EXHIBIT 10.10
WARRANT AGREEMENT
-----------------
THIS WARRANT AGREEMENT, dated as of __________, 1997, between XXXXXX, INC.,
------------
a Delaware corporation (the "Company"), and INTERWEST TRANSFER COMPANY, INC.
--------------------------------
(the "Warrant Agent"),
W I T N E S S E T H:
WHEREAS, in connection with an initial public offering (the "Public
Offering"), the Company has issued or will issue Units, consisting of one share
of Common Stock of the Company, $0.001 par value (the "Common Stock"), and one
Redeemable Common Stock Purchase Warrant (a "Warrant"), entitling the Registered
Owner of the Warrant to purchase one share of Common Stock; and
WHEREAS, the Company also has granted or will grant the several
underwriters (the "Underwriters") of the Company's Public Offering the option to
purchase additional Units containing Warrants to cover over-allotments (the
"Over-Allotment Warrants"); and
WHEREAS, the Company also has granted the representative of the several
Underwriters, Xxxxxx Xxxxxxx & Associates, Inc. (the "Representative"), purchase
options (the "Purchase Options") to purchase Units containing Warrants (the
"Representative's Warrants"); and
WHEREAS, the Company desires to provide for the issuance, registration,
transfer, exchange and exercise of certificates representing the Warrants (the
"Warrant Certificates"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of Warrant Certificates and
exercise of the Warrants:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrant Certificates and the Warrants, and the respective rights and
obligations thereunder of the Company, the registered holders of the Warrant
Certificates and the Warrant Agent, the parties hereto agree as follows:
1. Definitions. As used herein:
-----------
(a) "Common Stock" shall mean Common Stock, $0.001 par value per share, of
the Company, whether now or hereafter authorized.
(b) "Corporate Office" shall mean the place of business of the Warrant
Agent (or its successor) located in Salt Lake City, Utah, which office is
presently located at __________________.
-1-
(c) "Effective Date" shall mean __________, 1997, the date on which the
Company's Registration Statement is or will be declared effective by the
Securities and Exchange Commission.
(d) "Exercise Date" shall mean the date of surrender for exercise of any
Warrant Certificate to the Warrant Agent at its Corporate Office, provided the
exercise form on the back of the Warrant Certificate or a form substantially
similar thereto has been properly completed in full by the Registered Owner or a
duly appointed attorney and the Warrant Certificate is accompanied by payment in
full of the Exercise Price.
(e) "Exercise Period" shall mean the period commencing on the Effective
Date and extending to and including the Expiration Date.
(f) "Exercise Price" shall mean a purchase price of $_____ per share of
Common Stock (150% of the $_____ offering price of the Units in the Public
Offering); provided, however, that in the event the Company reduces the Exercise
Price, the Exercise Price shall be as established by the Company.
(g) "Expiration Date" shall mean 5:00 p.m. Pacific Standard Time on the
last day of the five (5) year period commencing on the Effective Date, subject
to the terms provided in Section 5 herein for redemption and subject to
extension by the Board of Directors of the Company; provided, however, if such
date shall be a holiday or a day on which banks are authorized to remain closed,
then Expiration Date shall mean 5:00 p.m. Pacific Standard Time on the next
following day which in the State of California is not a holiday or a day on
which banks are authorized to remain closed. The Expiration Date may be
extended from time to time, by resolution of the Board of Directors of the
Company, to a later date upon giving notice to the Warrant Agent and the
Registered Owners; provided, however, that notice to the Registered Owners of an
extension of the Expiration Date may be made by publication or by release to Dow
Xxxxx, X.X. Newswire or other means of general distribution. If the Company
redeems the Warrants as provided in Section 5 of this agreement, the Expiration
Date shall be the date fixed for redemption.
(h) "Firm Warrants" shall mean 1,700,000 Warrants to purchase 1,700,000
shares of Common Stock, all purchased by the several Underwriters from the
Company and sold in the Public Offering in accordance with the Underwriting
Agreement.
(i) "Over-Allotment Warrants" shall mean 255,000 Warrants to purchase
255,000 shares of Common Stock, any or all of which may be purchased by the
Representative for the several Underwriters from the Company in accordance with
the Underwriting Agreement. The Over-Allotment Warrants shall have identical
terms and conditions to those established for the Firm Warrants, subject to
their issuance in accordance with Section 2 hereof.
-2-
(j) "Registered Owner" shall mean the person in whose name any Warrant
Certificate shall be registered on the books maintained by the Warrant Agent
pursuant to Section 6 of this Agreement.
(k) "Registration Statement" shall mean the Company's Registration
Statement on Form S-1 (SEC File No. 333-31431), as amended.
(l) "Representative's Warrants" shall mean 170,000 Warrants to purchase
170,000 shares of Common Stock, issuable upon exercise of the Representative's
Purchase Option and all of which were or will be registered on the Registration
Statement. The Representative's Warrants shall have identical terms and
conditions to those established for the Firm Warrants (except for the Exercise
Price, which shall be equal to $________ per share of Common Stock (110% of the
$________ offering price of the Units in the Public Offering)), subject to their
issuance in accordance with Section 2 hereof.
(m) "Subsidiary" shall mean any corporation of which shares having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (regardless of whether the shares of any other class or classes of
such corporation shall have or may have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by the Company
or one or more subsidiaries of the Company.
(n) "Transfer Agent" shall mean Interwest Transfer Company, Inc., or its
successor, as the transfer agent and registrar of the Common Stock.
(o) "Underwriting Agreement" shall mean the Underwriting Agreement, dated
__________, 1997, between the Company and the Representative.
(p) "Warrant" or the "Warrants" shall mean and include up to 2,125,000
Warrants to purchase 2,125,000 authorized and unissued shares of Common Stock of
the Company and, unless otherwise noted, shall include 1,700,000 Firm Warrants,
255,000 Over-Allotment Warrants and 170,000 Representative's Warrants, each of
such Warrants evidencing the right to purchase one share of Common Stock.
(q) "Warrant Agent" shall mean Interwest Transfer Company, Inc., or its
successor, as the transfer agent and registrar of the Warrants.
(r) "Warrant Shares" shall mean and include up to 2,125,000 authorized and
unissued shares of Common Stock reserved for issuance on exercise of the
Warrants, and unless otherwise noted, shall include 1,700,000 shares of Common
Stock issuable upon exercise of the Firm Warrants, 255,000 shares of Common
Stock issuable upon exercise of the Over-Allotment
-3-
Warrants, 170,000 shares of Common Stock issuable upon exercise of the
Representative's Warrants and any additional shares of Common Stock or other
property which may hereafter be issuable or deliverable on exercise of the
Warrants pursuant to Section 9 of this Agreement.
Any capitalized terms used herein not otherwise defined herein shall have
the meaning assigned to them in the Underwriting Agreement.
2. Warrants and Issuance of Warrant Certificates. Each Warrant shall
---------------------------------------------
initially entitle the Registered Owner of the Warrant Certificate representing
such Warrant to purchase one share of Common Stock on exercise thereof, subject
to modification and adjustment as hereinafter provided in Section 9. Warrant
Certificates representing the Firm Warrants shall be executed by the proper
officers of the Company and delivered to the Warrant Agent for countersignature
on the Effective Date. Certificates representing the Firm Warrants to be
delivered to the Warrant Agent shall be in direct relation to the number of
Units sold in the Company's Public Offering and shall be attached to
certificates representing an equal number of shares of Common Stock. The
Warrant Certificates will be issued and delivered on written order of the
Company signed by an authorized officer. The Warrant Agent shall deliver
Warrant Certificates in required whole number denominations to the persons
entitled thereto in connection with any transfer or exchange permitted under
this Agreement.
The Over-Allotment Warrants shall carry identical terms and conditions to
those established for the Firm Warrants and outlined herein. Any Over-Allotment
Warrants to be issued will be executed by the proper officers of the Company and
delivered to the Warrant Agent for countersignature on exercise of the option to
purchase Units containing the Over-Allotment Warrants by the several
Underwriters in accordance with the Underwriting Agreement.
The Representative's Warrants shall carry identical terms and conditions to
those established for the Firm Warrants and outlined herein (except for the
Exercise Price of such Representative's Warrants, as set forth in Section 1(l)).
Any Representative's Warrants to be issued will be executed by the proper
officers of the Company and delivered to the Warrant Agent for countersignature
on exercise of the Representative's Purchase Options to purchase Units
containing the Representative's Warrants, which Purchase Options may not be
exercised prior to one (1) year from the Effective Date, and may not be
exercised after the Expiration Date.
Except as provided in Section 8 hereof, share certificates representing the
Warrant Shares shall be issued only on or after the Exercise Date on exercise of
the Warrants or on transfer or exchange of the Warrants. The Warrant Agent, if
other than the
-4-
Company's Transfer Agent, shall arrange with the Transfer Agent for the issuance
and registration of all Warrant Shares.
3. Form and Execution of Warrant Certificates. The Warrant Certificates
------------------------------------------
shall be substantially in the form attached hereto as Exhibit A and may have
---------
such letters, numbers or other marks of identification and such legends,
summaries or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement. The Warrant Certificates shall be dated as of the date of
issuance, whether on initial issuance, transfer, exchange or in lieu of
mutilated, lost, stolen or destroyed Warrant Certificates.
Each Warrant Certificate shall be initially issued only when attached to a
certificate representing the same number of shares of Common Stock as Warrants
and shall be separately transferable from the certificate representing shares of
Common Stock immediately upon issuance.
The Warrant Certificates shall be executed on behalf of the Company by its
President and Secretary, by manual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company's seal, if
any. The Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. In the
event any officer of the Company who executed the Warrant Certificates shall
cease to be an officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature and delivery by the Warrant Agent, such
Warrant Certificates may be countersigned, issued and delivered by the Warrant
Agent with the same force and effect as though the person who signed such
Warrant Certificates had not ceased to be an officer of the Company.
4. Exercise. The Warrants will become exercisable on the Effective Date.
--------
The exercise of Warrants in accordance with this Agreement shall only be
permitted during the Exercise Period.
Warrants shall be deemed to have been exercised immediately prior to the
close of business on the Exercise Date. The exercise form shall be executed by
the Registered Owner thereof or his attorney duly authorized in writing and
shall be delivered together with payment to the Warrant Agent, in cash or by
official bank or certified check, of an amount in lawful money of the United
States of America. Such payment shall be in an amount equal to the Exercise
Price.
The person entitled to receive the number of Warrant Shares deliverable on
such exercise shall be treated for all purposes as the Registered Owner of such
Warrant Shares as of the close of business on the Exercise Date. The Company
shall not be obligated to issue any fractional share interests in Warrant
-5-
Shares. If Warrants represented by more than one Warrant Certificate shall be
exercised at one time by the same Registered Owner, the number of full Warrant
Shares which shall be issuable on exercise of such Warrant Certificates shall be
computed on the basis of the aggregate number of full Warrant Shares issuable on
such exercise.
As soon as practicable on or after the Exercise Date and in any event
within thirty (30) days after such date, the Warrant Agent shall cause to be
issued and delivered by the Transfer Agent to the person or persons entitled to
receive the same, a certificate or certificates for the number of Warrant Shares
deliverable on such exercise. No adjustment shall be made in respect of cash
dividends on Warrant Shares deliverable on exercise of any Warrant. The Warrant
Agent shall promptly notify the Company in writing of any exercise and of the
number of Warrant Shares caused to be delivered and shall cause payment of an
amount in cash equal to the Exercise Price to be made promptly to the order of
the Company. The parties contemplate such payments will be made by the Warrant
Agent to the Company on a weekly basis and will consist of collected funds only.
The Warrant Agent shall hold any proceeds collected and not yet paid to the
Company in a Federally-insured escrow account at a commercial bank selected by
agreement of the Company and the Warrant Agent, at all times relevant hereto.
Following a determination by the Warrant Agent that collected funds have been
received, the Warrant Agent shall cause the Transfer Agent to issue share
certificates representing the number of Warrant Shares purchased by the
Registered Owner.
Expenses incurred by the Warrant Agent, including administrative costs,
costs of maintaining records and other expenses, shall be paid by the Company
according to the standard fees imposed by the Warrant Agent for such services.
All expenses incurred by the Warrant Agent and to be paid by the Company shall
be deducted from the escrow account prior to distribution of funds to the
Company.
A detailed accounting statement setting forth the number of Warrants
exercised, the number of Warrant Shares issued and the names and addresses of
the holders of such Warrant Shares, the net amount of funds from the exercise of
Warrants and all expenses incurred by the Warrant Agent shall be transmitted to
the Company on payment of each exercise amount. Such accounting statement shall
serve as an interim accounting issued, for the Company during the Exercise
Period. The Warrant Agent shall render to the Company, at the completion of the
Exercise Period, a complete accounting setting forth the number of Warrants
exercised, the identity of persons exercising such Warrants, the number of
Warrant Shares issued and the names and addresses of the holders of such Warrant
Shares, the amounts distributed to the Company, and all expenses incurred by the
Warrant Agent.
-6-
Under certain circumstances, the Company may be required to deliver a
prospectus that satisfies the requirements of section 10 of the Securities Act
of 1933, as amended (the "1933 Act") with delivery of the Warrant Shares and
must have a registration statement (or a post-effective amendment to an existing
registration statement) effective under the 1933 Act in order for the Company to
comply with any such prospectus delivery requirements. The Company will advise
the Warrant Agent of the status of any such registration statement under the
1933 Act and of the effectiveness of the Company's registration statement or
lapse of effectiveness.
No issuance of Warrant Shares shall be made unless there is an effective
registration statement under the 1933 Act (or an exemption therefrom), and
registration or qualification of the Warrant Shares (or an exemption therefrom)
has been obtained from state or other regulatory authorities in the jurisdiction
in which such Warrant Shares are sold. The Company will provide to the Warrant
Agent written confirmation of all such registration or qualification, or an
exemption therefrom, when requested by the Warrant Agent.
Upon thirty (30) days' prior written notice to all Registered Owners of
Warrants, the Company shall have the right to reduce the Exercise Price and/or
extend the term of the Warrants beyond the Expiration Date to a new Expiration
Date.
5. Redemption. At any time one year after the Effective Date, or such
----------
earlier date as may be determined by the Representative, the Company may, at its
option, redeem the Warrants in whole, but not in part, for a redemption price of
$.05 per Warrant, on thirty (30) days' prior written notice to the Registered
Owners. The right to redeem the Warrants may be exercised by the Company only
in the event (a) the closing price for the Company's shares of Common Stock has
exceeded two hundred percent (200%) of the initial Public Offering price of the
Units during a period of at least twenty (20) consecutive trading days within
the thirty (30) day period immediately preceding any notice of the call for
redemption, (b) the Company has a registration statement (or a post-effective
amendment to an existing registration statement) pertaining to the Warrant
Shares effective under federal law, which registration statement would enable a
Registered Owner to exercise the Warrants provided the Registered Owner resides
in a jurisdiction in which exercise is permitted, and (c) the expiration of the
thirty (30) day notice period is within the Exercise Period. In the event the
Company exercises its right to redeem the Warrants, the Expiration Date will be
deemed to be, and the Warrants will be exercisable until the close of business
on, the date fixed for redemption in such notice. If any Warrant called for
redemption is not exercised by such time, it will cease to be exercisable and
the Registered Owner thereof will be entitled only to the redemption price of
$0.05 per Warrant.
-7-
6. Reservation of Shares and Payment of Taxes. The Company covenants that
------------------------------------------
it will at all times reserve and have available from its authorized shares of
Common Stock such number of shares of Common Stock as shall then be issuable on
exercise of all outstanding Warrants. The Company covenants that all Warrant
Shares issuable shall be duly and validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issue thereof.
The Registered Owner shall pay all documentary, stamp or similar taxes and
other government charges that may be imposed with respect to the issuance of the
Warrants, or the issuance, transfer or delivery of any Warrant Shares on
exercise of the Warrants. In the event the Warrant Shares are to be delivered
in a name other than the name of the Registered Owner of the Warrant
Certificates, no such delivery shall be made unless the person requesting the
same has paid to the Warrant Agent or Transfer Agent the amount of any such
taxes or charges incident thereto.
The Company will supply the Warrant Agent with blank Warrant Certificates,
so as to maintain an inventory satisfactory to the Warrant Agent. The Company
will file with the Warrant Agent a statement setting forth the name and address
of its Transfer Agent for Warrant Shares and of each successor Transfer Agent,
if any.
7. Registration of Transfer. The Warrant Certificates may be transferred
------------------------
in whole or in part and may be separately transferred from the Common Stock
share certificate to which such Warrant Certificate is attached upon initial
issuance. Warrant Certificates to be exchanged shall be surrendered to the
Warrant Agent at its Corporate Office. The Company shall execute and the
Warrant Agent shall countersign, issue and deliver in exchange for such
surrendered Warrant Certificates, the Warrant Certificate or Certificates which
the holder making the transfer shall be entitled to receive.
The Warrant Agent shall keep transfer books at its Corporate Office on
which Warrant Certificates and the transfer thereof shall be registered. On due
presentment for registration of transfer of any Warrant Certificate at such
Corporate Office, the Company shall execute and the Warrant Agent shall issue
and deliver to the transferee or transferees a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants.
All Warrant Certificates presented for registration of transfer or exercise
shall be duly endorsed or be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company and the Warrant Agent.
Prior to due presentment for registration of transfer thereof, the Company
and the Warrant Agent may treat the Regis-
-8-
tered Owner of any Warrant Certificate as the absolute owner thereof
(notwithstanding any notations of ownership or writing thereon made by anyone
other than the Company or the Warrant Agent) and the parties hereto shall not be
affected by any notice to the contrary.
8. Loss or Mutilation. On receipt by the Company and the Warrant Agent of
------------------
evidence satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate, the Company shall execute and the Warrant
Agent shall countersign and deliver in lieu thereof, a new Warrant Certificate
representing an equal aggregate number of Warrants. In the case of loss, theft
or destruction of any Warrant Certificate, the Registered Owner requesting
issuance of a new Warrant Certificate shall be required to secure an indemnity
bond in favor of the Company and Warrant Agent in an amount satisfactory to each
of them. In the event a Warrant Certificate is mutilated, such Certificate
shall be surrendered and canceled by the Warrant Agent prior to delivery of a
new Warrant Certificate. Applicants for a substitute Warrant Certificate shall
also comply with such other regulations and pay such other reasonable charges as
the Company may prescribe.
9. Adjustment of Exercise Price and Shares.
---------------------------------------
(a) If at any time prior to the redemption of the Warrants by the Company
or the expiration of the Warrants by their terms or by exercise, the Company
increases or decreases the number of its issued and outstanding shares of Common
Stock, or changes in any way the rights and privileges of such shares of Common
Stock, by means of (i) the payment of a share dividend or the making of any
other distribution on such shares of Common Stock payable in its shares of
Common Stock, (ii) a split or subdivision of shares of Common Stock, or (iii) a
consolidation or combination of shares of Common Stock, then the Exercise Price
in effect at the time of such action and the number of Warrants required to
purchase each Warrant Share at that time shall be proportionately adjusted so
that the numbers, rights and privileges relating to the Warrant Shares then
purchasable upon the exercise of the Warrants shall be increased, decreased or
changed in like manner, for the same aggregate purchase price set forth in the
Warrants, as if the Warrant Shares purchasable upon the exercise of the Warrants
immediately prior to the event had been issued and outstanding at the time of
that event. Any dividend paid or distributed on the shares of Common Stock in
shares of any other class of shares of the Company or securities convertible
into shares of Common Stock shall be treated as a dividend paid in shares of
Common Stock to the extent shares of Common Stock are issuable on the payment or
conversion thereof.
(b) In the event that, prior to the redemption of the Warrants by the
Company or the expiration of the Warrants by exercise or by their terms, the
Company shall be recapitalized by reclassifying its outstanding shares of Common
Stock into
-9-
shares with a different par value, or by changing its outstanding shares of
Common Stock to shares without par value or in the event of any other material
change of the capital structure of the Company or of any successor corporation
by reason of any reclassification, recapitalization or conveyance, prompt,
proportionate, equitable, lawful and adequate provision shall be made whereby
any Registered Owner of the Warrants shall thereafter have the right to
purchase, on the basis and the terms and conditions specified in this Agreement,
in lieu of the Warrant Shares theretofore purchasable on the exercise of any
Warrant, such securities or assets as may be issued or payable with respect to
or in exchange for the number of Warrant Shares theretofore purchasable on
exercise of the Warrants had such reclassification, recapitalization or
conveyance not taken place, and in any such event, the rights of any Registered
Owner of a Warrant to any adjustment in the number of Warrant Shares purchasable
on exercise of such Warrant, as set forth above, shall continue and be preserved
in respect of any stock, securities or assets which the Registered Owner
becomes entitled to purchase.
(c) In the event the Company, at any time while the Warrants shall remain
unreedemed, unexpired and unexercised, shall sell all or substantially all of
its assets, or dissolves, liquidates or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made as part of
the terms of such sale, dissolution, liquidation or winding up such that the
Registered Owner of a Warrant may thereafter receive, on exercise thereof, in
lieu of each Warrant Share which he would have been entitled to receive, the
same kind and amount of any stock, securities or assets as may be issuable,
distributable or payable on any such sale, dissolution, liquidation or winding
up with respect to each share of Common Stock of the Company; provided, however,
that in the event of any such sale, dissolution, liquidation or winding up, the
right to exercise the Warrants shall terminate on a date fixed by the Company,
such date to be not earlier than 5:00 p.m. Pacific Standard Time on the
thirtieth (30th) day next succeeding the date on which notice of such
termination of the right to exercise the Warrants has been given by mail to the
Registered Owners thereof at such addresses as may appear on the books of the
Company.
(d) On exercise of the Warrants by the Registered Owners, the Company
shall not be required to deliver fractions of Warrant Shares; provided, however,
that the Company shall make prompt, proportionate, equitable, lawful and
adequate provisions in respect of any such fraction of one Warrant Share either
on the basis of adjustment in the then applicable Exercise Price or a purchase
of the fractional interest at the price of the Company's shares of Common Stock
on the Exercise Date or such other reasonable basis as the Company may
determine.
-10-
(e) In the event, prior to the redemption of the Warrants by the Company
or the expiration of the Warrants by exercise or by their terms, the Company
shall determine to take a record of the holders of its shares of Common Stock
for the purpose of determining shareholders entitled to receive any stock
dividend, distribution or other right which will cause any change or adjustment
in the number, amount, price or nature of the shares of Common Stock or other
stock, securities or assets deliverable on exercise of the Warrants pursuant to
the foregoing provisions, the Company shall give to the Registered Owners of the
Warrants at the addresses as may appear on the books of the Company at least
thirty (30) days' prior written notice to the effect that it intends to take
such a record. Such notice shall specify the date as of which such record is to
be taken; the purpose for which such record is to be taken; and the number,
amount, price and nature of the shares of Common Stock or other stock,
securities or assets that will be deliverable on exercise of the Warrants after
the action for which such record will be taken has been completed. Without
limiting the obligation of the Company to provide notice to the Registered
Owners of the Warrants of any corporate action hereunder, the failure of the
Company to give notice shall not invalidate such corporate action of the
Company.
(f) The Warrants shall not entitle the Registered Owner thereof to any of
the rights of shareholders or to any dividend declared on the shares of Common
Stock unless the Exercise Date for the relevant Warrant Shares purchased is
prior to the record date fixed by the Board of Directors of the Company for the
determination of holders of shares of Common Stock entitled to such dividend or
other right.
(g) No adjustment of the Exercise Price shall be made as a result of or in
connection with (i) the issuance of shares of Common Stock of the Company
pursuant to options, warrants, employee stock ownership plans and share purchase
agreements outstanding or in effect on the date hereof, (ii) the establishment
of additional option plans of the Company, the modification, renewal or
extension of any plan now in effect or hereafter created, or the issuance of
shares of Common Stock on exercise of any options pursuant to such plans, and
(iii) the issuance of shares of Common Stock in connection with compensation
arrangements for officers, employees or agents of the Company or any subsidiary,
and the like.
10. Duties, Compensation and Termination of Warrant Agent. The Warrant
-----------------------------------------------------
Agent shall act hereunder as agent and in a ministerial capacity for the
Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not, by issuing and delivering Warrant Certificates or
by any other act hereunder, be deemed to make any representations as to the
validity, value or authorization of the Warrant Certificate or the Warrants
represented thereby or of the Warrant Shares or other property delivered on
exercise of any
-11-
Warrant. The Warrant Agent shall not be under any duty or responsibility to any
holder of the Warrant Certificates to make or cause to be made any adjustment of
the Exercise Price or to determine whether any fact exists which may require any
such adjustments. The Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement or in the Warrant Certificates, or (iii) be liable for any act or
omission in connection with this Agreement except for its own negligence or
willful misconduct. The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken or omitted by it in good faith
in accordance with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand of
the Company shall be sufficiently evidenced by an instrument signed by its
President and attested by its Secretary or Assistant Secretary. The Warrant
Agent shall not be liable for any action taken or omitted by it in accordance
with such notice, statement, instruction, request, direction, order or demand.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder and to reimburse the Warrant Agent for its reasonable
expenses. The Company further agrees to indemnify the Warrant Agent against any
and all losses, expenses and liabilities, including judgments, costs and
counsel fees, for any action taken or omitted by the Warrant Agent in the
execution of its duties and powers hereunder, excepting losses, expenses and
liabilities arising as a result of the Warrant Agent's negligence or willful
misconduct. The Warrant Agent may resign its duties or the Company may
terminate the Warrant Agent and the Warrant Agent shall be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct) on thirty (30)
days' prior written notice to the other party. At least thirty (30) days prior
to the date such resignation or termination is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation or termination to be
mailed to the Registered Owner of each Warrant Certificate, the cost of such
mailing to be borne solely by the Warrant Agent, without a right to
reimbursement by the Company, if the Warrant Agent has resigned. On such
resignation or termination, the Company shall appoint a new Warrant Agent. If
the Company shall fail to make such appointment within a period of thirty (30)
days after it has been notified in writing of the resignation by the Warrant
Agent, then the Registered Owner of any Warrant Certificate may apply to any
court of competent jurisdiction for the appointment of a new Warrant Agent. Any
new Warrant Agent, whether
-12-
appointed by the Company or by such court, shall be a bank or trust company
having a capital and surplus, as shown by its last published report to its
shareholders, of not less than $1,000,000, and having its principal office in
the United States.
After acceptance in writing of an appointment of a new Warrant Agent is
received by the Company, such new Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; provided, however, if it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed. The
Company shall file a notice of appointment of a new Warrant Agent with the
resigning Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Owner of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new Warrant Agent may
be converted or merged, or any corporation resulting from any consolidation to
which the Warrant Agent or any new Warrant Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant Agent
shall be a successor Warrant Agent under this Agreement, provided that such
corporation is eligible for appointment as a successor to the Warrant Agent.
Any such successor Warrant Agent shall promptly cause notice of its succession
as Warrant Agent to be mailed to the Company and to the Registered Owner of each
Warrant Certificate, the cost of such mailing to be borne solely by such
successor Warrant Agent, without a right to reimbursement by the Company. No
further action shall be required for establishment and authorization of such
successor Warrant Agent.
The Warrant Agent, its officers or directors and it subsidiaries or
affiliates may buy, hold or sell Warrants or other securities of the Company and
otherwise deal with the Company in the same manner and to the same extent and
with like effect as though it were not Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company.
11. Modification of Agreement. The Warrant Agent and the Company may by
-------------------------
supplemental agreement make any changes or corrections in this Agreement they
shall deem appropriate to cure any ambiguity or to correct any defective or
inconsistent provision or mistake or error herein contained. Additionally, the
parties may make any changes or corrections deemed necessary which shall not
adversely affect the interests of the Registered Owners of Warrant Certificates;
provided, however, this Agreement shall not otherwise be modified, supplemented
or altered in any respect except with the consent in writing of the Registered
Owners of Warrant Certificates representing not less than a
-13-
majority of the Warrants outstanding. Additionally, no change in the number or
nature of the Warrant Shares purchasable on exercise of a Warrant or the
Exercise Price therefor shall be made without the consent in writing of the
Registered Owner of the Warrant Certificate representing such Warrant, other
than such changes as are specifically prescribed by this Agreement.
12. Notices. All notices, demands, elections, opinions or requests
-------
(however characterized or described) required or authorized hereunder shall be
deemed given sufficiently in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by tested telex, telegram or
cable to, in the case of the Company:
XxxXxx, Inc.
31166 Via Colinas
Xxxxxxxx Xxxxxxx, XX 00000
Attn: __________________
and in the case of the Warrant Agent:
Interwest Transfer Company, Inc.
_________________________
_________________________
Attn: __________________
and if to the Registered Owner of a Warrant Certificate, at the address of such
Registered Owner as set forth on the books maintained by the Warrant Agent.
13. Persons Benefiting. This Agreement shall be binding upon and inure to
------------------
the benefit of the Company, the Warrant Agent and their respective successors
and assigns, and the Registered Owners and beneficial owners from time to time
of the Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer on any other person any right, remedy or claim or to impose
on any other person any duty, liability or obligation.
14. Further Instruments. The parties shall execute and deliver any and
-------------------
all such other instruments and shall take any and all such other actions as may
be reasonable or necessary to carry out the intention of this Agreement.
15. Severability. If any provision of this Agreement shall be held,
------------
declared or pronounced void, voidable, invalid, unenforceable or inoperative for
any reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect adversely
any other provision of this Agreement, which shall otherwise remain in full
force and effect and be enforced in accordance with its terms, and the effect of
such holding, declaration or
-14-
pronouncement shall be limited to the territory or jurisdiction in which made.
16. Waiver. All the rights and remedies of either party under this
------
Agreement are cumulative and not exclusive of any other rights and remedies as
provided by law. No delay or failure on the part of either party in the
exercise of any right or remedy arising from a breach of this Agreement shall
operate as a waiver of any subsequent right or remedy arising from a subsequent
breach of this Agreement. The consent of any party where required hereunder to
any act or occurrence shall not be deemed to be a consent to any other action or
occurrence.
17. Assignability. This Agreement may not be assigned by either party
-------------
except by the express written consent of the other party, which consent shall be
obtained in compliance with the other provisions of this Agreement.
18. General Provisions. This Agreement shall be construed and enforced in
------------------
accordance with, and governed by, the laws of the State of California. Except
as otherwise expressly stated herein, time is of the essence in performing
hereunder. This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof, and this Agreement may not be modified or
amended or any term or provision hereof waived or discharged except in writing
signed by the party against whom such amendment, modification, waiver or
discharge is sought to be enforced. The headings of this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning thereof. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above mentioned.
COMPANY
-------
XXXXXX, INC.
By ___________________________
Title ________________________
-00-
XXXXXXX XXXXX
-------------
INTERWEST TRANSFER COMPANY, INC.
By ______________________________
Title ___________________________
-16-
