EXHIBIT 99.38
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. IT HAS BEEN ACQUIRED SOLELY
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THE WARRANT REPRESENTED BY THIS INSTRUMENT MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT THERETO OR IN
ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAN AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
No. W-2003-19 WARRANT August 4, 2003
To Purchase 250,000 Shares of Common Stock of
Universal Automotive Industries, Inc.
1. Number of Shares; Exercise Price; Term. In partial
consideration for entering into the First Amendment (the "Amendment"), effective
as of August 4, 2003, to that certain Investment Banking Agreement (the
"Agreement") dated June 30, 2003, by and between X.X. Xxxxxx & Company, LLC
("Xxxxxx Company") and Universal Automotive Industries, Inc., a Delaware
corporation (the "Company"), the Company issued a warrant (the "Original
Warrant") to Xxxxxx Company to acquire from the Company up to 250,000 shares
(the "Shares") of common stock, $0.01 par value, of the Company ("Common Stock")
on the terms and conditions set forth in the Original Warrant. Xxxxxx Company
has transferred to X.X. Xxxxxx Partners, LLP ("Holder") the Original Warrant
entitling Holder to acquire from the Company 250,000 Shares of Common Stock upon
the terms and subject to the conditions hereinafter set forth. Holder is
entitled at any time from the date of this Warrant, and subject to the vesting
schedule attached hereto as Exhibit A, and at or prior to 11:59 p.m. Central
Time, on June 30, 2006 (the "Expiration Time"), but not thereafter, to acquire
from the Company, in whole or in part, from time to time, up to 250,000 fully
paid and nonassessable shares (the "Shares") of common stock, $.01 par value, of
the Company ("Common Stock") at a purchase price of $.75 per Share. Such number
of Shares and Exercise Price are subject to adjustment as provided herein, and
all references to "Common Stock" and "Exercise Price" herein shall be deemed to
include any such adjustment or series of adjustments.
2. Exercise of Warrant. The purchase rights represented by this
Warrant are exercisable by Holder, in whole or in part, at any time, or from
time to time, subsequent to the date hereof, and subject to the vesting schedule
attached hereto as Exhibit A, by the surrender of this Warrant and the Notice of
Exercise annexed hereto, all duly completed and executed on behalf of Holder, at
the office of the Company in Chicago, Illinois (or such other office or agency
of the Company as it may designate by notice in writing to Holder at the address
of Holder appearing on the books of the Company). Payment of the Exercise Price
for the Shares thereby purchased shall be made by cash, certified or cashier's
check or wire transfer payable to the order of the Company, at 10:00 a.m.,
Central Time, on the day following surrender of this Warrant and the Notice of
Exercise, in an amount equal to the purchase price of the Shares thereby
purchased. Thereupon, Holder as the holder of this Warrant, shall be entitled to
receive from the Company a stock certificate in proper form representing the
number of Shares so purchased, and a new Warrant in substantially identical form
and dated as of such exercise for the purchase of that number of Shares equal to
the difference, if any, between the number of Shares subject hereto and the
number of Shares as to which this Warrant is so exercised.
3. Issuance of Shares. Certificates for Shares purchased
hereunder shall be delivered to Holder promptly after the date on which this
Warrant shall have been exercised in accordance with the terms hereof. The
Company hereby represents and warrants that all Shares that may be issued upon
the exercise of this Warrant will, upon such exercise, be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges in respect of the issuance thereof (other than liens or
charges created by or imposed upon Holder as the holder of the Warrant or taxes
in respect of any transfer occurring contemporaneously or otherwise specified
herein). The Company agrees that the Shares so issued shall be and shall for all
purposes be deemed to have been issued to Holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been exercised or converted in accordance with the terms hereof.
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4. No Fractional Shares or Scrip. No fractional Shares or scrip
representing fractional Shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional Share to which Holder as the holder would
otherwise be entitled, Holder shall be entitled, at its option, to receive
either (i) a cash payment equal to the excess of fair market value for such
fractional Share above the Exercise Price for such fractional share (as
determined in good faith by the Company) or (ii) a whole Share if Holder tenders
the Exercise Price for one whole share.
5. No Rights as Shareholder. This Warrant does not entitle Holder
as a holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.
6. Charges, Taxes and Expenses. Certificates for Shares issued
upon exercise of this Warrant shall be issued in the name of Holder as the
holder of this Warrant. Issuance of certificates for Shares upon the exercise of
this Warrant shall be made without charge to Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company.
7. No Transfer. This Warrant and any rights hereunder are not
transferable by Holder as the holder hereof except to employees or affiliates of
Holder, in whole or in part, without the prior written consent of the Company.
However, in the event of any resales of the Shares after exercise of all or part
of the Warrant, the Company agrees to accept, and shall so instruct its transfer
agent to accept, an appropriate Rule 144 opinion letter from any qualified
securities attorney (provided that such opinion provides that counsel for the
Company may rely thereon) representing Holder or any of its affiliates or agents
that are holders of such Shares.
8. Exchange and Registry of Warrant. This Warrant is
exchangeable, upon the surrender hereof by Holder as the registered holder at
the above-mentioned office or agency of the Company, for a new Warrant in
substantially identical form and dated as of such exchange. The Company shall
maintain at the above-mentioned office or agency a registry showing the name and
address of Holder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at the
office of the Company, and the Company shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and in the case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation
and reissuance, in lieu of this Warrant.
10. Reservation of Common Stock. The Company will at all times
reserve and keep available, solely for issuance, sale and delivery upon the
exercise of this Warrant, such number of Shares equal to the number of such
Shares purchasable upon the exercise of this Warrant. All such Shares shall be
duly authorized and, when issued upon exercise of this Warrant in accordance
with the terms hereof, will be validly issued and fully paid and nonassessable,
with no liability on the part of Holder. Such Shares will not be subject to any
preemptive rights.
11. Listing on Securities Exchanges, Etc. The Company will
maintain the listing of all Shares issuable or issued from time to time upon
exercise of this Warrant on each securities exchange or market or trading system
on which any shares of Common Stock are then or at any time thereafter listed or
traded, but only to the extent and for such period of time as such shares of
Common Stock are so listed.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday or a Sunday or a legal holiday.
13. Adjustments and Termination of Rights. The purchase price per
Share and the number of Shares purchasable hereunder are subject to adjustment
from time to time as follows:
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(a) Merger or Consolidation. If at any time there shall
be a merger or a consolidation of the Company with or into another corporation
when the Company is not the surviving corporation, then, as part of such merger
or consolidation, lawful provision shall be made so that Holder as the holder of
this Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other securities
or property (including cash) of the successor corporation resulting from such
merger or consolidation, to which Holder as the holder of the Shares deliverable
upon exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before such merger
or consolidation. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Warrant with respect to the rights and
interests of Holder as the holder of this Warrant after the merger or
consolidation. This provision shall apply to successive mergers or
consolidations.
(b) Reclassification, Recapitalization, etc. If the
Company at any time shall, by subdivision, combination or reclassification of
securities, recapitalization, automatic conversion, or other similar event
affecting the number or character of outstanding Shares, or otherwise, change
any of the securities as to which purchase rights under this Warrant exist into
the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.
(c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.
(d) Common Stock Dividends. If the Company at any time
while this Warrant is outstanding and unexpired shall pay a dividend with
respect to Common Stock payable in Shares, or make any other distribution with
respect to Common Stock in Shares, then the Exercise Price shall be adjusted,
from and after the date of determination of the shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of Shares
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of Shares outstanding immediately
after such dividend or distribution. This paragraph shall apply only if and to
the extent that, at the time of such event, this Warrant is then exercisable for
Common Stock.
(e) Adjustment of Number of Shares. Upon each adjustment
in the Exercise Price pursuant to Section 13(c) or 13(d) hereof, the number of
Shares purchasable hereunder shall be adjusted, to the nearest whole Share, to
the product obtained by multiplying the number of Shares purchasable immediately
prior to such adjustment in the Exercise Price by a fraction (i) the numerator
of which shall be the Exercise Price immediately prior to such adjustment, and
(ii) the denominator of which shall be the Exercise Price immediately after such
adjustment.
14. Notice of Adjustments; Notices. Whenever the Exercise Price or
number or type of securities issuable hereunder shall be adjusted pursuant to
Section 13 hereof, the Company shall issue and provide to Holder as the holder
of this Warrant a certificate signed by an officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment.
15. Registration Rights.
(a) Registration Shares. As used herein, the term
"Registrable Securities" shall mean this Warrant and/or the shares of Common
Stock issued or issuable upon exercise of this Warrant, as the same shall be so
designated by the Holder.
(b) "Piggy Back" Registration. Each time from the date
hereof until the Expiration Time, the Company shall advise Holder, whether
Holder holds this Warrant or has exercised this Warrant and holds any of the
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Common Stock, by written notice at least two weeks prior to the filing of any
registration statement (other than a registration statement on Form S-8 or its
counterpart), covering any securities of the Company, whether for its own
account or for the account of others, and shall, upon the request of Holder,
include in any registration statement such information as may be required to
permit a public offering of any or all of the Registrable Securities of Holder,
all at no expense whatsoever to Holder (to the extent as permitted by the
Securities Act of 1933 or the rules and regulations promulgated thereunder),
except that each Holder whose Registrable Securities are included in such
registration shall bear the fees of its own counsel and any underwriting
discounts or commissions applicable to the Registrable Securities sold by it.
(c) Further Rights. The registration rights provided by
this Section 15 may be exercised by Holder either prior or subsequent to its
exercise of this Warrant. The piggyback registration rights provided by this
Section 15 shall be pari passu to any other piggyback registration rights
granted by the Company to other holders of its outstanding securities.
16. Governing Law. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall constitute a contract
under the laws of Illinois and for all purposes shall be construed in accordance
with and governed by the laws of said state, without giving effect to conflict
of laws principles.
17. Amendments. This Warrant may be amended and the observance of
any term of this Warrant may be waived only with the written consent of the
Company and Holder as the holder hereof.
18. Notice. All notices hereunder shall be in writing and shall be
effective (a) on the day on which delivered if delivered personally or
transmitted by telex or telegram or telecopier with evidence of receipt, (b) one
(1) business day after the date on which the same is delivered to a nationally
recognized overnight courier service with evidence of receipt, or (c) five (5)
business days after the date on which the same is deposited, postage prepaid, in
the U.S. mail, sent by certified or registered mail, return receipt requested,
and addressed to the party to be notified at the address indicated below for the
Company, or at the address for Holder as the holder set forth in the registry
maintained by the Company pursuant to Section 8, or at such other address and/or
telecopy or telex number and/or to the attention of such other person as the
Company or Holder as the holder may designate by ten (10) day advance written
notice.
19. Entire Agreement. This Warrant and the forms attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.
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IN WITNESS WHEREOF, Universal Automotive Industries, Inc. has caused
this Warrant to be executed by its duly authorized officer.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
Name of Holder: X.X. Xxxxxx Partners, LLP
Address: Attn: Xxxxxxx X. Power,
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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EXHIBIT A
VESTING SCHEDULE
Vesting Period Number of Shares Vested
-------------- -----------------------
On the date of execution of the Agreement 40,000
30 days following the date of execution of the Agreement 40,000
90 days following the date of execution of the Agreement 40,000
120 days following the date of execution of the Agreement 40,000
180 days following the date of execution of the Agreement 90,000
-------
TOTAL 250,000
=======
Notwithstanding the above, the Warrant shall vest completely and immediately in
favor of Holder and shall become exercisable immediately, in the event of the
consummation of (i) sale of the Company (or all or substantially all of the
assets thereof) or (ii) an acquisition or merger transaction of the Company by
or into another entity.
A-1
NOTICE OF EXERCISE
To: Universal Automotive Industries, Inc.
1. The undersigned hereby elects to purchase ________________
shares (the "Shares") of common stock $.01 par value of Universal Automotive
Industries, Inc. (the "Company") pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price and any transfer taxes
payable pursuant to the terms of the Warrant, together with an investment
Representation Statement in form and substance satisfactory to legal counsel to
the Company.
2. The Shares to be received by the undersigned upon exercise of
the Warrant are being acquired for his own account, not as a nominee or agent,
and not with a view to resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the same, except in compliance with applicable federal
and state securities laws. The undersigned further represents that he does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to the Shares. The undersigned believes he has received all the
information he considers necessary or appropriate for deciding whether to
purchase the Shares.
3. The undersigned understands that unless there is an effective
registration statement for either the issuance of the Shares by the Company or
resale of the Shares by the undersigned, the Shares are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in transactions not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, the
undersigned represents that he is familiar with Rule 144 of the Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
4. The undersigned understands the certificates evidencing the
Shares may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY
HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS."
(b) Any legend required by applicable state law.
5. Please issue a certificate or certificates representing said
Shares in the name of the undersigned.
6. Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned.
_____________________________________
(Print Name)
______________________ By: _________________________________
Date Title: ________________________
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS. IT HAS BEEN ACQUIRED SOLELY
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. THE WARRANT REPRESENTED BY THIS INSTRUMENT MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT THERETO OR IN
ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAN AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
No. W-2003-19 WARRANT June 30, 2003
To Purchase 250,000 Shares of Common Stock of
Universal Automotive Industries, Inc.
1. Number of Shares; Exercise Price; Term. This certifies that,
in partial consideration for entering into the First Amendment June 30, 2003 and
effective as of August 4, 2003 to that certain Investment Banking Agreement by
and between X.X. Xxxxxx & Company, LLC ("Holder") and Universal Automotive
Industries, Inc., a Delaware corporation (the "Company"), Holder is entitled,
upon the terms and subject to the conditions hereinafter set forth, at any time
from the date of this Warrant, and subject to the vesting schedule attached
hereto as Exhibit A, and at or prior to 11:59 p.m. Central Time, on June 30,
2006 (the "Expiration Time"), but not thereafter, to acquire from the Company,
in whole or in part, from time to time, up to 250,000 fully paid and
nonassessable shares (the "Shares") of common stock, $.01 par value, of the
Company ("Common Stock") at a purchase price of $.75 per Share. Such number of
Shares and Exercise Price are subject to adjustment as provided herein, and all
references to "Common Stock" and "Exercise Price" herein shall be deemed to
include any such adjustment or series of adjustments.
2. Exercise of Warrant. The purchase rights represented by this
Warrant are exercisable by Holder, in whole or in part, at any time, or from
time to time, subsequent to the date hereof, and subject to the vesting schedule
attached hereto as Exhibit A, by the surrender of this Warrant and the Notice of
Exercise annexed hereto, all duly completed and executed on behalf of Holder, at
the office of the Company in Chicago, Illinois (or such other office or agency
of the Company as it may designate by notice in writing to Holder at the address
of Holder appearing on the books of the Company). Payment of the Exercise Price
for the Shares thereby purchased shall be made by cash, certified or cashier's
check or wire transfer payable to the order of the Company, at 10:00 a.m.,
Central Time, on the day following surrender of this Warrant and the Notice of
Exercise, in an amount equal to the purchase price of the Shares thereby
purchased. Thereupon, Holder as the holder of this Warrant, shall be entitled to
receive from the Company a stock certificate in proper form representing the
number of Shares so purchased, and a new Warrant in substantially identical form
and dated as of such exercise for the purchase of that number of Shares equal to
the difference, if any, between the number of Shares subject hereto and the
number of Shares as to which this Warrant is so exercised.
3. Issuance of Shares. Certificates for Shares purchased
hereunder shall be delivered to Holder promptly after the date on which this
Warrant shall have been exercised in accordance with the terms hereof. The
Company hereby represents and warrants that all Shares that may be issued upon
the exercise of this Warrant will, upon such exercise, be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges in respect of the issuance thereof (other than liens or
charges created by or imposed upon Holder as the holder of the Warrant or taxes
in respect of any transfer occurring contemporaneously or otherwise specified
herein). The Company agrees that the Shares so issued shall be and shall for all
purposes be deemed to have been issued to Holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been exercised or converted in accordance with the terms hereof.
4. No Fractional Shares or Scrip. No fractional Shares or scrip
representing fractional Shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional Share to which Holder as the holder would
otherwise be entitled, Holder shall be entitled, at its option, to receive
either (i) a cash payment equal to the excess
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of fair market value for such fractional Share above the Exercise Price for such
fractional share (as determined in good faith by the Company) or (ii) a whole
Share if Holder tenders the Exercise Price for one whole share.
5. No Rights as Shareholder. This Warrant does not entitle Holder
as a holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.
6. Charges, Taxes and Expenses. Certificates for Shares issued
upon exercise of this Warrant shall be issued in the name of Holder as the
holder of this Warrant. Issuance of certificates for Shares upon the exercise of
this Warrant shall be made without charge to Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company.
7. No Transfer. This Warrant and any rights hereunder are not
transferable by Holder as the holder hereof except to employees or affiliates of
Holder, in whole or in part, without the prior written consent of the Company.
However, in the event of any resales of the Shares after exercise of all or part
of the Warrant, the Company agrees to accept, and shall so instruct its transfer
agent to accept, an appropriate Rule 144 opinion letter from any qualified
securities attorney (provided that such opinion provides that counsel for the
Company may rely thereon) representing Holder or any of its affiliates or agents
that are holders of such Shares.
8. Exchange and Registry of Warrant. This Warrant is
exchangeable, upon the surrender hereof by Holder as the registered holder at
the above-mentioned office or agency of the Company, for a new Warrant in
substantially identical form and dated as of such exchange. The Company shall
maintain at the above-mentioned office or agency a registry showing the name and
address of Holder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at the
office of the Company, and the Company shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and in the case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation
and reissuance, in lieu of this Warrant.
10. Reservation of Common Stock. The Company will at all times
reserve and keep available, solely for issuance, sale and delivery upon the
exercise of this Warrant, such number of Shares equal to the number of such
Shares purchasable upon the exercise of this Warrant. All such Shares shall be
duly authorized and, when issued upon exercise of this Warrant in accordance
with the terms hereof, will be validly issued and fully paid and nonassessable,
with no liability on the part of Holder. Such Shares will not be subject to any
preemptive rights.
11. Listing on Securities Exchanges, Etc. The Company will
maintain the listing of all Shares issuable or issued from time to time upon
exercise of this Warrant on each securities exchange or market or trading system
on which any shares of Common Stock are then or at any time thereafter listed or
traded, but only to the extent and for such period of time as such shares of
Common Stock are so listed.
12. Saturdays, Sundays, Holidays, etc. If the last or appointed
day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday or a Sunday or a legal holiday.
13. Adjustments and Termination of Rights. The purchase price per
Share and the number of Shares purchasable hereunder are subject to adjustment
from time to time as follows:
(a) Merger or Consolidation. If at any time there shall
be a merger or a consolidation of the Company with or into another corporation
when the Company is not the surviving corporation, then, as part of such merger
or consolidation, lawful provision shall be made so that Holder as the holder of
this Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
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aggregate Exercise Price then in effect, the number of shares of stock or other
securities or property (including cash) of the successor corporation resulting
from such merger or consolidation, to which Holder as the holder of the Shares
deliverable upon exercise of this Warrant would have been entitled in such
merger or consolidation if this Warrant had been exercised immediately before
such merger or consolidation. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of Holder as the holder of this Warrant after the merger or
consolidation. This provision shall apply to successive mergers or
consolidations.
(b) Reclassification, Recapitalization, etc. If the
Company at any time shall, by subdivision, combination or reclassification of
securities, recapitalization, automatic conversion, or other similar event
affecting the number or character of outstanding Shares, or otherwise, change
any of the securities as to which purchase rights under this Warrant exist into
the same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.
(c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.
(d) Common Stock Dividends. If the Company at any time
while this Warrant is outstanding and unexpired shall pay a dividend with
respect to Common Stock payable in Shares, or make any other distribution with
respect to Common Stock in Shares, then the Exercise Price shall be adjusted,
from and after the date of determination of the shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such date of determination by a
fraction (i) the numerator of which shall be the total number of Shares
outstanding immediately prior to such dividend or distribution, and (ii) the
denominator of which shall be the total number of Shares outstanding immediately
after such dividend or distribution. This paragraph shall apply only if and to
the extent that, at the time of such event, this Warrant is then exercisable for
Common Stock.
(e) Adjustment of Number of Shares. Upon each adjustment
in the Exercise Price pursuant to Section 13(c) or 13(d) hereof, the number of
Shares purchasable hereunder shall be adjusted, to the nearest whole Share, to
the product obtained by multiplying the number of Shares purchasable immediately
prior to such adjustment in the Exercise Price by a fraction (i) the numerator
of which shall be the Exercise Price immediately prior to such adjustment, and
(ii) the denominator of which shall be the Exercise Price immediately after such
adjustment.
14. Notice of Adjustments; Notices. Whenever the Exercise Price or
number or type of securities issuable hereunder shall be adjusted pursuant to
Section 13 hereof, the Company shall issue and provide to Holder as the holder
of this Warrant a certificate signed by an officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment.
15. Registration Rights.
(a) Registration Shares. As used herein, the term
"Registrable Securities" shall mean this Warrant and/or the shares of Common
Stock issued or issuable upon exercise of this Warrant, as the same shall be so
designated by the Holder.
(b) "Piggy Back" Registration. Each time from the date
hereof until the Expiration Time, the Company shall advise Holder, whether
Holder holds this Warrant or has exercised this Warrant and holds any of the
Common Stock, by written notice at least two weeks prior to the filing of any
registration statement (other than a registration statement on Form S-8 or its
counterpart), covering any securities of the Company, whether for its own
account or for the account of others, and shall, upon the request of Holder,
include in any registration statement such information as may be required to
permit a public offering of any or all of the Registrable Securities of Holder,
all at
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no expense whatsoever to Holder (to the extent as permitted by the Securities
Act of 1933 or the rules and regulations promulgated thereunder), except that
each Holder whose Registrable Securities are included in such registration shall
bear the fees of its own counsel and any underwriting discounts or commissions
applicable to the Registrable Securities sold by it.
(c) Further Rights. The registration rights provided by
this Section 15 may be exercised by Holder either prior or subsequent to its
exercise of this Warrant. The piggyback registration rights provided by this
Section 15 shall be pari passu to any other piggyback registration rights
granted by the Company to other holders of its outstanding securities.
16. Governing Law. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall constitute a contract
under the laws of Illinois and for all purposes shall be construed in accordance
with and governed by the laws of said state, without giving effect to conflict
of laws principles.
17. Amendments. This Warrant may be amended and the observance of
any term of this Warrant may be waived only with the written consent of the
Company and Holder as the holder hereof.
18. Notice. All notices hereunder shall be in writing and shall be
effective (a) on the day on which delivered if delivered personally or
transmitted by telex or telegram or telecopier with evidence of receipt, (b) one
(1) business day after the date on which the same is delivered to a nationally
recognized overnight courier service with evidence of receipt, or (c) five (5)
business days after the date on which the same is deposited, postage prepaid, in
the U.S. mail, sent by certified or registered mail, return receipt requested,
and addressed to the party to be notified at the address indicated below for the
Company, or at the address for Holder as the holder set forth in the registry
maintained by the Company pursuant to Section 8, or at such other address and/or
telecopy or telex number and/or to the attention of such other person as the
Company or Holder as the holder may designate by ten (10) day advance written
notice.
19. Entire Agreement. This Warrant and the forms attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.
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IN WITNESS WHEREOF, Universal Automotive Industries, Inc. has caused this
Warrant to be executed by its duly authorized officer.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
By: ____________________________________
Name: __________________________________
Title: _________________________________
Name of Holder: X.X. Xxxxxx & Company, LLC
Address: Attn: Xxxxxxx X. Power, Managing
Director of Investment Banking
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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EXHIBIT A
VESTING SCHEDULE
Vesting Period Number of Shares Vested
-------------------------------------------- -----------------------
On effective date of Warrant 40,000
30 days following effective date of Warrant 40,000
90 days following effective date of Warrant 40,000
120 days following effective date of Warrant 40,000
180 days following effective date of Warrant 90,000
-------
TOTAL 250,000
=======
Notwithstanding the above, the Warrant shall vest completely and immediately in
favor of Holder and shall become exercisable immediately, in the event of the
consummation of (i) sale of the Company (or all or substantially all of the
assets thereof) or (ii) an acquisition or merger transaction of the Company by
or into another entity.
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NOTICE OF EXERCISE
To: Universal Automotive Industries, Inc.
1. The undersigned hereby elects to purchase ________________ shares (the
"Shares") of common stock $.01 par value of Universal Automotive Industries,
Inc. (the "Company") pursuant to the terms of the attached Warrant, and tenders
herewith payment of the purchase price and any transfer taxes payable pursuant
to the terms of the Warrant, together with an investment Representation
Statement in form and substance satisfactory to legal counsel to the Company.
2. The Shares to be received by the undersigned upon exercise of the
Warrant are being acquired for his own account, not as a nominee or agent, and
not with a view to resale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting any participation in,
or otherwise distributing the same, except in compliance with applicable federal
and state securities laws. The undersigned further represents that he does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to the Shares. The undersigned believes he has received all the
information he considers necessary or appropriate for deciding whether to
purchase the Shares.
3. The undersigned understands that unless there is an effective
registration statement for either the issuance of the Shares by the Company or
resale of the Shares by the undersigned, the Shares are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in transactions not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, the
undersigned represents that he is familiar with Rule 144 of the Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
4. The undersigned understands the certificates evidencing the Shares may
bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED SOLELY
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
LAWS."
(b) Any legend required by applicable state law.
5. Please issue a certificate or certificates representing said Shares in
the name of the undersigned.
6. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________________
(Print Name)
______________________ By: ____________________________
Date Title: _________________________
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