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Exhibit 4.15
12/16/96
REPRESENTATIVE'S WARRANT AGREEMENT
THIS REPRESENTATIVE'S WARRANT AGREEMENT (the "Agreement"), dated as of
__________, 1996, is made and entered into by and between CRAGAR INDUSTRIES,
INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇▇▇ & CO. (together with
its successors and assigns, the "Warrantholder").
The Company agrees to issue and sell, and the Warrantholder agrees to
purchase, for the price of $85.00, warrants, as hereinafter described (the
"Warrants"), to purchase (i) up to 85,000 (subject to adjustment pursuant to
Section 8 hereof) shares (the "Shares") of the Company's Common Stock, $.01 par
value (the "Common Stock") and (ii) up to 85,000 Common Stock Purchase Warrants
(the "Common Stock Warrants"), each such Common Stock Warrant being exercisable
to purchase one share of Common Stock, in connection with a public offering (the
"Offering") by the Company of up to 850,000 shares of Common Stock and up to
850,000 Common Stock Purchase Warrants pursuant to an underwriting agreement
(the "Underwriting Agreement"), dated as of _____________, 1996, among the
Company and the Warrantholder, as Representative of the several underwriters, as
contemplated by the prospectus of the Company dated ________, 1996 (the "Final
Prospectus"). (The Common Stock Warrants underlying the Warrants are hereinafter
referred to as the "Underlying Warrants." The shares of Common Stock purchasable
upon exercise of the Warrants and the Underlying Warrants are hereinafter
referred to as the "Underlying Warrant Stock.") The purchase and sale of the
Warrants shall occur upon completion of the Offering, and be subject to the
conditions to the Representative's obligations to purchase Shares of Common
Stock and Common Stock Warrants thereunder. The Underlying Warrants shall be
subject to all of the terms and conditions of the warrant agreement, dated as of
________________, 1996, between the Company and American Stock Transfer & Trust
Company, as Warrant Agent (the "Warrant Agreement").
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
Section 1. TRANSFERABILITY AND FORM OF WARRANTS.
1.1. REGISTRATION. The Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2. TRANSFER. The Warrants may not be sold, transferred,
assigned, pledged or hypothecated by the Warrantholder or any other person,
except in accordance with and subject to applicable securities laws, (i) to any
member of the National Association of Security Dealers, Inc. participating in
the offering as underwriter or as a member of the Selling Group
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to which the Final Prospectus relates and bona fide officers and partners
thereof, or (ii) by operation of law or by reason of the reorganization of the
Company or (iii) after _________, 1996 [date 12 months from date of registration
statement of which the Final Prospectus is a part] to any person that agrees to
exercise the Warrants so acquired immediately upon acquisition thereof. All
Warrant certificates shall bear an appropriate legend describing the foregoing
restriction and stating the time period for which the restriction is operative.
The Warrants shall be transferable only on the books of the Company
maintained at its principal office in Phoenix, Arizona or wherever its principal
office may then be located, upon delivery thereof duly endorsed by the
Warrantholder or by its duly authorized attorney or representative, accompanied
by proper evidence of succession, assignment, or authority to transfer. Upon any
registration of transfer, the Company shall execute and deliver new Warrants to
the person entitled thereto.
1.3 FORM OF WARRANTS. The text of the Warrants and of the form of
election to purchase Shares and Underlying Warrants shall be substantially as
set forth in Exhibit A attached hereto. The number of shares of Common Stock
issuable upon exercise of the Warrants is subject to adjustment upon the
occurrence of certain events, all as hereinafter provided. The Warrants shall be
executed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, President, or by a Vice President, and attested to by its Secretary or
an Assistant Secretary.
A Warrant bearing the signature of an individual who was at the
time of execution thereof the proper officer of the Company shall bind the
Company, notwithstanding that such individual shall have ceased to hold such
office prior to the delivery of such Warrant or did not hold such office on the
date of this Agreement.
The Warrants shall be dated as of the date of signature thereof
by the Company either upon initial issuance or upon division, exchange,
substitution, or transfer.
Section 2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may
be exchanged for another certificate or certificates entitling the Warrantholder
to purchase a like aggregate number of Shares and Underlying Warrants as the
certificate or certificates surrendered then entitled such Warrantholder to
purchase. Any Warrantholder desiring to exchange a Warrant certificate shall
make such request in writing delivered to the Company, and shall surrender,
properly endorsed, with signatures guaranteed, the certificate evidencing the
Warrant to be so exchanged. Thereupon, the Company shall execute and deliver to
the person entitled thereto a new Warrant certificate as so requested.
Section 3. TERM OF WARRANTS; EXERCISE OF WARRANTS. Subject to the terms
of this Agreement, the Warrantholder shall have the right, at any time during
the period commencing at 9:00 A.M. Arizona Time, on the date one year from the
date of the Final Prospectus, and ending at 5:00 P.M., Arizona Time, on the date
immediately preceding the date five years from
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the date of the Final Prospectus (the "Termination Date"), to purchase from the
Company up to the number of fully paid and nonassessable shares and Underlying
Warrants to which the Warrantholder may at the time be entitled to purchase
pursuant to this Agreement, upon surrender to the Company, at its principal
office, of the certificate evidencing the Warrants to be exercised, together
with the purchase form on the reverse thereof duly filled in and signed, with
signatures guaranteed, and upon payment to the Company of the Warrant Price (as
defined in and determined in accordance with the provisions of Sections 7 and 8
hereof), for the number of shares and Underlying Warrants in respect of which
such Warrants are then exercised, but in no event for less than 100 shares and
100 Underlying Warrants (unless less than an aggregate of 100 shares and 100
Underlying Warrants are then purchasable under all outstanding Warrants held by
a Warrantholder). Each Warrant may be exercised only for an equal number of
shares and Underlying Warrants. Payment of the aggregate Warrant Price shall be
made in cash or by check. No Underlying Warrant may be exercised by the
Warrantholder after 5:00 p.m., Arizona Time, on the date immediately preceding
the Termination Date. The exercise price of the Underlying Warrants shall be
$6.60, subject to adjustment as is provided in Section 9 of the of the Warrant
Agreement.
Upon surrender of the Warrants and payment of the Warrant Price, the
Company shall issue and cause to be delivered with all reasonable dispatch to or
upon the written order of the Warrantholder and in such name or names as the
Warrantholder may designate a certificate or certificates for the number of full
shares and Underlying Warrants so purchased upon the exercise of the Warrant,
together with cash, as provided in Section 9 hereof, in respect of any
fractional Shares otherwise issuable upon surrender; provided, however, that the
right of the Warrantholder to designate a person other than the Warrantholder as
the recipient of Shares or Underlying Warrants receivable upon the exercise of
the Warrants shall be subject to the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Securities and Exchange Commission
thereunder. Such certificate or certificates shall be deemed to have been issued
and any person so designated to be named therein shall be deemed to have become
a holder of record of such securities as of the date of surrender of the
Warrants and payment of the Warrant Price, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock and Underlying Warrant transfer books of the Company
shall then be closed. The Warrants shall be exercisable, at the election of the
Warrantholder, either in full or from time to time in part and, in the event
that a certificate evidencing the Warrants is exercised in respect of less than
all of the Shares and Underlying Warrants specified therein at any time prior to
the Termination Date, a new certificate evidencing the remaining portion of the
Warrants will be issued by the Company.
Section 4. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of the Warrants, Shares, and
Underlying Warrants, the securities and shares of Common Stock issuable upon
exercise thereof; provided, however, the Company shall not be required to pay
any tax which may be payable in respect of any secondary transfer of the
Warrants, the shares, and Underlying Warrants.
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Section 5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen, or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen, or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence satisfactory to the Company of such loss, theft,
or destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount at the applicant's cost. Applicants for such
substitute Warrant certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 6. RESERVATION OF SHARES. There has been reserved, and the
Company shall at all times keep reserved so long as the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of Common
Stock as shall be subject to purchase under the Warrants (including such number
of shares of Underlying Warrant Stock subject to purchase upon exercise of the
Underlying Warrants). Every transfer agent for the Common Stock and other
securities of the Company issuable upon the exercise of the Warrants will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares and other securities as shall be requisite for such purpose.
The Company will keep a copy of this Agreement and the Warrant Agreement on file
with every transfer agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Warrants. The Company will supply
every such transfer agent with duly executed stock and other certificates, as
appropriate, for such purpose and will provide or otherwise make available any
cash which may be payable as provided in Section 9 hereof.
Section 7. WARRANT PRICE. The price (the "Warrant Price") at which
Shares and Underlying Warrants shall be purchasable upon the exercise of the
Warrants shall be $7.50 per Share and $0.125 per Underlying Warrant, subject to
adjustment as provided in Section 8.
Section 8. ADJUSTMENT OF NUMBER OF SHARES. The number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant Price
shall be subject to adjustment from time to time upon the happening of certain
events, as follows:
8.1. ADJUSTMENTS. The number of shares purchasable upon the
exercise of the Warrants shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in Common
Stock or make a distribution in Common Stock, (ii) subdivide its outstanding
Common Stock, (iii) combine its outstanding Common Stock into a smaller number
of shares of Common Stock, or (iv) issue by reclassification of its Common Stock
other securities of the Company, the number of shares purchasable upon exercise
of the Warrants immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares or
other securities of the Company which it would have owned or would have been
entitled to receive
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immediately after the happening of any of the events described above, had the
Warrants been exercised immediately prior to the happening of such event or any
record date with respect thereto. Any adjustment made pursuant to this
subsection 8.1(a) shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
(b) In case the Company shall distribute to all or
substantially all holders of its Common Stock evidences of its indebtedness or
assets (excluding cash dividends or distributions out of earnings) or rights,
options, warrants, or convertible securities containing the right to subscribe
for or purchase Common Stock, then the Company shall reserve, and the
Warrantholder shall be entitled to receive upon the exercise of such Warrant,
for each Share issuable upon exercise of such Warrant, the amount of
indebtedness or assets or the number of rights, options, warrants, or
convertible securities that such Warrantholder would have received had the
Warrantholder been the holder of such Share on the record date established by
the Company for the determination of holders of Common Stock entitled to receive
such distribution, or, if no such record date shall have been established, then
on the date of such distribution. Notwithstanding the above, in the event that
any of the provisions of this subsection 8.1(b) do not comply with the Conduct
Rules of the National Association of Securities Dealers, as such rules exist on
the date of this Agreement (the "Conduct Rules"), then such provisions shall be
deemed to be null and void, but only to the extent that such provisions do not
comply with the Conduct Rules, in which case the Warrantholder will be entitled
to receive the maximum amount of indebtedness or assets of the Company and/or
that number of rights, options, warrants, or convertible securities that the
Warrantholder may receive without violating the Conduct Rules.
(c) No adjustment in the number of shares purchasable
pursuant to the Warrants shall be required unless such adjustment would require
an increase or decrease of at least one percent in the number of shares then
purchasable upon the exercise of the Warrants or, if the Warrants are not then
exercisable, the number of shares purchasable upon the exercise of the Warrants
on the first date thereafter that the Warrants become exercisable; provided,
however, that any adjustments which by reason of this subsection 8.1(c) are not
required to be made immediately shall be carried forward and taken into account
in any subsequent adjustment.
(d) Whenever the number of shares purchasable upon the
exercise of the Warrant is adjusted, as herein provided, the Warrant Price for
shares payable upon exercise of the Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of shares purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of shares so purchasable immediately thereafter.
(e) Whenever the number of shares purchasable upon the
exercise of the Warrants is adjusted as herein provided, the Company shall cause
to be promptly mailed to the Warrantholder by first class mail, postage prepaid,
notice of such adjustment and a certificate of the chief financial officer of
the Company setting forth the number of shares purchasable upon
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the exercise of the Warrants after such adjustment, a brief statement of the
facts requiring such adjustment and the computation by which such adjustment was
made.
(f) For the purpose of this subsection 8.1, the term
"Common Stock" shall mean (i) the class of stock designated as the Common Stock
of the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. In the event that at any time, as a result of an
adjustment made pursuant to this Section 8, the Warrantholder shall become
entitled to purchase any securities of the Company other than Shares and
Underlying Warrants, thereafter the number of such other securities so
purchasable upon exercise of the Warrants 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 shares contained in this Section 8.
8.2. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 8.1, no adjustment in respect of any dividends or distributions out
of earnings shall be made during the term of the Warrants or upon the exercise
of the Warrants.
8.3. NO ADJUSTMENT IN CERTAIN CASES. No adjustments shall be made
pursuant to Section 8 hereof in connection with the issuance of Shares,
Underlying Warrants or Underlying Warrant Stock sold as part of the public sale
and issuance of shares of Common Stock and Common Stock Warrants pursuant to the
Underwriting Agreement or the issuance of Shares, Underlying Warrants or
Underlying Warrant Stock upon exercise of the Warrants.
8.4. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement that the Warrantholder shall have the right thereafter upon payment
of the Warrant Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had the Warrants (and each underlying security) been exercised immediately prior
to such action. In the event of a merger described in Section 368(a)(2)(E) of
the Internal Revenue Code of 1954, as amended, in which the Company is the
surviving corporation, the right to purchase Shares and Underlying Warrants
under the Warrants shall terminate on the date of such merger and thereupon the
Warrants shall become null and void, but only if the controlling corporation
shall agree to substitute for the Warrants its warrant which entitles the holder
thereof to purchase upon its exercise the kind and amount of shares and other
securities and property which it would have owned or been entitled to receive
had the Warrants been exercised immediately prior to such merger. Any such
agreements referred to in this subsection 8.4 shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
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provided for in Section 8 hereof. The provisions of this subsection 8.4 shall
similarly apply to successive consolidations, mergers, sales, or conveyances.
8.5. PAR VALUE OF SHARES OF COMMON STOCK. Before taking any
action that would cause an adjustment effectively reducing the portion of the
Warrant Price allocable to each Share below the then par value per share of the
Common Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Stock upon exercise of the Warrants.
8.6. INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a
firm of independent public accountants of recognized national standing (which
may be any such firm regularly employed by the Company) to make any computation
required under this Section 8, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 8.
8.7. STATEMENT ON WARRANT CERTIFICATES. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof; and any Warrant certificate thereafter issued,
whether upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.
Section 9. FRACTIONAL INTERESTS. The Company is not required to issue
fractional shares of Common Stock on the exercise of a Warrant. If any fraction
of a share of Common Stock would, except for the provisions of this Section 10,
be issuable on the exercise of a Warrant (or specified portion thereof), the
Company will in lieu thereof pay an amount in cash equal to the then Current
Market Price multiplied by such fraction. For purposes of this Agreement, the
term "Current Market Price" means (i) if the Common Stock is traded in the
over-the-counter market and is not listed for quotation on the Nasdaq National
Market or the Nasdaq SmallCap Market nor on any national securities exchange,
the average of the per share closing bid prices of the Common Stock on the 30
consecutive trading days immediately preceding the date in question, as reported
by Nasdaq or an equivalent generally accepted reporting service, or (ii) if the
Common Stock is listed for quotation on the Nasdaq National Market or the Nasdaq
SmallCap Market or on a national securities exchange, the average for the 30
consecutive trading days immediately preceding the date in question of the daily
per share closing prices of the Common Stock as quoted by the Nasdaq National
Market or the Nasdaq SmallCap Market or on the principal stock exchange on which
it is listed, as the case may be, whichever is the higher. For purposes of
clause (i) above, if trading in the Common Stock is not reported by Nasdaq, the
bid price referred to in said clause shall be the lowest bid price as reported
on the
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OTC Bulletin Board or in the "pink sheets" published by National Quotation
Bureau, Incorporated. The closing price referred to in clause (ii) above shall
be the last reported sale price or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices, in either
case as quoted by the Nasdaq National Market or the Nasdaq SmallCap Market or on
the national securities exchange on which the Common Stock is then listed.
Section 10. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or its transferees any rights as a stockholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a stockholder in respect of any meeting of stockholders for the
election of directors of the Company or any other matter. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any
one or more of the following events shall occur:
(a) any action which would require an adjustment pursuant to
Section 8.1 (except subsections 8.1(e) and 8.1(h)) or 8.4; or
(b) a dissolution, liquidation, or winding up of the Company
(other than in connection with a consolidation, merger, or sale of its
property, assets and business as an entirety or substantially as an
entirety) shall be proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least 20 days, unless such
period is impracticable, prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholders entitled to
any relevant dividend, distribution, subscription rights, or other rights or for
the determination of stockholders entitled to vote on such proposed dissolution,
liquidation, or winding up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. Failure to mail or
receive such notice or any defect therein shall not affect the validity of any
action taken with respect thereto. If the Company has not disclosed publically
the event set forth in such notice, and this fact is clearly indicated on such
notice, the Warrantholder shall maintain such information in confidence until so
disclosed.
Section 11. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
(a) The Warrantholder agrees that prior to making any disposition
of the Warrants, the Shares, the Underlying Warrants, or the Underlying Warrant
Stock other than to persons or entities identified in clauses (i) through (iii),
inclusive, of Section 1.2, the Warrantholder shall give written notice to the
Company describing briefly the manner in which any such proposed disposition is
to be made; and no such disposition shall be made if the Company has notified
the Warrantholder that in the opinion of counsel reasonably satisfactory to the
Warrantholder a registration statement or other notification or post-effective
amendment thereto (hereinafter collectively a "Registration Statement") under
the Act is required with
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respect to such disposition and no such Registration Statement has been filed by
the Company with, and declared effective, if necessary, by, the Securities and
Exchange Commission (the "Commission").
(b) The Company shall be obligated to the owners of the Warrants,
the Shares, the Underlying Warrants and the Underlying Warrant Stock to file a
Registration Statement as follows:
(i) Whenever during the four-year period beginning on the
date one year from the date of the Final Prospectus and ending on the date
immediately preceding the date five years from the date of the Final Prospectus,
the Company proposes to file with the Commission a Registration Statement (other
than as to securities issued pursuant to an employee benefit plan or as to a
transaction subject to Rule 145 promulgated under the Act), it shall, at least
30 days prior to each such filing, give written notice of such proposed filing
to the Warrantholder and each holder of Shares, Underlying Warrants, and the
Underlying Warrant Stock, at their respective addresses as they appear on the
records of the Company, and shall offer to include and shall include in such
filing any proposed disposition of the Shares, the Underlying Warrants, and the
Underlying Warrant Stock upon receipt by the Company, not less than 10 days
prior to the proposed filing date, of a request therefor setting forth the facts
with respect to such proposed disposition and all other information with respect
to such person reasonably necessary to be included in such Registration
Statement. In the event that the managing underwriter for said offering advises
the Company in writing that the inclusion of such securities in the offering
would be detrimental to the offering, such securities shall nevertheless be
included in the Registration Statement, provided that the Warrantholder and each
holder of Shares, Underlying Warrants, and the Underlying Warrant Stock desiring
to have such securities included in the Registration Statement agrees in
writing, for a period of 60 days following such offering, not to sell or
otherwise dispose of such securities pursuant to such Registration Statement,
which Registration Statement the Company shall keep effective for a period of at
least nine months following the expiration of such 60-day period.
(ii) In addition to any Registration Statement pursuant to
Section 11(b)(i) above, during the four-year period beginning on the date one
year from the date of the Final Prospectus and ending on the date immediately
preceding the date five years from the date of the Final Prospectus the Company
will, as promptly as practicable (but in any event within 60 days), after
written request by ▇▇▇▇▇▇▇▇▇ & Co., or by a person or persons holding (or having
the right to acquire by virtue of holding the Warrants or Unit Warrants) at
least 50% of the Shares which have been (or may be) issued upon exercise of the
Warrants and Underlying Warrants, prepare and file at its own expense a
Registration Statement with the Commission and appropriate Blue Sky authorities
sufficient to permit the public offering of the Shares of Common Stock, the
Underlying Warrants, and the Underlying Warrant Stock, and will use its best
efforts at its own expense through its officers, directors, auditors and
counsel, in all matters necessary or advisable, to cause such Registration
Statement to become effective as promptly as
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practicable; provided, however, that the Company shall only be obligated to file
one such Registration Statement under this Section 11(b)(ii).
(c) All fees, disbursements and out-of-pocket expenses (other
than Warrantholders' brokerage fees and commissions and legal fees of counsel to
the Warrantholder, if any) in connection with the filing of any Registration
Statement under Section 11(b) and in complying with applicable securities and
Blue Sky laws shall be borne by the Company. The Company at its expense will
supply any Warrantholder and any holder of Shares, Underlying Warrants, or
Underlying Warrant Stock with copies of such Registration Statement and the
prospectus included therein and other related documents in such quantities as
may be reasonably requested by the Warrantholder or holder of Shares, Underlying
Warrants, or Underlying Warrant Stock.
(d) If the Warrantholder shall be entitled to registration of any
Shares, Underlying Warrants, or Underlying Warrant Stock as provided in this
Section 11 and so requests, in lieu of such registration, the Company shall have
the right, for a period of 30 days following such request, to purchase or cause
to be purchased all of the securities to which such request for registration
pertains, at the Current Market Price (as defined in Section 9) less the
exercise price, if any, of the Warrants or Underlying Warrants, as the case may
be.
(e) The Company shall not be required by this Section 11 to file
such Registration Statement if, in the opinion of counsel for the Warrantholders
and holders of Shares, Underlying Warrants, and the Underlying Warrant Stock and
the Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for such holders and
the Company), the proposed public offering or other transfer as to which such
Registration Statement is requested is exempt from applicable federal and state
securities laws and would result in all purchasers or transferees obtaining
securities which are not "restricted securities," as defined in Rule 144 under
the Act.
(f) The provisions of this Section 11 and Section 12 hereof shall
apply to the extent as provided herein if the Company chooses to file an
Offering Statement under Regulation A promulgated under the Act.
(g) The Company agrees that until all Shares, Underlying
Warrants, and the Underlying Warrant Stock have been sold under a Registration
Statement or pursuant to Rule 144 under the Act, it will keep current in filing
all materials required to be filed with the Commission in order to permit the
holders of such securities to sell the same under Rule 144.
Section 12. INDEMNIFICATION.
(a) In the event of the filing of any Registration Statement with
respect to the Warrants, the Shares, the Underlying Warrants, or the Underlying
Warrant Stock pursuant to Section 11 hereof, the Company agrees to indemnify and
hold harmless the Warrantholder or
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any holder of such Shares, the Underlying Warrants, or the Underlying Warrant
Stock and each person, if any, who controls the Warrantholder or any holder of
such Shares, the Underlying Warrants, or the Underlying Warrant Stock, within
the meaning of the Act, against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this Agreement, include, but
not be limited to, all costs of defense and investigation and all attorneys'
fees), to which the Warrantholder or any holder of such Shares, the Underlying
Warrants, or the Underlying Warrant Stock or such 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 statement or alleged untrue statement of any material fact contained in
any such Registration Statement, or any related preliminary prospectus, final
prospectus, or amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
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 such Registration Statement, preliminary prospectus, final
prospectus or amendment or supplement thereto in reliance upon, and in
conformity with, written information furnished to the Company by such
Warrantholder or the holder of such Shares, Underlying Warrants, or the
Underlying Warrant Stock specifically for use in the preparation thereof. This
indemnity will be in addition to any liability which the Company may otherwise
have.
(b) The Warrantholder and the holders of the Shares, Underlying
Warrants, or the Underlying Warrant Stock agree that they will indemnify and
hold harmless the Company, each other person referred to in subparts (1), (2)
and (3) of Section 11(a) of the Act in respect of the Registration Statement and
each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities (which shall, for all
purposes of this Agreement, include but not be limited to, all costs of defense
and investigation and all attorneys' fees) 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 statement or alleged
untrue statement of any material fact contained in such Registration Statement,
or any related preliminary prospectus, final prospectus or 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, but in each case
only to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Warrantholder or such holder of Shares, Underlying Warrants, or
the Underlying Warrant Stock specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which the
Warrantholder or such holder of shares of Common Stock or Underlying Warrants
may otherwise have.
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(c) Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 12, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than as to the particular item as to which indemnification is
then being sought solely pursuant to this Section 12. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, 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, reasonably assume the defense thereof, subject to the
provisions herein stated, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense hereof, the
indemnifying party will not be liable to such indemnified party under this
Section 12 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless the indemnifying party shall not pursue the
action to its final conclusion. The indemnified party shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the indemnifying party if the indemnifying party has assumed the defense of
the action with counsel reasonably satisfactory to the indemnified party;
provided that if the indemnified party is a Warrantholder or a holder of Shares,
Underlying Warrants, or Underlying Warrant Stock or a person who controls a
Warrantholder or a holder of Shares, Underlying Warrants, or Underlying Warrant
Stock within the meaning of the Act, the fees and expenses of such counsel shall
be at the expense of the indemnifying party if (i) the employment of such
counsel has been specifically authorized in writing by the indemnifying party or
(ii) the named parties to any such action, including any impleaded parties,
include both a Warrantholder or a holder of Shares, Underlying Warrants, or
Underlying Warrant Stock or such controlling person and the indemnifying party
and a Warrantholder or a holder of Shares, Underlying Warrants, or Underlying
Warrant Stock or such controlling person shall have been advised by such counsel
that there may be one or more legal defenses available to a Warrantholder or a
holder of Shares, Underlying Warrants, or Underlying Warrant Stock or
controlling person which are not available to or in conflict with any legal
defenses which may be available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of a Warrantholder or a holder of Shares, Underlying Warrants, or
Underlying Warrant Stock or such controlling person, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for the Warrantholder, the holders of the Shares, Underlying Warrants,
and Underlying Warrant Stock and controlling persons, which firm shall be
designated in writing by a majority in interest of such holders and controlling
persons based upon the value of the securities included in the Registration
Statement). No settlement of any action against an indemnified party shall be
made without the consent of the indemnified and the
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indemnifying parties, which shall not be unreasonably withheld in light of all
factors of importance to such parties.
Section 13. CONTRIBUTION. In order to provide for just and equitable
contribution under the Act in any case in which (i) a Warrantholder or any
holder of the Shares, Underlying Warrants, or Underlying Warrant Stock or
controlling person makes a claim for indemnification pursuant to Section 12
hereof but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
Section 12 hereof provide for indemnification in such case or (ii) contribution
under the Act may be required on the part of any Warrantholder or any holder of
the Shares, Underlying Warrants, or Underlying Warrant Stock or controlling
person, then the Company and any Warrantholder or any such holder of the Shares,
Underlying Warrants, or Underlying Warrant Stock or controlling person shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (which shall, for all purposes of this Agreement, include, but
not be limited to, all costs of defense and investigation and all attorneys'
fees), in either such case (after contribution from others) on the basis of
relative fault as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or a Warrantholder or holder of Shares, Underlying
Warrants, or Underlying Warrant Stock or controlling person on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and such holders of
such securities and such controlling persons agree that it would not be just and
equitable if contribution pursuant to this Section 13 were determined by pro
rata allocation or by any other method which does not take account of the
equitable considerations referred to in this Section 13. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof referred to above in this Section 13
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Section 14. NOTICES. Any notice pursuant to this Agreement by the
Company or by a Warrantholder, a holder of Shares, Underlying Warrants, or
Underlying Warrant Stock must be in writing and shall be deemed to have been
duly given if delivered (including by overnight delivery service) or mailed by
certified mail, return receipt requested:
(a) If to a Warrantholder, a holder of Shares, Underlying
Warrants or Underlying Warrant Stock:
▇▇▇▇▇▇▇▇▇ & Co.
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(b) If to the Company:
CRAGAR Industries
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Each party may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith to
the other party.
Section 15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrantholder, or the
holders of shares of Common Stock, Underlying Warrants, or Underlying Warrant
Stock shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 16. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the provisions
of Section 8.4 are complied with.
Section 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any schedule, exhibit, certificate, or other instrument delivered
by or on behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties, and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
Section 18. APPLICABLE LAW. This Agreement shall be deemed to be a
contract made under the laws of the State of Arizona and for all purposes shall
be construed in accordance with the laws of said State.
Section 19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrantholder and the holders of Shares, Underlying Warrants, or Underlying
Warrant Stock any legal or equitable right, remedy or claim under this
Agreement. This Agreement shall be for the sole and exclusive benefit of the
Company, the Warrantholder and the holders of Shares, Underlying Warrants and
Underlying Warrant Stock.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
CRAGAR INDUSTRIES, INC.
(CORPORATE SEAL)
By________________________________
Name:
Title:
ATTEST:
___________________________
Secretary
▇▇▇▇▇▇▇▇▇ & CO.
By________________________________
Name:
Title:
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NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF, HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY APPLICABLE STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO OR (II) IN THE OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER THE SECURITIES ACT AND SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH A PROPOSED
SALE OR TRANSFER.
Warrant Certificate, No. _____
REPRESENTATIVE'S WARRANT
TO PURCHASE ______ SHARES OF COMMON STOCK AND ____ UNDERLYING WARRANTS TO
PURCHASE AN AGGREGATE OF ____ SHARES OF COMMON STOCK
VOID AFTER 5:00 P.M.,
ARIZONA TIME, ON [date immediately preceding date
five years from the date of the Final Prospectus]
CRAGAR INDUSTRIES, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
This certifies that, for value received, _______________________
___________________, the registered holder hereof or assigns (the
"Warrantholder"), is entitled to purchase from CRAGAR INDUSTRIES, INC., a
Delaware corporation (the "Company"), at any time during the period commencing
at 9:00 a.m., Arizona Time, on [date one year from the date of the Final
Prospectus] and before 5:00 p.m., Arizona Time, on [date immediately preceding
date five years from date of the Final Prospectus], at the purchase price (the
"Warrant Price") of $7.50 per Share and $0.125 per Underlying Warrant, the
number of Shares of Common Stock of the Company and the number of Underlying
Warrants of the Company set forth above. The number of shares of Common Stock of
the Company purchasable upon exercise of each Warrant evidenced hereby shall be
subject to adjustment from time to time as set forth in the Representative's
Warrant Agreement referred to below.
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The Warrants evidenced hereby may be exercised in whole or in
part by presentation of this Warrant certificate with the Purchase Form attached
hereto duly executed (with a signature guarantee as provided thereon) and
simultaneous payment of the Warrant Price at the principal office of the
Company. Payment of such price shall be made at the option of the Warrantholder
in cash or by check.
The Warrants evidenced hereby represent a portion of an aggregate
of up to 85,000 Warrants issued under and in accordance with a Representative's
Warrant Agreement, dated as of _________________, 1996, between the Company and
▇▇▇▇▇▇▇▇▇ & Co. (the "Representative's Warrant Agreement") and are subject to
the terms and provisions contained in the Representative's Warrant Agreement, to
all of which the Warrantholder by acceptance hereof consents. Capitalized terms
used herein and not otherwise defined will have the meanings given in the
Representative's Warrant Agreement.
Upon any partial exercise of the Warrants evidenced hereby, there
shall be signed and issued to the Warrantholder a new Warrant certificate in
respect of the number of shares of Common Stock and number of Underlying
Warrants as to which the Warrants evidenced hereby shall not have been
exercised. These Warrants may be exchanged at the office of the Company by
surrender of this Warrant certificate properly endorsed for one or more new
Warrants of the same aggregate number of Shares of Common Stock and number of
Underlying Warrants as are evidenced by the Warrant or Warrants exchanged. No
fractional shares of Common Stock will be issued upon the exercise of rights to
purchase hereunder, but the Company shall pay the cash value of any fraction
upon the exercise of one or more Warrants. These Warrants are transferable at
the office of the Company in the manner set forth in the Representative's
Warrant Agreement.
This Warrant may not be sold, transferred, assigned, pledged or
hypothecated by the Warrantholder or any other person, except in accordance with
and subject to applicable securities laws, (i) to any member of the National
Association of Security Dealers, Inc. participating in the offering to which the
Final Prospectus relates and bona fide officers and partners thereof, (ii) by
operation of law or by reason of the reorganization of the Company or (iii)
after _________, 1996 [date 12 months from date of registration statement of
which the Final Prospectus is a part] to any person that agrees to exercise the
Warrant so acquired immediately upon acquisition thereof.
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This Warrant certificate does not entitle any Warrantholder to
any of the rights of a stockholder of the Company.
CRAGAR INDUSTRIES, INC.
By__________________________________
[Seal]
ATTEST:
_____________________________________
Secretary
Dated: _________________
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CRAGAR INDUSTRIES, INC.
PURCHASE FORM
CRAGAR Industries
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned hereby irrevocably elects to exercise the right
of purchase represented by the within Warrant certificate for, and to purchase
thereunder, ____________ Shares of Common Stock and an equal number of
Underlying Warrants provided for therein, and requests that certificates for the
shares of Common Stock and the Underlying Warrants be issued in the name of:
________________________________________________________________________________
(Please Print or Type Name, Address and Social Security Number)
________________________________________________________________________________
and, if said number of Shares and Underlying Warrants shall not be all the
Shares and Underlying Warrants purchasable hereunder, that a new Warrant
certificate for the balance of the Shares and Underlying Warrants purchasable
under the within Warrant certificate be registered in the name of the
undersigned Warrantholder or his or her allowable Assignee as below indicated
and delivered to the address stated below.
Dated: ______________
Name of Warrantholder
or Assignee:____________________________________________________________________
(Please Print)
Address:________________________________________________________________________
Signature:______________________________________________________________________
Note: The above signature must correspond with the name as written upon
the face of this Warrant certificate in every particular, without
alteration or enlargement or any change whatever, unless these
Warrants have been assigned.
Signature Guaranteed:
__________________________________
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)
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ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
(Name and Address of Assignee Must Be Printed or Typewritten)
________________________________________________________________________________
the within Warrants, hereby irrevocably constituting and appointing ____________
______ Attorney to transfer said Warrants on the books of the Company, with full
power of substitution in the premises.
Dated:___________________ _____________________________________________________
Signature of Registered Holder
Note: The signature on this assignment must correspond with the name as
it appears upon the face of the within Warrant certificate in
every particular, without alteration or enlargement or any change
whatever.
Signature Guaranteed:
_______________________________
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)
5
