EXHIBIT 10.19
EXECUTION COPY
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PLACEMENT AGENT WARRANT AGREEMENT
WARRANT AGREEMENT dated as of January 30, 2006, between Strong
Technical, Inc., a Delaware corporation ("Company"), and TN Capital Equities,
Ltd. ("Agent").
W I T N E S S E T H
WHEREAS, the Agent has been retained by the Company to act as the
placement agent in connection with the Company's proposed private placement (the
"Offering") of 3,450,000 units ("Units"), each Unit consisting of two shares of
the Company's Series A Convertible Preferred Stock, par value $.001 per share
("Preferred Stock"), and one Common Stock Purchase Warrant (the "Warrants"),
each such Warrant entitling the holder thereof to purchase one share of the
Company's Common Stock, par value $.001 per share ("Common Stock"), at a price
of $0.1414467 per share, subject to adjustment, for a period five (5) years; and
WHEREAS, the Company proposes to issue to the Agent or its designees
warrants ("Agent's Warrants") to purchase a number of Units equal to ten percent
(10%) of the number of Units sold in the Offering; and
WHEREAS, the Agent's Warrants to be issued pursuant to this Agreement
will be issued by the Company to the Agent on the date of the closing of the
Offering (the "Closing") in consideration for, and as part of the Agent's
compensation in connection with, the Agent acting as the placement agent for the
Offering.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT. In consideration of $1.00 and other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the Company, the Company hereby grants to the Agent and its assigns (each, a
"Holder"), by issuance of the Agent's Warrants, the right to purchase, at any
time during the term ("Warrant Exercise Term") commencing on the date hereof and
ending at 5:30 p.m., New York time, on the fifth anniversary of the Closing, an
aggregate number of Units ("Agent's Units") equal to ten percent (10%) of the
number of the Units sold by the Agent in the Offering at an initial exercise
price of $8.00 per Unit, subject to adjustment as provided in Section 6 hereof
(as in effect from time to time, the "Exercise Price").
2. CERTIFICATES EVIDENCING THE AGENT'S WARRANTS. The Agent's
Warrants shall be evidenced by warrant certificates ("Warrant Certificates") in
the form attached as Exhibit A hereto. The certificates evidencing the Preferred
Stock and Warrants comprising the Units underlying the Agent's Warrants and/or
other securities, property or rights issuable upon exercise of the Agent's
Warrants (collectively, the "Agent's Securities"), shall be executed on behalf
of
the Company by the manual or facsimile signature of the then present Chairman or
Vice Chairman of the Board of Directors, Chief Executive Officer or President or
Vice President of the Company and the Company's corporate seal affixed thereto
shall be attested to by the manual or facsimile signature of the then present
Secretary or Assistant Secretary of the Company.
3. EXERCISE OF THE AGENT'S WARRANTS
3.1 EXERCISE OF THE AGENT'S WARRANTS. The Agent's Warrants may be
exercised, in whole or in part (but not as to fractional shares), by surrender
of a Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price for the Agent's Units for
which such Agent's Warrants are being exercised, at the Company's principal
offices which, at the date hereof, are located c/o Henan Zhongpin Food Share
Co., Ltd., 00 Xxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxxxx, The People's Republic
of China, or, in lieu thereof, at such location in the City of New York as the
Company may notify each Holder in writing from time to time. The Exercise Price
shall be payable by certified or official bank check. The Exercise Price may
also be paid, in whole or in part, (i) in shares of Common Stock owned by the
Holder having a Fair Market Value (as defined below) on the last business day
immediately preceding the Exercise Date (as defined below) equal to the portion
of the Exercise Price being paid in such shares or (ii) by returning, together
with the Form of Election to Purchase, duly executed, irrevocable instructions
to the Company to issue in exchange for the Warrant Certificate a number of
Agent's Units equal to the product of (a) the number of Agent's Units as to
which the Agent's Warrants are being exercised multiplied by (b) a fraction the
numerator of which is the sum of (x) the aggregate Fair Market Value of all of
the shares of Common Stock for which the Preferred Stock issuable upon the
exercise of each Agent's Warrant is convertible on the last business day
immediately preceding the date of exercise (the "Preferred Value") less the
Exercise Price for the Agent's Warrants plus (y) the difference between the Fair
Market Value of a share of Common Stock on the last business day immediately
preceding the date of exercise and the exercise price of each Warrant, and the
denominator of which is the sum of the Preferred Value plus the amount
calculated in (y) above. In the case of the purchase of less than all the
Agent's Units purchasable under any Warrant Certificate, the Company shall
cancel said Warrant Certificate and shall execute and deliver a new Warrant
Certificate of like tenor for the unexercised balance of the Agent's Warrants.
For purposes hereof, "Exercise Date" shall mean the date on which all deliveries
required to be made to the Company upon exercise of Agent's Warrants pursuant to
this Section 3.1 shall have been made.
3.2 ISSUANCE OF CERTIFICATES FOR AGENT'S SECURITIES. Upon
the exercise of the Agent's Warrants, the issuance of certificates for Agent's
Securities shall be made forthwith (and in any event such issuance shall be made
within three (3) business days from the Exercise Date) without charge to the
Holder thereof, including, without limitation, any tax which may be payable in
respect of the issuance thereof, and such certificates shall (subject to the
provisions of Section 5 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver
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such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
3.3 FAIR MARKET VALUE. As is used herein, the "Fair
Market Value" of a share of Common Stock on any day means: (a) if the principal
market for the Common Stock is The New York Stock Exchange, any other national
securities exchange or The Nasdaq National Market, the closing sales price of
the Common Stock on such day as reported by such exchange or market, or on a
consolidated tape reflecting transactions on such exchange or market, or (b) if
the principal market for the Common Stock is not a national securities exchange
or The Nasdaq National Market and the Common Stock is quoted on the Nasdaq, the
mean between the closing bid and the closing asked prices for the Common Stock
on such day as quoted on such system, or (c) if the Common Stock is not quoted
on the Nasdaq, the mean between the highest bid and lowest asked prices for the
Common Stock on such day as reported by the National Quotation Bureau, Inc.;
provided that if none of (a), (b) or (c) above is applicable, or if no trades
have been made or no quotes are available for such day, the Fair Market Value of
the Common Stock shall be determined, in good faith, by the Board of Directors
of the Company.
4. TRANSFER OF SECURITIES. Each Holder, by acceptance of a
Warrant Certificate, covenants and agrees that it is acquiring the Agent's
Warrants evidenced thereby, and, upon exercise thereof, the Agent's Securities,
for its own account as an investment and not with a view to distribution
thereof. The Agent's Securities have not been registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws and no
transfer of any Agent's Securities shall be permitted unless the Company has
received notice of such transfer, at the address of its principal office set
forth in Section 3.1 hereof, in the form of assignment attached hereto,
accompanied by an opinion of counsel reasonably satisfactory to the Company that
an exemption from registration of such Agent's Securities under the Act is
available for such transfer. Upon any exercise of the Agent's Warrants,
certificates representing the shares of Preferred Stock and any of the other
securities issuable upon exercise of the Agent's Warrants shall bear the
following legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933 ("Act") or any state securities laws
for public resale, and may not be offered or sold except pursuant to
(i) an effective registration statement under the Act and such laws or
(ii) an opinion of counsel satisfactory to the issuer that an exemption
from such registration is available.
Any purported transfer of any Agent's Warrants or Agent's Securities not in
compliance with the provisions of this Section 4 shall be null and void.
5. REGISTRATION RIGHTS.
5.1 DEMAND REGISTRATION.
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(a) Until the expiration of the Warrant Exercise Term,
the Majority of Holders (as defined below) shall have the right, by written
notices to the Company (collectively, "Demand Notice"), to demand that, subject
to Section 5.1(d) hereof, the Company prepare and file with the U.S. Securities
and Exchange Commission (the "Commission"), on not more than two separate
occasions, a registration statement and such other documents, including a
prospectus, as may be necessary to permit a public offering and sale of the
shares of Common Stock issuable upon conversion of their respective shares of
Preferred Stock (including the shares of Preferred Stock underlying the Agent's
Units, and the shares of Common Stock underlying the Agent's Warrants contained
in the Agent's Securities (hereinafter, the "Registrable Securities")) in the
manner set forth in the Demand Notice; provided, that the second of these two
requests shall not be made within 180 days of the first such request.
(b) In addition, if the Company is a registrant entitled
to use Form S-3, or any successor thereto, then, until the expiration of the
Warrant Exercise Term, a Majority of Holders shall have the right, by written
notices to the Company (also, collectively, "Demand Notice"), to demand that the
Company prepare and file with the Commission, on not more than two separate
occasions, a registration statement on Form S-3, or any successor thereto, and
such other documents as may be necessary to permit a public offering of the
Registrable Securities in the manner set forth in the Demand Notice; provided,
that the second of these two requests shall not be made within 180 days of the
first such request.
(c) Following receipt of any Demand Notice, the Company
shall immediately notify all Holders from whom a Demand Notice has not been
received of its receipt thereof, the number of shares of Common Stock specified
in the Demand Notice and in all Demand Notices received by the Company from
other Holders within 30 days after the giving of such notice by the Company. If
the method of disposition shall be an underwritten public offering, the Holders
of a majority of the Registrable Securities (exclusive of shares of Common Stock
included pursuant to Section 5.3(d) hereof) to be sold in such offering may
designate the managing underwriter of such offering, subject to the approval of
the Company, which approval shall not be unreasonably withheld or delayed.
(d) Notwithstanding anything to the contrary in Section
5.1(a), the Company shall not be required to file any registration statement
pursuant to Section 5.1(a) unless within the 60-day period immediately preceding
the delivery of the applicable Demand Notice the Company has received cash
proceeds from the exercise of Agent's Warrants of at least $25,000 or Holders of
Registrable Securities to be included in such registration statement agree in
writing with the Company to exercise a number of Agent's Warrants within 90 days
of the date of effectiveness of such registration statement by cash payment of
the exercise price that will generate cash proceeds to the Company of at least
$25,000.
5.2 PIGGYBACK REGISTRATION. If, at any time commencing
after the date hereof and ending on the first anniversary of the expiration of
the Warrant Exercise Term, the Company proposes to register any of its
securities under the Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4 or S-8) it will give written notice by
registered mail, at least 30 days
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prior to the filing of each such registration statement, to all Holders of its
intention to do so. If a Holder shall notify the Company within 30 days after
receipt of any such notice of its desire to include any Registrable Securities
in such proposed registration statement, the Company shall cause the Registrable
Securities as to which registration shall have been so requested to be included
therein, all to the extent requisite to permit the sale or other disposition by
the holder of such Registrable Securities. Notwithstanding the foregoing, in the
event that any registration pursuant to this Section 5.2 shall be an
underwritten public offering of Common Stock, the number of Registrable
Securities to be included in such an underwriting may be reduced (pro rata among
the requesting Holders and purchasers of Units in the Offering ("Investors"))
based upon the number of shares requested to be registered by them if and to the
extent that the managing underwriter shall be of the good faith opinion that
such inclusion would reduce the number of shares to be offered by the Company,
provided that such number of shares shall not be reduced if any shares are to be
included in such underwriting for the account of any person other than the
Company, Investors or requesting Holders. Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 5.2 without thereby incurring any liability to the Holders.
5.3 COVENANTS OF THE COMPANY WITH RESPECT TO
REGISTRATION. In connection with any registration under this Section 5, the
Company covenants and agrees that it shall:
(a) prepare and file with the Commission a registration
statement with respect to the securities to be registered within 45 days after
delivery of a Demand Notice under Section 5.1 hereof, and use its best efforts
to cause such registration statement to become effective not later than 120 days
from the date of its filing and to remain effective for the Requisite Period (as
defined below);
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for the Requisite Period and comply with the provisions of the Act
with respect to the disposition of all Registrable Securities covered by such
registration statement in accordance with the intended method of disposition set
forth in such registration statement for such period;
(c) upon the written request therefor by any Holder(s),
include in the registration statement any other shares of Common Stock of the
Company held by such Holder(s) as of the date of filing of such registration
statement, provided that there shall not be in effect any reduction required
pursuant to the penultimate sentence of Section 5.2 hereof and any such Common
Stock so included shall be deemed shares of Common Stock for purposes of this
Section 5 other than for purposes of the definition of Majority of Holders as
herein below set forth;
(d) furnish to each seller of such shares of Common Stock
covered by the registration statement and to each underwriter such number of
copies of the registration statement
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and the prospectus included therein (including each preliminary prospectus) as
such persons reasonably may request in order to facilitate the intended
disposition of the shares of Common Stock covered by such registration
statement;
(e) use its best efforts (i) to register or qualify the
shares of Common Stock covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the sellers of such
shares of Common Stock or, in the case of an underwritten public offering, the
managing underwriter reasonably shall request, (ii) to prepare and file in those
jurisdictions such amendments (including post effective amendments) and
supplements, and take such other actions, as may be necessary to maintain such
registration and qualification in effect at all times for the period of
distribution contemplated thereby and (iii) to take such further action as may
be necessary or advisable to enable the disposition of the Registrable
Securities in such jurisdictions, provided that the Company shall not for any
such purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction;
(f) use its best efforts to list Registrable Securities
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed or, if the Common Stock is not then
listed on a national securities exchange, use its best efforts to facilitate the
reporting of the Common Stock on the Nasdaq Stock Market;
(g) immediately notify each seller of Registrable
Securities and each underwriter under such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the Act, of
the happening of any event of which the Company has knowledge as a result of
which the prospectus contained in such registration statement, as then in
effect, includes any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing and promptly
amend or supplement such registration statement to correct any such untrue
statement or omission;
(h) notify each seller of Registrable Securities of the
issuance by the Commission of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that purpose and
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
time;
(i) permit a single firm of counsel designated as selling
stockholders' counsel by the holders of a majority in interest of the
Registrable Securities being registered to review the registration statement and
all amendments and supplements thereto for a reasonable period of time prior to
their filing and the Company shall not file any document in a form to which such
counsel reasonably objects;
(j) make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Act) covering a 12-month period
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beginning not later than the first day of the Company's next fiscal quarter
following the effective date of the registration statement;
(k) if the offering is an underwritten offering, enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are usual and
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature,
including, without limitation customary indemnification and contribution
provisions;
(l) if the offering is an underwritten offering, at the
request of any seller of shares of Common Stock, use its best efforts to furnish
on the date that shares of Common Stock are delivered to the underwriters for
sale pursuant to such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters and to such seller, stating that such registration statement has
become effective under the Act and that (A) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Act, (B) the registration statement, the related
prospectus and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Act (except that such counsel
need not express any opinion as to financial statements contained therein) and
(C) to such other effects as reasonably may be requested by counsel for the
underwriters or by such seller or its counsel and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Act and that, in the opinion of such
accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Act, and such letter shall additionally cover
such other financial matters (including information as to the period ending no
more than five business days prior to the date of such letter) with respect to
such registration as such underwriters reasonably may request; and
(m) make available for inspection by each seller of
shares of Common Stock, any underwriter participating in any distribution
pursuant to such registration statement, and any attorney, accountant or other
agent retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement.
For purposes hereof, "Requisite Period" shall mean, with
respect to a firm commitment underwritten public offering, the period commencing
on the effective date of the registration statement and ending on the date each
underwriter has completed the distribution of all securities purchased by it,
and with respect to any other registration the period commencing on the
effective date of the registration statement and ending on the earlier of the
date on which the sale of all shares of Common Stock covered thereby is
completed and 180 days after such effective date.
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For purposes hereof, "Majority of Holders" shall mean Holders
holding in excess of fifty percent (50%) of shares of Common Stock underlying
the Agent's Securities (deeming, for purposes hereof, all Agent's Warrants and
all Warrants underlying the Agent's Warrants as having been exercised, and all
shares of Preferred Stock underlying the Agent's Warrants as having been
converted) that (i) are not held by the Company, an affiliate (excluding the
Agent and any affiliate of the Agent), officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their family, persons
acting as nominees or in conjunction therewith or (ii) have not been resold to
the public pursuant to a registration statement filed with the Commission under
the Act.
Nothing contained in this Section 5 shall be construed as
requiring the Holder(s) to exercise their Agent's Warrants or Warrants, or to
convert their shares of Preferred Stock, prior to the initial filing of any
registration statement or the effectiveness thereof.
5.4 EXPENSES. All expenses incurred by the Company in
complying with this Section 5, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
fees of transfer agents and registrars, costs of insurance and fees and
disbursements of one counsel for the sellers of shares of Common Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Registrable Securities are called "Selling Expenses".
The Company will pay all Registration Expenses in connection
with the first registration statement under Section 5.1(a) and each registration
statement under Sections 5.1(b) and 5.2. All Selling Expenses, and all
Registration Expenses in connection with the second registration statement under
Section 5.1(a), in connection with each registration statement under Sections
5.1 and 5.2 shall be borne by the participating sellers in proportion to the
number of shares of Common Stock sold by each or as they may otherwise agree.
5.5 INDEMNITY.
(a) The Company shall indemnify each Holder of shares of
Common Stock to be sold pursuant to any registration statement and each person,
if any, who controls such Holder within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"),
against all loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which any of them may become subject under the Act or otherwise,
in connection with the offer and sale of such shares of Common Stock; provided,
however, that the Company will not be liable in any such case to the extent that
any such claim, damage or liability results from an untrue statement or alleged
untrue statement or an omission or alleged omission made in such registration
statement in reliance upon and in conformity with written information furnished
to the Company by such Holder or any such controlling persons specifically for
inclusion therein.
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(b) Each Holder of the shares of Common Stock to be sold
pursuant to a registration statement, and their successors and assigns, shall,
severally and not jointly, indemnify the Company, its officers and directors and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, against all loss, claim, damage
or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any such claim) to which it may
become subject under the Act or otherwise, to the extent, but only to the
extent, resulting from written information furnished by or on behalf of such
Holder, or its successors or assigns, for specific inclusion in such
registration statement.
6. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF AGENT'S
SECURITIES.
6.1 SUBDIVISION AND COMBINATION. In case the Company
shall at any time subdivide or combine the outstanding shares of Preferred
Stock, the Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination.
6.2 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 6,
the number of shares of Preferred Stock issuable upon the exercise of each
Agent's Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Preferred Stock issuable upon exercise of
the Agent's Units immediately prior to such adjustment and dividing the product
so obtained by the adjusted Exercise Price.
6.3 MERGER OR CONSOLIDATION. In the event there is
proposed any consolidation of the Company with, or merger of the Company with or
into, another corporation, other than a merger or consolidation in which the
Company is the surviving corporation and after which at least fifty percent
(50%) of the outstanding voting securities of the Company are owned by the
stockholders of the Company immediately prior to such merger or consolidation,
the Company shall cause effective provisions to be made so that the Holder shall
have the right to receive (a) in lieu of the Preferred Stock purchasable upon
the exercise of the Agent's Warrants, the kind and amount of shares of stock and
other securities or property that would have been received upon the conversion
of such Preferred Stock into Common Stock immediately prior to such merger or
consolidation and (b) in lieu of the Warrants purchasable upon the exercise of
the Agent's Warrants, warrants to purchase the kind and amount of shares of
stock and other securities or property that would have been received upon the
exercise of such Warrants immediately prior to such merger or consolidation. The
Company will not effect any such merger or consolidation unless prior to the
consummation thereof the surviving corporation resulting from such merger or
consolidation shall assume by written instrument (1) the obligation to deliver
to the Holder such securities or property as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase or receive, and (2) all other
obligations of the Company under this Agreement. The provisions of this Section
6.3 shall similarly apply to successive mergers and consolidations.
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6.4 DIVIDENDS AND OTHER DISTRIBUTIONS. In the event that
the Company shall at any time prior to the exercise of all Agent's Warrants
declare a dividend (other than a dividend consisting solely of shares of Common
Stock) or otherwise distribute to its stockholders any assets, property, rights,
evidence of indebtedness, securities (other than shares of Common Stock),
whether issued by the Company or by another, or any other thing of value, the
Holders of the unexercised Agent's Warrants shall thereafter be entitled, in
addition to the shares of Preferred Stock, Warrants or other securities and
property receivable upon the exercise thereof, to receive, upon the exercise of
such Agent's Warrants, the same property, assets, rights, evidences of
indebtedness, securities or any other thing of value that they would have been
entitled to receive at the time of such dividend or distribution as if the
Agent's Warrants had been exercised immediately prior to such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make appropriate reserves to ensure the timely performance of the
provisions of this Section 6.4.
7. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of securities in such denominations as shall be
designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any Warrant
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Warrants, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
8. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be
required to issue certificates representing fractions of shares of Preferred
Stock upon the exercise of the Agent's Warrants, but instead shall pay cash in
lieu of such fractional interests to the Holders entitled thereto based on the
Fair Market Value of the underlying Common Stock as determined in good faith by
the Board of Directors of the Company.
9. RESERVATION AND LISTING OF SECURITIES. The Company shall at
all times reserve and keep available out of its authorized shares of Preferred
Stock and Common Stock, solely for the purpose of issuance upon the exercise of
the Agent's Warrants or the Agent's Securities, as the case may be, such number
of shares of Preferred Stock, Common Stock or other securities, properties or
rights as shall be issuable upon the exercise thereof. The Company covenants and
agrees that, upon exercise of the Agent's Warrants and payment of the Exercise
Price therefor, all shares of Preferred Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder.
10. NOTICES TO AGENT'S WARRANT HOLDERS. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote or
to consent or to receive
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notice as a stockholder in respect of any meetings of stockholders for the
election of directors or any other matter, or as having any rights whatsoever as
a stockholder of the Company. If, however, at any time prior to the expiration
of the Agent's Warrants and their exercise, any of the following events shall
occur:
(a) the Company shall take a record of the holders of its
shares of Preferred Stock or Common Stock for the purpose of entitling them to
receive a dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its
Preferred Stock or Common Stock any additional shares of capital stock of the
Company or securities convertible into or exchangeable for shares of capital
stock of the Company, or any option right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a sale 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 give written notice
of such event at least 15 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, convertible or exchangeable securities
or subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
11. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(a) If to a Holder, to the address of such Holder as
shown on the books of the Company; or
(b) If to the Company, to the address set forth in
Section 3.1 hereof, or to such other address as the Company may designate by
notice to the Holders.
12. SUPPLEMENTS AND AMENDMENTS. The Company and the Agent may from
time to time supplement or amend this Agreement without the approval of any
Holders in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any provision
herein, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Agent may deem necessary or
desirable
11
and which the Company and the Agent deem shall not adversely affect the
interests of any other Holders of Warrant Certificates. Other amendments to this
Agreement may be made only with the written consent of a Majority of Holders.
13. SUCCESSORS. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
14. TERMINATION. This Agreement shall terminate at the close of
business on the fifth anniversary of the date hereof. Notwithstanding the
foregoing, the indemnification provisions of Section 5.5 hereof shall survive
such termination until the close of business on the tenth anniversary of the
date hereof.
15. GOVERNING LAW: SUBMISSION TO JURISDICTION. This Agreement and
each Agent's Warrant and Warrant Certificate issued hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to contracts entered into and to be performed wholly within said
State.
The Company, the Agent and each of the Holders hereby agree that any
action, proceeding or claim against it arising out of, or relating in any way
to, this Agreement shall be brought and enforced in the courts of the State of
New York, and any Federal court located in the County of Manhattan, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company, the Agent and each of the Holders hereby irrevocably waives any
objection to such exclusive jurisdiction or inconvenient forum. Any such process
or summons to be served upon any of the Company, the Agent and any of the
Holders (at the option of the party bringing such action, proceeding or claim)
may be served by transmitting a copy thereof, by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address as set
forth in Section 11 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the party so served in any action, proceeding or
claim. The Company and each Holder, by its acceptance of an Agent's Warrant,
agrees that the prevailing party(ies) in any such action or proceeding shall be
entitled to recover from the other party(ies) all of its/their reasonable legal
costs and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
16. ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto and supersedes all prior agreements and
understandings, written or oral, with respect to the subject matter hereof.
17. SEVERABILITY. If any provision of this Agreement shall be held
to be invalid and unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
18. CAPTIONS. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor should
they be construed as, a part of this Agreement and shall be given no substantive
effect.
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19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Agent and any other Holder(s) of the Agent Warrants or Agent's Securities, any
legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Agent and any other such Holder(s).
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together 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 and year first above written.
STRONG TECHNICAL, INC.
By: /s/ Xxxxxx Xxx
--------------------------------
Name: Xxxxxx Xxx
Title: Chief Executive Officer
TN CAPITAL EQUITIES, LTD.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
TN Capital Equities, Ltd.
13
[FORM OF AGENT'S WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
(ii) AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER, THAT AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE AGENT WARRANT AGREEMENT REFERRED TO HEREIN.
STRONG TECHNICAL, INC.
No. BW- _________ Warrants
AGENT'S WARRANT CERTIFICATE
This Agent Warrant Certificate certifies that __________________, or
its assigns, is the holder of ________ Warrants (the "Agent Warrants") to
purchase initially, at any time after the date hereof until 5:30 p.m. New York
time on the last day of the Warrant Exercise Term ("Expiration Date"), one (1)
Unit, each Unit consisting of two fully paid and non-assessable shares of Series
A Convertible Preferred Stock, $.001 par value ("Preferred Stock"), of Strong
Technical, Inc., a Delaware corporation (the "Company"), and one Common Stock
Purchase Warrant (the "Investor Warrants") (shares of Preferred Stock and the
Investor Warrants are referred to herein individually as a "Security" and
collectively as the "Securities"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $8.00 per Unit upon
surrender of this Agent Warrant Certificate and payment of the Exercise Price at
an office or agency of the Company, but subject to the conditions set forth
herein and in the Placement Agent Warrant Agreement dated as of January 30,
2006, between the Company and TN Capital Equities, Ltd. (the "Agent Warrant
Agreement"). Capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms by the Agent Warrant Agreement. Payment of the
Exercise Price shall be made by certified or official bank check payable to the
order of the Company or by any other method permitted by the Agent Warrant
Agreement.
No Warrant may be exercised after 5:30 p.m., New York, time, on the
Expiration Date, at which time all Agent Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Agent Warrants evidenced by this Agent Warrant Certificate are part
of a duly authorized issue of Agent Warrants issued pursuant to the Agent
Warrant Agreement, which Agent 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, limitations of rights,
obligations, duties and immunities thereunder of the Company and the Holders of
the Agent Warrants.
The Agent Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the Company's
securities issuable upon the exercise of the Agent Warrants may, subject to
certain conditions, be adjusted. In such event, the Company will, at the request
of the Holder, issue a new Agent Warrant Certificate evidencing the adjustment
in the Exercise Price and the number and/or type of securities issuable upon the
exercise of the Agent Warrants; provided, however, that the failure of the
Company to issue such new Agent Warrant Certificates shall not in any way
change, alter or otherwise impair the rights of the Holder as set forth in the
Agent Warrant Agreement.
Upon due presentment for registration of transfer of this Agent Warrant
Certificate and executed form of assignment as attached hereto at the office of
the Company set forth in the Agent Warrant Agreement, a new Agent Warrant
Certificate or Agent Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Agent Warrants shall be issued to the transferee(s)
in exchange for this Agent Warrant Certificate, subject to the limitations
provided herein and in the Agent Warrant Agreement, without any charge except
for any tax or other governmental charge imposed in connection with such
transfer.
Upon the exercise of less than all of the Agent Warrants evidenced by
this Agent Warrant Certificate, the Company shall forthwith issue to the holder
hereof a new Agent Warrant Certificate representing such unexercised Agent
Warrants.
The Company may deem and treat the Holder(s) hereof as reflected on the
records of the Company as the absolute owner(s) of this Agent Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, and 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.
IN WITNESS WHEREOF, the Company has caused this Agent Warrant
Certificate to be duly executed under its corporate seal.
Dated as of ____________, 200_
STRONG TECHNICAL, INC.
[SEAL]
By:
----------------------------------------
Name:
Title:
Attest:
------------------------------
Secretary
2
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Agent Warrant Certificate, to purchase ___________ Units.
In accordance with the terms of Section 3.1 of the Placement Agent
Warrant Agreement dated as of January 30, 2006, between Strong Technical, Inc.
and TN Capital Equities, Ltd., the undersigned requests that a certificate for
such securities be registered in the name of ___________________ whose address
is __________________________________________ and that such Certificate be
delivered to ________________ whose address is _____________
_______________________________.
Dated: ______________________, 200_
Signature: _________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
______________________________________
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the Holder if such Holder
desires to transfer the Agent Warrant Certificate.)
FOR VALUE RECEIVED ____________________________________________________
here sells, assigns and transfers unto _________________________________________
(Please print name and address of transferee)
this Agent Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _________________
Attorney, to transfer the within Agent Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, 200_
Signature: _________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
_______________________________________
(Insert Social Security or Other
Identifying Number of Holder)
