Exhibit 4.1
WARRANT AGREEMENT
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 OPINION OF COUNSEL, SATISFACTORY IN FORM
AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY
APPLICABLE STATE SECURITIES LAWS.
WARRANT
February 8, 2005
To Purchase 879,996 Shares of Common Stock of
Circle Group Holdings, Inc., an Illinois Corporation (the "Company")
Number of Shares; Exercise Price; Term. This certifies that for good and
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Xxxxx Xxxxxx ("Holder") is entitled, upon the terms and subject to
the conditions hereinafter set forth, at any time after the date hereof and at
or prior to 11:59 p.m. Central Time, on February 7, 2007 (the "Expiration
Time"), but not thereafter, to acquire from the Company, in whole or in part,
from time to time, up to 879,996 (Number of Warrants) fully paid and non
assessable shares (the "Shares") of the Company ("Common Stock"), at a purchase
price of $1.00 per share (the "Exercise Price"). The right to purchase all of
the Shares under the Warrant shall vest immediately upon issuance of this
Warrant. The number of Shares, type of security 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.
Exercise of Warrant. The purchase rights represented by this Warrant are
exercisable by the Holder, in whole or in part, at any time, or from time to
time, prior to the Expiration Time and with Piggy Back registration rights after
October 1, 2005 or at such time a registration statement registering the shares
of Common Stock issuable upon exercise of this Warrant has been declared
effective by the Securities and Exchange Commission, by the surrender of this
Warrant and the Notice of Exercise annexed hereto, all duly completed and
executed on behalf of the Holder, at the office of the Company in Mundelein,
Illinois (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company) and upon payment of the Exercise Price for the Shares
thereby purchased (by cash, certified or cashier's check, or wire transfer
payable to the Company). Thereupon, the 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.
Issuance of Shares. Certificates for Shares purchased hereunder shall be
delivered to the Holder within a reasonable time after the date on which this
Warrant shall have been exercised in accordance with the terms hereof. All
Shares that may be issued upon the exercise of this Warrant shall, upon such
exercise, be duly and validly authorized and issued, fully paid and
non-assessable and free from all taxes, liens and charges in respect of the
issuance thereof (other than liens or charges created by or imposed upon the
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 the 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. 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.
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 Warrant Share to which the Holder as the holder would otherwise
be entitled, the 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
Warrant Share above the Exercise Price for such fractional share (as determined
in good faith by the Company) or (ii) a whole Warrant Share if the Holder
tenders the Exercise Price for one whole share.
No Rights as Shareholders. This Warrant does not entitle the Holder as a
holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.
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 of 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.
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 reissue, in lieu of this Warrant.
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.
Adjustments of Rights. The purchase price per Share and/or the number of
Shares purchasable hereunder are subject to adjustment from time to time as
follows:
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 the 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 the Holder as the holder of the stock 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 the Holder as the holder of this Warrant after the merger or
consolidation. This provision shall apply to successive mergers or
consolidations.
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 of Common Stock, 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.
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.
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 of Common Stock, or make any other distribution with respect
to Common Stock payable in shares of Common Stock, 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 of Common Stock outstanding immediately prior to such dividend or
distribution, and (ii) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution.
Adjustment of Number of Shares. Upon each adjustment in the Exercise Price
pursuant to Sections 9(c), 9(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.
Notice of Adjustments; Notices. Whenever the Exercise Price or number or
type of securities issuable hereunder shall be adjusted pursuant to Sections 9,
hereof, the Company shall issue and provide to the Holder as the holder of this
Warrant, within ten (10) days after the event requiring the adjustment, 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.
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 the conflict of laws
principles.
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 the
Holder as the holder hereof.
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 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 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 the Holder set forth in the registry maintained
by the Company pursuant to Section 6, or at such other address and/or telecopy
or telex number and/or to the attention of such other person as the Company or
the Holder as the holder may designate by ten-day advance written notice.
Entire Agreement. This Warrant and the form 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.
IN WITNESS WHEREOF, Circle Group Holdings, Inc. has caused this Warrant to
be executed by its duly authorized officer.
Dated As Of: February 17, 2005
CIRCLE GROUP HOLDINGS, INC.,
an Illinois corporation
/s/ Xxxxxxx X. Xxxxxxx
------------------------
Xxxxxxx X. Xxxxxxx - CEO
NOTICE OF EXERCISE
To: Circle Group Holdings, Inc.
1. The undersigned hereby elects to purchase ________________ shares (the
"Shares") of common stock $_________ par value of Circle Group Holdings, 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.
The Shares to be received by the undersigned upon exercise of the Warrant
are being acquired for its 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 it 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 it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Shares.
Please issue a certificate or certificates representing said Shares in the
name of the undersigned.
___________________________________
Please issue a new Warrant for the unexercised portion of the attached Warrant
in the name of the undersigned.
__________________________________
Date ____________________________ Signature
