EXHIBIT 99.31
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-2003-12 WARRANT June 13, 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 that certain Investment Banking Agreement dated
as of June 13, 2003 by and between Xxxxx Xxxxxx ("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 13, 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 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.
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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 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
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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 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.
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(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: Xxxxx Xxxxxx
Address: 000 Xxxxxxxx Xxxx, Xxx. 000
Xxxxxxxx, Xxx Xxxx 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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