Exhibit 4.4
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE
APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on June 30, 2014.
WARRANT TO PURCHASE COMMON STOCK
OF
OVATION PRODUCTS CORPORATION
WARRANT NO. 54-1 72,000 SHARES
FOR VALUE RECEIVED, Ovation Products Corporation (the "Company"), a
Delaware corporation, hereby certifies that WMS Family I, LLC with principal
offices at 000 Xxxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, or his assigns, is
entitled to purchase from the Company, at any time or from time to time, a total
of seventy-two thousand (72,000) fully paid and nonassessable shares of the
Common Stock, $1.00 par value per share, of the Company for an aggregate
purchase price of $180,000 (computed on the basis of $5.00 per share).
Hereinafter, (i) said Common Stock, together with any other equity securities
which may be issued by the Company with respect thereto or in substitution
therefor, is referred to as the "Common Stock"; (ii) the shares of the Common
Stock purchasable hereunder are referred to as the "Warrant Shares"; (iii) the
aggregate purchase price payable hereunder for the Warrant Shares is referred to
as the "Aggregate Warrant Price"; (iv) the price payable hereunder for each of
the Warrant Shares is referred to as the "Per Share Warrant Price"; (v) this
Warrant, and all warrants hereafter issued in exchange or substitution for this
Warrant are referred to as the "Warrant"; and (vi) the holder of this Warrant is
referred to as the "Holder". The Per Share Warrant Price is subject to
adjustment as hereinafter provided. In the event of any such adjustment, the
number of Warrant Shares shall be adjusted by dividing the Aggregate Warrant
Price by the Per Share Warrant Price in effect immediately after such
adjustment.
1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the date hereof, and prior to
5:00 P.M., Eastern Standard Time, on June 30, 2014, the Holder (with the
subscription form at the end hereof duly executed) at the address set forth in
Subsection 9(a) hereof, together with proper payment of the Aggregate Warrant
Price, or the proportionate part thereof if this Warrant is exercised in part.
Payment for Warrant Shares shall be made, at the election of the Holder, (i) by
set-offs against amounts due to the Holder under any promissory notes issued by
the Company (in which event such note(s) shall be delivered to the Company at
the time of exercise), or (ii) certified or official bank check payable to the
order of the
-1-
Company. If this Warrant is exercised in part, this Warrant must be exercised
for a minimum of 25 shares of the Common Stock, and the Holder is entitled to
receive a new Warrant covering the number of Warrant Shares in respect of which
this Warrant has not been exercised and setting forth the proportionate part of
the Aggregate Warrant Price applicable to such Warrant Shares. Upon such
surrender of this Warrant, the Company will (a) issue a certificate or
certificates in the name of the Holder for the largest number of whole shares of
the Common Stock to which the Holder shall be entitled and, if this Warrant is
exercised in whole, in lieu of any fractional share of the Common Stock to which
the Holder shall be entitled, cash equal to the fair value of such fractional
share (determined in such reasonable manner as the Board of Directors of the
Company shall determine); (b) deliver the proportionate part thereof if this
Warrant is exercised in part, pursuant to the provisions of the Warrant and (c)
deliver a replacement promissory note representing the unsatisfied portion of
any promissory note delivered in payment for the Warrant Shares.
2. RESERVATION WARRANT SHARES. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the shares of the Common Stock as from time to time
shall be receivable upon the exercise of this Warrant.
3. ANTI-DILUTION PROVISIONS.
(a) If, at any time or from time to time after the date of this Warrant,
the Company shall distribute to its holders of Common Stock (i)
securities, other than shares of the Common Stock, or (ii) property,
other than cash, without payment therefor, with respect to the
Common Stock, then, and in each such case, the Holder, upon the
exercise of this Warrant, shall be entitled to receive the
securities and properties which the Holder would hold on the date of
such exercise if, on the date of this Warrant, the Holder had been
the holder of record of the number of shares of the Common Stock
subscribed for upon such exercise and, during the period from the
date of this Warrant to and including the date of such exercise, had
retained such shares and the securities and properties receivable by
the Holder during such period. Notice of each such distribution
shall be forthwith mailed to the Holder.
(b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, or (iv) issue by
reclassification of its Common Stock any shares of capital stock of
the Company, the Per Share Warrant Price in effect immediately prior
to such action shall be adjusted so that if the Holder surrendered
this Warrant for exercise immediately thereafter the Holder would be
entitled to receive the number of shares of Common Stock or other
capital stock of the Company which he would have owned immediately
following such action had such Warrant been exercised immediately
prior thereto. An adjustment made pursuant to this subsection (b)
shall become effective immediately after the record date in the case
of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant
to this subsection (b), the Holder shall become entitled to receive
shares of two or more classes of capital stock or shares of Common
Stock and other capital stock of the Company, the Board of Directors
shall in good faith determine
-2-
the allocation of the adjusted Per Share Warrant Price between or
among shares of such classes of capital stock or shares of Common
Stock and other capital stock.
(c) In the event the Company shall, at any time or from time to time
after the date hereof, issue or sell any shares of Common Stock for
a consideration per share less than the then Per Share Warrant Price
or issue any options or rights to purchase shares of Common Stock of
a strike price of less than the Per Share Warrant Price (any such
sale herein called a "Change of Shares"), then, and thereafter upon
each further Change of Shares, the applicable Per Share Warrant
Price in effect immediately prior to such Change of Shares shall be
changed to a price equal to the consideration per share received in
such Change of Shares (including any applicable fraction of a cent).
(d) Upon each adjustment of the Per Share Warrant Price pursuant to this
Section 3, the total number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be such number of shares
(calculated to the nearest tenth) purchasable at the applicable Per
Share Warrant Price immediately prior to such adjustment multiplied
by a fraction, the numerator of which shall be the Per Share Warrant
Price in effect immediately prior to such adjustment and the
denominator of which shall be the Per Share Warrant Price in effect
immediately after such adjustment.
(e) In case of any consolidation or merger to which the Company is a
party other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to
another entity of the property of the Company as an entirety or
substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any
exchange effected in connection with a merger of a third corporation
into the Company), the Holder shall have the right thereafter to
convert this Warrant into the kind and amount of securities, cash or
other property which he would have owned or have been entitled to
receive immediately after such consolidation, merger, statutory
exchange, sale or conveyance had such Warrant been converted
immediately prior to the effective date of such consolidation,
merger, statutory exchange, sale or conveyance and in any such case,
if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the
end that the provisions set forth in this Section 3 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be,
in relation to any shares of stock or other securities or property
thereafter deliverable on the exercise and conversion of this
Warrant. The above provisions of this subsection (d) shall similarly
apply to successive consolidations, mergers, statutory exchanges,
sales or conveyances. Notice of any such consolidation, merger,
statutory exchange, sale or conveyance and of said provisions so
proposed to be made, shall be mailed to the Holder not less than 30
days prior to such event. A sale of all or substantially all of the
assets of the Company for a consideration consisting primarily of
securities shall be deemed a consolidation or merger for the
foregoing purposes.
(f) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modification of the rights of the Holder in
accordance with this Section 3, the Company shall promptly prepare a
certificate of an officer of the Company, setting forth the Per
Share Warrant Price and the number of Warrant Shares after such
adjustment or modification, a brief statement of the facts requiring
such adjustment or modification
-3-
and the manner of computing the same and cause a copy of such
certificate to be mailed to the Holder.
(g) If the Board of Directors of the Company shall (i) declare any
dividend or other distribution in cash with respect to the Common
Stock, (ii) offer to holders of shares of Common Stock any
additional shares of Common Stock, any securities convertible into
or exercisable for shares of Common Stock, or any rights to
subscribe thereto; or (iii) propose a dissolution, winding up or
liquidation of the Company, the Company shall mail notice thereof to
the Holder not less than 15 days prior to the record date fixed for
determining shareholders entitled to participate in such dividend or
other distribution.
(h) If at any time or from time to time the Company shall take any
action affecting its Common Stock or any other capital stock of the
Company, not otherwise described in any of the foregoing subsections
of this Section 3, then, if the failure to make any adjustment would
in the reasonable opinion of the Board of Directors of the Company
have a materially adverse effect upon the rights of the Holder, the
number of shares of Common Stock or other stock comprising a Warrant
Share, or the Per Share Warrant Price, shall be adjusted in such
manner and at such time as the Board of Directors of the Company may
in good faith determined to be equitable under the circumstances.
(i) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modification of the rights of the Holder in
accordance with this Section 3, the Company shall promptly cause its
Chief Financial Officer to provide a notice to the Holder setting
forth the Per Share Warrant Price and the number of Warrant Shares
after such adjustment or the effect of such modification, a brief
statement of the facts requiring such adjustment or modification and
the manner of computing the same.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares of stock
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant shall, at the time of such delivery, be validly issued
and outstanding, fully paid and non-assessable, and not subject to preemptive
rights, and the Company will take all such actions as may be necessary to assure
that the par value or stated value, if any, per share of the Common Stock is at
all times equal to or less than the then Per Share Warrant Price. The Company
further covenants and agrees that it will pay, when due and payable, any and all
Federal and state stamp, original issue or similar taxes that may be payable in
respect of the issue of any Warrant Share or certificate therefor.
5. TRANSFER.
(a) SECURITIES LAWS. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or under
any state securities laws and unless so registered may not be
transferred, sold, pledged, hypothecated or otherwise disposed of
unless an exemption from such registration is available. In the
event Holder desires to transfer this Warrant or any of the Warrant
Shares issued, the Holder must give the Company prior written notice
of such proposed transfer including the name and address of the
proposed transferee. Such transfer may be made only either (i) upon
publication by the Securities and Exchange Commission (the
"Commission") of a ruling, interpretation, opinion or "no action
letter" based upon facts presented to said Commission, or (ii) upon
receipt by the
-4-
Company of an opinion of counsel to the Company in either case to
the effect that the proposed transfer will not violate the
provisions of the Securities Act, the Securities Exchange Act of
1934, as amended, or the rules and regulations promulgated under
either such act, or in the case of clause (ii) above, to the effect
that the Warrant or Warrant Shares to be sold or transferred has
been registered under the Securities Act, as amended, and that there
is in effect a current prospectus meeting the requirements of
Subsection 10(a) of the Securities Act, which is being or will be
delivered to the purchaser or transferee at or prior to the time of
delivery of the certificates evidencing the Warrant or Warrant Stock
to be sold or transferred.
(b) CONDITIONS TO TRANSFER. Prior to any such proposed transfer, and as
a condition thereto, if such transfer is not made pursuant to an
effective registration statement under the Securities Act, the
Holder will, if requested by the Company, deliver to the Company (i)
an investment covenant signed by the proposed transferee, (ii) an
agreement by such transferee to the impression of the restrictive
investment legend set forth herein on the certificate or
certificates representing the securities acquired by such
transferee, (iii) an agreement by such transferee that the Company
may place a "stop transfer order" with its transfer agent or
registrar, and (iv) an agreement by the transferee to indemnify the
Company to the same extent as set forth in the next succeeding
paragraph.
(c) INDEMNITY. The Holder acknowledges that the Holder understands the
meaning and legal consequences of this Section 5, and the Holder
hereby agrees to indemnify and hold harmless the Company, its
representatives and each officer and director thereof from and
against any and all loss, damage or liability (including all
attorneys, fees and costs incurred in enforcing this indemnity
provision) due to or arising out of (a) the inaccuracy of any
representation or the breach of any warranty of the Holder contained
in, or any other breach of, this Warrant, (b) any transfer of the
Warrant or any of the Warrant Shares in violation of the Securities
Act, the Securities Exchange Act of 1934, as amended, or the rules
and regulations promulgated under either of such acts, (c) any
transfer of the Warrant or any of the Warrant Shares not in
accordance with this Warrant or (d) any untrue statement or omission
to state any material fact in connection with the investment
representations or with respect to the facts and representations
supplied by the Holder to counsel to the Company upon which its
opinion as to a proposed transfer shall have been based,
(d) TRANSFER. Except as restricted hereby, this Warrant and the Warrant
Shares issued may be transferred by the Holder in whole or in part
at any time or from time to time. Upon surrender of this Warrant to
the Company or at the office of its stock transfer agent, if any,
with assignment documentation duly executed and funds sufficient to
pay any transfer tax, and upon compliance with the foregoing
provisions, the Company shall, without charge, execute and deliver a
new Warrant in the name of the assignee named in such instrument of
assignment, and this Warrant shall promptly be canceled. Any
assignment, transfer, pledge, hypothecation or other disposition of
this Warrant attempted contrary to the provisions of this Warrant,
or any levy of execution, attachment or other process attempted upon
the Warrant, shall be null and void and without effect.
(e) LEGEND AND STOP TRANSFER ORDERS. Unless the Warrant Shares have been
registered under the
-5-
Securities Act, upon exercise of any part of the Warrant and the
issuance of any of the shares of Warrant Shares, the Company shall
instruct its transfer agent to enter stop transfer orders with
respect to such shares, and all certificates representing Warrant
Shares shall bear on the face thereof substantially the following
legend, insofar as is consistent with New Hampshire law:
"The shares of Common Stock represented by this certificate
have not been registered under the Securities Act, as amended,
and may not be sold, offered for sale, assigned, transferred
or otherwise disposed of unless registered pursuant to the
provisions of that Act or an opinion of counsel to the Company
is obtained stating that such disposition is in compliance
with an available exemption from such registration."
-6-
6. REGISTRATION RIGHTS.
(a) INCIDENTAL REGISTRATION. If the Company at any time proposes for any
reason to register any of its securities under the Securities Act
(other than pursuant to a registration statement on Form S-8, S-14
or S-15 or similar or successor form), it shall each such time
promptly give written notice to all holders of outstanding
Registrable Shares (as defined below) of its intention so to do,
and, upon the written request, given within 30 days after receipt of
any such notice, of the holder of any such Registrable Shares to
register any Registrable Shares (which request shall specify the
Registrable Shares intended to be sold or disposed of by such
holders and shall state the intended method of disposition of such
Registrable Shares by the prospective seller), the Company shall use
its best efforts to cause all such Registrable Shares, to be
registered under the Securities Act promptly upon receipt of the
written request of such holders for such registration, all to the
extent requisite to permit the sale or other disposition (in
accordance with the intended methods thereof, as aforesaid) by the
prospective seller or sellers of the Registrable Shares so
registered. In the event that the proposed registration by the
Company is, in whole or in part, an underwritten public offering of
securities of the Company, any request pursuant to this Section 6 to
register Registrable Shares may specify that such shares are to be
included in the underwriting (i) on the same terms and conditions as
the shares of Common Stock, if any, otherwise being sold through
underwriters under such registration, or (ii) on terms and
conditions comparable to those normally applicable to offerings of
common stock in reasonably similar circumstances in the event that
no shares of Common Stock other than Registrable Shares are being
sold through underwriters under such registration; PROVIDED,
HOWEVER, that (A) if the managing underwriter determines and advises
in writing that the inclusion of all Registrable Shares proposed to
be included in the underwritten public offering and other issued and
outstanding shares of Common Stock proposed to be included therein
by persons other than holders of Registrable Shares (the "Other
Shares") would interfere with the successful marketing (including
pricing) of such securities, then the number of Registrable Shares
and Other Shares to be included in such underwritten public offering
shall be reduced FIRST, PRO RATA among the holders of Other Shares,
and SECOND, if necessary, PRO RATA among the holders of Registrable
Shares based upon the number of Registrable Shares and shares of
Common Stock requested by the holders thereof to be registered in
such underwritten public offering and (B) in each case those shares
of Common Stock which are excluded from the underwritten public
offering shall be withheld from the market by the holders thereof
for a period, not to exceed 180 days, which the managing underwriter
reasonably determines as necessary in order to effect the
underwritten public offering.
(b) PREPARATION AND FILING. If and whenever the Company is under an
obligation pursuant to the provisions of this Section 6 to use its
best efforts to effect the registration of any Registrable Shares,
the Company shall, as expeditiously as practicable:
(i) prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts
to cause such registration statement to become and remain effective
in accordance with Section 6(b)(ii);
(ii) prepare and file with the Commission such amendments and
supplements to
-7-
such registration statements and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for at least nine months and to comply with the provisions
of the Securities Act with respect to the sale or other disposition
of all Registrable Shares covered by such registration statement;
(iii) furnish to each holder of Registrable Shares such number
of copies of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the public sale or other
disposition of such Registrable Shares;
(iv) use its best efforts to register or qualify the
Registrable Shares covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as each such
seller shall reasonably request (PROVIDED, HOWEVER, that the Company
shall not be required to consent to general service or process for
all purposes in any jurisdiction where it is not then qualified) and
do any and all other acts or things which may be necessary or
advisable to enable such seller to consummate the public sale or
other disposition in such jurisdiction of such securities;
(v) notify each seller of Registrable Shares covered by such
registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be
delivered under the Securities Act within the appropriate period
mentioned in Section 6(c), of the happening of any event as a result
of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing and at the request of such
seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of
such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(vi) furnish, at the request of any holder or holders
requesting registration of Registrable Shares pursuant to this
Section 6, on the date that such Registrable Shares are delivered to
the underwriters for sale in connection with a registration
described in this Section 6, if such securities are being sold
through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (A) an opinion,
dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the holder
or holders making such request; and (B) a letter dated such date,
from the independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if
any, and to the holder or holders making such request.
(c) MARKET STAND-OFF AGREEMENT. Each holder of Registrable Shares
agrees, if requested by the Company and an underwriter of Common
Stock or other securities of the Company,
-8-
not to sell, assign, donate, pledge, encumber, hypothecate, grant an
option to, or otherwise transfer or dispose of, whether in privately
negotiated or open market transactions, any Common Stock or other
securities of the Company held by it during the 180-day period
following the effective date of a registration statement filed
pursuant to the Public Offering (as defined below), provided that:
(i) Such agreement shall apply only to the initial Public Offering;
and
(ii) All other holders of Registrable Shares, any other security
holders whose securities are included in such registration
statement, and all officers, directors and key employees of the
Company shall also enter into similar agreements.
Such agreement shall be in writing in form and substance
satisfactory to the Company and such underwriter. The Company may
impose stop-transfer instructions with respect to the shares subject
to the foregoing restrictions until the end of said 180-day period.
(d) EXPENSES. In the case of a registration hereof for the account of
the Company in which the Company is receiving proceeds from the sale
of its equity securities, the Company shall bear all costs and
expenses of each such registration, including, but not limited to,
printing, legal and accounting fees and expenses, Securities and
Exchange Commission and NASD filing fees and "Blue Sky" fees and
expenses; provided, however, that the Company shall have no
obligation to pay or otherwise bear any portion of the underwriters'
commissions or discounts attributable to the Registrable Shares
being offered and sold by the holders of Registrable Shares, or the
fees and expenses of any counsel for the selling holders of
Registrable Shares in connection with the registration of the
Registrable Shares.
(e) ADDITIONAL COVENANTS CONCERNING SALE OF SHARES.
(i) If permitted by applicable law and regulation, the
Company, at the request of the holder of Registrable Shares, shall
file such amendments and/or supplements to such registration
statement necessary to take such other steps as may be required to
maintain such registration statement in effect, and to keep the
information therein current, so long as any of the Registrable
Shares included therein remain unsold. In connection with any
registration statement referred to in this Section 6, the Company
shall furnish to the holder of Registrable Shares (or to any broker
or other person at its request) a reasonable number of copies of
such registration statement, each amendment and supplement thereto
and each document included therein, and such number of copies of the
then current prospectus included therein as either the holder of
Registrable Shares or its brokers may from time to time reasonably
request.
(ii) In connection with any registration statement referred to
in this Section 6 of this Agreement, the holder of Registrable
Shares will furnish to the Company such information as the Company
may reasonably require from such holder for inclusion in the
registration statement (and the prospectus included therein).
(iii) The Company's obligations under this Section 6 shall be
conditioned upon each shareholder (including the Holder of
Registrable Shares) whose Shares are being
-9-
registered and any underwriter participating in such public offering
executing and delivering to the Company an appropriate agreement, if
necessary in the reasonable opinion of counsel to the Company, in
form satisfactory to counsel for the Company, that he will comply
with all anti-stabilization, manipulation, and similar provisions of
Section 10 of the Securities Exchange Act of 1934, as amended, and
any rules promulgated thereunder and will furnish to the Company
information about sales made in such public offering.
(f) BLUE SKY PROVISIONS. The Company, at its expense, shall cause all of
the Registrable Shares included in a registration statement referred
to in this Section 6 to be qualified under the laws of such
reasonable number of jurisdictions as the holder of Registrable
Shares, or the managing underwriter named therein, may designate,
and the Company will continue such qualification in effect so long
as may be necessary to comply with all applicable laws regulating
sales of securities.
(g) ADVISING THE HOLDER OF REGISTRABLE SHARES. In connection with any
registration statement referred to in this Section 6, the Company
will promptly advise each holder of Registrable Shares and confirm
such advice in writing (i) when the registration statement has
become effective, (ii) when any post-effective amendment to the
registration statement becomes effective, and (iii) of any request
by the SEC for any amendment or supplement to the registration
statement or prospectus or for additional information.
If at any time the SEC should institute or threaten to institute any
proceeding for the purposes of issuing, or should issue, a stop
order suspending the effectiveness of the registration statement,
the Company will promptly notify the holder of Registrable Shares,
and will use its best efforts to prevent the issuance of any such
stop order or to obtain the withdrawal thereof as soon as possible;
and the Company will advise such Holder of Registrable Shares
promptly of any order or communication of any public board or body
addressed to the Company suspending or threatening to suspend the
qualification of any Registrable Shares for sale in any
jurisdiction.
(h) INDEMNIFICATION.
(i) With respect to the registration rights described in this
Section 6, the Company hereby agrees to indemnify, hold harmless and
defend each holder of Registrable Shares and each person, if any,
who is deemed a controlling person of such holder of Registrable
Shares within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities (including legal and other
expenses incurred in investigating and defending against the same),
to which they, or any of them, may become subject under the
Securities Act or other statute or common law, arising out of or
based upon:
(A) any alleged untrue statement of a material fact contained
in any registration statement, preliminary prospectus or
prospectus included therein, any amendment thereof of
supplement thereto; or
(B) the alleged omission to state therein a material fact
required to be stated
-10-
therein or necessary to make the statements contained therein
not misleading; provided, however, that the indemnity
contained in this Subsection (g) shall not apply to any such
alleged untrue statement or omission made in reliance upon and
in conformity with information furnished in writing to the
Company by or on behalf of the Holder of Registrable Shares.
The Holder of Registrable Shares agrees that as soon as
practicable, but in any event within forty-five (45) days,
after the receipt of notice of any claim or action against it
in respect of which indemnity may be sought from the Company
hereunder, to notify the Company thereof in writing, and the
Company shall assume the defense of such claim or action (and
the cost thereof) by counsel of its own choosing, who shall be
reasonably satisfactory to the Holder of Registrable Shares.
(ii) Each selling holder of Registrable Shares shall agree to
indemnify, hold harmless and defend the Company, its directors and
officers, and each person, if any, who is deemed a controlling
person of the Company with the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities,
including legal or other expenses incurred in investigating and
defending against the same, to which they or any of them may become
subject under the Securities Act or other statute or common law,
arising out of or based upon:
(A) any alleged untrue statement of a material fact contained
in any such registration statement, or prospectus or preliminary
prospectus included therein, or any amendment thereof or supplement
thereto, or
(B) the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading. The Company, and any other person
or entity in respect of which indemnity may be sought from the
Holder of Registrable Shares hereunder, agree, that as soon as
practicable, but in any event within forty-five (45) days, after
receipt of notice of any claim or action against the Company or such
other person or entity, to notify the holder of Registrable Shares
thereof in writing, and the holder of Registrable Shares shall
assume the defense of any such claim or action (and the cost
thereof) by counsel of their own choosing, who shall be reasonably
satisfactory to the Company.
(i) DEFINITIONS. For purposes of this Section 6, the following terms
shall have the following meanings:
(i) "Public Offering" means the consummation of the first
fully underwritten, firm commitment public offering pursuant to an
effective registration statement under the Securities Act, other
than on Forms S-4 or S-8, or their then equivalents, covering the
offer and sale by the Company of its Common Stock, resulting in
aggregate net proceeds to the Company of at least $2,000,000
(excluding underwriting discounts and commissions).
(ii) "Registrable Shares" means (i) the shares of Common Stock
issued or issuable upon conversion of this Warrant, and (iii) any
other shares of Common Stock of the Company issued in respect of
such shares (because of stock splits, stock dividends or other
distributions, reclassifications, recapitalizations or similar
events).
-11-
7. LOSS, ETC. OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
8. WARRANT HOLDER NOT SHAREHOLDER. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof.
9. INFORMATION TO HOLDER. The Company agrees that it shall deliver to the
Holder promptly after their becoming available copies of all financial
statements, reports and proxy statements which the Company shall have sent to
its stockholders generally.
10. NOTICES. No notice or other communication under this Warrant shall be
effective unless the same is in writing and is mailed by first-class mail,
postage prepaid, addressed to: the Company at 0 Xxxxxxxxx Xxxxx, Xxxxxx, Xxx
Xxxxxxxxx 00000, or such other address as the Company has designated in writing
to the Holder, 000 Xxxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, or such other
address as the Holder has designated in writing to the Company.
11. HEADINGS. The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.
12. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of New Hampshire without giving effect to
the principles of conflicts of thereof.
IN WITNESS WHEREOF, OVATION PRODUCTS CORPORATION has caused this Warrant
to be signed by its President and attested by its Assistant Secretary as of the
30th day of June, 2004.
ATTEST: OVATION PRODUCTS CORPORATION
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------- ---------------------------
Chairman Xxxxxxx Xxxxxxxx, Pres. & Treasurer
-12-
ASSIGNMENT
FOR VALUE RECEIVED _________________ hereby sells, assigns and transfers
unto _____________ the foregoing Warrant and all rights evidenced thereby, and
does irrevocably constitute and appoint ________________, attorney, to transfer
said Warrant on the books of Ovation Products Corporation.
Dated: _____________________ Signature: _____________________________
Address: _______________________________
________________________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED ______________________ hereby assigns and transfers
unto __________________ the right to purchase _________ shares of the Common
Stock of __________________ covered by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced thereby, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of said Warrant on the books of Ovation Products Corporation.
Dated: _____________________ Signature: _____________________________
Address: _______________________________
_______________________________
-13-
SUBSCRIPTION FORM
(To be executed upon exercise of Warrant pursuant to Section 1)
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for, and to purchase thereunder,
__________________________ shares of Common Stock, as provided for in Section l,
and tenders herewith payment of the purchase price in full in the form of cash
or a certified or official bank check in the amount of $_________________.
Please issue a certificate or certificates for such Common Stock in
the name of, and pay any cash for any fractional share to:
Name: __________________________________
(Please Print Name, Address and Social
Security No.)
Address: _______________________________
________________________________________
Social Security Number _________________
Signature: _____________________________
NOTE: The above signature should
correspond exactly with the name on the
first page of this Warrant or with the
name of the assignee appearing in the
assignment form below.
Date: __________________________________
And if said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant is to be issued in the name of said Warrant Holder
for the balance remaining of the shares purchasable thereunder.
-14-
