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HAWAIIAN NATURAL WATER COMPANY, INC.
AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
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WARRANT AGREEMENT
DATED AS OF MAY 14, 1997
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WARRANT AGREEMENT, dated this 14th day of May, 1997 by and between HAWAIIAN
NATURAL WATER COMPANY, INC., a Hawaiian corporation (the "Company"), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY.
WITNESSETH:
WHEREAS, in connection with (i) the offering (the "Offering") to the
public of 2,000,000 units (the "Units"), each Unit consisting of one share of
the Company's common stock, no par value per share (the "Common Stock"), and
one redeemable warrant (the "Warrants"), each Warrant entitling the holder
thereof to purchase one share of Common Stock, (ii) the over-allotment option
granted to Xxxxxx Xxxxxxx & Company, Inc., (the "Underwriter") in the public
offering referred to above, to purchase up to an additional 300,000 Units
(the "Over-Allotment Option"), and (iii) 643,500 Warrants to be issued upon
consummation of the Offering and registered for the account of certain
securityholders of the Company in exchange for certain warrants ("Bridge
Warrants") issued in connection with the Company's bridge financing
consummated in October 1996 (the "Bridge Financing"), the Company will issue
up to 2,943,500 Warrants (subject to increase as provided herein);
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent (as defined in SECTION
1(r) hereof) to act on behalf of the Company, and the Warrant Agent is
willing to so act, in connection with the issuance, registration, transfer
and exchange of certificates representing the Warrants and the exercise of
the Warrants.
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 Warrants
and the certificates representing the Warrants and the respective rights and
obligations thereunder of the Company, the Underwriter, the holders of
certificates representing the 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) "Act" shall mean the Securities Act of 1933, as amended.
(b) "Commission" shall mean the Securities and Exchange Commission.
(c) "Common Stock" shall have the meaning set forth in SECTION 8(d)
hereof.
(d) "Company" shall have the meaning assigned to such term in the first
(1st) paragraph of this Agreement.
(e) "Corporate Office" shall mean the office of the Warrant Agent at
which at any particular time its principal business in New York, New York
shall be administered, which office is located on the date hereof at 0
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Exercise Date" shall mean, subject to the provisions of
SECTION 5(b) hereof, as to any Warrant, the date on which the Warrant Agent
shall have received both (i) the Warrant Certificate representing such
Warrant, with the exercise form thereon duly executed by the Registered
Holder (as defined in SECTION 1(m) hereof) thereof or his attorney duly
authorized in writing, and (ii) payment in cash or by check made payable to
the Warrant Agent for the account of the Company of an amount in lawful money
of the United States of America equal to the applicable Purchase Price (as
defined in SECTION 1(k) hereof).
(h) "Initial Warrant Exercise Date" shall mean May 14, 1997.
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(i) "Initial Warrant Redemption Date" shall mean May 14, 1998.
(j) "NASD" shall mean the National Association of Securities Dealers, Inc.
(k) "Purchase Price" shall mean, subject to modification and adjustment as
provided in SECTION 8 hereof, $6.00 per Share.
(1) "Redemption Date" shall mean the date (which may not occur before the
Initial Warrant Redemption Date) fixed for the redemption of the Warrants in
accordance with the terms hereof.
(m) "Registered Holder" shall mean the person in whose name any certificate
representing the Warrants shall be registered on the books maintained by the
Warrant Agent pursuant to SECTION 6(b) hereof.
(n) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to
elect a majority of the board of directors of such corporation or
corporations (regardless of whether or not at the time the stock of any other
class or classes of such corporation shall have or may have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned by the Company or by one or more Subsidiaries, or by the
Company and one or more Subsidiaries.
(o) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company of New York, New York or its authorized successor.
(p) "Underwriting Agreement" shall mean the underwriting agreement dated
May 14, 1997 between the Company and the Underwriter relating to the purchase
for resale to the public of 2,000,000 Units (without giving effect to the
Over-Allotment Option).
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(q) "Warrant Agent" shall mean Continental Stock Transfer & Trust
Company of New York, New York or its authorized successor.
(r) "Warrant Certificate" shall mean a certificate representing each of
the Warrants substantially in the form annexed hereto as EXHIBIT A.
(s) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in SECTION 9 hereof prior to such date, 5:00 p.m. (New
York time) on May 13, 2002 or, if such date shall in the State of New York be
a holiday or a day on which banks are authorized 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 to close, subject to the
Company's right, prior to the Warrant Expiration Date, with the consent of
the Underwriter, to extend such Warrant Expiration Date on five (5) business
days prior written notice to the Registered Holders.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) One Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the Purchase
Price therefor from the Initial Warrant Exercise Date until the Warrant
Expiration Date one (1) share of Common Stock upon the exercise thereof,
subject to modification and adjustment as provided in SECTION 8 hereof.
(b) Upon execution of this Agreement, Warrant Certificates representing
2,000,000 Warrants to purchase up to an aggregate of 2,000,000 shares of
Common Stock (subject to modification and adjustment as provided in SECTION 8
hereof), shall be executed by the Company and delivered to the Warrant Agent.
(c) Upon exercise of the Over-Allotment Option, in whole or in part,
Warrant Certificates representing up to 300,000 Warrants to purchase up to an
aggregate of
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300,000 shares of Common Stock (subject to modification and adjustment as
provided in SECTION 8 hereof) shall be executed by the Company and delivered
to the Warrant Agent.
(d) [Intentionally omitted]
(e) Upon consummation of the Offering, Warrant Certificates representing
643,500 Warrants, issued to certain security holders of the Company in
exchange for certain Bridge Warrants, entitling the holders thereof to
purchase up to an aggregate of 643,500 shares of Common Stock (subject to
modification and adjustment as provided in SECTION 8) shall be executed by
the Company and delivered to the Warrant Agent.
(f) From time to time, up to the Warrant Expiration Date, the Warrant
Agent shall countersign and deliver Warrant Certificates in required
denominations of one or whole number multiples thereof to the person entitled
thereto in connection with any transfer or exchange permitted under this
Agreement. No Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder, (ii) Warrant Certificates issued
upon any transfer or exchange of Warrants, (iii) Warrant Certificates issued
in replacement of lost, stolen, destroyed or mutilated Warrant Certificates
pursuant to SECTION 7 hereof, and (iv) at the option of the Company, Warrant
Certificates 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 the exercise of a Warrant or the redemption
price therefor.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The 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
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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 Warrants may be listed, or to conform to usage. The 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 Warrant Certificates).
(b) Warrant Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, President or any Vice President and by its
Treasurer or an Assistant Treasurer or 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. 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 Warrant Certificates shall cease
to be such officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent and issued and delivered with the same
force and effect as though the officer of the Company who signed such Warrant
Certificates had not ceased to hold such office.
SECTION 4. EXERCISE.
(a) Warrants in denominations of one or whole number multiples thereof
may be exercised commencing at any time on or after the Initial Warrant
Exercise Date, but not after the Warrant Expiration Date, upon the terms and
subject to the conditions set forth herein (including the provisions set
forth in SECTIONS 5 and 9 hereof) and in the applicable Warrant Certificate.
A Warrant shall be deemed to have been exercised immediately prior to the
close
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of business on the Exercise Date, provided that the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by
the Registered Holder thereof or his attorney duly authorized in writing,
together with payment in cash or by check made payable to the Warrant Agent
for the account of the Company of an amount in lawful money of the United
States of America equal to the applicable Purchase Price, have been received
by the Warrant Agent. The person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes as the
holder of such securities as of the close of business on the Exercise Date.
As soon as practicable on or after the Exercise Date and in any event within
three (3) business days after such date, the Warrant Agent, on behalf of the
Company, shall cause to be issued to the person or persons entitled to
receive the same a Common Stock certificate or certificates for the shares of
Common Stock deliverable upon such exercise, and the Warrant Agent shall
deliver the same to the person or persons entitled thereto. Upon the exercise
of any Warrants, the Warrant Agent shall promptly notify the Company in
writing of such fact and of the number of securities delivered upon such
exercise and, subject to SECTION 4(b) hereof, shall cause all payments in
cash or by check made payable to the order of the Company in respect of the
Purchase Price to be deposited promptly in the Company's bank account or
delivered to the Company.
(b) At any time upon the exercise of any Warrants after one year and one
day from the date hereof, the Warrant Agent shall, on a daily basis, within
two business days after such exercise, notify the Underwriter, its successors
or assigns of the exercise of any such Warrants and shall, on a weekly basis
(subject to collection of funds constituting the tendered Purchase Price, but
in no event later than five business days after the last day of the calendar
week in which such funds were tendered), for solicitation by the Underwriter
of the exercise of
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Warrants of the Registered Holders then being exercised, remit to the
Underwriter an amount equal to five percent (5%) of the Purchase Price of
such Warrants then being exercised unless the Underwriter shall have notified
the Warrant Agent that the payment of such amount with respect to such
Warrant is violative of the General Rules and Regulations promulgated under
the Exchange Act, or the rules and regulations of the NASD or applicable
state securities or "blue sky" laws, in which event, the Warrant Agent shall
have to pay such amount to the Company; provided, that, the Warrant Agent
shall not be obligated to pay any amounts pursuant to this SECTION 4(b)
during any week that such amounts payable are less than $1,000 and the
Warrant Agent's obligation to make such payments shall be suspended until the
amount payable aggregates $1,000, and provided further, that, in any event,
any such payment (regardless of amount) shall be made not less frequently
than monthly.
(c) The Company shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Warrant or
Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of
fractional interests. Any fractional interest shall be eliminated by rounding
any fraction up to the next full share or Warrant, as the case may be, or
other securities, properties or rights.
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
issuance upon the exercise of Warrants, such number of shares of Common Stock
as shall then be issuable upon the exercise of all outstanding Warrants. The
Company covenants that, upon exercise of the Warrants and payment of the
Purchase Price for the shares of Common Stock underlying the Warrants, all
shares of Common Stock which shall be issuable upon such exercise shall be
duly
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and validly issued, fully paid, non-assessable, free from all preemptive or
similar rights. and free from all taxes, liens and charges with respect to
the issuance thereof, and that upon issuance such shares shall be listed or
quoted on each securities exchange, if any, on which the other shares of
outstanding Common Stock are then listed or quoted, or if not then so listed
or quoted on each place (whether the Nasdaq Stock Market, Inc., the NASD OTC
Electronic Bulletin Board, the National Quotation Bureau "pink sheets" or
otherwise) on which the other shares of outstanding Common Stock are listed
or quoted.
(b) The Company covenants that if any securities reserved for the
purpose of exercise of 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 file a registration statement under the federal
securities laws or a post-effective amendment to a registration statement,
use its best efforts to cause the same to become effective, keep such
registration statement current while any of the Warrants are outstanding and
deliver a prospectus which complies with Section 10(a)(3) of the Act. to the
Registered Holder exercising the Warrant (except, if in the opinion of
counsel to the Company, such registration is not required under the federal
securities law or if the Company receives a letter from the staff of the
Commission stating that it would not take any enforcement action if such
registration is not effected). The Company will use its best efforts to
obtain appropriate approvals or registrations under the state "blue sky"
securities laws of all states in which Registered Holders reside. Warrants
may not be exercised by, nor may shares of Common Stock be issued to, any
Registered Holder in any state in which such exercise would be unlawful.
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(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 Warrants, or the issuance or delivery of any shares of Common
Stock upon exercise of the Warrants; PROVIDED, HOWEVER, that if shares of
Common Stock are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate representing any 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 as the
Transfer Agent to requisition from time to time certificates representing
shares of Common Stock or other securities required upon exercise of the
Warrants, and the Company will comply with all such requisitions.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be so exchanged
shall be surrendered to the Warrant Agent at its Corporate Office, and the
Company shall execute and the Warrant Agent shall countersign, issue and
deliver in exchange therefor the Warrant Certificate or Certificates which
the Registered Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the
Company shall execute and the Warrant Agent shall issue and deliver to the
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transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the subscription or
assignment form, as the case may be, on the reverse thereof shall be duly
endorsed or be accompanied by a written instrument or instruments of
subscription or assignment, in form satisfactory to the Company and the
Warrant Agent, duly executed by the Registered Holder thereof or his attorney
duly authorized in writing.
(d) No service charge shall be made for any exchange or
registration of transfer of Warrant Certificates. However, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange shall be promptly cancelled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and the
loss, theft, destruction or mutilation of any Warrant Certificate and (in the
case of loss, theft or destruction) of indemnity satisfactory to them, and
(in case of mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall countersign and deliver in lieu
thereof a new
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Warrant Certificate representing an equal number of Warrants. Applicants for
a substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.
SECTION 8. ADJUSTMENTS TO PURCHASE PRICE AND NUMBER OF SECURITIES.
(a) SUBDIVISION AND COMBINATION. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Purchase Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
(b) STOCK DIVIDENDS AND DISTRIBUTIONS. In case the Company shall
pay dividend in, or make a distribution of, shares of Common Stock or of the
Company's capital stock convertible into Common Stock, the Purchase Price
shall forthwith be proportionately decreased. An adjustment made pursuant to
this SECTION 8(b) shall be made as of the record date for the subject stock
dividend or distribution.
(c) ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of the
Purchase Price pursuant to the provisions of this SECTION 8, the number of
shares of Common Stock issuable upon the exercise at the adjusted Purchase
Price of each Warrant shall be adjusted to the nearest whole number by
multiplying a number equal to the Purchase Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of the Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted Purchase Price.
(d) DEFINITION OF COMMON STOCK. For the purpose of this Agreement,
the term "Common Stock" shall mean (i) the class of stock designated as
Common Stock in the Articles of Incorporation of the Company as may be
amended or restated as of the date hereof,
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or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
In the event the Company shall after the date hereof issue Common Stock with
greater or superior voting rights than the shares of Common Stock outstanding
as of the date hereof, each Holder, at its option, may receive upon exercise
of any Warrant either shares of Common Stock or a like number of such
securities with greater or superior voting rights.
(e) MERGER OR CONSOLIDATION OR SALE.
(i) In case of any consolidation of the Company with, or merger of
the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger which does not result in any reclassification
or change of the outstanding Common Stock), the corporation formed by such
consolidation or surviving such merger shall execute and deliver to the
Holder a supplemental warrant agreement providing that the holder of each
Warrant then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of such
Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation, merger, sale or transfer by a
Holder of the number of shares of Common Stock of the Company for which such
Warrant might have been exercised immediately prior to such consolidation,
merger, sale or transfer. Such supplemental warrant agreement shall provide
for adjustments which shall be identical to the adjustments provided in this
SECTION 8. The above provision of this subsection shall similarly apply to
successive consolidations or mergers.
(ii) In the event of (A) the sale by the Company of all or
substantially all of its assets, or (B) the engagement by the Company or any
of its affiliates in a "Rule 13e-3
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transaction" as defined in paragraph (a)(3) of Rule 13e-3 of the General
Rules and Regulations under the Exchange Act or (C) a distribution to the
Company's stockholders of any cash, assets, property, rights, evidences of
indebtedness, securities or any other thing of value, or any combination
thereof, the Holders of the unexercised Warrants shall receive notice of such
sale, transaction or distribution twenty (20) days prior to the date of such
sale or the record date for such transaction or distribution, as applicable,
and, if they exercise such Warrants prior to the date of such transaction or
distribution, they shall be treated as holders of Common Stock of the Company
upon the consummation of such transaction or distribution.
(f) NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment
of the Exercise Price shall be made if the amount of said adjustment shall be
less than ten cents (10 CENTS) per share of Common Stock, provided, however,
that in such case any adjustment that would otherwise be required then 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 so
carried forward, shall amount to at least ten cents (10 CENTS) per share of
Common Stock.
SECTION 9. REDEMPTION.
(a) Commencing on the Initial Warrant Redemption Date, the Company
may (but only with the prior written consent of the Underwriter), on not less
than thirty (30) days' prior written notice (the "Redemption Notice"), redeem
all of the Warrants, in whole and not in part, at a redemption price of five
cents ($.05) per Warrant; PROVIDED, HOWEVER, that before any such call for
redemption of Warrants can take place, the (i) average closing bid price for
the Common Stock, as reported by the National Association of Securities
Dealers Automated Quotation System, or (ii) if not so quoted, as reported by
any other recognized quotation system on which the Common Stock is quoted,
shall have for any twenty (20) trading days within a
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period of thirty (30) consecutive trading days ending on the fifth (5th)
trading day prior to the date on which the Redemption Notice is given,
equalled or exceeded 150% of the then exercise price per share of Common
Stock (subject to adjustment in the event of any stock splits or other
similar events as provided in SECTION 8 hereof).
(b) In case the Company shall exercise its right to redeem all of
the Warrants, it shall give or cause to be given notice to the Registered
Holders of the Warrants, by mailing to such Registered Holders the Redemption
Notice, first class, postage prepaid, at their last address as shall appear
on the records of the Warrant Agent. Any Redemption Notice mailed in the
manner provided herein shall be conclusively presumed to have been duly given
whether or not the Registered Holder receives such Redemption Notice. Not
less than five (5) business days prior to the mailing to the Registered
Holders of the Warrants of the Redemption Notice, the Company shall deliver
or cause to be delivered to the Underwriter or its successors or assigns a
similar notice telephonically and confirmed in writing, together with a list
of the Registered Holders (including their respective addresses and number of
Warrants beneficially owned by them) to whom such Redemption Notice has been
or will be given.
(c) The Redemption Notice shall specify (i) the redemption price,
(ii) the date fixed for redemption, which shall in no event be less than
thirty (30) days after the date of mailing of such notice, (iii) the place
where the Warrant Certificates shall be delivered and the redemption price
shall be paid, and (iv) that the Underwriter is the Company's exclusive
warrant solicitation agent and shall receive the commission contemplated by
SECTION 4(b) hereof and (v) that the right to exercise the Warrant shall
terminate at 5:00 p.m. (New York time) on the business day immediately
preceding the date fixed for redemption. The date fixed for the redemption of
the Warrants shall be the "Redemption Date" for purposes of this Agreement.
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No failure to mail the Redemption Notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such
redemption except as to a holder (A) to whom notice was not mailed or (B)
whose notice was defective. An affidavit of the Warrant Agent or the
Secretary or Assistant Secretary of the Company that the Redemption Notice
has been mailed shall, in the absence of fraud, be prima facie evidence of
the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m.
(New York time) on the business day immediately preceding the Redemption
Date. The redemption price payable to the Registered Holders shall be mailed
to such persons at their addresses of record.
(e) The Company shall indemnify the Underwriter and each person, if
any, who controls the Underwriter within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act against all loss, claim, damage, expense
or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from the
registration statement or prospectus referred to in SECTION 5(b) hereof to
the same extent and with the same effect (including the provisions regarding
contribution) as the provisions pursuant to which the company has agreed to
indemnify the Underwriter contained in Section 7 of the Underwriting
Agreement.
(f) Five business days prior to the Redemption Date, the Company
shall furnish to the Underwriter (i) opinions of counsel to the Company,
dated such date and addressed to the Underwriter, and (ii) a "cold comfort"
letter dated such date addressed to the Underwriter, signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus
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included therein) and, in the case of such accountants' letter, with respect
to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities, including, without limitation, those matters covered in Sections
6(d), 6(e) and 6(j) of the Underwriting Agreement.
(g) The Company shall as soon as practicable after the Redemption
Date, and in any event within 15 months thereafter, make "generally available
to its security holders" (within the meaning of Rule 158 under the Act) an
earnings statement (which need not be audited) complying with Section 11(a)
of the Act and covering a period of at least 12 consecutive months beginning
after the Redemption Date.
(h) The Company shall deliver within five business days prior to
the Redemption Date copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to such
registration statement and permit the Underwriter to do such investigation,
upon reasonable advance notice, with respect to information contained in or
omitted from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times and as often as the Underwriter shall reasonably request.
SECTION 10. CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and the Underwriter, and its duties shall be
determined solely by the provisions
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hereof. The Warrant Agent shall not, by issuing and delivering Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to the validity or value or authorization of the Warrant
Certificates or the Warrants represented thereby, or of any securities or
other property delivered upon exercise of any Warrant or whether any stock
issued upon exercise of any Warrant is fully paid and non-assessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Purchase Price provided in this Agreement, or to
determine whether any fact exists which may require any such adjustment, 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 (i) be
liable for any recital or statement of fact contained herein or for any
action taken, suffered or omitted by it in reliance on any 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, (ii) 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 Warrant Certificate, or (iii) be liable for any act or omission in
connection with this Agreement except for its own gross negligence or willful
misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company or the Underwriter)
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.
(d) Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument
signed by the Chairman of the
18
Board of Directors, President or any Vice President (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.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its
reasonable expenses hereunder; the Company further agrees to indemnify the
Warrant Agent and hold 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 liabilities arising as a result of the
Warrant Agent's gross negligence or willful misconduct.
(f) 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 gross negligence or willful misconduct),
after giving thirty (30) days' prior written notice to the Company. At least
fifteen (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 Warrant Certificate at the Company's
expense. Upon such resignation the Company shall appoint in writing a new
warrant agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after it has been notified in writing of such
resignation by the resigning Warrant Agent, then the Registered Holder of any
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
19
published report to its stockholders, of not less than ten million dollars
($10,000,000) or a stock transfer company doing business in New York, New
York. 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
Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, 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 corporate trust business of the
Warrant Agent or any new 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 Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effect
20
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.
(i) The Warrant Agent shall retain for a period of two (2) years from
the date of exercise any Warrant Certificate received by it upon such
exercise.
SECTION 11. MODIFICATION OF AGREEMENT.
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 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 holding not less
than sixty-six and two-thirds percent (66-2/3%) of the Warrants then
outstanding; PROVIDED, FURTHER, that no change in the number or nature of the
securities purchasable upon the exercise of any Warrant, and no change that
increases the Purchase Price of any Warrant, other than such changes as are
specifically set forth in this Agreement as originally executed, shall be
made without the consent in writing of each Registered Holders affected by
such change. In addition, this Agreement may not be modified, amended or
supplemented without the prior written consent of the Underwriter or its
successors or assigns, other than to cure any ambiguity or to correct any
defective or inconsistent provision or manifest mistake or error herein
contained or to make any such change that the Warrant Agent and the Company
deem necessary or desirable and which shall not adversely affect the
interests of the Underwriter or its successors or assigns.
21
SECTION 12. 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 postage prepaid or delivered to a telegraph office for
transmission, if to the Registered Holder of 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 Hawaiian Natural Water Company, Inc., 000
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000, Attention: Xxxxxx Xxxxxx, Chief
Executive Officer, 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. Copies of any notice delivered pursuant to this Agreement
shall be delivered to Xxxxxx Xxxxxxx & Company, Inc., 00 Xxxxxx Xxxx, 0xx
Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxxx, Chief Executive Officer
or at such other address as may have been furnished to the Company and the
Warrant Agent in writing.
SECTION 13. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to conflicts of laws
rules or principals.
SECTION 14. BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and
the holders from time to time of Warrant Certificates or any of them. Except
as hereinafter stated, nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or claim or to
impose upon any other person any duty, liability or obligation. The
Underwriter is, and shall at all times irrevocably be deemed to be, a
third-party beneficiary of this Agreement, with full power, authority and
standing to enforce the rights granted to it hereunder.
22
SECTION 15. COUNTERPARTS.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
HAWAIIAN NATURAL WATER CONTINENTAL STOCK TRANSFER
COMPANY, INC. & TRUST COMPANY
As Warrant Agent
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------ -----------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxx Xxxxxx
Title: Cluef Executive Officer Title: Chairman
EXHIBIT A
No. W ______________ VOID AFTER __________, 2002
____________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO
PURCHASE SHARES OF COMMON STOCK
HAWAIIAN NATURAL WATER COMPANY, INC.
CUSIP ___
THIS CERTIFIES THAT, FOR VALUE RECEIVED __________________________________
or registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Warrants (the "Warrants") specified above. One Warrant initially
entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and non-assessable share of Common
Stock, no par value per share, of Hawaiian Natural Water Company, Inc., a
Hawaii corporation (the "Company"), at any time from May 14, 1997 and prior
to 5:00 p.m. on the Expiration Date (as hereinafter defined) upon the
presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of
Continental Stock Transfer & Trust Company, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000 as Warrant Agent, or its successor (the "Warrant Agent"), accompanied
by payment of $6.00 per share, subject to adjustment (the "Purchase Price"),
in lawful money of the United States of America in cash or by check made
payable to the Warrant Agent for the account of the Company.
This Warrant Certificate, and each Warrant represented hereby, is issued
pursuant to and is subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated May 14, 1997
by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock
subject to purchase upon the exercise of each Warrant represented hereby are
subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all of the Warrants represented hereby, the Company
shall cancel this Warrant Certificate upon the surrender hereof and shall
execute and deliver a new Warrant Certificate or Warrant Certificates of like
tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
A-1
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on May
13, 2002. If such date shall in the State of New York be a holiday or a day
on which banks are authorized to close, then the Expiration Date shall mean
5:00 p.m. (New York time) on the next day which in the State of New York is
not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such
securities is effective or an exemption thereunder is available. The Company
has covenanted and agreed that it will file a registration statement under
the Federal securities laws, use its best efforts to cause the same to become
effective, to keep such registration statement current, if required under the
Act, while any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by a
Registered Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an
equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and payment of any
tax or other charge imposed in connection therewith or incident thereto, for
registration of transfer of this Warrant Certificate at such office, a new
Warrant Certificate or Warrant Certificates representing an equal aggregate
number of Warrants will be issued to the transferee in exchange therefor,
subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, in whole and not in part, at a
redemption price of $.05 per Warrant, at any time commencing May 14, 1998
provided that (i) the average closing bid price for the Company's Common
Stock, as reported by the National Association of Securities Dealers
Automated Quotation System (or, if not so quoted, as reported by any other
recognized quotation system on which the price of the Common Stock is
quoted), shall have, for any twenty (20) trading days within a period of
thirty (30) consecutive trading days ending on the fifth (5th) trading day
prior to the date on which the Notice of Redemption (as defined below) is
given, equalled or exceeded 150% of the then exercise price per share
(subject to adjustment in the event of any stock splits or other similar
events) and (ii) the Company has obtained the prior written consent of Xxxxxx
Xxxxxxx & Company, Inc. Notice of redemption (the "Notice of Redemption")
shall be given not later than the thirtieth (30th) day before the date fixed
for redemption, all as provided in the Warrant Agreement. On and after the
date fixed for redemption, the Registered Holder shall have no rights with
respect to this Warrant except to receive the $.05 per Warrant upon surrender
of this Certificate.
A-2
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon 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, except as provided in
the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts of
laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: _________, 1997
HAWAIIAN NATURAL WATER COMPANY,
INC.
[SEAL]
By:______________________________
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
ATTEST:
By:______________________________
Name:
Title:
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By:__________________
Authorized Officer
A-3
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably elects to exercise
_____ Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
____________________________
____________________________
____________________________
____________________________
(please print or type name and address)
and be delivered to
____________________________
____________________________
____________________________
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the balance of
such Warrants be registered in the name of, and delivered to, the Registered
Holder at the address stated below.
A-4
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
l. If the exercise of this Warrant was
solicited by Xxxxxx Xxxxxxx & Company,
Inc. please check the
following box / /
2. The exercise of this Warrant was
solicited by / /
_________________________________
3. If the exercise of this Warrant was
not solicited, please check the
following box / /
Dated:__________________________ X___________________________
___________________________
___________________________
Address
___________________________
Social Security or Taxpayer
Identification Number
___________________________
Signature Guaranteed
___________________________
A-5
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED,______________, hereby sells, assigns
and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
_______________________________________
_______________________________________
_______________________________________
(please PRINT or TYPE name and address)
_______________________of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints _______________
Attorney to transfer this Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Dated:______________________________ X___________________________
___________________________
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME(S) AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND
MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF
THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
A-6
