Exhibit 4.4
Warrant to Purchase 200,000
Units, consisting of one
Share of Common Stock and
one Common Stock
Purchase Warrant
REPRESENTATIVE'S WARRANT
------------------------
Dated: , 1997
THIS CERTIFIES THAT XXXXXX XXXXXXX & ASSOCIATES, INC. (herein sometimes
called the "Holder" or the "Representative") is entitled to purchase from
XXXXXX, INC., a Delaware corporation (the "Company"), at the price and during
the period as hereinafter specified, up to Two Hundred Thousand (200,000) Units
(the "Units"), each Unit consisting of one (1) share of common stock, $.001 par
value per share (the "Common Stock") and one (1) Common Stock Purchase Warrant
(the "Warrants") to purchase one (1) share of Common Stock at a purchase price
of $____ per share subject to adjustment as described below, at any time during
the four-year period commencing one (1) year from the effective date of the
Registration Statement (the "Effective Date").
This Representative's Warrant (the "Representative's Warrant") is issued
pursuant to an Underwriting Agreement between the Company, Aura Systems, Inc.
("Aura") and Xxxxxx Xxxxxxx & Associates, Inc., as Representative of the several
Underwriters set forth in Schedule I to said Underwriting Agreement, in
connection with a public offering, through the Representative, of 2,000,000
Units as therein described (and up to 300,000 additional Units covered by an
over-allotment option granted by the Company and Aura to the Underwriters; the
shares of Common Stock included in such additional Units will be offered by Xxxx
and the Warrants included in such additional Units will be offered by the
Company), and in consideration of $200 received by the Company for the
Representative's Warrant. Except as specifically otherwise provided herein, the
Common Stock and the Warrants issued pursuant to the Representative's Warrant
shall bear the same terms and conditions as described under the caption
"Description of the Units" in the Registration Statement on Form S-1, File No.
333-31431 (the "Registration Statement") except that (i) the Holder shall have
registration rights under the Securities Act of 1933, as amended (the "Act"),
for the Representative's Warrant, the Common Stock and the Warrants issuable
pursuant thereto and the Common Stock issuable pursuant to such Warrants as more
fully described in paragraph 6 herein; and (ii) the Warrants will be exercisable
only during the period commencing upon such date as the Representative's Warrant
is exercised and expiring five (5) years from the Effective Date.
1. The rights represented by the Representative's Warrant shall be
exercised at the price, subject to adjustment in accordance with Section 8
hereof (the "Exercise Price"), and during the periods as follows:
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(a) During the period from the Effective Date to and through
_________, 1998 (the "First Anniversary Date"), inclusive, the
Holder shall have no right to purchase any Units hereunder,
except that in the event of any merger, consolidation or sale of
substantially all the assets of the Company as an entirety prior
to the First Anniversary Date (other than (i) a merger or
consolidation in which the Company is the continuing corporation
and which does not result in any reclassification or
reorganization of an outstanding shares of Common Stock or (ii)
any sale/leaseback, mortgage or other financing transaction), the
Holder shall have the right to exercise the Representative's
Warrant concurrently with such event and into the kind and amount
of shares of stock and other securities and property (including
cash) receivable by a holder of the number of shares of Common
Stock into which the Representative's Warrant and the Warrants
underlying the Representative's Warrant were exercisable
immediately prior thereto.
(b) Between __________, 1998 and 2002, (five (5) years from the
Effective Date, i.e. the "Expiration Date") inclusive, the Holder
shall have the option to purchase Units hereunder at a price of
$_____ per Unit (110% of public offering price per Unit).
(c) After the Expiration Date, the Holder shall have no right to
purchase any Units hereunder.
2. (a) The rights represented by the Representative's Warrant may be
exercised at any time within the periods above specified, in whole or in part,
by (i) the surrender of the Representative's Warrant (with the purchase form at
the end hereof properly executed) at the principal executive office of the
Company (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); (ii) payment to the Company of the exercise price then in
effect for the number of Units specified in the above-mentioned purchase form
together with applicable stock transfer taxes, if any; and (iii) delivery to the
Company of a duly executed agreement signed by the person(s) designated in the
purchase form to the effect that such person(s) agree(s) to be bound by the
provisions of paragraph 6 and subparagraphs (b), (c) and (d) of paragraph 7
hereof. The Representative's Warrant shall be deemed to have been exercised, in
whole or in part to the extent specified, immediately prior to the close of
business on the date the Representative's Warrant is surrendered and payment is
made in accordance with the foregoing provisions of this paragraph 2, and the
person or persons in whose name or names the certificates for shares of Common
Stock and Warrants shall be issuable upon such exercise shall become the holder
or holders of record of such Common Stock and Warrants at that time and date.
The Common Stock and Warrants and the certificates for the Common Stock and
Warrants so purchased shall be delivered to the Holder within a reasonable time,
not exceeding ten (10) business days, after the rights represented by this
Representative's Warrant shall have been so exercised.
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(b) Notwithstanding anything to the contrary contained in paragraph
2(a), the Holder may elect to exercise this Representative's Warrant in whole or
in part by receiving shares of Common Stock equal to the value (as determined
below) of this Representative's Warrant, or any part hereof, upon surrender of
the Representative's Warrant at the principal office of the Company together
with notice of such election in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:
X = Y(A-B) + Z(A-C)
------ ------
A A
Where X = the number of Shares of Common Stock to be issued to the
Holder;
Y = the number of Shares of Common Stock underlying the Units
(exclusive of any shares issuable upon exercise of any
Warrants underlying the Units) to be exercised under this
Representative's Warrant (the "Shares");
A = the current fair market value of one share of Common Stock;
B = the Exercise Price of the Representative's Warrant;
Z = the number of shares of Common Stock issuable upon exercise
of the Warrants included in the Units underlying this
Representative's Warrant; and
C = the exercise price of the Warrants included in the Units
underlying this Representative's Warrant.
As used herein, current fair market value of Common Stock
shall mean with respect to each share of Common Stock the average
of the closing prices of the Company's Common Stock sold on the
principal national securities exchanges on which the Common Stock
is at the time admitted to trading or listed, or, if there have
been no sales of any such exchange on such day, the average of
the highest bid and lowest ask price on such day as reported by
NASDAQ, or any similar organization if NASDAQ is no longer
reporting such information, either (i) on the date which the form
of election is deemed to have been sent to the Company (the
"Notice Date") or (ii) over a period of five (5) trading days
preceding the Notice Date, whichever of (i) or (ii) is greater.
If on the date for which current fair market value is to be
determined the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter
market, the current fair market value of Common Stock shall be
the highest price per share which the Company could then obtain
from a willing buyer (not a current employee or director) for
shares of
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Common Stock sold by the Company, from authorized but
unissued shares, as determined in good faith by the Board of
Directors of the Company, unless prior to such date the
Company has become subject to a binding agreement for a
merger, acquisition or other consolidation pursuant to which
the Company is not the surviving party, in which case the
current fair market value of the Common Stock shall be
deemed to be the value to be received by the holders of the
Company's Common Stock for each share thereof pursuant to
the Company's acquisition.
3. The Representative's Warrant shall not be transferred, sold, assigned,
or hypothecated for a period of one year commencing on the Effective Date except
that it may be transferred to successors of the Holder, and may be assigned in
whole or in part to any person who is an officer of the Holder to any members of
the selling group and/or the officers or partners thereof during such period.
This Representative's Warrant must be executed immediately upon its transfer at
any time after one year from the Effective Date, and if not so executed, shall
lapse. Any such assignment shall be effected by the Holder by (i) executing the
form of assignment at the end hereof and (ii) surrendering the Representative's
Warrant for cancellation at the office or agency of the Company referred to in
paragraph 2 hereof, accompanied by a certificate (signed by an officer of the
Holder if the Holder is a corporation) stating that each transferee is a
permitted transferee under this paragraph 3; whereupon the Company shall issue,
in the name or names specified by the Holder (including the Holder), a new
Representative's Warrant or Warrants of like tenor and representing in the
aggregate rights to purchase the same number of Units as are purchasable
hereunder at such time.
4. The Company covenants and agrees that all shares of Common Stock which
may be issued as part of the Units purchased hereunder will, upon issuance and
delivery against payment therefor of the requisite purchase price, be duly and
validly issued, fully paid and nonassessable. The Company further covenants and
agrees that, during the periods within which the Representative's Warrant may be
exercised, the Company will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the exercise of
the Representative's Warrant and that it will have authorized and reserved a
sufficient number of shares of Common Stock for issuance upon exercise of the
Warrants included in the Units issuable upon exercise of the Representative's
Warrant.
5. The Representative's Warrant shall not entitle the Holder to any
voting rights or other rights, including without limitation notice of meetings
of other actions or receipt of dividends, as a shareholder of the Company.
6. (a) The Company shall advise the Holder or its permitted transferee,
whether the Holder holds the Representative's Warrant or has exercised the
Representative's Warrant and holds Units or any of the securities underlying the
Units, by written notice at least four weeks prior to the filing of any new
registration
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statement thereto under the Act, or the filing of a notification on Form 1-A
under the Act for a public offering of securities, covering any securities of
the Company, for its own account or for the account of others, except for any
registration statement filed on Form S-4 or S-8 (or other comparable form), and
will, during the five (5) year period from the Effective Date, upon the request
of the Holder, include in any such new registration statement (or notification
as the case may be) such information as may be required to permit a public
offering of, all or any of the Units underlying the Representative's Warrant,
the Common Stock or Warrants included in the Units or the Common Stock issuable
upon the exercise of the Warrants (the "Registrable Securities"). For so long as
the Warrants remain outstanding and as long as required by the Securities Act
(so long as the Holder's ability to exercise any Warrant is not adversely
affected), the Company currently intends to file post-effective amendments to
the Registration Statement (or any new registration statement filed by the
Company) setting forth or otherwise incorporating certain information contained
in the then most recent quarterly report on Form 10-Q or annual report on Form
10-K filed by the Company (each such post-effective amendment, a "Quarterly
Amendment"). The parties hereby agree that if at any time during such five (5)
year period the Company receives written notice from the Holder at least two
weeks prior to the filing of any such Quarterly Amendment indicating such
Xxxxxx's intention to offer Registrable Securities in such Quarterly Amendment,
the Company will include in such Quarterly Amendment such information as may be
required to permit a public offering of such Registrable Securities. The
delivery by the Holder of any such notice shall not constitute a demand made
pursuant to Section 6(b). The Company shall supply prospectuses and such other
documents as the Holder may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities, use its best efforts to
register and qualify any of the Registrable Securities for sale in such states
(i) as such Holder designates and (ii) with respect to which the Company
obtained a qualification in connection with its initial public offering; and do
any and all other acts and things which may be necessary or desirable to enable
such Holder to consummate the public sale or other disposition of the
Registrable Securities, all at no expense to the Holder or the Representative
(other than sales commissions, underwriting discounts or commissions, or other
expenses of such sale), and furnish indemnification in the manner provided in
paragraph 7 hereof. The Holder shall furnish information and indemnification as
set forth in paragraph 7.
(b) At any time during the four (4) year period beginning one (1) year
after the Effective Date, a 50% Holder (as defined below) may request, on one
occasion, that the Company register under the Act any and all of the Registrable
Securities held by such 50% Holder. Upon the receipt of any such notice, the
Company will promptly, but no later than four weeks after receipt of such
notice, file a post-effective amendment to the current Registration Statement or
a new registration statement pursuant to the Act, so that such designated
Registrable Securities may be publicly sold under the Act as promptly as
practicable thereafter and the Company will use reasonable efforts to cause such
registration to become and remain effective (including the taking of such
reasonable steps as are necessary to obtain the removal of any stop order)
within 120 days after the receipt of such notice, provided, that such Holder
shall furnish the Company with appropriate information in connection therewith
as the Company may reasonably request in writing. The 50% Holder may, at its
option, request the registration of any of the securities underlying the
Representative's Warrant in a registration statement made by the Company as
contemplated by Section 6(a) or in connection with a request made pursuant to
this Section 6(b) prior to acquisition of the Units issuable upon exercise of
the Representative's
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Warrant. The 50% Holder may, at its option, request such post-effective
amendment or new registration statement during the described period with respect
to the Representative's Warrant, the Units as units, or separately as to the
Common Stock and/or Warrants included in the Units and/or the Common Stock
issuable upon the exercise of the Warrants, and such registration rights may be
exercised by the 50% Holder prior to or subsequent to the exercise of the
Representative's Warrant. Within ten days after receiving any such notice
pursuant to this subsection (b) of paragraph 6, the Company shall give notice to
any other Holders of the Representative's Warrant, advising that the Company is
proceeding with such post-effective amendment or registration statement and
offering to include therein the securities underlying that part of the Warrant
held by the other Holders, provided that they shall furnish the Company with
such appropriate information (relating to the intentions of such Holders) in
connection therewith as the Company shall reasonably request in writing. All
costs and expenses of the post-effective amendment or new registration statement
shall be borne by the Company, except that the Holder(s) shall bear the fees of
their own counsel and any other advisors retained by them and any underwriting
discounts or commissions applicable to any of the securities sold by them. The
Company will use its best efforts to maintain such registration statement or
post-effective amendment current under the Act for a period of at least 180 days
from the effective date thereof. The Company shall supply prospectuses, and such
other documents as the Holder(s) may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities, use its best
efforts to register and qualify any of the Registrable Securities for sale in
such states (i) as such Holder(s) designate and (ii) with respect to which the
Company obtained a qualification in connection with its initial public offering
and furnish indemnification in the manner provided in paragraph 7 hereof.
Notwithstanding the foregoing set forth in this paragraph 6(b), the Company
shall not be required to include in any registration statement any Registration
Securities which in the opinion of counsel to the Company (which opinion is
reasonably acceptable to counsel to the Representative) would be saleable
immediately without restriction under Rule 144 (or its successor) if the
Representative's Warrant was exercised pursuant to paragraph 2(b) herein.
(c) The term "50% Holder" as used in this paragraph 6 shall mean the
Holder(s) of at least 50% of the Representative's Warrant and/or the Units,
other Common Stock and the Warrants underlying the Representative's Warrant
(considered in the aggregate.
7. (a) Whenever pursuant to paragraph 6 a registration statement
relating to any Units, Common Stock or Warrants issued upon exercise of (or
issuable upon the exercise of any Warrants purchasable under) the
Representative's Warrant is filed under the Act, amended or supplemented, the
Company will indemnify and hold harmless each Holder of the securities covered
by such registration statement, amendment or supplement (such Holder being
hereinafter called the "Distributing Holder"), and each person, if any, who
controls (within the meaning of the Act) the Distributing Holder, and each
underwriter (within the meaning of the Act) of such securities and each person,
if any, who controls (within the meaning of the Act) any such underwriter,
against any losses, claims, damages or liabilities, joint or several, to which
the Distributing Holder, any such controlling person or any such underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities, or actions in
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respect thereof, arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement as declared effective or any final prospectus constituting a part
thereof or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and will reimburse the Distributing Holder or such controlling person
or underwriter for any legal or other expense reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished by such
Distributing Holder or any other Distributing Holder for use in the preparation
thereof and provided further, that the indemnity agreement provided in this
Section 7(a) with respect to any preliminary prospectus shall not inure to the
benefit of any Distributing Holder, controlling person of such Distributing
Holder, underwriter or controlling person of such underwriter from whom the
person asserting any losses, claims, charges, liabilities or litigation based
upon any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state therein a material fact, received such
preliminary prospectus, if a copy of the prospectus in which such untrue
statement or alleged untrue statement or omission or alleged omission was
corrected has not been sent or given to such person within the time required by
the Act and the Rules and Regulations thereunder.
(b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities, joint or several, to which the
Company or any such director, officer or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in said
registration statement, said preliminary prospectus, said final prospectus, or
said amendment or supplement, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder for use in the preparation thereof; and will
reimburse the Company or any such director, officer or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
paragraph 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect
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thereof is to be made against any indemnifying party, give the indemnifying
party notice of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this paragraph 7.
(d) In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement hereof, the
indemnifying party will be entitled to participate in and, to the extent that it
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
paragraph 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
8. The Exercise Price in effect at the time and the number and kind of
securities purchasable upon the exercise of the Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common Stock
(other than issuance of Common Stock pursuant to the Contingent Stock Issuance,
as defined in the Registration Statement), (ii) subdivide or reclassify its
outstanding shares of Common Stock into a greater number of shares, (iii)
combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares, or (iv) enter into any transaction whereby the Warrants or
outstanding shares of Common Stock of the Company are at any time changed into
or exchanged for a different number or kind of shares or other security of the
Company or of another corporation through reorganization, merger, consolidation,
liquidation or recapitalization, then appropriate adjustments in the number of
Shares (or other securities for which such Shares have previously been exchanged
or converted) subject to this Representative's Warrant shall be made and the
Exercise Price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination,
reclassification, reorganization, merger, consolidation, liquidation or
recapitalization shall be proportionately adjusted so that the Holder of this
Representative's Warrant exercised after such date shall be entitled to receive
the aggregate number and kind of shares of Common Stock which, if this
Representative's Warrant had been exercised by such Holder immediately prior to
such date, he would have been entitled to receive upon such dividend,
distribution, subdivision, combination, reclassification, reorganization,
merger, consolidation, liquidation or recapitalization. For example, if the
Company declares a 2 for 1 stock distribution and the Exercise Price hereof
immediately prior to such event was $_____ per Unit and the number of Shares
comprising the Units issuable upon exercise of this Representative's Warrant was
200,000, the adjusted Exercise Price immediately after such event would be
$_____ per Unit (giving no value to the Warrants included in the Units) and the
adjusted number of Shares comprising the Units issuable upon exercise of this
Representative's Warrant would be 400,000. Such adjustment shall be made
successively
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whenever any event listed above shall occur. Any adjustments in the number and
exercise price of the Warrants included in the Units shall be made in accordance
with the provisions of the Warrant Agreement dated as of __________, 1995,
between and among the Company and Interwest Transfer Company, Inc. and shall be
made irrespective of whether such Warrants are outstanding or not.
(b) In case the Company shall fix a record date for the issuance of
rights or warrants to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the Exercise Price on a per share basis giving no
value to the Warrants included in the Units (the "Per Share Exercise Price") on
such record date, the Exercise Price shall be adjusted so that the same shall
equal the price determined by multiplying the number of shares of Common Stock
then comprising a Unit by the Per Share Exercise Price in effect immediately
prior to the date of issuance by a fraction, the numerator of which shall be the
sum of the number of shares of Common Stock then outstanding on the record date
mentioned below and the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered (or the aggregate conversion price of the convertible securities so
offered) would purchase at the Per Share Exercise Price in effect immediately
prior to the date of such issuance, and the denominator of which shall be sum of
the number of shares of Common Stock outstanding on the record date mentioned
below and the number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible securities so offered
are convertible). Such adjustment shall be made successively whenever such
rights or warrants are issued and shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
rights or warrants; and to the extent that shares of Common Stock are not
delivered (or securities convertible into Common Stock are not delivered) after
the expiration of such rights or warrants the Exercise Price shall be readjusted
to the Exercise Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made upon the basis of deliver
of only the number of shares of Common Stock (or securities convertible into
Common Stock) actually delivered.
(c) In case the Company shall hereafter distribute to all holders of
its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in
Subsection (a) above) or subscription rights or warrants (excluding those
referred to in Subsection (b) above, then in each such case the Exercise Price
in effect thereafter shall be determined by multiplying the number of shares
then comprising a Unit by the Per Share Exercise Price in effect immediately
prior thereto, multiplied by a fraction, the numerator of which shall be the
total number of shares of Common Stock then outstanding multiplied by the
current market price per share of Common Stock (as defined in Subsection (e)
below), less the fair market value (as determined by the Company's Board of
Directors) of said assets, or evidences of indebtedness so distributed or of
such rights or warrants, and the denominator of which shall be the total number
of shares of Common Stock outstanding multiplied by such current market price
per share of Common Stock. Such adjustment shall be
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made whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
(d) Whenever the Exercise Price payable upon exercise of the
Representative's Warrant is adjusted pursuant to Subsections (a), (b) or (c)
above, the number of Units purchasable upon exercise of this Representative's
Warrant shall simultaneously be adjusted by multiplying the number of Units
issuable upon exercise of this Representative's Warrant by the Exercise Price in
effect on the date hereof and dividing the product so obtained by the Exercise
Price, as adjusted.
(e) For the purpose of any computation under Subsection (c) above, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing prices of the Common Stock for 30 consecutive
business days before such date. The closing price for each day shall be the last
sale price regular way or, in case no such reported sale takes place on such
day, the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or, if not listed or admitted to trading
on such exchange, the average of the highest reported bid and lowest reported
asked prices as reported by NASDAQ, or other similar organization if NASDAQ is
no longer reporting such information, or if not so available, the fair market
price as determined by the Board of Directors as set forth in Section 2(b)
herein.
(f) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($0.05)
in such price; provided, however, that any adjustments which may by reason of
this Subsection (f) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made hereunder.
All calculations under this Section 8 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be. Anything in this
Section 8 to the contrary notwithstanding, the Company shall be entitled, but
shall not be required, to make such changes in the Exercise Price, in addition
to those required by this Section 8, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution in shares
of Common Stock, or any subdivision, reclassification or combination of Common
Stock, hereafter made by the Company shall not result in any Federal income tax
liability to the holders of the Common Stock or securities convertible into
Common Stock (including Warrants issuable upon exercise of the Representative's
Warrant).
(g) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise Price
and adjusted number of Units issuable upon exercise of the Representative's
Warrant to be mailed to the Holder, at its address set forth herein, and shall
cause a certified copy thereof to be mailed to the Company's transfer agent, if
any. The Company may retain a firm of independent certified public accountants
selected by the Board of Directors (who may be the regular accountants employed
by the Company) to make any computation required by this Section 8, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of such adjustment.
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(h) In the event that at any time, as a result of an adjustment made
pursuant to the provisions of this Section 8, the Holder of the Representative's
Warrant thereafter shall become entitled to receive any shares of the Company
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of the Representative's Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Subsections (a) to (f), inclusive, above.
9. This Agreement shall be governed by and in accordance with the laws of
the State of California without regard to conflict of laws provision.
IN WITNESS WHEREOF, XXXXXX, INC. has caused this Representative's Warrant
to be signed by its duly authorized officers under its corporate seal, and this
Representative's Warrant to be dated ____________, 1997.
XXXXXX, INC.
By:________________________________
Xxxxxx X. Xxxx, Chief Executive
Officer and President
Attest:
______________________________
Xxxx X. Xxxx,
its Executive Vice President
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PURCHASE FORM
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(To be signed only upon exercise of Warrant)
The undersigned, the holder of the foregoing Representative's Warrant,
hereby irrevocably elects to exercise the purchase rights represented by such
Warrant for, and to purchase thereunder, _______________ Units of XXXXXX, INC.,
each Unit consisting of one (1) share of $.001 par value Common Stock and one
(1) Warrant to purchase one (1) share of Common Stock, and herewith makes
payment of $_______ therefor, and requests that the Warrants and certificates
for shares of Common Stock be issued in the name(s) of, and delivered to
________________________, whose address(es) is (are):
Dated: _______________, ____
By:________________________________
___________________________________
___________________________________
Address
TRANSFER FORM
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(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ______________________________ the right to purchase Units represented by
the foregoing Representative's Warrant to the extent of __________ Units, and
appoints _________________________ attorney to transfer such rights on the books
of _________________ ____________, with full power of substitution in the
premises.
Dated: _______________, ____
By:________________________________
___________________________________
___________________________________
Address
In the presence of:
