WARRANT AGREEMENT
Agreement made as of ___________ __, 1996, between The Millbrook Press
Inc., a Delaware corporation with offices at 0 Xxx Xxx Xxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxx 00000 ("Company"), and Continental Stock Transfer & Trust Company, a
New York corporation with offices at 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Warrant Agent").
WHEREAS, the Company is engaged in a public offering of Common Stock
and Warrants ("Public Offering") and in connection therewith, has determined to
issue and deliver up to (i) 2,600,000 Redeemable Common Stock Purchase Warrants
("Public Warrants") to the public investors which includes 875,000 Warrants
("Bridge Warrants") issuable to certain investors in the Company's August 1996
bridge financing and (ii) 150,000 Warrants to GKN Securities Corp.
("Underwriter") or its designees ("Underwriter's Warrants") and together with
the Public Warrants, the "Warrant(s)"), each of such Warrants evidencing the
right of the holder thereof to purchase one share of common stock, $.01 par
value per share, of the Company's Common Stock ("Common Stock") for $4.50; and
WHEREAS, the Company has filed with the Securities and Exchange Commission
("Commission") a Registration Statement, No. 333-14631 on Form SB-2
("Registration Statement") for the registration, under the Securities Act of
1933, as amended ("Act"), of, among others, the Warrants and the Common Stock
issuable upon exercise of the Warrants; and
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, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows (capitalized terms not defined herein, shall
have the same meaning as set forth in the Registration Statement):
1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the Warrant
Agent to act as agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in accordance
with the terms and conditions set forth in this Agreement.
2. WARRANTS.
2.1. FORM OF WARRANT. Each Warrant certificate shall be issued in
registered form only, shall be in substantially the form of EXHIBIT A hereto,
the provisions of which are incorporated
herein, and shall be signed by, or bear the facsimile signature of, the Chairman
of the Board or President and Secretary or Assistant Secretary of the Company
and shall bear a facsimile of the Company's seal. In the event that the person
whose facsimile signature has been placed upon any Warrant certificate shall
have ceased to be Chairman of the Board or President and Secretary or Assistant
Secretary of the Company, as the case may be, before such Warrant certificate is
issued, it may be issued with the same effect as if the named person had not
ceased to be such at the date of issuance. The Warrants represented by a
Warrant certificate may not be exercised until such certificate has been
countersigned by the Warrant Agent as provided in Section 2.3 hereof.
2.2. EFFECT OF COUNTERSIGNATURE. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant certificate shall be invalid
and of no effect.
2.3. EVENTS FOR COUNTERSIGNATURE. The Warrant Agent shall countersign a
Warrant certificate only upon the occurrence of either of the following events:
(i) if the Warrant certificate is to be issued in exchange or
substitution for one or more previously countersigned Warrant certificates, as
hereinafter provided, or
(ii) if the Company instructs the Warrant Agent to do so.
2.4. REGISTRATION.
2.4.1. WARRANT REGISTER. The Warrant Agent shall maintain books
("Warrant Register"), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2. REGISTERED HOLDER. Prior to due presentment for
registration of transfer of any Warrant certificate, the Company and the Warrant
Agent may deem and treat the person in whose name such Warrant certificate shall
be registered upon the Warrant Register ("registered holder"), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant certificate 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.
3. TERMS AND EXERCISE OF WARRANTS
3.1. WARRANT PRICE. Each Warrant certificate, when countersigned by the
Warrant Agent, shall entitle the registered holder thereof, subject to the
provisions of such Warrant certificate and of this Warrant Agreement, to
purchase from the Company the number of shares of Common Stock stated therein,
at the price of $4.50 per whole share, subject to the adjustments provided in
Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement
refers to the price per share at which Common Stock may be purchased at the time
a Warrant is exercised.
3.2. DURATION OF WARRANTS. Subject to Section 3.3.6 hereof, a Warrant may
be exercised only during the period ("Exercise Period") commencing on December
___, 1997, and terminating
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on the earlier of December ___, 2001 or the date fixed for redemption of the
Warrant as provided in Section 6 of this Agreement ("Expiration Date"). Each
Warrant not exercised on or before its expiration date shall become void, and
all rights thereunder and all rights in respect thereof under this Agreement
shall cease at the close of business on its Expiration Date. The Company in its
sole discretion may extend the duration of the Warrants by extending the
Expiration Date. The Company in its sole discretion may extend the duration of
the Warrants by delaying the Expiration Date.
3.3. EXERCISE OF WARRANTS.
3.3.1. PAYMENT. A Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering the
certificate representing such Warrant, at the office of the Warrant Agent, or at
the office of its successor as Warrant Agent, in the Borough of Manhattan, City
and State of New York, with the subscription form, as set forth on the Warrant
certificate and in substantially the form of EXHIBIT A hereto, duly executed,
and by paying in full, in lawful money of the United States, in cash, or by good
certified check or bank draft payable to the order of the Company, the Warrant
Price for each full share of Common Stock as to which the Warrant is exercised
and any and all applicable taxes due in connection with the exercise of the
Warrant, the exchange of the Warrant for the Common Stock, and the issuance of
the Common Stock.
3.3.2. ISSUANCE OF CERTIFICATES. As soon as practicable after the
exercise of any Warrant and the clearance of the funds in payment of the Warrant
Price, the Company shall issue to the registered holder of such Warrant a
certificate or certificates for the number of full shares of Common Stock to
which he is entitled, registered in such name or names as may be directed by
him, and if such Warrant shall not have been exercised in full, a new
countersigned Warrant certificate for the number of shares as to which such
Warrant shall not have been exercised. Notwithstanding the foregoing, the
Company shall not be obligated to deliver any securities pursuant to the
exercise of a Warrant unless a registration statement under the Securities Act
of 1933 with respect to the securities is effective. Warrants may not be
exercised by, or securities issued to, any registered holder in any state in
which such exercise would be unlawful.
3.3.3. VALID ISSUANCE. All shares of Common Stock issued upon the
proper exercise of a Warrant in conformity with this Agreement shall be validly
issued.
3.3.4. DATE OF ISSUANCE. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant certificate was surrendered (with the subscription form duly
executed) and payment of the Warrant Price was made, irrespective of the date of
delivery of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
3.4. WARRANT SOLICITATION AND WARRANT SOLICITATION FEE.
3.4.1. ENGAGEMENT. The Company has engaged the Underwriter, on a
non-exclusive basis, as its agent for the solicitation of the exercise of the
Warrants. The Company, at
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its cost, will (i) assist the Underwriter with respect to such solicitation, if
requested by the Underwriter and (ii) provide the Underwriter, and direct the
Company's transfer and warrant agent to deliver to the Underwriter, lists of the
record, and to the extent known, beneficial owners of the Company's Warrants.
Accordingly, the Company hereby instructs the Warrant Agent to cooperate with
the Underwriter in every respect in connection with the Underwriter's
solicitation activities, including, but not limited to, providing to the
Underwriter, at the Company's cost, a list of record and beneficial holders of
the Warrants and circulating a prospectus or offering circular disclosing the
compensation arrangements referenced in Section 3.4.2 to holders of the Warrants
at the time of exercise of the Warrants. In addition to the conditions set
forth in Section 3.4.2, the Underwriter shall only accept payment of the warrant
solicitation fee provided in Section 3.4.2 if it has provided bona fide services
in connection with the exercise of the Warrants. In addition to soliciting,
either orally or in writing, the exercise of Warrants by a Warrantholder, such
services may also include disseminating information, either orally or in
writing, to Warrantholders about the Company or the market for the Company's
securities, or assisting in the processing of the exercise of Warrants.
3.4.2. WARRANT AGENT EXERCISE NOTICE AND PAYMENT. In each instance
in which a Warrant is exercised, the Warrant Agent shall promptly give written
notice of such exercise to the Company and the Underwriter ("Warrant Agent's
Exercise Notice"). If, upon the exercise of any Warrant more than one year from
the Effective Date, (i) the market price of the Company's Common Stock is
greater than the Warrant Price, (ii) disclosure of compensation arrangements was
made both at the time of the original offering and at the time of exercise (by
delivery of the Prospectus or as otherwise required by applicable law, rule or
regulation), (iii) the exercise of the Warrant was solicited by the Underwriter,
(iv) the Warrant was not held in a discretionary account, and (v) the
solicitation of the exercise of the Warrant was not in violation of Rule 10b-6
(as such rule or any successor rule may be in effect as of such time of
exercise) promulgated under the Securities Exchange Act of 1934, then the
Warrant Agent, simultaneously with the distribution of proceeds to the Company
received upon exercise of the Warrant(s) so exercised, shall, on behalf of the
Company, pay from the proceeds received upon exercise of the Warrant(s), a fee
of 5% of the Warrant Price to the Underwriter, provided that the Underwriter
delivers to the Warrant Agent within ten (10) business days from the date on
which the Underwriter has received the Warrant Agent's Exercise Notice, a
certificate that the conditions set forth in the preceding clauses (iii), (iv)
and (v) have been satisfied. The Underwriter and the Company may at any time
during business hours, examine the records of the Warrant Agent, including its
ledger of original Warrant certificates returned to the Warrant Agent upon
exercise of Warrants.
3.4.3. CONSENT OF UNDERWRITER. The provisions of this Section 3.4
may not be modified, amended or deleted without the prior written consent of the
Underwriter.
4. ADJUSTMENTS.
4.1. STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject to
the provisions of Section 4.5 below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock or by a
split-up of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares issuable on exercise of each
Warrant shall be increased in proportion to such increase in outstanding shares
and the then applicable Warrant Price shall be correspondingly decreased.
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4.2. AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 4.5, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination or reclassification of shares of
Common Stock or other similar event, then, upon the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
4.3. REPLACEMENT OF SECURITIES UPON REORGANIZATION, ETC. If after the date
hereof any capital reorganization or reclassification of the Common Stock of the
Company, or consolidation or merger of the Company with another corporation, or
the sale of all or substantially all of its assets to another corporation or
other similar event shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful and
fair provision shall be made whereby the Warrant holders shall thereafter have
the right to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities, or
assets as may be issued or payable with respect to or in exchange for the number
of outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares purchasable upon the exercise of the Warrants) shall
thereafter be applicable, as nearly as may be in relation to any share of stock,
securities, or assets thereafter deliverable upon the exercise hereof. The
Company shall not effect any such consolidation, merger, or sale unless prior to
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing such
assets, shall assume by written instrument executed and delivered to the Warrant
Agent the obligation to deliver to the Warrant holders such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.
4.4. NOTICES OF CHANGES IN WARRANT. Upon every adjustment of the Warrant
Price or the number of shares issuable on exercise of a Warrant, the Company
shall give written notice thereof to the Warrant Agent, which notice shall state
the Warrant Price resulting from such adjustment and the increase or decrease,
if any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Upon the occurrence of any event
specified in Sections 4.1., 4.2., or 4.3., the Company shall give written notice
in the manner set forth above of the record date for such dividend,
distribution, or subscription rights, or the effective date of such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be entitled to exchange
their Common Stock for stock, securities, or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.
4.5. NO FRACTIONAL SHARES. Notwithstanding any provision contained in this
Warrant Agreement to the contrary, the Company shall not issue fractional shares
upon exercise of
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Warrants. If, by reason of any adjustment made pursuant to this Section 4, the
holder of any Warrant would be entitled, upon the exercise of such Warrant, to
receive a fractional interest in a share, the number of shares of Common Stock
to be received shall be rounded off to the nearest whole number.
4.6. FORM OF WARRANT. The form of Warrant need not be changed because of
any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the same Warrant Price and the same number of shares as is
stated in the Warrants initially issued pursuant to this Agreement. However,
the Company may at any time in its sole discretion make any change in the form
of Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in
the form as so changed.
5. TRANSFER AND EXCHANGE OF WARRANTS.
5.1. REGISTRATION OF TRANSFER. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of a Warrant certificate for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant certificate
representing an equal aggregate number of Warrants shall be issued and the old
Warrant certificate shall be cancelled by the Warrant Agent. The Warrant
certificate so cancelled shall be delivered by the Warrant Agent to the Company
from time to time upon request.
5.2. PROCEDURE FOR SURRENDER OF WARRANTS. Warrant certificates may be
surrendered to the Warrant Agent, together with a written request for exchange
or transfer, and thereupon the Warrant Agent shall issue in exchange therefor
one or more new Warrant certificates as requested by the registered holder of
the Warrant certificates so surrendered, representing an equal aggregate number
of Warrants; provided, however, that in the event that a Warrant certificate
surrendered for transfer bears a restrictive legend, the Warrant Agent shall not
cancel such Warrant certificate and issue new Warrant certificates in exchange
therefor until the Warrant Agent has received an opinion of counsel for the
Company stating that such transfer may be made and indicating whether the new
Warrant certificates must also bear a restrictive legend.
5.3. FRACTIONAL WARRANTS. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant. The number of
Warrants to be delivered shall be rounded off to the nearest whole number.
5.4. SERVICE CHARGES. No service charge shall be made for any exchange or
registration of transfer of Warrants.
5.5. WARRANT EXECUTION AND COUNTERSIGNATURE. The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the provisions hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrant certificates duly executed on behalf of the Company for such
purpose.
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6. REDEMPTION.
6.1. REDEMPTION. The outstanding Warrants may be redeemed, at the option
of the Company, as a whole at any time or in part from time to time, after they
become exercisable and prior to the Expiration Date, on a pro rata basis as the
Company in its sole discretion may determine, at the office of the Warrant
Agent, upon the notice referred to in Section 6.2., at the price of $.01 per
Warrant ("Redemption Price"), provided that (a) the last sale price of the
Common Stock has been at least one hundred and fifty-five percent (155%) of the
then effective exercise price of the Public Warrants on twenty (20) of the
twenty-five (25) trading days ending on the third business day prior to the date
on which notice of redemption is given, the satisfaction of which condition
shall be certified by the Company and (b) the Company has obtained the prior
written consent of the Underwriter. The provisions of this Section 6 may not be
modified, amended or deleted without the prior written consent of the
Underwriter.
6.2. DATE FIXED FOR, AND NOTICE OF, REDEMPTION. In the event the Company
shall elect to redeem all or any part of the outstanding Warrants, the Company
shall fix a date for the redemption. Notice of redemption shall be mailed by
first class mail, postage prepaid, by the Company or the Company's agent at its
direction not less than 30 days from the date fixed for redemption to the
registered holders of the outstanding Warrants to be redeemed at their last
address as they shall appear on the registration books. Any notice mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such notice.
6.3. EXERCISE AFTER NOTICE OF REDEMPTION. The Warrants may be exercised in
accordance with Section 3 of this Agreement at any time after notice of
redemption shall have been given by the Company pursuant to Section 6.2 hereof
and prior to the time and date fixed for redemption. On and after the
redemption date, the record holder of the Warrants shall have no further rights
except to receive, upon surrender of the Warrants, the redemption price.
7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS.
7.1. NO RIGHTS AS SHAREHOLDER. A Warrant does not entitle the registered
holder thereof to any of the rights of a shareholder of the Company, including,
without limitation, the right to receive dividends, or other distributions,
exercise any preemptive rights to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors of the Company or any other matter.
7.2. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If any Warrant
certificate is lost, stolen, mutilated, or destroyed, the Company and the
Warrant Agent may on such terms as to indemnity or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant
certificate, include the surrender thereof), issue a new Warrant certificate of
like denomination, tenor, and date as the Warrant certificate so lost, stolen,
mutilated, or destroyed. Any such new Warrant certificate shall constitute a
substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant certificate shall be at any time
enforceable by anyone.
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7.3. RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.
7.4. REGISTRATION OF COMMON STOCK. The Company agrees that prior to the
commencement of the Exercise Period it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, if
possible or a new registration statement, for the registration, under the
Securities Act of 1933, of the Common Stock issuable upon exercise of the
Warrants. In either case, the Company shall cause the same to become effective
at or prior to the commencement of the Exercise Period and to maintain the
effectiveness of such registration statement and keep current a prospectus
thereunder until the expiration of the Public Warrants, Bridge Warrants and the
Underwriter's Warrants in accordance with the provisions of this Agreement. The
provisions of this Section 7.4 may not be modified, amended or deleted without
the prior written consent of the Underwriter.
8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS.
8.1. PAYMENT OF TAXES. The Company will from time to time promptly pay all
taxes and charges that may be imposed upon the Company or the Warrant Agent in
respect of the issuance or delivery of shares of Common Stock upon the exercise
of Warrants, but the Company shall not be obligated to pay any transfer taxes in
respect of the Warrants or such shares.
8.2. RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.
8.2.1. APPOINTMENT OF SUCCESSOR WARRANT AGENT. The Warrant Agent,
or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities (other than those incurred
prior to such resignation or discharge) hereunder after giving sixty (60) days'
notice in writing to the Company. If the office of the Warrant Agent becomes
vacant by resignation or incapacity to act or otherwise, the Company shall
appoint in writing a successor Warrant Agent in place of the Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or incapacity by the Warrant
Agent or by a holder of Warrants (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant may apply
to the Supreme Court of the State of New York for the County of New York for the
appointment of a successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized,
existing and in good standing and authorized under the laws of the state in
which it was incorporated to exercise corporate trust powers, shall maintain an
office in the Borough of Manhattan, City and State of New York for the transfer
of the Warrants and, if not incorporated in the State of New York, shall be
authorized to do business in the State of New York as a foreign corporation, and
subject to supervision or examination by federal or state authority and shall be
authorized to serve as Warrant Agent for the Warrants under the Securities
Exchange Act of 1934, as amended. After appointment, any successor Warrant
Agent shall be vested with all the authority, powers, rights, immunities,
duties, and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed;
but if for any reason it becomes necessary or appropriate, the predecessor
Warrant Agent shall execute and deliver, at the expense of the Company, an
instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request
of any successor Warrant Agent the
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Company shall make, execute, acknowledge, and deliver any and all instruments in
writing for more fully and effectually vesting in and confirming to such
successor Warrant Agent all such authority, powers, rights, immunities, duties,
and obligations.
8.2.2. NOTICE OF SUCCESSOR WARRANT AGENT. In the event a successor
Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.
8.2.3. MERGER OR CONSOLIDATION OF WARRANT AGENT. Any corporation
into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the
Warrant Agent shall be a party, if it shall be eligible to serve as Warrant
Agent under Section 8.2.1, shall be the successor Warrant Agent under this
Agreement without any further act.
8.3. FEES AND EXPENSES OF WARRANT AGENT.
8.3.1. REMUNERATION. The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as such Warrant Agent hereunder and
will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2. FURTHER ASSURANCES. The Company agrees to perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may
reasonably be required by the Warrant Agent for the carrying out or performing
of the provisions of this Agreement.
8.4. LIABILITY OF WARRANT AGENT.
8.4.1. RELIANCE ON COMPANY STATEMENT. Whenever in the performance
of its duties under this Warrant Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a statement signed by the
President of the Company and delivered to the Warrant Agent. The Warrant Agent
may rely upon such statement for any action taken or suffered in good faith by
it pursuant to the provisions of this Agreement.
8.4.2. INDEMNITY. The Warrant Agent shall be liable hereunder only
for its own negligence or willful misconduct. The Company agrees to indemnify
the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and reasonable counsel fees, for anything done or
omitted by the Warrant Agent in the execution of this Agreement except as a
result of the Warrant Agent's negligence, willful misconduct, or bad faith.
8.4.3. EXCLUSIONS. The Warrant Agent shall have no responsibility
with respect to the validity of this Agreement or with respect to the validity
or execution of any Warrant (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; nor shall it be responsible to
make any adjustments required under the provisions of Section 4. hereof or
responsible for the
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manner, method, or amount of any such adjustment or the ascertaining of the
existence of 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 to be issued pursuant
to this Agreement or any Warrant or as to whether any shares of Common Stock
will when issued be valid and fully paid and nonassessable.
8.5. 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 and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
pay to the Company, all moneys received by the Warrant Agent for the purchase of
shares of the Company's Common Stock through the exercise of Warrants.
9. MISCELLANEOUS PROVISIONS.
9.1. SUCCESSORS. 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.
9.2. NOTICES. Any notice, statement or demand authorized by this Agreement
to be given or made by the Warrant Agent or by the holder of any Warrant to or
by the Company shall be sufficiently given or made if sent by certified mail, or
private courier service, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as follows:
To the Company: The Millbrook Press Inc.
0 Xxx Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Att: Xx. Xxxxxxx Xxxxxx
President
With a copy to: Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Att: Xxxxxxx X. Xxxxxxxxxxx, Esq.
To the Warrant Agent: Continental Stock Transfer & Trust Company
0 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Att: Xxxxxx X. Xxxxxx, Chairman
To GKN: GKN Securities Corp.
10
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Att: Xxxxx X. Xxxxxxxx
Chairman
With a copy to: Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Att: Xxxxx Xxxx Xxxxxx, Esq.
9.3. APPLICABLE LAW; JURISDICTION. The validity, interpretation, and
performance of this Agreement and of the Warrants shall be governed in all
respects by the law of the State of New York, without giving effect to
principles of conflicts of law. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and that
such courts represent an inconvenient forum. Any process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.2 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the Company
in any action, proceeding or claim.
9.4. PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. 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 parties hereto and the registered holders of the
Warrants and, for the purposes of Sections 3.4, 6.1 through 6.3 and 7.4 hereof,
the Underwriter, any right, remedy, or claim under or by reason of this Warrant
Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. Underwriter shall be deemed to be a third-party beneficiary of this
Agreement with respect to such Sections. All covenants, conditions,
stipulations, promises, and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the parties hereto (and the Underwriter to the
extent set forth above) and their successors and assigns and of the registered
holders of the Warrants.
9.5. EXAMINATION OF THE WARRANT AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the office of the Warrant Agent in the
Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his or her Warrant for inspection by it.
9.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
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9.7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and are not part of this Agreement and shall not affect the interpretation
thereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year first above
written.
Attest: THE MILLBROOK PRESS INC.
___________________ By:_____________________________
Name: Name: Xxxxxxx Xxxxxx
Title: Title: President
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
Attest:
____________________ By:_____________________________
Name: Name:
Title: Title:
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