Exhibit 1.2
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED, EXCEPT UPON SUCH REGISTRATION OR
UPON DELIVERY TO MAKER OF AN OPINION OF COUNSEL SATISFACTORY TO MAKER THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
XXXX GROUP, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
NO. [ ] [_______] SHARES
FOR VALUE RECEIVED, XXXX GROUP, INC., a Delaware
corporation (the "Company"), hereby certifies that ______________________
_______________ or its permitted assigns, is entitled to purchase from the
Company, at any time or from time to time commencing on [ , 1999]
and prior to 5:00 P.M., New York City time, on [ , 2004], Two
Hundred Thousand (200,000) fully paid and non-assessable shares of the common
stock, $.01 par value per share, of the Company for an aggregate purchase
price of $[ ] (computed on the basis of $ PER SHARE). Hereinafter, (i)
said common stock, together with any other equity securities which may be
issued by the Company with respect thereto or in substitution therefor, is
referred to as the "Common Stock," (ii) the shares of the Common Stock
purchasable hereunder or under any other Warrant (as hereinafter defined) are
referred to individually as a "Warrant Share" and collectively as the
"Warrant Shares," (iii) the aggregate purchase price payable for the Warrant
Shares hereunder is referred to as the "Aggregate Warrant Price," (iv) the
price payable for each of the Warrant Shares hereunder is referred to as the
"Per Share Warrant Price," (v) this Warrant, all similar Warrants issued on
the date hereof and all Warrants hereafter issued in exchange or substitution
for this Warrant or such similar Warrants are referred to as the "Warrants",
and (vi) the holder of this Warrant is referred to as the "Holder" and the
holder of this Warrant and all other Warrants or Warrant Shares issued upon
the exercise of any Warrant are referred to as the "Holders." The Aggregate
Warrant Price is not subject to adjustment. The Per Share Warrant Price is
subject to adjustment as hereinafter provided, and in the event of any such
adjustment, the number of Warrant Shares shall be adjusted to equal the
number determined by dividing the Aggregate Warrant Price by the Per Share
Warrant Price in effect immediately after such adjustment.
1. Exercise of Warrant.
(a) This Warrant may be exercised in whole at any time or
in part from time to time, during the period commencing on
[ , 1999] and ending prior to 5:00 P.M., New York City time, on
[ , 2004] (such period, the "Exercise Period"), by the Holder by
the surrender of this Warrant (with the subscription form at the end of this
Warrant duly executed) at the address set forth in Section 10(a) hereof,
together with proper payment of the Aggregate Warrant Price, or the
proportionate part thereof if this Warrant is exercised in part. Payment for
Warrant Shares shall be made by certified or official bank check payable to
the order of the Company. If this Warrant is exercised in part, this Warrant
must be exercised for a number of whole shares of the Common Stock, and the
Holder is entitled to receive a new Warrant covering the Warrant Shares in
respect of which this Warrant has not been exercised and setting forth the
proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such exercise and surrender of this Warrant, the Company will
(i) issue a
certificate or certificates in the name of the Holder for the largest number
of whole shares of the Common Stock to which the Holder shall be entitled
and, if this Warrant is exercised in whole, in lieu of any fractional share
of the Common Stock to which the Holder shall be entitled, pay to the Holder
cash in an amount equal to the fair value of such fractional share
(determined in such reasonable manner as the Board of Directors of the
Company shall determine) and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
(b) In lieu of exercising this Warrant in the manner set forth
in Section 1(a) above, this Warrant may be exercised in whole at any time or in
part from time to time during the Exercise Period, by the Holder by surrendering
the Warrant at the address set forth in Section 10(a) hereof, without payment of
any other consideration, commission or remuneration, together with the
subscription form at the end of this Warrant, duly executed. The number of
shares of the Common Stock to be issued by the Company shall be calculated using
the following formula:
X=Y(A-B)
A
Where X= the number of shares of the Common
Stock to be issued to the Holder
Y= the number of shares of the Common
Stock purchasable under this
Warrant or, if this Warrant is
being exercised in part, under the
portion of the Warrant being
exercised (at the date of the
surrender of this Warrant and the
subscription form)
A= the Market Price (at the date of
the surrender of this Warrant and
the subscription form)
B= the Per Share Warrant Price (as
adjusted to the date of the
surrender of this Warrant and the
subscription form)
If this Warrant is exercised in part pursuant to this Section
1(b), this Warrant must be exercised for a number of whole shares of the Common
Stock, and the Holder is entitled to receive a new Warrant covering the Warrant
Shares in respect of which this Warrant has not been exercised and setting forth
the proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such exercise and surrender of this Warrant, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of the Common Stock to which the Holder shall be entitled
and, if this Warrant is exercised in whole, in lieu of any fractional share of
the Common Stock to which the Holder shall be entitled, pay cash equal to the
fair value of such fractional share (determined in such reasonable manner as the
Board of Directors of the Company shall determine) and (ii) deliver the other
securities and properties receivable upon the exercise of this Warrant, or the
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
(c) The market price of a share of the Common Stock (the
"Market Price") on any date of determination shall be (i) the last reported sale
price per share of the Common Stock on the business
-2-
day immediately preceding the date of determination as reported on the Nasdaq
National Market (the "Nasdaq National Market"), or (ii) if there is no such
reported sale on the date in question, the average of the closing bid and
asked quotations as so reported on the Nasdaq National Market, or (iii) if
the Common Stock is not then listed on the Nasdaq National Market, the last
reported sale price per share of the Common Stock on such national securities
exchange upon which the Common Stock is then listed, or (iv) if the Common
Stock is not then listed on any national securities exchange, the average of
the closing bid and asked quotations in the over-the-counter market as
reported by Nasdaq, or if not so reported, as reported by the National
Quotations Bureau or a similar organization. In the absence of such
quotations, the Board of Directors of the Company shall determine in good
faith the fair market value per share of the Common Stock, which shall for
these purposes be deemed to be the Market Price, which determination shall be
set forth in a certificate executed by an officer of the Company showing the
facts upon which the Market Price is based.
2. Reservation of Warrant Shares; Listing. The Company agrees
that, prior to the expiration of this Warrant, the Company will at all times (a)
have authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists the Common Stock on any national
securities exchange, use its best efforts to keep the shares of the Common Stock
receivable upon the exercise of this Warrant authorized for listing on such
exchange upon notice of issuance.
3. Protection Against Dilution.
(a) If, at any time or from time to time after the date of this
Warrant, the Company shall issue or distribute to the holders of shares of the
Common Stock (i) securities, other than shares of the Common Stock, or (ii)
property, other than cash, without payment therefor, with respect to the Common
Stock, then, and in each such case, the Holder, upon the exercise of this
Warrant, shall be entitled to receive the securities and property which the
Holder would hold on the date of such exercise if, on the date of this Warrant,
the Holder had been the holder of record of the number of shares of the Common
Stock subscribed for upon such exercise and, during the period from the date of
this Warrant to and including the date of such exercise, had retained such
shares and the securities and properties receivable by the Holder during such
period. Notice of each such distribution shall be forthwith mailed to the
Holder.
(b) If, at any time or from time to time after the date of this
Warrant, the Company shall (i) pay a dividend or make a distribution on its
capital stock in shares of the Common Stock, (ii) subdivide its outstanding
shares of the Common Stock into a greater number of shares, (iii) combine its
outstanding shares of the Common Stock into a smaller number of shares or (iv)
issue by reclassification of the Common Stock any shares of capital stock of the
Company, the Per Share Warrant Price shall be adjusted so that the Holder upon
the exercise hereof shall be entitled to receive the number of shares of the
Common Stock or other capital stock of the Company which the Holder would have
owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this Section 3(b)
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
(c) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or
-3-
conveyance to another entity of the property of the Company as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another entity (including any exchange effected in connection
with a merger of another corporation with the Company), the Holder of this
Warrant shall have the right thereafter to receive on the exercise of this
Warrant the kind and amount of securities, cash or other property which the
Holder would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale or conveyance had this Warrant
been exercised immediately prior to the effective date of such consolidation,
merger, statutory exchange, sale or conveyance and, in any such case, if
necessary, appropriate adjustment shall be made in the application of the
provisions set forth in this Section 3 with respect to the rights and interests
thereafter of the Holder of this Warrant to the end that the provisions set
forth in this Section 3 shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock or other
securities or property thereafter deliverable on the exercise of this Warrant.
The above provisions of this Section 3(c) shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances. The issuer
of any shares of stock or other securities or property thereafter deliverable on
the exercise of this Warrant shall be responsible for all of the agreements and
obligations of the Company hereunder. Notice of any such consolidation, merger,
statutory exchange, sale or conveyance and of said provisions so proposed to be
made, shall be mailed to the Holders of the Warrants not less than 30 days prior
to such event. A sale of all or substantially all of the assets of the Company
for a consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(d) No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least $0.05
per share of the Common Stock; provided, however, that any adjustments which by
reason of this Section 3(d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment; provided further, however,
that adjustments shall be required and made in accordance with the provisions of
this Section 3 (other than this Section 3(d)) not later than such time as may be
required in order to preserve the tax-free nature of a distribution to the
Holder of this Warrant or the Common Stock issuable upon exercise hereof. All
calculations under this Section 3 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. Anything in this Section 3 to
the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Per Share Warrant Price, in addition to those required by this
Section 3, as it in its discretion shall deem to be advisable in order that any
stock dividend, subdivision of shares or distribution of rights to purchase
stock or securities convertible or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable.
(e) Whenever the Per Share Warrant Price is adjusted as provided
in this Section 3 and upon any modification of the rights of a Holder of
Warrants in accordance with this Section 3, the Company shall promptly prepare a
notice (the "Adjustment Notice"), which shall be certified by the Company's
Chief Executive Officer to be true and correct. The Adjustment Notice shall set
forth the Per Share Warrant Price and the number of Warrant Shares after such
adjustment or the effect of such modification, a brief statement of the facts
requiring such adjustment or modification and the manner of computing the same,
and copies of such notice shall be mailed to the Holders of the Warrants not
later than thirty (30) days following the occurrence of the event giving rise to
the adjustment.
(f) If the Board of Directors of the Company shall (i) declare
any dividend or other distribution with respect to the Common Stock, other than
a cash dividend payable otherwise than out of earnings or earned surplus, (ii)
offer to the holders of shares of the Common Stock any additional shares of the
Common Stock, any securities convertible into or exercisable for shares of the
Common Stock or any rights to subscribe thereto or (iii) propose a dissolution,
liquidation or winding up of the Company, the Company shall mail notice thereof
to the Holders of the Warrants not less than 15 days prior to the
-4-
record date fixed for determining stockholders entitled to participate in such
dividend, distribution, offer or subscription right or to vote on such
dissolution, liquidation or winding up.
(g) If, as a result of an adjustment made pursuant to this Section
3, the Holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive shares of two or more classes of capital stock or shares of
the Common Stock and other capital stock of the Company, the Board of Directors
of the Company (whose determination shall be conclusive and shall be described
in a written notice to the Holder of any Warrant promptly after such adjustment)
shall determine the allocation of the adjusted Per Share Warrant Price between
or among shares or such classes of capital stock or shares of the Common Stock
and other capital stock and any subsequent adjustments made pursuant to this
Section 3 shall apply equally to each such resulting class of capital stock.
4. Fully Paid Stock; Taxes. The Company agrees that the
shares of the Common Stock represented by each and every certificate for Warrant
Shares delivered on the exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable, and
not subject to preemptive rights, rights of first refusal or other contractual
rights to purchase securities of the Company, and the Company will take all such
actions as may be necessary to assure that the par value or stated value, if
any, per share of the Common Stock is at all times equal to or less than the
then Per Share Warrant Price. The Company further covenants and agrees that it
will pay, when due and payable, any and all federal and state stamp, original
issue or similar taxes which may be payable in respect of the issue of any
Warrant Share or certificate therefor.
5. Registration Under Securities Act of 1933.
(a) The Company agrees that if, at any time during the period
commencing on [_________,1999] and ending on [_________,2004], (i) the Holder
and/or the Holders of any other Warrants and/or Warrant Shares who or which
shall hold, collectively, not less than 50% of the Warrants and/or Warrant
Shares outstanding at such time and not previously sold pursuant to this Section
5 shall request that the Company file a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering not less
than 50% of the Warrant Shares issued or issuable upon the exercise of the
Warrants, and not so previously sold, the Company will (i) promptly notify each
Holder of the Warrants and each holder of Warrant Shares not so previously sold
that such registration statement will be filed and that the Warrant Shares which
are then held, and/or may be acquired upon exercise of the Warrants by the
Holder and such Holders, will be included in such registration statement at the
Holder's and such Holders' request, (ii) cause such registration statement to
cover all Warrant Shares which it has been so requested to include, (iii) use
its best efforts to cause such registration statement to become effective as
soon as practicable and (iv) take all other action necessary under any federal
or state law or regulation of any governmental authority to permit all Warrant
Shares which it has been so requested to include in such registration statement
to be sold or otherwise disposed of, and will maintain such compliance with each
such federal and state law and regulation of any governmental authority for the
period necessary for such Holders to effect the proposed sale or other
disposition. The Company shall be required to effect a registration or
qualification pursuant to this Section 5(a) on one occasion only and shall be
required to effect such registration only at such time as the Company is
eligible to use Form S-3 (or any successor form) for the resale of shares by
persons other than the Company. The Company agrees to exercise its best efforts
to obtain eligibility to use Form S-3 at the earliest possible time, and to
maintain such eligibility through the term of this Warrant.
(b) The Company agrees that if, at any time and from time to time
during the period commencing [__________,1999] and ending on
-5-
[___________,2004], the Board of Directors of the Company shall authorize the
filing of a registration statement (any such registration statement being
hereinafter called a "Subsequent Registration Statement") under the Securities
Act (otherwise than pursuant to Section 5(a) hereof, and other than a
registration statement on Form X-0, Xxxx X-0 or other form which does not permit
secondary sales or include substantially the same information as would be
required in a form for the general registration of securities) in connection
with the proposed offer of any of its securities by it or any of its
stockholders, the Company will (i) promptly notify the Holder and each of the
Holders, if any, of other Warrants and/or Warrant Shares not previously sold
pursuant to this Section 5 that such Subsequent Registration Statement will be
filed and that the Warrant Shares which are then held, and/or which may be
acquired upon the exercise of the Warrants, by the Holder and such Holders,
will, at the Holder's and such Holders' request, be included in such Subsequent
Registration Statement, (ii) upon the written request of a Holder made within 20
days after the giving of such notice by the Company, include in the securities
covered by such Subsequent Registration Statement all Warrant Shares which it
has been so requested to include, (iii) use its best efforts to cause such
Subsequent Registration Statement to become effective as soon as practicable and
(iv) take all other action necessary under any federal or state law or
regulation of any governmental authority to permit all Warrant Shares which it
has been so requested to include in such Subsequent Registration Statement to be
sold or otherwise disposed of, and will maintain such compliance with each such
federal and state law and regulation of any governmental authority for the
period necessary for the Holder and such Holders to effect the proposed sale or
other disposition.
(c) Whenever the Company is required pursuant to the provisions of
this Section 5 to include Warrant Shares in a registration statement or a
post-effective amendment to a registration statement, the Company shall (i)
furnish each Holder of any such Warrant Shares and each underwriter of such
Warrant Shares with such copies of the prospectus, including the preliminary
prospectus, conforming to the Securities Act (and such other documents as each
such Holder or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of the Warrant Shares, (ii) use its best
effort to register or qualify such Warrant Shares under the blue sky laws (to
the extent applicable) of such jurisdiction or laws (to the extent applicable)
of such jurisdiction or jurisdictions as the Holders of any such Warrant Shares
and each underwriter of Warrant Shares being sold by such Holders shall
reasonably request and (iii) take such other actions as may be reasonably
necessary or advisable to enable such Holders and such underwriters to
consummate the sale or distribution in such jurisdiction or jurisdictions in
which such Holders shall have reasonably requested that the Warrant Shares be
sold, provided that the Company shall not be required to execute a general
consent to service of process or qualify to do business as a foreign corporation
in any jurisdiction where it is not so qualified.
(d) The Company shall have the right to defer the filing of any
registration statement pursuant to Section 5(a) hereof and to suspend the
ability of Holders to sell Warrant Shares pursuant to any registration statement
declared effective under Section 5(a) or 5(b) hereof, in either case for up to
60 days, if (i) in the opinion of counsel for the Company, the Company would
thereby be required to disclose nonpublic information relating to pending
corporate developments or business transactions involving the Company or its
subsidiaries not otherwise then required by law to be publicly disclosed and
(ii) in the good faith judgment of the Company's Board of Directors, such
disclosure at such time would adversely affect the Company or such corporate
development or business transaction contemplated by the Company or its
subsidiaries. Such period shall be referred to herein as the "Black-Out Period,"
and the Company shall not be entitled to implement more than two such Black-Out
Periods during any 12-month period. In the event that notice of a Black-Out
Period is given, each Holder shall keep the fact and subject matter of such
notice confidential and refrain from any further sales or other transfers of
Warrant Shares pursuant to the registration statement until the Holder receives
either copies of a supplemented pr amended prospectus or a notice from the
Company advising the Holder that the use of the existing
-6-
prospectus may be resumed.
(e) Notwithstanding any provision in this Section 5 to the
contrary, the Company shall not be required to include in any registration
requested pursuant to this Section 5 any Warrant Shares issued or issuable upon
exercise of a Warrant and then held by any Holder who is able at such time to
sell all such Warrant Shares in one three-month period pursuant to Rule 144
under the Securities Act.
(f) The Company shall pay all expenses incurred in connection
with any registration or other action pursuant to the provisions of this
Section, other than underwriting discounts and applicable transfer taxes
relating to the Warrant Shares and fees and disbursements of counsel and
accountants for the Holders.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each selling
holder (including, for purposes of this Section 6, any Holder) of Warrant Shares
and each person who controls any such selling holder within the meaning of
Section 15 of the Securities Act, and each and all of them, from and against any
and all losses, claims, damages, liabilities or actions, joint or several, to
which any selling holder of Warrant Shares or they or any of them may become
subject under the Securities Act or otherwise and to reimburse the persons
indemnified above for any legal or other expenses (including the cost of any
investigation and preparation) reasonably incurred by them in connection with
any litigation or threatened litigation, whether or not resulting in any
liability, but only insofar as such losses, claims, damages, liabilities or
actions arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in any registration statement pursuant to
which Warrant Shares were registered under the Securities Act (hereinafter
called a "Registration Statement"), any preliminary prospectus, the final
prospectus or any amendment or supplement thereto (or in any application or
document filed in connection therewith) or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that (i) the indemnity agreement
contained in this Section 6(a) shall not extend to any selling holder of Warrant
Shares in respect of any such losses, claims, damages, liabilities or actions
arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was based upon and made in conformity with information furnished in
writing to the Company by a selling holder of Warrant Shares specifically for
use in connection with the preparation of such Registration Statement, any final
prospectus, any preliminary prospectus or any such amendment or supplement
thereto. The Company agrees to pay any legal and other expenses for which it is
liable under this Section 6(a) from time to time (but not more frequently than
monthly) within 30 days after its receipt of a xxxx therefor.
(b) Each selling holder of Warrant Shares, severally and not
jointly, will indemnify and hold harmless the Company, its directors, its
officers who shall have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act to the same extent as the foregoing indemnity from the Company, but in each
case to the extent, and only to the extent, that any statement in or omission
from or alleged omission from such Registration Statement, any final prospects,
any preliminary prospectus or any amendment or supplement thereto was made in
reliance upon information furnished in writing to the Company by such selling
holder specifically for use in connection with the preparation of the
Registration Statement, any final prospectus or the preliminary prospectus or
any such amendment or supplement thereto; PROVIDED, HOWEVER, that the obligation
of any holder of Warrant Shares to indemnify the Company under the provisions of
this
-7-
Section 6(b) shall be limited to the Market Price of the Warrant Shares
being sold by the selling holder minus the Aggregate Warrant Price for such
Warrant Shares. Each selling holder of Warrant Shares agrees to pay any legal
and other expenses for which its liable under this Section 6(b) from time to
time (but not more frequently than monthly) within 30 days after receipt of a
xxxx therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing Section 6(a) or Section 6(b) (an
"indemnified party") in respect of which indemnity may by sought against a
person granting indemnification (an "indemnifying party") pursuant to such
section, such indemnified party shall promptly notify such indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party of any such action shall not release the indemnifying party
from any liability it may have to such indemnified party otherwise than on
account of the indemnity agreement contained in Section 6(a) or Section 6(b)
hereof to the extent it is not prejudiced as a proximate result of such failure.
In case any such action is brought against an indemnified party and it notifies
an indemnifying party of the commencement thereof, the indemnifying party
against which a claim is to be made will be entitled to participate therein at
its own expense and, to the extent that it may wish, to assume at its own
expense the defense thereof, with counsel reasonably satisfactory to such
indemnified party; PROVIDED, HOWEVER, that if the indemnified party shall have
reasonably concluded based upon advice of counsel that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party shall have the right to select separate counsel to assume such legal
defenses and otherwise to participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 6 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party. An
indemnifying party shall not be liable for any settlement of any action or
proceeding effected without its written consent (which consent shall not be
unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6(a) or
(b) hereof is unavailable in accordance with its terms, the Company and the
selling holder of Warrant Shares shall contribute to the aggregate losses,
claims, damages and liabilities, of the nature contemplated by said indemnity
agreement, incurred by the Company and the selling holder of Warrant Shares, in
such proportions as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the selling holder of Warrant Shares, on the
other hand, from any offering of the Warrant Shares; PROVIDED, HOWEVER, that if
such allocation is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 6(c), then the relative fault
of the Company and the selling holder of Warrant Shares in connection with the
statements or omissions which result in such losses, claims, damages and
liabilities and other relevant equitable considerations will be considered
together with such relative benefits.
(e) The respective indemnity and contribution agreements by the
Company and the selling holder of Warrant Shares in Sections 6(a), (b), (c) and
(d) hereof shall remain operative and in full force and effect regardless of (i)
any investigation made by any selling holder of Warrant Shares or by or
-8-
on behalf of any person who controls such selling holder or by the Company or
any controlling person of the Company or any director or any officer of the
Company, (ii) the exercise of this Warrant or (iii) payment for any of the
Warrant Shares, and shall survive the delivery of the Warrant Shares, and any
successor of the Company, or of any selling holder of Warrant Shares, or of any
person who controls the Company, or of any selling holder of Warrant Shares, as
the case may be, shall be entitled to the benefit of such respective indemnity
and contribution agreements. The respective indemnity and contribution
agreements by the Company and the selling holders of Warrant Shares contained in
Sections 6(a), (b), (c) and (d) hereof shall be in addition to any liability
which the Company and the selling holders of Warrant Shares may otherwise have.
7. Limited Transferability. This Warrant may not be sold,
transferred, assigned or hypothecated by the Holder (a) except in compliance
with the provisions of the Securities Act and any applicable state securities
laws and (b) until the first anniversary of the date hereof except (i) to
Cruttenden Xxxx Incorporated or any successor firm or corporation of Cruttenden
Xxxx Incorporated, (ii) to any of the officers of Cruttenden Xxxx Incorporated,
or of any such successor firm or corporation, or (iii) in the case of an
individual, pursuant to such individual's last will and testament or the laws of
descent and distribution, and is so transferable only upon the books of the
Company which it shall cause to be maintained for the purpose. The Company may
treat the registered Holder of this Warrant as he or it appears on the Company's
books at any time as the Holder for all purposes. The Company shall permit any
Holder of a Warrant or his or its duly authorized attorney, upon written request
during ordinary business hours, to inspect and copy or make extracts from its
books showing the registered holders of Warrants. All Warrants issued upon the
transfer or assignment of this Warrant will be dated the same date as this
Warrant, and all rights of the Holder thereof shall be identical to those of the
Holder of this Warrant.
8. Loss, etc., of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Company, if lost,
stolen or destroyed, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver to the Holder a new Warrant of
like date, tenor and denomination.
9. Warrant Holder Not Stockholder. Except as otherwise
provided herein, this Warrant does not confer upon the Holder any right to vote
or to consent to or receive notice as a stockholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
stockholder, prior to the exercise hereof.
10. Communication. No notice or other communication under
this Warrant shall be effective unless, but any notice or other communication
shall be effective and shall be deemed to have been given if, the same is in
writing and is mailed by first-class mail, postage prepaid, addressed to:
(a) the Company at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx
Xxx, Xxxxxxxxxx, 00000, or such other address as the Company
has designated in writing to the Holder, or
(b) the Holder at Cruttenden Xxxx Incorporated, 00000
Xxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention:
Corporate Finance Department, or such other address as the
Holder has designated in writing to the Company.
11. Headings. The headings of this Warrant have been
inserted as a matter of convenience and shall not affect the construction
hereof.
-9-
12. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, Xxxx Group, Inc. has caused this Warrant to
be signed by its [ ] and its corporate seal to be hereunto affixed
and attested by its Secretary this __ day of ____________, 1999.
XXXX GROUP, INC.
By:
---------------------------------
Xxxxxxx X. Xxxx
Chairman and Chief Executive Officer
ATTEST:
-----------------------------
Name:
Title:
[Corporate Seal]
-10-
ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto _______________________________ the foregoing Warrant
and all rights evidenced thereby, and does irrevocably constitute and appoint
_____________________________, attorney, to transfer said Warrant on the
books of Xxxx Group, Inc.
Dated: ________________ Signature: ____________________________
Address: _______________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto __________________________ the right to purchase
_____________ shares of the Common Stock of Xxxx Group, Inc. covered by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint
__________________________, attorney, to transfer that part of said Warrant on
the books of Xxxx Group, Inc.
Dated: ________________ Signature: ____________________________
Address: _______________________________
SUBSCRIPTION FORM
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the attached Warrant for, and to purchase
thereunder, _____________ shares of the Common Stock of Xxxx Group, Inc., as
provided for in Section 1 thereof.
The undersigned herewith makes payment for such shares in full
at the price per share provided by such Warrant in the following manner (please
check the type or types of payment and indicate the portion of the aggregate
payment to be paid by each type of payment):
____ exercise for cash as provided in Section 1(a) of such
Warrant.
____ exercise by surrender of such Warrant (or a portion
thereof) in accordance with Section 1(b) of such Warrant.
Please issue a certificate or certificates for such shares in
the name of, and pay any cash for any fractional share to:
Name _____________________________________
(Please Print Name, Address and Social
Security No. or Taxpayer Identification No.)
Address __________________________________
__________________________________
Social Security No. or
Taxpayer Identification No._____________
Signature ________________________________
NOTE: The above signature should correspond
exactly with the name on the first page of
such Warrant or with the name of the
assignee appearing in the assignment form
attached to the Warrant.
And if such number of shares shall not be all the shares
purchasable under the attached Warrant, a new Warrant is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder and delivered to the address set forth above.
