1
EXHIBIT 4.3
--------------------------------------------------------------------------------
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGENT
WARRANT AGREEMENT
DATED AS OF DECEMBER 18, 2000
--------------------------------------------------------------------------------
2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of December 18, 2000, between AMERICAN
BANK NOTE HOLOGRAPHICS, INC., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Warrant Agent").
WHEREAS, the Company proposes to issue Eight Hundred Sixty-Three
Thousand Six Hundred and Forty-Seven (863,647) common stock purchase warrants
(the "Warrants"), each to purchase one share of its common stock, par value
$0.01 per share (the "Common Stock") (the shares of Common Stock issuable on
exercise of the Warrants being referred to herein as the "Warrant Shares"), in
connection with the settlement of a class action lawsuit (the "Action")
previously pending against the Company in federal district court in the Southern
District of New York (the "Federal Court") in accordance with a Global
Stipulation and Agreement of Settlement dated October 24, 2000 (the
"Stipulation") between the Company and the participants in such settlement,
following final Court approval of the Settlement and promptly after Holographics
Plaintiffs' Co-Lead Counsel (as such terms are defined in the Stipulation)
provide instructions to the Company for delivery of the Warrants (the
"Plaintiff's Instructions");
WHEREAS, the Company proposes to issue certificates evidencing the
Warrants (the "Warrant Certificates");
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, division, transfer, exchange, redemption and surrender
of the Warrants, the issuance of certificates representing the Warrants, the
exercise of the warrants, and the rights of the registered holders thereof;
WHEREAS, a registration statement covering the issuance and sale of the
Warrant Shares upon exercise of the Warrants is to be filed by the Company with
the United States Securities and Exchange Commission (the "SEC") pursuant to
Section 2.03 hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained 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 registered
holders of the Warrants and the Warrants Agent, the parties hereto hereby agree
as follows:
ARTICLE I
DISTRIBUTION OF WARRANT CERTIFICATES
SECTION 1.01. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act on behalf of the Company in accordance with the
instructions hereinafter set forth, and the Warrant Agent hereby accepts such
appointment.
3
SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates
shall be issued in registered form only and, together with the forms of election
to purchase Warrant Shares and of assignment to be printed on the reverse
thereof, shall be substantially in the form of Exhibit A attached hereto and, in
addition, may have such letters, numbers or other marks of identification or
designation and such legends, summaries, or endorsements stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as, in any particular
case, may be required in the opinion of counsel for the Company, to comply with
any law or with any rule or regulation of any securities exchange, regulatory
authority or agency, or to conform to customary usage. The Warrants Certificates
shall be dated the date of issuance thereof (whether upon initial issuance,
transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrants
Certificates) and shall be numbered serially with the letter "W".
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman or
President or any Vice President attested to by its Secretary or Assistant
Secretary, either manually or by facsimile signature printed thereon. The
Warrant Certificates shall be countersigned, either manually or by facsimile
signature printed thereon, and (except as set forth in Sections 1.04 and 2.02
hereof) dated the date of countersignature by the Warrant Agent and shall not be
valid for any purpose unless so countersigned and dated. In case any authorized
officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer of the Company either before or after delivery
thereof by the Company to the Warrant Agent, the signature of such person on
such Warrant Certificates, nevertheless, shall be valid and such Warrant
Certificates may be countersigned by the Warrant Agent, and issued and delivered
to those persons entitled to receive the Warrants represented thereby with the
same force and effect as though the person who signed such Warrant Certificates
had not ceased to be such officer of the Company.
SECTION 1.04. Registration. The Company shall deliver to the Warrant
Agent an adequate supply of Warrant Certificates executed on behalf of the
Company as described in Section 1.03 hereof. These Warrant Certificates shall
initially be registered in the names of those persons who are entitled to
receive such Warrants in accordance with the terms of the Stipulation, which
names shall be provided to the Warrant Agent by the Company (the "Authorized
Warrant Holders"). Each such Warrant Certificate shall have imprinted on its
face the date of December 18, 2000 (the "Commencement Date"). The Warrant Agent
shall mail or caused to be mailed such Warrant Certificates to the Authorized
Warrant Holders as soon as practicable following delivery of such instructions.
The Warrant Agent shall maintain books for the transfer and
registration of the Warrant Certificates in accordance with its regular
practice. The Warrant Certificates shall be registered in a Warrant Register as
they are issued. The Company and the Warrant Agent shall be entitled to treat
the registered owner(s) of the Warrant Certificates (the "Holder(s)") as the
owner(s) in fact thereof (notwithstanding any notation of ownership or other
writing on the Warrant Certificates made by anyone other than the Company or the
Warrant Agent), for the purpose of any exercise thereof and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.
2
4
SECTION 1.05. Transfer of Warrants. The Warrant Certificates shall be
transferable only on the books of the Company maintained at the office of the
Warrant Agent designated for such purpose upon delivery thereof duly endorsed by
the Holder or by his duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer, which
endorsement shall be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee Medallion Program), pursuant to S.E.C. Rule
17Ad-15 (hereafter, "Signatures Guaranteed"). In all cases of transfer by an
attorney, the original power of attorney, duly approved, or a copy thereof, duly
certified, shall be deposited and remain with the Warrant Agent. In case of
transfer by executor, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and may be
required to be deposited and remain with the Warrant Agent in its discretion.
A reasonable service charge may be imposed by the Warrant Agent upon
the Holder for any exchange or registration of transfer of Warrant Certificates.
The Company may require payment by a Holder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
SECTION 2.01. Exercise Price. Each Warrant Certificate shall, when
signed and countersigned as provided in Section 1.03, entitle the Holder thereof
to purchase from the Company one share of Common Stock for each Warrant
evidenced thereby, at the purchase price of Six Dollars ($6.00) per share (the
"Exercise Price"). Except as the context otherwise requires, the term "Exercise
Price" as used in this Agreement shall mean the purchase price of one share of
Common Stock, reflecting all appropriate adjustments made in accordance with the
provisions of Article III hereof.
SECTION 2.02. Exercisability of Warrants and Registration of Warrant
Shares. Each Warrant may be exercised at any time after the December 18, 2000
until 5:00 p.m., New York City time on May 18, 2002 (the "Exercise Deadline").
After the Exercise Deadline, any unexercised Warrants will be void and all
rights of Holders shall cease. Each Warrant Certificate shall have the Exercise
Deadline imprinted on its face. Notwithstanding anything to the contrary
contained herein, the Warrants may not be exercised until the Registration
Statement referred to in Section 2.03 has been declared effective by the SEC.
Subject to Section 2.03 hereof, the Company shall use reasonable good faith
efforts to keep available for delivery upon the exercise of Warrants a
prospectus that meets the requirements of Section 10 of the Securities Act,
until the earlier of the date by which all Warrants are exercised or the
Exercise Deadline, unless the Company determines that, by virtue of an amendment
of the Securities Act or otherwise, the effectiveness of such registration or
the delivery of such prospectus is not required at the time Warrant Shares are
to be issued.
3
5
In the event that, in the judgment of the Company, it is advisable to
suspend use of the prospectus described in this Section 2.02, due to (i) any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related prospectus or
for additional information; (ii) the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation or threat of any proceedings for that
purpose; (iii) the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Common Stock for sale in any jurisdiction or the initiation or threat of any
proceeding for such purpose; (iv) the existence of any fact or the happening of
any event which makes any statement of a material fact in such Registration
Statement or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which would require the making of
any changes in the Registration Statement or prospectus in order that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and that in the case
of the prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; (v) the
Company's determination that a post-effective amendment to a Registration
Statement would be appropriate, or (vi) pending material corporate developments
or similar material events that have not yet been publicly disclosed and as to
which the Company believes public disclosure will be prejudicial to the Company,
the Company shall give written notice to the Warrant Agent to the effect of the
foregoing and to the effect that the Warrants may not be exercised during such
time period (the "Blackout Period"). In the event that a Holder seeks to
exercise a Warrant during the Blackout Period, the Warrant Agent will notify the
Holder, in accordance with Section 6.15 hereof, that a Blackout Period is in
effect. In no event shall the Company call a Blackout Period sixty (60) days
prior to the Exercise Deadline.
SECTION 2.03. Registration of Warrant Shares.
(a) The Company shall, as soon as reasonably practicable after the
Commencement Date, at the Company's sole cost and expense (other than the fees
and disbursements of counsel for the Holders and the underwriting discounts, if
any) prepare and file with the SEC a registration statement on Form S-3 or any
other available form approved by the SEC (the "Registration Statement")
registering the issuance of the Warrant Shares and will use its reasonable best
efforts through its officers, directors, auditors and counsel to cause such
Registration Statement to become effective as soon as reasonably practicable.
(b) Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless the Holders, its officers, directors, partners,
employees, agents, counsel, and each person, if any, who controls any such
person within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from
and against any and all loss, liability, charge, claim, damage and expense
whatsoever (which shall include, for all purposes of this Section 2.03, but not
be limited to, attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation) as and when
4
6
incurred, arising out of, based upon or in connection with any untrue statement
or alleged untrue statement of a material fact contained (A) in any Registration
Statement, preliminary prospectus or final prospectus (as from time to time
amended and supplemented) or any amendment or supplement thereto, relating to
the sale of any of the Warrant Shares or (B) in any application or other
document or communication (in this Section 2.03 collectively called an
"application") executed by or on behalf of a Holder or based upon written
information furnished by or on behalf of a Holder filed in any jurisdiction in
order to register or qualify any of the Warrant Shares under the securities or
blue sky laws thereof or filed with the SEC or any securities exchange; or any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading, unless
(x) such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company with respect to a Holder by or on
behalf of such Holder expressly for inclusion in any Registration Statement,
preliminary prospectus or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (y) such loss, liability,
charge, claim, damage or expense arises out of a Holder's failure to comply with
the terms and provisions of this Agreement. The foregoing agreement to indemnify
shall be in addition to any remedy a Holder may otherwise have, including
remedies arising under this Agreement.
If any action is brought against a Holder or any of its officers,
directors, partners, employees, agents or counsel, if any, or any controlling
persons of such person (an "indemnified party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability other than pursuant to this Section 2.03(b)) and the
Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or
parties) provided that the indemnified party shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any of which
events such fees and expenses shall be borne by the Company and the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties. Anything in this Section 2.03 to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such
claim or action effected without its written consent. The Company shall not,
without the prior written consent of each indemnified party that is not released
as described in this sentence, settle or compromise any action, or permit a
default or consent to the entry of judgment in or otherwise seek to terminate
any pending or threatened action, in respect of which indemnity may be sought
hereunder (whether or not any indemnified party is a party thereto) unless such
settlement, compromise, consent or termination includes an unconditional release
of each indemnified party from all liability in respect of such action. The
Company agrees promptly to notify the Holders of the commencement of any
litigation or proceedings against the Company or any of it officers or directors
in connection with the sale of Common Stock or any preliminary prospectus,
5
7
prospectus, Registration Statement, or amendment or supplement thereto, or any
application relating to any sale of Common Stock.
(c) The Holders agree to indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who shall have signed
any Registration Statement covering the Common Stock held by the Holders, each
other person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act and its or their
respective counsel and Plaintiffs' Counsel (as that term is defined in the
Stipulation), to the same extent as the foregoing indemnity from the Company to
the Holders in Section 2.03(b) hereof but only with respect to statements or
omissions, if any, made in any Registration Statement, preliminary prospectus,
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto or in any application, in reliance upon and in
conformity with written information furnished to the Company with respect to the
Holders by or on behalf of a Holder, expressly for inclusion in any such
Registration Statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto or in any application, as the case may be. If
any action shall be brought against the Company or any other person to be so
indemnified based on any such Registration Statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto or in any application,
and in respect of which indemnity may be sought against a Holder pursuant to
this Section 2.03(c) a Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
2.03(b).
(d) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 2.03(b)
or 2.03(c) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, even though this Agreement expressly provides
for indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise, then
the Company (including for this purpose any contribution made by or on behalf of
any director of the Company, any officer of the Company who signed any such
Registration Statement, any controlling person of the Company, and its or their
respective counsel) as one entity, and the Holders (including for this purpose
any contribution by or on behalf of an indemnified party) as a second entity,
shall contribute to the losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, on the basis of relevant
equitable considerations such as the relative fault of the Holders and the
Company in connection with the facts which resulted in such losses, liabilities,
claims, damages and expenses. The relative fault, in the case of an untrue
statement, alleged untrue statement, omission or alleged omission shall be
determined by, among other things, whether such statement, alleged statement,
omission or alleged omission relates to information supplied by a Holder or the
Company, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement, omission or
alleged omission. Each Holder and the Company agree that it would be unjust and
inequitable if the respective obligations of the Holders and the Company for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the Holders
and the other indemnified parties were treated as one entity for such purpose)
or by any other method of allocation that does not reflect the equitable
considerations referred to in this Section 2.03(d). No person guilty of a
fraudulent
6
8
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. For purposes of this Section 2.03(d) each person,
if any, who controls a Holder within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and each officer, director, partner,
employee, agent and counsel of a Holder or control person shall have the same
rights to contribution as the Company or control person and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed any such Registration Statement, each director of the Company, and its or
their respective counsel shall have the same rights to contribution as the
Company, subject in each case to the provisions of this Section 2.03(d).
Anything in this Section 2.03(d) to the contrary notwithstanding, no party shall
be liable for contribution with respect to the settlement of any claim or action
effected without its written consent. This Section 2.03(d) is intended to
supersede any right to contribution under the Securities Act, the Exchange Act
or otherwise.
(e) Notwithstanding the foregoing provisions of this Section 2.03,
in the event the Stipulation shall be the subject of appeal by members of the
Settlement Class or other persons, the Company may in its sole discretion, cease
its efforts to file or to cause the declaration of effectiveness of the
Registration Statement and/or cause the withdrawal of such Registration
Statement. Upon resolution of such appeal, the Company shall forthwith use its
reasonable best efforts to file or cause the declaration of effectiveness of the
Registration Statement, subject to the foregoing provisions.
SECTION 2.04. Procedure for Exercise of Warrants.
(a) During the period specified in and subject to the provisions
and limitations set forth in Section 2.02 hereof, Warrants may be exercised by
surrendering the Warrant Certificates representing such Warrants to the Warrant
Agent at 00 Xxxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxx, XX 00000, attention: Trust
Department (the "Principal Office") or at such other location as the Warrant
Agent may specify in writing to the Holders with the election to purchase form
set forth on the reverse side of the Warrant Certificate duly completed and
executed, with Signature Guaranteed under certain circumstances as set forth in
the purchase form, accompanied by payment in full to the Warrant Agent for the
account of the Company of the Exercise Price in effect at the time of such
exercise, together with such taxes as are specified in Section 6.01 hereof, for
each share of Common Stock with respect to which such Warrants are being
exercised. Such Exercise Price and taxes shall be paid in full by certified or
official bank check, or by United States Postal Service money order, payable in
United States currency to the order of the Warrant Agent for the account of the
Company.
(b) The date on which a Warrant is exercised in accordance with
this Section 2.04 is sometimes referred to herein as the "Date of Exercise" of
such Warrant. In the event that a Blackout Period, as described in Section 2.02
hereof is in effect, the Warrant Agent will notify the Holder, in accordance
with Section 6.15 hereof, that a Blackout Period is in effect and that the
Warrants surrendered may not be exercised during the Blackout Period. In this
event, the date that the Company notifies the Warrant Agent that the Blackout
Period has ended will be the Date of Exercise unless the Holder notifies the
Warrant Agent, in writing, prior to the end of the Blackout Period that he
withdraws his surrender of the Warrant Certificates.
7
9
SECTION 2.05. Issuance of Warrant Shares. As soon as practicable after
the Date of Exercise of any Warrant, the Warrant Agent shall deposit the
proceeds received, if any, from the exercise of the Warrants, and promptly,
after clearance of checks received in payment of the Exercise Price pursuant to
such Warrants, shall issue a certificate or certificates for the number of full
Warrant Shares to which the Holder thereof is entitled, registered in accordance
with the instructions set forth in the election to purchase. The Company
covenants that the Warrant Shares which shall be issuable upon exercise of the
Warrants and payment, if any, of the Exercise Price in compliance with this
Agreement and the Warrant Certificate shall, pursuant to and in accordance with
the terms of this Agreement, be validly authorized and issued, fully paid and
nonassessable, and free from all taxes, liens and charges created by the Company
in respect of the issue thereof. Certificates representing such Warrant Shares
shall be delivered by the Warrant Agent in such names and denominations as are
required for delivery to, or in accordance with the instructions of, the Holder.
Each person in whose name any such certificate for Warrant Shares issued shall
for all purposes be deemed to have become the holder of record of the Warrant
Shares represented thereby on the Date of Exercise of the Warrants resulting in
the issuance of such Warrant Shares, irrespective of the date of issuance or
delivery of such certificate for Warrant Shares; provided, however, that if, at
the date of the surrender of such Warrants and payment of the Exercise Price,
the transfer books for the Warrant Shares purchasable upon the exercise of such
Warrants shall be closed, the certificates for the Warrant Shares in respect of
which such Warrants are then exercised shall be issuable as of the date on which
such books shall next be opened (whether before or after the Exercise Deadline)
and until such date the Warrant Agent shall be under no duty to deliver any
certificate for such Warrant Shares; provided, further, that the transfer books
of record, unless otherwise required by law, shall not be closed at any one time
for a period longer than twenty (20) days.
SECTION 2.06. Certificates for Unexercised Warrants. Subject to Section
2.04(b) hereof, if less than all of the Warrants represented by a Warrant
Certificate are exercised, the Warrant Agent shall execute and mail, by
first-class mail, within thirty (30) days of the Date of Exercise, to the Holder
of such Warrant Certificate, or such other person as shall be designated in the
election to purchase, a new Warrant Certificate representing the number of
Warrants not exercised. In no event shall a fraction of a Warrant be exercised,
and the Warrant Agent shall distribute no Warrant Certificates representing
fractions of Warrants under this or any other Section of this Agreement.
SECTION 2.07. Reservation of Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares or treasury shares, or both, of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants. The transfer agent for the Company's Common Stock and every subsequent
transfer agent for the Company's capital stock issuable upon the exercise of
Warrants, will be irrevocably authorized and directed at all times to reserve a
number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with the transfer agent for the
Company's Common Stock and with every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of the Warrants. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from such transfer agent the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such transfer agent with duly executed stock
certificates for such purposes and will
8
10
provide or otherwise make available any cash which may be payable as provided in
Section 3.09 hereof. All Warrant Certificates surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Warrant Agent and retained by
the Warrant Agent pursuant to Section 5.02 hereof.
SECTION 2.08. Disposition of Proceeds. Upon the exercise of any
Warrant, the Warrant Agent shall promptly deposit all funds received by it for
the purchase of Warrant Shares into a non-interest-bearing escrow account as
directed in writing by the Company. All funds deposited in the escrow account
shall be disbursed on a weekly basis to the Company, or as otherwise requested
by the Company in writing. A detailed accounting statement relating to the
number of Warrants exercised, names of Holders of such exercised Warrants and
the net amount of funds remitted will be given to the Company with each such
disbursement.
ARTICLE III
ADJUSTMENTS AND NOTICE PROVISIONS
SECTION 3.01. Adjustment of Exercise Price. Subject to the provisions
of this Article III, the Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(a) In case the Company shall (i) declare a dividend payable in
stock or make some other distribution on the outstanding shares of its Common
Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of its Common Stock into a greater number of shares or (iii)
combine or reclassify the outstanding shares of its Common Stock into a smaller
number of shares, the Exercise Price, in effect immediately after the record
date for such dividend or distribution or the effective date of such division,
reclassification or combination shall be proportionately adjusted by multiplying
the then Exercise Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Exercise Price then in effect. Such adjustment shall be made
successively whenever any event specified above shall occur.
(b) All calculations under this Section 3.01 shall be made to the
nearest thousandth of a cent.
SECTION 3.02. No Adjustments to Exercise Price. No adjustment in the
Exercise Price in accordance with the provisions of paragraph (a) of Section
3.01 hereof need be made if such adjustment would amount to a change in such
Exercise Price of less than ten cents; provided, however, that the amount by
which any adjustment is not made by reason of the provision of this Section 3.02
shall be carried forward and taken into account at the time of any subsequent
adjustment in the Exercise Price.
SECTION 3.03. Adjustment to Number of Shares. Upon each adjustment of
the Exercise Price pursuant to Paragraph (a) of Section 3.01, each Warrant shall
thereupon evidence
9
11
the right to purchase that number of shares of Common Stock (calculated to the
nearest hundredth of a share) obtained by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment upon exercise of
the Warrant by the Exercise Price in effect immediately prior to such adjustment
and dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment.
SECTION 3.04. Reorganizations. In case of any capital reorganization,
consolidation or merger of the Company (other than in the cases referred to in
Section 3.01 hereof, and other than the consolidation or merger of the Company
with or into another corporation in which the Company is the continuing
corporation and which does not result in any reclassification of the outstanding
shares of Common Stock or the conversion of such outstanding shares of Common
Stock into shares of other stock or other securities or property), or the sale
of all or substantially all of the Company's stock or property, (any of the
foregoing events hereinafter referred to as a "Reorganization"), each
outstanding Warrant shall automatically become exercisable for the kind and
amount of securities, cash or other assets receivable by a holder of the number
of shares of Common Stock as would have been issuable upon exercise of such
Warrant immediately before the closing of such Reorganization. Concurrently with
the consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into a supplemental
Warrant Agreement so providing and further providing for adjustments to the
Warrants which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article III. The successor Company shall mail
to Warrant holders a notice describing the supplemental Warrant Agreement in the
manner specified in Section 6.15 hereof.
If the issuer of securities deliverable upon exercise of Warrants under
the supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
SECTION 3.05. Exercise Price Not Less Than Par Value. In no event shall
the Exercise Price be adjusted below the par value per share of the Common
Stock.
SECTION 3.06. Notice of Certain Action. In the event the Company shall:
(a) declare any dividend payable in stock to the holders of its
Common Stock or make any other distribution in property other than cash to the
holders of its Common Stock; or
(b) offer to the holders of its Common Stock as such rights to
subscribe for or purchase any shares of any class of stock or any other rights
or opinions; or
(c) effect any reclassification of its Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), Reorganization or the liquidation, dissolution or
winding up of the Company;
then, in each such case, the Company shall cause notice of such proposed
action to be mailed to the Warrant Agent. Such notice shall specify the date on
which the books of the Company shall close, or a record be taken, for
determining holders of Common Stock entitled to receive such stock dividend or
other distribution or such rights or options, or the date on which
10
12
such reclassification, Reorganization, liquidation, dissolution or winding up
shall take place or commence, as the case may be, and the date as of which it is
expected that holders shall be entitled to receive securities or other property
deliverable upon such action, if any such date has been fixed. The Company shall
also cause copies of such notice to be mailed to each Holder of a Warrant
Certificate in the manner specified in Section 6.15 hereof. Such notice shall be
mailed, in the case of any action covered by Subsection 3.06(a) or 3.06(b)
above, at least ten (10) days prior to the record date for determining holders
of the Common Stock for purposes of receiving such payment or offer, and in the
case of any action covered by Subsection 3.06(c) above, at least ten (10) days
prior to the earlier of the date upon which such action is to take place or any
record date to determine holders of Common Stock entitled to receive such
securities or other property.
SECTION 3.07. Notice of Adjustments. Whenever any adjustment is made
pursuant to this Article III, the Company shall cause notice of such adjustment
to be mailed to the Warrant Agent within fifteen (15) days thereafter, such
notice to include in reasonable detail (i) the events precipitating the
adjustment, (ii) the computation of any adjustments and (iii) the Exercise
Price, the number of shares or the securities or other property purchasable upon
exercise of each Warrant after giving effect to such adjustment. The Warrant
Agent shall be entitled to rely on such notice and any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such notice. The Warrant Agent shall
within fifteen (15) days after receipt of such written instruction from the
Company cause a similar notice to be mailed to each Holder.
SECTION 3.08. Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Article III, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced, but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments.
SECTION 3.09. Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Article III to the Exercise
Price or number of shares of Common Stock purchasable under each Warrant. If
more than one Warrant is exercised at one time by the same Holder, the number of
full shares of Common Stock which shall be deliverable shall be computed based
on the number of shares deliverable in exchange for the aggregate number of
Warrants exercised. With respect to any final fraction of a share called for
upon the exercise of any Warrant or Warrants, the Company, at its option, shall
either (i) issue a full share of Common Stock to the Holder in respect of such
fraction or (ii) pay a cash adjustment in respect of such final fraction in an
amount equal to the same fraction of the market value of a share of Common
Stock, as determined by the Warrant Agent on the basis of the market price per
share of Common Stock on the business day next preceding the date of such
exercise. For the purposes of this Section 3.09, the market price per share of
Common Stock for such day shall mean (i) the average of the high and low bid and
ask prices of the Common Stock on the Nasdaq National Market System or any
national securities exchange for such day; or (ii) if the Common Stock is not
then traded on such exchange, then the last known price paid per share by a
purchaser of such stock in an arm's-length transaction.
11
13
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 4.01. Rights of Warrant Holders. No Warrant Certificate shall
entitle the registered holder thereof, as such, to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to
receive dividends and other distributions, to receive any notice of, or to
attend, meetings of stockholders or any other proceedings of the Company.
SECTION 4.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. If any Warrant Certificate shall be mutilated, apparently lost,
stolen or destroyed, the Company in its discretion may direct the Warrant Agent
to execute and deliver, in exchange and substitution for and upon cancellation
of a mutilated Warrant Certificate, or in lieu of or in substitution for an
apparently lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, apparently lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Warrant Certificate, and of
the ownership thereof, and indemnity, if requested, all satisfactory to the
Company and the Warrant Agent. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges incidental thereto as the Company or Warrant Agent
may prescribe. Any such new Warrant Certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly mutilated,
lost or stolen or destroyed Warrant Certificate shall be at any time enforceable
by anyone.
ARTICLE V
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
SECTION 5.01. Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Prior to the Exercise Deadline, Warrant Certificates, subject to
the provisions of Section 5.02, may be split-up, combined or exchanged for other
Warrant Certificates representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any Holder desiring to split-up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Warrant Agent at its Principal Office and shall
surrender the Warrant Certificate or Warrant Certificates so to be split-up,
combined or exchanged at said office. Subject to any applicable laws, rules or
regulations restricting transferability, any restriction on transferability that
may appear on a Warrant Certificate in accordance with the terms hereof, or any
"stop-transfer" instructions the Company may give to the Warrant Agent to
implement any such restriction (which instructions the Company is expressly
authorized to give), transfer of outstanding Warrant Certificates may be
effected by the Warrant Agent from time to time upon the books of the Company to
be maintained by the
12
14
Warrant Agent for that purpose, upon a surrender of the Warrant Certificate to
the Warrant Agent at its Principal Office, with the assignment form set forth in
the Warrant Certificate duly executed and with Signature Guaranteed. Upon any
such surrender for split-up, combination, exchange or transfer, the Warrant
Agent shall execute and deliver to the person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested. The
Warrant Agent shall not be required to effect any split-up, combination,
exchange or transfer which will result in the issuance of a Warrant Certificate
evidencing a fraction of a Warrant. The Warrant Agent may require the holder to
pay a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any split-up, combination, exchange or transfer of Warrant
Certificates prior to the issuance of any new Warrant Certificate.
SECTION 5.02. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered upon the exercise of Warrants or for split-up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as provided in Section 2.06 in case of the exercise of less than all of the
Warrants evidenced by a Warrant Certificate or in Section 5.01 in case of a
split-up, combination, exchange or transfer, no Warrant Certificate shall be
issued hereunder in lieu of such canceled Warrant Certificates. Any Warrant
Certificate so canceled shall be held by the Warrant Agent (unless otherwise
directed by the Company) and destroyed not earlier than seven (7) years after
such cancellation. The Warrant Agent shall furnish to the Company written
confirmation of the destruction of the Warrant Certificates so canceled.
ARTICLE VI
PROVISIONS CONCERNING THE
AGENT AND OTHER MATTERS
SECTION 6.01. Payment of Taxes and Charges. The Company will from time
to time promptly pay to the Warrant Agent, or make provisions satisfactory to
the Warrant Agent for the payment of, all taxes and charges that may be imposed
by the United States or any state upon the Company or the Warrant Agent in
connection with the issuance or delivery of any Warrant Shares, but any transfer
taxes in connection with the issuance of Warrant Certificates or certificates
for Warrant Shares in any name other than that of the Holder of the Warrant
Certificates surrendered shall be paid by such Holder; and, in such case, the
Company shall not be required to issue or deliver any Warrant Certificate or
certificate for Warrant Shares until such taxes shall have been paid or it has
been established to the Company's satisfaction that no tax is due.
SECTION 6.02. Resignation or Removal of Warrant Agent. The Warrant
Agent may resign its duties and be discharged from all further duties and
liabilities hereunder after giving at least thirty (30) days' notice in writing
to the Company, except that such shorter notice may be given as the Company
shall, in writing, accept as sufficient. Upon comparable notice to the Warrant
Agent, the Company may remove the Warrant Agent; provided, however, that in such
event the Company shall appoint a new Warrant Agent, as hereinafter provided,
and the removal of the Warrant Agent shall not be effective until a new Warrant
Agent has been
13
15
appointed and has accepted such appointment. If the office of Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, 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 or incapacity by the resigning or incapacitated
Warrant Agent or by the Holder of any Warrant Certificate, then the 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 which is a member of the Federal
Reserve System. Any new Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to the former Warrant Agent last in office, and to the
Company, an instrument accepting such appointment under substantially the same
terms and conditions as are contained herein, and thereupon such new Warrant
Agent without any further act or deed shall become vested with the rights,
powers, duties and responsibilities of the Warrant Agent and the former Warrant
Agent shall cease to be the Warrant Agent; but if for any reason it becomes
necessary or expedient to have the former Warrant Agent 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 former Warrant Agent.
SECTION 6.03. Notice of Appointment. Not later than the effective date
of the appointment of a new Warrant Agent the Company shall cause notice thereof
to be mailed to the former Warrant Agent and the transfer agent for the
Company's Common Stock, and shall forthwith cause a copy of such notice to be
mailed to each Holder of a Warrant Certificate. Failure to mail such notice, or
any defect contained therein, shall not affect the legality or validity of the
appointment of the successor Warrant Agent.
SECTION 6.04. Merger of Warrant Agent. Any company into which the
Warrant Agent may be merged or with which it may be consolidated or any company
resulting from any merger or consolidation to which the Warrant Agent shall be a
party, or any company to which the Warrant Agent may transfer its stockholder
services business, shall be the successor Warrant Agent under this Agreement
without further act, provided that such company would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 6.02
hereof. Any such successor Warrant Agent may adopt the prior countersignature of
any predecessor Warrant Agent and distribute Warrant Certificates countersigned
but not distributed by such predecessor Warrant Agent, or may countersign the
Warrant Certificates in its own name.
SECTION 6.05. Company Responsibilities. The Company agrees that it
shall (i) pay the Warrant Agent the agreed upon remuneration for its services as
Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all
expenses, advances, and expenditures that the Warrant Agent may reasonably incur
in the execution of its duties hereunder (including reasonable fees and expenses
of its counsel); (ii) provide the Warrant Agent, upon request, with sufficient
funds to pay any cash due pursuant to Section 3.09 upon exercise of Warrants;
and (iii) perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this Agreement.
14
16
SECTION 6.06. Purchase of Warrants by the Company. The Company shall
have the right, except as limited by law, other agreement or herein, to purchase
or otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
SECTION 6.07. Certification for the Benefit of Warrant Agent. Whenever
in the performance of its duties under this Agreement the Warrant Agent shall
deem it necessary or desirable that any matter be proved or established or that
any instructions with respect to the performance of its duties hereunder be
given by the Company prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established, or such
instructions may be given, by a certificate or instrument signed by the Chairman
of the Board, the President, a Vice President, the Secretary or the Treasurer of
the Company and delivered to the Warrant Agent. Such certificate or instrument
may be relied upon by the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement; but in its discretion the
Warrant Agent may in lieu thereof accept other evidence of such matter or may
require such further or additional evidence as it may deem reasonable.
SECTION 6.08. Liability of Warrant Agent. The Warrant Agent shall be
liable hereunder solely for its own negligence or willful misconduct. The
Warrant Agent shall act hereunder solely as an agent in a ministerial capacity
for the Company and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Warrant
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only. The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder of any Warrant Certificate for
any action taken, or any failure to take action, in reliance on any paper,
document or instrument reasonably believed by the Warrant Agent to be genuine
and to have been signed, sent or presented by the proper party or parties. The
Warrant Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof by the Company or in
respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant Certificate or the Stipulation; nor shall it be responsible for the
making of any adjustment required under the provisions of Article III hereof or
responsible for the manner, method or amount of any such adjustment or the facts
that would require any such adjustment; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities to be issued
pursuant to this Agreement or any Warrant Certificate or as to whether any
shares of Common Stock or other securities will when issued be validly
authorized and issued and fully paid and nonassessable.
SECTION 6.09. Use of Attorneys, Agents and Employees. The Warrant Agent
may execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys, agents
or employees.
SECTION 6.10. Indemnification. The Company agrees to indemnify the
Warrant Agent and save it harmless against any and all losses, expenses or
liabilities, including
15
17
judgments, costs and reasonable counsel fees arising out of or in connection
with its acceptance of its position hereunder and in carrying out the terms
hereof, except as a result of the negligence or willful misconduct of the
Warrant Agent.
SECTION 6.11. Acceptance of Agency. The Warrant Agent hereby accepts
the agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth.
SECTION 6.12. Instructions from the Company. The Warrant Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President, a Vice President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions of any such officer or
officers.
SECTION 6.13. Changes to Agreement. The Warrant Agent may, without the
consent or concurrence of any Holder, by supplemental agreement or otherwise,
join with the Company in making any changes or corrections in this Agreement
that shall in the judgment of the Company (i) be required to cure any ambiguity
or to correct any defective or inconsistent provision or clerical omission or
mistake or manifest error herein contained, (ii) add to the covenants and
agreements of the Company or the Warrant Agent in this Agreement such further
covenants and agreements thereafter to be observed, or (iii) result in the
surrender of any right or power reserved to or conferred upon the Company or the
Warrant Agent in this Agreement, but which changes or corrections do not or will
not adversely affect, alter or change the rights, privileges or immunities of
the Holders of Warrant Certificates. The Warrant Agent shall be entitled to rely
on such Company counsel's written advice. Otherwise this Agreement and the terms
of the Warrants may be amended by the written consent of the Company and the
affirmative vote or written consent of Holders holding not less than one-half of
the then outstanding Warrants, provided that "outstanding Warrants" shall
include Warrants acquired by the Company, and that the Company shall be deemed a
"Holder" with respect to any Warrants acquired by it.
SECTION 6.14. Assignment. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns.
SECTION 6.15. Notices. Any notice or demand required by this Agreement
to be given or made by the Warrant Agent or by the Holder to or on the Company
shall be sufficiently given or made if sent by first-class or registered mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
16
18
American Bank Note Holographics, Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Any notice or demand required by this Agreement, to be given or made by
the registered Holder of any Warrant Certificate or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing with the Company by the Warrant Agent), as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Trust Department (American Bank Note Holographics, Inc.)
Any notice or demand required by this Agreement to be given or made by
the Company or the Warrant Agent to or on the Holder of any Warrant Certificate
shall be sufficiently given or made, whether or not such Holder receives the
notice, if sent by first-class or registered mail, postage prepaid, addressed to
such Holder at his last address as shown on the books of the Company maintained
by the Warrant Agent.
SECTION 6.16. Defects in Notice. Failure to file any certificate or
notice or to mail any notice, or any defect in any certificate or notice
pursuant to this Agreement shall not affect in any way the rights of any Holder
or the legality or validity of any adjustment made pursuant to Section 3.01
hereof, or any transaction giving rise to any such adjustment, or the legality
or validity of any action taken or to be taken by the Company.
SECTION 6.17. Governing Law. The validity, interpretation and
performance of this Agreement, of each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by the internal
laws of the State of Delaware, without reference to principles of conflict of
laws.
SECTION 6.18. Standing. Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
Company, the Warrant Agent, and the Holders any right, remedy or claim under or
by reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement contained herein; and all covenants, conditions, stipulations,
promises and agreements contained in this Agreement shall be for the sole and
exclusive benefit of the Company and the Warrant Agent and their successors, and
the Holders.
SECTION 6.19. Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
17
19
SECTION 6.20. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.21. Conflict of Interest. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrant Certificates or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though the Warrant Agent were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
SECTION 6.22. Availability of the Agreement. The Warrant Agent shall
keep copies of this Agreement available for inspection by holders of Warrants
during normal business hours at its stock transfer department. Copies of this
Agreement may be obtained upon written request addressed to the Company at the
address set forth in Section 6.15.
18
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their corporate seals affixed and attested, all as of the day
and year first above written.
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
By:
-----------------------------------------
Name:
Title:
[Corporate Seal]
Attests:
---------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
-----------------------------------------
Name:
Title:
[Corporate Seal]
Attests:
---------------------------
Name:
Title:
19
21
TABLE OF CONTENTS
Page
----
ARTICLE I DISTRIBUTION OF WARRANT CERTIFICATES......................................1
Section 1.01. Appointment of Warrant Agent......................................1
Section 1.02. Form of Warrant Certificates......................................2
Section 1.03. Execution of Warrant Certificates.................................2
Section 1.04. Registration......................................................2
Section 1.05. Transfer of Warrants..............................................3
ARTICLE II WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS...........................3
Section 2.01. Exercise Price....................................................3
Section 2.02. Exercisability of Warrants and Registration of Warrant Shares.....3
Section 2.03. Registration of Warrant Shares....................................4
Section 2.04. Procedure for Exercise of Warrants................................7
Section 2.05. Issuance of Warrant Shares........................................8
Section 2.06. Certificates for Unexercised Warrants.............................8
Section 2.07. Reservation of Shares.............................................8
Section 2.08. Disposition of Proceeds...........................................9
ARTICLE III ADJUSTMENTS AND NOTICE PROVISIONS.........................................9
Section 3.01. Adjustment of Exercise Price......................................9
Section 3.02. No Adjustments to Exercise Price..................................9
Section 3.03. Adjustment to Number of Shares....................................9
Section 3.04. Reorganizations..................................................10
Section 3.05. Exercise Price Not Less Than Par Value...........................10
Section 3.06. Notice of Certain Action.........................................10
Section 3.07. Notice of Adjustments............................................11
Section 3.08. Warrant Certificate Amendments...................................11
Section 3.09. Fractional Shares................................................11
ARTICLE IV OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT
CERTIFICATES.............................................................12
Section 4.01. Rights of Warrant Holders........................................12
Section 4.02. Lost, Stolen, Mutilated or Destroyed Warrant Certificates........12
i
22
ARTICLE V SPLIT UP, COMBINATION, EXCHANGE, TRANSFER AND CANCELLATION OF
WARRANT CERTIFICATES.....................................................12
Section 5.01. Split Up, Combination, Exchange and Transfer of Warrant
Certificates.....................................................12
Section 5.02. Cancellation of Warrant Certificates.............................13
ARTICLE VI PROVISIONS CONCERNING THE AGENT AND OTHER MATTERS........................13
Section 6.01. Payment of Taxes and Charges.....................................13
Section 6.02. Resignation or Removal of Warrant Agent..........................13
Section 6.03. Notice of Appointment............................................14
Section 6.04. Merger of Warrant Agent..........................................14
Section 6.05. Company Responsibilities.........................................14
Section 6.06. Purchase of Warrants by the Company..............................15
Section 6.07. Certification for the Benefit of Warrant Agent...................15
Section 6.08. Liability of Warrant Agent.......................................15
Section 6.09. Use of Attorneys, Agents and Employees...........................15
Section 6.10. Indemnification..................................................15
Section 6.11. Acceptance of Agency.............................................16
Section 6.12. Instructions from the Company....................................16
Section 6.13. Changes to Agreement.............................................16
Section 6.14. Assignment.......................................................16
Section 6.15. Notices..........................................................16
Section 6.16. Defects in Notice................................................17
Section 6.17. Governing Law....................................................17
Section 6.18. Standing.........................................................17
Section 6.19. Headings.........................................................17
Section 6.20. Counterparts.....................................................18
Section 6.21. Conflict of Interest.............................................18
Section 6.22. Availability of the Agreement....................................18
ii
