agent.
WITNESS the signatures or facsimile signatures of the proper officers
of the Company.
Date:__________________________ INDUSTRIAL HOLDINGS, INC.
Attest:________________________ BY: ____________________________
Authorized Officer XXXXXX X. XXXX, President
Secretary
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES
as Warrant Agent
By_______________________________
Authorized Officer
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(Form of)
ASSIGNMENT
For value received and subject to the restrictions on transfer
described in the Warrant Agreement under which this Warrant was issued,
__________________________________ hereby sells, assigns, and transfers unto
____________________________________ Warrants represented by the within Warrant
Certificate, together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint __________________
________________________________ attorney, to transfer such Warrants on the
books of the within named corporation, with full power of substitution.
Dated ______________________, 1997
__________________________________
Signature of Warrant Holder
__________________________________
Printed Name of Warrant Holder
--------------------------------------------------------------------------------
Note: The above signature must correspond with the name as written upon the face
of this Warrant in every particular, without any change whatsoever.
TRANSFER FEE: $____________ Per Certificate
