EXHIBIT 1.2
WARRANT AGREEMENT
This Warrant Agreement (this "Agreement") dated as of March __, 1998 is by
and among CPS Systems, Inc., a Texas corporation (the "Company"), Josephthal &
Co. Inc. ("Josephthal") and Cruttenden Xxxx Incorporated ("Cruttenden").
WHEREAS, Cruttenden and Josephthal have each agreed pursuant to an
Underwriting Agreement dated March __, 1998 (the "Underwriting Agreement") to
act as the representative of the several underwriters in connection with the
proposed public offering (the "Public Offering") by the Company of ________
shares of Common Stock, including up to ________ additional shares of Common
Stock to cover over-allotments, if any; and
WHEREAS, pursuant to Section 1 of the Underwriting Agreement, the Company
has agreed to issue warrants (the "Warrants") to Cruttenden and Josephthal & Co.
Inc. (together, the "Representatives") to purchase, at a price of $0.01 per
warrant, up to an aggregate of ______[10% or #shares in offering] shares
(hereinafter, and as the number thereof may be adjusted hereto, the "Warrant
Shares") of the Company's Common Stock, $0.01 par value per share (the "Common
Stock"), each Warrant initially entitling the holder thereof to purchase one
share of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein and in the Underwriting Agreement set forth and for other good and
valuable consideration, the parties hereto agree as follows:
1. ISSUANCE OF WARRANTS: FORM OF WARRANT. The Company will issue and
deliver to (a) Cruttenden, Warrants to purchase _______ Warrant Shares and (b)
Josephthal, Warrants to purchase ____________ Warrant Shares, each on the
Closing Date referred to in the Underwriting Agreement, in consideration for,
and as part of the Representatives' compensation in connection with, its acting
as the representative of the several underwriters for the Public Offering
pursuant to the Underwriting Agreement. The text of the Warrants and of the form
of election to purchase Warrants Shares shall be substantially as set forth in
Exhibit A attached hereto. The Warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the present or any future
Chairman of the Board, President or Vice President of the Company, under its
corporate seal, affixed or in facsimile, attested by the manual or facsimile
signature of the Secretary or an Assistant Secretary of the Company.
Warrants bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrants or did not hold such
offices on the date of this Agreement. Warrants shall be dated as of the date of
execution thereof by the Company either upon initial issuance or upon division,
exchange, substitution or transfer.
2. REGISTRATION. The Warrants shall be numbered and registered on the
books of the Company (the "Warrant Register") as they are issued. The Company
shall be entitled to treat the
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registered holder of any Warrant on the Warrant Register (the "Holder") as the
owner in fact therefor for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration or transfer of Warrants
which are registered or are to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration or
transfer, or with the knowledge of such facts that its participation therein
amounts to bad faith. The Warrants shall be registered initially in the name of
(a) with respect to Cruttenden's Warrants, "Cruttenden Xxxx Incorporated" or in
such other denominations as Cruttenden may request in writing to the Company and
(b) with respect to Josephthal's Warrants, "Josephthal & Co. Inc." or in such
other denominations as Josephthal may request in writing to the Company.
3. EXCHANGE OF WARRANT CERTIFICATES. Subject to any restriction upon
transfer set forth in this Agreement, each Warrant certificate may be exchanged
for another certificate or certificates entitling the Holder thereof to purchase
a like aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitled such Holder to purchase. Any Holder desiring to
exchange a Warrant certificate or certificates shall make such request in
writing delivered to the Company, and shall surrender, properly endorsed, the
certificate or certificates to be so exchanged. Thereupon, the Company shall
execute and deliver to the person entitled thereto a new Warrant certificate or
certificates, as the case may be, as so requested.
4. TRANSFER OF WARRANTS. Until March __, 1999, the Warrants will not be
sold, transferred, assigned or hypothecated except to (i) other brokers or
dealers; (ii) one or more bona fide officers and/or partners of the
Representatives; (iii) a successor to the transferring Holder in merger or
consolidation; (iv) a purchaser of all or substantially all of the transferring
Holder's assets; or (v) any person receiving the Warrants from one or more of
the persons listed in this Section 4 at such person's or persons' death pursuant
to will, trust or the laws of intestate succession, each of whom agrees in
writing to be bound by the terms hereof. The Warrants shall be transferable
only on the Warrant Register upon delivery thereof duly endorsed by the Holder
or by the Holder's duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In all
cases of transfer by an attorney, the original power of attorney, duly approved,
or an official copy thereof, duly certified, shall be deposited with the
Company. In case of transfer by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall be
produced and may be required to be deposited with the Company in its discretion.
Upon any registration of transfer, the Company shall deliver a new Warrant or
Warrants to the person entitled thereto.
5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
5.1 Each Warrant entitles the registered owner thereof to purchase one
share of Common Stock at any time from 10:00 a.m., Pacific time, on March __,
1999 (the "Initiation Date") until 6:00 p.m., Pacific time, on March __, 2003
(the "Expiration Date") at a purchase price of $____[165% of public offering
price]_______, subject to adjustment (the "Warrant Price"). Notwithstanding the
foregoing, if at 6:00 p.m., Pacific time on the Expiration Date, any Holder or
Holders of the Warrants have not exercised their Warrants and the Closing Price
(as defined below) for the Common Stock on the Expiration Date is greater than
the Warrant Price, then
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each such unexercised Warrant shall be automatically converted into a number of
shares of Common Stock of the Company equal to: (A) the number of shares of
Common Stock then issuable upon exercise of a Warrant multiplied by (B) a
fraction (1) the numerator of which is the difference between the Closing Price
for the Common Stock on the Expiration Date and the Warrant Price and (2) the
denominator of which is the Closing Price for the Common Stock on the Expiration
Date.
5.2 The Warrant Price and the number of Warrant Shares issuable upon
exercise of each Warrant are subject to adjustment upon the occurrence of
certain events, pursuant to the provisions of Section 11 of this Agreement.
Subject to the provisions of this Agreement, each Holder of Warrants shall have
the right, which may be exercised as expressed in the Warrant Certificate, to
purchase from the Company (and the Company shall issue and sell to such Holder
of Warrants) the number of fully paid and nonassessable Warrant Shares specified
in such Warrant Certificate, upon surrender to the Company, or its duly
authorized agent, of such Warrant Certificate, with the form of election to
purchase on the reverse thereof duly filled in and signed, and upon payment to
the Company of the Warrant Price, as adjusted in accordance with the provisions
of Section 11 of this Agreement, for the number of Warrant Shares in respect of
which such Warrants are then exercised. Payment of such Warrant Price shall be
made in cash, by wire transfer or by certified or official bank check, or any
combination thereof. No adjustment shall be made for any dividends on any
Warrant Shares of stock issuable upon exercise of a Warrant.
5.3 Upon such surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder of such Warrants and in such
name or names as such registered Holder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrants, together with cash, as provided in Section 12 of this
Agreement, in respect of any fraction of a share otherwise issuable upon such
surrender and, if the number of Warrants represented by a Warrant certificate
shall not be exercised in full, a new Warrant certificate, executed by the
Company for the balance of the number of whole Warrant Shares.
5.4 If permitted by applicable law, 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 shares as of the date
of the surrender of such Warrants and payment of the Warrant Price as aforesaid.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the registered Holders thereof, either as an entirety or from time
to time for only part of the shares specified therein.
6. COMPLIANCE WITH GOVERNMENT REGULATIONS. The Company covenants that if
any shares of Common Stock required to be reserved for purposes of exercise or
conversion of Warrants require, under any Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any governmental authority, or listing on any such national
securities exchange before such shares may be issued upon exercise, the Company
will in good faith and as expeditiously as possible endeavor to cause such
shares to be duly registered, approved or listed on the relevant national
securities exchange, as the case
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may be; provided, however, that (except to the extent legally permissible with
respect to Warrants of which the one or both of the Representatives is the
Holder) in no event shall such shares of Common Stock be issued, and the Company
is hereby authorized to suspend the exercise of all Warrants, for the period
during which such registration, approval or listing is required but not in
effect.
7. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of the Warrants or the securities
comprising the Warrant Shares upon the exercise of Warrants; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue or delivery of any
warrants or certificate for Warrant Shares in a name other than that of the
registered Holder of such warrants.
8. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest; but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of such Warrant and, if requested, indemnity or bond also
reasonably satisfactory to the Company. An applicant for such substitute
Warrants shall also comply with such other reasonable regulations and pay such
other reasonable charges as the Company may prescribe.
9. RESERVATION OF WARRANT SHARES. There has been reserved out of the
authorized and unissued shares of Common Stock a number of shares sufficient to
provide for the exercise of the Warrants, and the transfer agent for the Common
Stock ("Transfer Agent") and every subsequent Transfer Agent for any shares of
the Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid are hereby irrevocably authorized and directed at all times
until the Expiration Date to reserve such number of authorized and unissued
shares as shall be required for such purpose. The Company will keep a copy of
this Agreement on file with the Transfer Agent and with every subsequent
Transfer Agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. The Company
will supply such Transfer Agent with duly executed stock certificates for such
purposes and will itself provide or otherwise make available any cash which may
be issuable as provided in Section 12 of this Agreement. The Company will
furnish to such Transfer Agent a copy of all notices of adjustments, and
certificates related thereto, transmitted to each Holder pursuant to Section
11.2 of this Agreement. All Warrants surrendered in the exercise of the rights
thereby evidenced shall be cancelled.
10. OBTAINING STOCK EXCHANGE LISTINGS. The Company will from time to time
take all action which may be necessary so that the Warrant Shares, immediately
upon their issuance upon the exercise of Warrants, will be listed on the
securities exchanges and stock markets within the United States of America, if
any, on which other shares of Common Stock are then listed.
11. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price shall
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be subject to adjustment from time to time upon the happening of certain events
as hereinafter defined. For purposes of this Section 11, "Common Stock" means
shares now or hereafter authorized of any class of common stock of the Company
and any other stock of the Company, however designated, that has the right
(subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount.
11.1 MECHANICAL ADJUSTMENTS. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock or (iv) issue by reclassification of its
shares of Common Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which the
Company is the surviving corporation), the number of Warrant Shares purchasable
upon exercise of each warrant immediately prior thereto shall be adjusted so
that the Holder of each Warrant shall be entitled to receive the kind and number
of Warrant Shares or other securities of the Company which he would have owned
or would have been entitled to receive after the happening of any of the events
described above, had such Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event. Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) In case the Company shall distribute to all holders of its shares
of Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving corporation)
evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or earned surplus and
dividends or distribution referred to in paragraph (a) above or in the paragraph
immediately following this paragraph) or rights, options or warrants, or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock, then in each case the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon the
exercise of each Warrant by a fraction, the numerator of which shall be the then
current market price per share of Common Stock (as defined in paragraph (c)
below) on the date of such distribution, and the denominator of which shall be
the then current market price per share of Common Stock, less the then fair
value (as reasonably determined by the Board of Directors of the Company) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment shall be
made whenever any such distribution is made and shall become effective on the
date of distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution.
In the event of a distribution by the Company to all holders of its shares
of Common Stock of a subsidiary or securities convertible into or exercisable
for such stock, then in lieu of an adjustment in the number of Warrant Shares
purchasable upon the exercise of each Warrant, the
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Holder of each Warrant, upon the exercise thereof at any time after such
distribution, shall be entitled to receive from the Company, such subsidiary or
both, as the Company shall determine, the stock or other securities to which
such Holder would have been entitled if such Holder had exercised such Warrant
immediately prior thereto, all subject to further adjustment as provided in this
Section 11.1; provided, however, that no adjustment in respect of dividends or
interest on such stock or other securities shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(c) For the purpose of any computation under paragraph (b) of this
Section, the current market price per share of Common Stock at any date shall be
the average of the daily Closing Prices for 20 consecutive trading days
commencing 30 trading days before the date of such computation. The selling
price for each day (the "Closing Price") shall be the last such reported sales
price regular way or, in case no such reported sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if not listed or admitted to trading, the
average of the closing bid and asked prices of the Common Stock in the over-the
counter market as reported by the Nasdaq National Market System or Nasdaq
SmallCap System or if not approved for quotation on the Nasdaq National Market
System or Nasdaq SmallCap System, the average of the closing bid and asked
prices as furnished by two members of the National Association of Securities
Dealers, Inc. selected from time to time by the Company for that purpose.
(d) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Warrant Shares
purchasable upon the exercise of each Warrant; provided, however, that any
adjustments which by reason of this paragraph (d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest one-thousandth of a share.
(e) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as herein provided, the Warrant Price
payable upon exercise of each Warrant shall be adjusted by multiplying such
Warrant Price immediately prior to such adjustment by a fraction, the numerator
of which shall be the number of Warrant Shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment, and the denominator of which
shall be the number of Warrant Shares purchasable immediately thereafter.
(f) No adjustment in the number of Warrant Shares purchasable upon
the exercise of each Warrant need be made under paragraph (b) if the Company
issues or distributes to each Holder of Warrants the rights, options, warrants
or convertible or exchangeable securities, or evidences of indebtedness or
assets referred to in those paragraphs which each Holder of Warrants would have
been entitled to receive had the Warrants been exercised prior to the happening
of such event or the record date with respect thereto. No adjustment need be
made for a change in the par value of the Warrant Shares.
(g) In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders shall become entitled to purchase
any securities of the Company
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other than shares of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price of such shares
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 Warrant
Shares contained in this Section 11, and the other provisions of this Agreement,
with respect to the Warrant and Warrant Shares, shall apply as nearly equivalent
as practicable on like terms to such other securities.
(h) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges for which an adjustment was made hereunder, if
any thereof shall not have been exercised, the Warrant Price and the number of
shares of Common Stock purchasable upon the exercise of each Warrant shall, upon
such expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment not been
required, as the case may be) as if (i) the only shares of Common Stock so
issued were the shares of Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion or exchange rights and
(ii) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange rights whether or not exercised; provided, however, that no such
readjustment shall have the effect of increasing the Warrant Price or decreasing
the number of shares of Common Stock purchasable upon the exercise of each
Warrant by an amount in excess of the amount of the adjustment initially made in
respect to the issuance, sale or grant of such rights, options, warrants or
conversion or exchange rights.
11.2 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall promptly mail
by first class, postage prepaid, to each Holder notice of such adjustment or
adjustments and a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price of such
Warrant Shares after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made.
11.3 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 11.1, no
adjustments in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
11.4 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, 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, transfer or lease to another
corporation of all or substantially all the property of the Company, the Company
or such successor or purchasing corporation, as the case may be, shall execute
with each Holder an agreement that each Holder shall have the right thereafter
upon payment of the Warrant Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities, cash and property which he would have owned or would have been
entitled to receive after the happening of such
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consolidation, merger, sale, transfer or lease had such Warrant been exercised
immediately prior to such action; provided, however, that no adjustment in
respect of dividends, interest or other income on or from such shares or other
securities, cash and property shall be made during the term of a Warrant or upon
the exercise of a Warrant. Such agreement shall provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 11. The provisions of this Section 11.4 shall similarly
apply to successive consolidations, mergers, sales transfer or leases.
11.5 STATEMENTS ON WARRANTS. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
11.6 OPTIONAL CONVERSION.
(a) In addition to and without limiting the rights of the Holders of
the Warrants under the terms of this Agreement and the Warrants, the holder of
the Warrants shall have the right (the "Conversion Right") to convert the
Warrants or any portion thereof into shares of Common Stock as provided in this
Section 11.6 at any time or from time to time after the first anniversary of the
date hereof and prior to its expiration, subject to the restrictions set forth
in paragraph (c) below. Upon exercise of the Conversion Right with respect to a
particular number of shares subject to the Warrants (the "Converted Warrant
Shares"), the Company shall deliver to the Holder of the Warrants, without
payment by the Holder of any exercise price or any cash or other consideration,
the number of shares of Common Stock equal to the quotient obtained by dividing
the Net Value (as hereinafter defined) of the Converted Warrant Shares by the
fair market value (as defined in paragraph (d) below) of a single share of
Common Stock, determined in each case as of the close of business on the
Conversion Date (as hereinafter defined). The "Net Value" of the Converted
Warrant Shares shall be determined by subtraction of the aggregate warrant
purchase price of the Converted Warrant Shares (which aggregate warrant purchase
price includes the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance of the Warrants) from the aggregate fair market value
of the Converted Warrant Shares. No fractional shares shall be issuable upon
exercise of the Conversion Right, and if the number of shares to be issued in
accordance with the foregoing formula is other than a whole number, the Company
shall pay to the Holder of the Warrants an amount in cash equal to the fair
market value of the resulting fractional share.
(b) The Conversion Right may be exercised by the Holder of the
Warrants by the surrender of such Warrants at the principal office of the
Company together with a written statement specifying that the holder thereby
intends to exercise the Conversion Right and indicating the number of shares
subject to the Warrants which are being surrendered (referred to in paragraph
(a) above as the Converted Warrant Shares) in exercise of the Conversion Right.
Such conversion shall be effective upon receipt by the Company of the Warrants
together with the aforesaid written statement, or on such later date as is
specified therein (the "Conversion Date"), not later than the expiration date of
the Warrants. Certificates for the shares of Common Stock issuable upon exercise
of the Conversion Right together with a check in payment of any
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fractional share and, in the case of a partial exercise, new warrants evidencing
the shares remaining subject to the Warrants, shall be issued as of the
Conversion Date and shall be delivered to the holder of the Warrants within 7
days following the Conversion Date.
(c) In the event the Conversion Right would, at any time the Warrants
remain outstanding, be deemed by the Company's independent certified public
accountants to give rise to a charge to the Company's earnings for financial
reporting purposes, then the Conversion Right shall automatically terminate upon
receipt by the holder of this Warrant of an opinion of such independent
certified public accountant as to such adverse accounting treatment.
(d) For purposes of this paragraph 11.6, the "fair market value" of a
share of Common Stock as of a particular date shall be its "current market
price," calculated as described in paragraph 11.1(c) hereof.
12. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the sale time by the same holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereon
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 12 be issuable on
the exercise of any Warrant (or specified portion thereof), the Company shall
pay an amount in cash equal to the closing price for one share of the Common
Stock, as defined in Section 11.1(c), on the trading day immediately preceding
the date the Warrant is presented for exercise, multiplied by such faction.
13. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Each of the
Representatives represents and warrants to the Company that it will not dispose
of the Warrants or the Warrant Shares except pursuant to (i) an effective
registration statement under the Securities Act of 1933, as amended (the "Act"),
including a post-effective amendment to the Registration Statement, (ii) Rule
144 under the Act (or any similar rule under the Act relating to the disposition
of securities), or (iii) an opinion of counsel, reasonably satisfactory to
counsel of the Company, that an exemption from such registration is available.
14. CERTIFICATES TO BEAR LEGENDS. The Warrant, the Warrant Shares or other
securities issued upon exercise of the Warrant shall be subject to a stop-
transfer order and the certificate or certificates therefore shall bear the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW. SAID SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
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15. REGISTRATION RIGHTS.
15.1 Demand Registration Rights. The Company covenants and agrees with the
Representatives and any subsequent Holders of the Warrants and/or Warrant Shares
that, on two occasions, within 60 days after receipt of a written request from
either of the Representatives (provided that in no event shall either of the
Representatives be entitled to request a registration if such Representative has
previously requested (and been granted by the Company) a registration under this
Section) or from Holders of more than 25% in interest of the aggregate of
Warrants and/or Warrant Shares issued pursuant to this Agreement, that either of
the Representatives or such Holders of the Warrants and/or Warrant Shares
desires and intends to transfer more than 25% in interest of the aggregate
number of the Warrants and/or Warrant Shares under such circumstances that a
public offering, within the meaning of the Act, will be involved, the Company
shall, on those occasions, file a registration statement (and use its best
efforts to cause such registration statement to become effective under the Act
at the Company's expense) with respect to the offering and sale or other
disposition of the Warrant Shares (the "Offered Warrant Shares"); provided,
however, that the Company shall have no obligation to comply with the foregoing
provisions of this Section 15.1 if in the opinion of counsel to the Company
reasonably acceptable to the Holder or Holders, from whom such written requests
have been received, registration under the Act is not required for the transfer
of the Offered Warrant Shares in the manner proposed by such person or persons
or that a post-effective amendment to an existing registration statement would
be legally sufficient for such transfer (in which latter event the Company shall
promptly file such post-effective amendment (and use its best efforts to cause
such amendment to become effective under the Act)). Notwithstanding the
foregoing, the Company shall not be obligated to file a registration statement
with respect to the Offered Warrant Shares on more than two occasions.
The Company may defer the preparation and filing of a registration
statement for up to 90 days after the request for registration is made if the
Board of Directors determines in good faith that such registration or post-
effective amendment would materially adversely affect or otherwise materially
interfere with a proposed or pending transaction by the Company, including
without limitation a material financing or a corporate reorganization, or during
any period of time in which the Company is in possession of material inside
information concerning the Company or its securities, which information the
Company determines in good faith is not ripe for disclosure.
The Company shall not honor any request to register Warrant Shares pursuant
to this Section 15.1 received later than five (5) years from the effective date
of the Company's Registration Statement on Form SB-2 (File No. 333-39173) (the
"Effective Date"). The Company shall not be required (i) to maintain the
effectiveness of the registration statement beyond the earlier to occur of 90
days after the effective date of the registration statement or the date on which
all of the Offered Warrant Shares have been sold (the "Termination Date");
provided, however, that if at the Termination Date the Offered Warrant Shares
are covered by a registration statement which also covers other securities and
which is required to remain in effect beyond the Termination Date, the Company
shall maintain in effect such registration statement as it relates to Offered
Warrant Shares for so long as such registration statement (or any substitute
registration statement) remains or is required to remain in effect for any such
other securities, or (ii) to cause any registration statement with respect to
the Warrant Shares to become effective
10
prior to the Initiation Date. All expenses of registration pursuant to this
Section 15.1 shall be borne by the Company (excluding underwriting discounts and
commissions on Warrant Shares not sold by the Company).
The Company shall be obligated pursuant to this Section 15.1 to include in
the registration statement Warrant Shares that have not yet been purchased by a
Holder of Warrants so long as such Holder of Warrants submits an undertaking to
the Company that such Holder intends to exercise Warrants representing the
number of Warrant Shares to be included in such registration statement prior to
the consummation of the public offering with respect to such Warrant Shares. In
addition, such Holder of Warrants is permitted to pay the Company the Warrant
Price for such Warrant Shares upon the consummation of the public offering with
respect to such Warrant Shares.
15.2 Piggy-back Registration Rights. The Company covenants and agrees with
the Holders and any subsequent Holders of the Warrants and/or Warrant Shares
that in the event the Company proposes to file a registration statement under
the Act with respect to any class of security (other than in connection with an
exchange offer, a non-cash offer or a registration statement on Form S-8 or
other unsuitable registration statement form) which becomes or which the Company
believes will become effective at any time after the Initiation Date then the
Company shall in each case give written notice of such proposed filing to the
Holders of Warrants and Warrant Shares at least 30 days before the proposed
filing date and such notice shall offer to such Holders the opportunity to
include in such registration statement such number of Warrant Shares as they may
request, unless, in the opinion of counsel to the Company reasonably acceptable
to any such Holder of Warrants or Warrant Shares who wishes to have Warrant
Shares included in such registration statement, registration under the Act is
not required for the transfer of such Warrants and/or Warrant Shares in the
manner proposed by such Holders. The Company shall not honor any such request
to register any such Warrant Shares if the request is received later than six
(6) years from the Effective Date, and the Company shall not be required to
honor any request (a) to register any such Warrant Shares if the Company is not
notified in writing of any such request pursuant to this Section 15.2 within at
least 20 days after the Company has given notice to the Holders of the filing,
or (b) to register Warrant Shares that represent in the aggregate fewer than 25%
of the aggregate number of Warrant Shares. The Company shall permit, or shall
cause the managing underwriter of a proposed offering to permit, the Holders of
Warrant Shares requested to be included in the registration (the "Piggy-back
Shares") to include such Piggy-back Shares in the proposed offering on the same
terms and conditions as applicable to securities of the Company included therein
or as applicable to securities of any person other than the Company and the
Holders of Piggy-back Shares if the securities of any such person are included
therein. Notwithstanding the foregoing, if any such managing underwriter shall
advise the Company in writing that it believes that the distribution of all or a
portion of the Piggy-back Shares requested to be included in the registration
statement concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company
for its own account, then the Holders of such Piggy-back Shares shall delay
their offering and sale of Piggyback Shares (or the portion thereof so
designated by such managing underwriter) for such period, not to exceed 120
days, as the managing underwriter shall request provided that no such delay
shall be required as to Piggy-back Shares if any securities of the Company are
included in such registration statement for the
11
account of any person other than the Company and the Holders of Piggy-back
Shares. In the event of such delay, the Company shall file such supplements,
post-effective amendments or separate registration statement, and take any such
other steps as may be necessary to permit such Holders to make their proposed
offering and sale for a period of 90 days immediately following the end of such
period of delay ("Piggy-back Termination Date"); provided, however, that if at
the Piggy-back Termination Date the Piggyback Shares are covered by a
registration statement which is, or required to remain, in effect beyond the
Piggy-back Termination Date, the Company shall maintain in effect the
registration statement as it relates to the Piggy-back Shares for so long as
such registration statement remains or is required to remain in effect for any
of such other securities. All expenses of registration pursuant to this Section
15.2 shall be borne by the Company, except that underwriting commissions and
expenses attributable to the Piggy-back Shares and fees and disbursements of
counsel (if any) to the Holders requesting that such Piggy-back Shares be
offered will be borne by such Holders.
The Company shall be obligated pursuant to this Section 15.2 to include in
the Piggy-back Offering, Warrant Shares that have not yet been purchased by a
holder of Warrants so long as such Holder of Warrants submits an undertaking to
the Company that such Holder intends to exercise Warrants representing the
number of Warrant Shares to be included in such Piggy-back Offering prior to the
consummation of such Piggy-back Offering. In addition, such Holder of Warrants
is permitted to pay the Company the Warrant Price for such Warrant Shares upon
the consummation of the Piggy-back Offering.
If the Company decides not to proceed with a Piggy-back Offering, the
Company has no obligation to proceed with the offering of the Piggy-back Shares,
unless the Holders of the Warrants and/or Warrant Shares otherwise comply with
the provisions of Section 15.1 hereof (without regard to the 60 days' written
request required thereby). Notwithstanding any of the foregoing contained in
this Section 15.2, the Company's obligation to offer registration rights to the
Piggy-back Shares pursuant to this Section 15.2 shall terminate two (2) years
after the Expiration Date.
15.3 In connection with the registration of Warrant Shares in accordance
with Section 15.1 and 15.2 above, the Company agrees to:
(a) Use its best efforts to register or qualify the Warrant Shares
for offer or sale under the state securities or Blue Sky laws of such states
which the Holders of such Warrant Shares shall designate, until the dates
specified in Section 15.1 and 15.2 above in connection with registration under
the Act; provided, however, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of process in any
jurisdiction where it is not now so subject or to register or get a license as a
broker or dealer in securities in any jurisdiction where it is not so registered
or licensed or to register or qualify the Warrant Shares for offer or sale under
the state securities or Blue Sky laws of any state other than the states in
which some or all of the shares offered or sold in the Public Offering were
registered or qualified for offer and sale.
(b) (i) In the event of any post-effective amendment or other
registration
12
with respect to any Warrant Shares pursuant to Section 15.1 or 15.2 above, the
Company will indemnify and hold harmless any Holder whose Warrant Shares are
being so registered, and each person, if any, who controls such Holder within
the meaning of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Holder or such controlling person may be
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, on
the effective date thereof, in any such registration statement, any preliminary
prospectus or final prospectus contained therein, or any 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; and will reimburse each such Holder and
each such controlling person for any legal or other expenses reasonably incurred
by such Holder or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any such registration statement, any preliminary prospectus or final prospectus,
or any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished by such Holder expressly for use in the
preparation thereof. The Company will not be liable to a claimant to the extent
of any misstatement corrected or remedied in any amended prospectus if the
Company timely delivers a copy of such amended prospectus to such indemnified
person and such indemnified person does not timely furnish such amended
prospectus to such claimant. The Company shall not be required to indemnify any
Holder or controlling person for any payment made to any claimant in settlement
of any suit or claim unless such payment is approved by the Company.
(ii) Each Holder of Warrants and/or Warrant Shares who
participates in a registration pursuant to Section 15.1 or 15.2 will indemnify
and hold harmless the Company, each of its directors, each of its officers who
have signed any such registration statement, and each person, if any, who
controls the Company within the meaning of the Act, against any losses, claims,
damages or liabilities to which the Company, or any such director, officer or
controlling person may become subject under the Act, or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement or any
material fact contained in any such registration statement, any preliminary
prospectus or final prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any such registration statement, any preliminary prospectus
or final prospectus, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in the preparation thereof; and will reimburse any legal or other
expenses reasonably incurred by the Company, or any such director, officer or
13
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subparagraph (ii) shall not apply to amounts paid to
any claimant in settlement of any suit or claim unless such payment is first
approved by such Holder.
(iii) In order to provide for just and equitable contribution in
any action in which a claim for indemnification is made pursuant to this clause
(b)(iii) of Section 15.3 but 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
this clause (b)(iii) of Section 15.3 provides for indemnification in such case,
all the parties hereto shall contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (after contribution from others) in
such proportion so that each Holder whose Warrant Shares are being registered is
responsible pro rata for the portion represented by the public offering price
received by such Holder from the sale of such Holder's Warrant Shares, and the
Company is responsible for the remaining portion; provided, however, that (i) no
Holder shall be required to contribute any amount in excess of the public
offering price received by such Holder from the sale of such Holder's Warrant
Shares and (ii) no person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. This subsection
(b)(iii) shall not be operative as to any Holder of Warrant Shares to the extent
that the Company has received indemnity under this clause (b)(iii) of Section
15.3.
16. NO RIGHTS AS STOCKHOLDER; NOTICES TO HOLDERS. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Holders or their transferee(s) the right to vote or to receive dividends or
to consent to or receive notice as stockholders in respect of any meeting of
stockholders for the election of directors of the Company or any other matter or
any rights whatsoever as stockholders of the Company. If, however, at any time
prior to the expiration of the Warrants and prior to their exercise, any of the
following events occur:
(a) the Company shall declare any dividend payable in any securities
upon its shares of Common Stock or make any distribution (other than a cash
dividend) to the holders of its shares of Common Stock: or
(b) the Company shall offer to the holders of its shares of Common
Stock any additional shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock or any right to subscribe to or purchase
any thereof; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger, sale, transfer or lease of all
or substantially all of its property, assets and business as an entirety) shall
be proposed,
then in any one or more of said events the Company shall (i) give notice in
writing of such event to the Holders, as provided in Section 17 hereof and (ii)
if there are more than 100 Holders,
14
cause notice of such event to be published once in The Wall Street Journal
(national edition), such giving of notice and publication to be completed at
least 20 days 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 such
dividend, distribution or subscription 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 publish, mail or receive such
notice or any defect therein or in the publication or mailing thereof shall not
affect the validity of any action taken in connection with such dividend,
distribution or subscription rights, or such proposed dissolution, liquidation
or winding up.
17. NOTICES. Any notice pursuant to this Agreement to be given or made by
the registered Holder of any Warrant to the Company shall be sufficiently given
or made if sent by first-class mail or facsimile to:
CPS Systems, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President
Fax: 000-000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company to the registered Holder of any Warrant shall be sufficiently given or
made (except as otherwise provided in this Agreement) if sent by first-class
mail to such Holder at the address of such Holder as shown on the Warrant
Register.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without giving effect to
principles of conflicts of laws.
19. SUPPLEMENTS AND AMENDMENTS. The Company and the Representatives may
from time to time supplement or amend this Agreement in order to cure any
ambiguity or to correct or supplement any provision contained herein, or to make
any other provisions in regard to matters or questions arising hereunder which
the Company and the Representatives may deem necessary or desirable and which
shall not be inconsistent with the provisions of the Warrants and which shall
not adversely affect the interests of the Holders. This Agreement may also be
supplemented or amended from time to time by a writing executed by or on behalf
of the Company and all of the Holders.
20. SUCCESSOR. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder. Assignments by the
Holders of their rights hereunder shall be made in accordance with Section 4
hereof.
21. MERGER OR CONSOLIDATION OF THE COMPANY. So long as Warrants remain
outstanding, the Company will not merge or consolidate with or into, or sell,
transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing
15
corporation, as the case may be (if not the Company), shall expressly assume, by
supplemental agreement executed and delivered to the Holders, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Company.
22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement, but
this Agreement shall be for the sole and exclusive benefit of the Company any
the Holders of the Warrants and Warrant Shares.
23. CAPTIONS. The captions of the sections and subsections of this
Agreement have been reserved for convenience only and shall have no substantive
effect.
24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which when so executed shall be deemed to be an original;
but such counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.
CRUTTENDEN XXXX INCORPORATED
Attest:
____________________________ By:_________________________
Name:
Title:
JOSEPHTHAL & CO. INC.
Attest:
____________________________ By:_________________________
Name:
Title:
CPS SYSTEMS, INC.
Attest:
____________________________ By:_________________________
Name:
Title:
16
EXHIBIT A
[Form of Warrant Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. SAID
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SAID ACT
WARRANT CERTIFICATE
OF
CPS SYSTEMS, INC.
EXERCISABLE ON OR BEFORE MARCH , 2003
No. ___ _________ Warrants
This Warrant Certificate certifies that the registered holder hereof or its
registered assigns, is the registered holder of Warrants expiring March __, 2003
(the "Warrants") to purchase Common Stock, $0.01 par value per share (the
"Common Stock"), of CPS Systems, Inc., a Texas corporation (the "Company").
Each Warrant entitles the holder upon exercise to receive from the Company from
10:00 a.m., Pacific time, on March __, 1999 through and until 6:00 p.m., Pacific
time, on March __, 2003, one fully paid and nonassessable share of Common Stock
(a "Warrant Share") at the initial exercise price (the "Warrant Price") of
$_____ payable in lawful money of the United States of America upon surrender of
this Warrant Certificate and payment of the Warrant Price at the conditions set
forth herein and in the Warrant Agreement referred to on the reverse hereof.
The Warrant Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
No Warrant may be exercised after 6:00 p.m., Pacific Time, on March __,
2003 (the "Expiration Date"). Notwithstanding the foregoing, if at 6:00 p.m.,
Pacific time on the Expiration Date, any Holder or Holders of the Warrants have
not exercised their Warrants and the Closing Price (as defined in the Warrant
Agreement) for the Common Stock on the Expiration Date is greater than the
Warrant Price, then each such unexercised Warrant shall be automatically
converted into a number of shares of Common Stock of the Company equal to: (A)
the number of shares of Common Stock then issuable upon exercise of a Warrant
multiplied by (B) a fraction (1) the numerator of which is the difference
between the Closing Price for the Common Stock on the Expiration Date and the
Warrant Price and (2) the denominator of which is the Closing Price for the
Warrant Stock on the Expiration Date.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this price.
17
This Warrant Certificate shall not be valid unless countersigned by the
Company.
IN WITNESS WHEREOF, CPS Systems, Inc. has caused this Warrant Certificate
to be signed by its President and by its Chief Financial Officer and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated: March __, 1998 CPS SYSTEMS, INC.
________________________
Xxx Xxxxxxx
President
________________________
Chief Financial Officer
18
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring March __, 2003 entitling the holder on
exercise to receive shares of Common Stock, $0.001 par value per share, of the
Company (the "Common Stock"), and are issued or to be issued pursuant to a
Warrant Agreement, dated as of March __, 1998 (the "Warrant Agreement"), duly
executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
The Warrants may be exercised at any time on or before March __, 2003. The
holder of Warrants evidenced by this Warrant Certificate may exercise them by
surrendering this Warrant Certificate, with the form of election to purchase set
forth hereon properly completed and executed, together with payment of the
Warrant Price at the office of the Company designated for such purpose. In the
event that upon any exercise of Warrants evidenced hereby the number of Warrants
exercised shall be less than the total number of Warrants evidenced hereby,
there shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised. No adjustment
shall be made for any dividends on any Common Stock issuable upon exercise of
this Warrant.
The Warrant Agreement provides that upon the occurrence of certain events
the number of shares of Common Stock issuable upon the exercise of each Warrant
shall be adjusted. If the number of shares of Common Stock issuable upon such
exercise is adjusted, the Warrant Agreement provides that the Warrant Price set
forth on the face hereof may, subject to certain conditions, be adjusted. No
fractions of a share of Common Stock will be issued upon the exercise of any
Warrants but the Company will pay the cash value thereof determined as provided
in the Warrant Agreement. The Warrant Agreement also provides that, while the
Warrants are exercisable, the holders of the Warrants shall have an optional
conversion right to convert, without payment of any exercise price or any cash
or other consideration by such holders, the Warrants or any portion thereof into
a number of shares of Common Stock as specified in the Warrant Agreement.
The holders of the Warrants are entitled to certain registration rights
with respect to the Common Stock purchasable upon exercise thereof. Said
registration rights are set forth in full in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Company by the
registered holder thereof in person or by legal representative or attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant certificate of Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
19
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company, a new Warrant certificate or Warrant
certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to other transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
20
(Form of Election to Purchase)
(To be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive ____________ shares of
Common Stock and herewith tenders payment for such shares in accordance with the
terms of the Warrant Agreement. The undersigned requests that a certificate for
such shares be registered in the name of _____________________________, whose
address is _________________________________________ and that such shares be
delivered to _____________________________________________ whose address is
_______________________________________. If said number of shares is less than
all of the shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
such shares be registered in the name of ________________________, whose address
is _______________________, and that such Warrant Certificate be delivered to
_______________________, whose address is _________________________________.
Signature:
Date:
Signature Guaranteed:
21
(Form of Assignment)
(To be Executed 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.)
22
