THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " 1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE 1933 ACT, OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE ISSUER HEREOF, TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER THE 1933 ACT.
WARRANT TO PURCHASE
COMMON STOCK OF
XXXXX BROTHERS, INC.
Date of Issuance: October , 1999 Warrant No. ______
This certifies that, for value received, XXXXX BROTHERS, INC., a Delaware
corporation (the "Company"), grants U.S. BANCORP REPUBLIC COMMERCIAL FINANCE,
INC., a Minnesota corporation, or registered assigns (the "Registered Holder"),
the right to subscribe for and purchase from the Company, at the price of one
dollar ($1.00) per share, as such price may be adjusted from time to time (the
"Exercise Price"), from and after 9:00 a.m. Phoenix time on October ____, 1999
(the "Exercise Commencement Date") and to and including 5:00 p.m., Phoenix time
on June 30, 2004 (the "Expiration Date"), fifty thousand (50,000) shares, as
such number of shares may be adjusted from time to time (the "Warrant Shares"),
of the Company's common stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares purchasable upon exercise of
this Warrant are subject to adjustment from time to time as provided in Section
7 hereof.
SECTION 1. REGISTRATION. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose in the name of the
Registered Holder. The Company may deem and treat the Registered Holder as the
absolute owner of this Warrant for the purpose of any exercise hereof or any
distribution to the Registered Holder, and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
SECTION 2. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) Subject to Section 11 hereof, the Company shall register the transfer
of this Warrant, in whole or in part, upon records to be maintained by the
Company for that purpose, upon surrender of this Warrant, with the Form of
Assignment attached hereto completed and duly endorsed by the Registered Holder,
to the Company at the office specified in or pursuant to Section 3(b). Upon any
such registration of transfer, a new Warrant, in substantially the form of this
Warrant, evidencing the Common Stock purchase rights so transferred shall be
issued to the transferee and a new Warrant, in similar form, evidencing the
remaining Common Stock purchase rights not so transferred, if any, shall be
issued to the Registered Holder.
(b) This Warrant is exchangeable, upon the surrender hereof by the
Registered Holder at the office of the Company specified in or pursuant to
Section 3(b) hereof, for new Warrants, in substantially the form of this Warrant
evidencing, in the aggregate, the right to purchase the number of Warrant Shares
which may then be purchased hereunder, each of such new Warrants to be dated the
date of such exchange and to represent the right to purchase such number of
Warrant Shares as shall be designated by the Registered Holder at the time of
such surrender.
SECTION 3. DURATION AND EXERCISE OF THIS WARRANT.
(a) This Warrant shall be exercisable by the Registered Holder, in whole,
or from time to time in part, on any business day before 5:00 p.m., Phoenix
time, during the period beginning on the Exercise Commencement Date and ending
on the Expiration Date. At 5:00 p.m., Phoenix time, on the Expiration Date, this
Warrant, to the extent not previously exercised, shall become void and of no
further force or effect.
(b) Subject to Sections 4, and 11(a) hereof, upon exercise or surrender of
this Warrant, with the Form of Election to Purchase attached hereto completed
and duly endorsed by the Registered Holder, to the Company at its office at 0000
Xxxxx Xx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, Attention: Chief Financial
Officer, or at such other address as the Company may specify in writing to the
Registered Holder, and upon payment of the Exercise Price multiplied by up to
the number of Warrant Shares then issuable upon exercise of this Warrant in
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lawful money of the United States of America (except as otherwise provided for
in Section 3(c) hereof), all as specified by the Registered Holder in the Form
of Election to Purchase, the Company shall promptly issue and cause to be
delivered to or upon the written order of the Registered Holder, and in such
name or names as the Registered Holder may designate, a certificate for the
Warrant Shares issued upon such exercise. Any person so designated in the Form
of Election to Purchase, duly endorsed by the Registered Holder, as the person
to be named on the certificates for the Warrant Shares, shall be deemed to have
become holder of record of such Warrant Shares, evidenced by such certificates,
as of the Date of Exercise (as hereinafter defined) of such Warrant.
(c) The Registered Holder may pay the applicable Exercise Price pursuant to
Section 3(b), at the option of the Registered Holder, either (i) in cash or by
cashier's or certified bank check payable to the Company in an amount equal to
the product of the Exercise Price multiplied by the number of Warrant Shares
being purchased upon such exercise (the "Aggregate Exercise Price"), (ii) by
wire transfer of immediately available funds to the account which shall be
indicated in writing by the Company to the Registered Holder, or (iii) by
written notice to the Company that the Registered Holder is exercising this
Warrant and is authorizing the Company to withhold from the issuance to such
Registered Holder that number of Warrant Shares which when multiplied by the
Market Price (as hereinafter defined) for the Date of Exercise is equal to the
Aggregate Exercise Price. Any Warrant Shares withheld by the Company in
connection with an exercise of this Warrant pursuant to clause (iii) of this
Section 3(c) shall no longer be issuable under this Warrant and this Warrant
shall be deemed to be automatically amended to reduce the number of Warrant
Shares issuable hereunder by an amount equal to the amount of such withheld
Warrant Shares.
(d) The "Date of Exercise" of any Warrant means the date on which the
Company shall have received (i) this Warrant, with the Form of Election to
Purchase attached hereto appropriately completed and duly endorsed, and (ii)
payment of the Aggregate Exercise Price as provided herein.
(e) This Warrant shall be exercisable either as an entirety or, from time
to time, for part only of the number of Warrant Shares which are issuable
hereunder; provided, however, that no partial exercise of this Warrant shall
involve less than 25,000 Warrant Shares unless the aggregate remaining Warrant
Shares available for purchase pursuant to this Warrant is less than 25,000, in
which case this Warrant shall be exercisable for only all such remaining Warrant
Shares. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the certificates for the Warrant Shares issued
pursuant to such exercise, deliver to the Registered Holder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which Warrant
shall be substantially in the form of this Warrant.
(f) Definition of Market Price. As used in this Warrant, the term "Market
Price" shall mean the average of the daily closing prices per share of the
Common Stock for the ten (10) consecutive trading days immediately preceding the
day as of which Market Price is being determined. The closing price for each day
shall be the last reported sale price or, in case no such sale takes place on
such day, the average of the reported closing bid and asked prices, in either
case on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the shares are listed or admitted to trading, or,
if the shares are not so listed or admitted to trading, the average of the
highest reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers, Inc. (the "NASD") through NASDAQ or
through a similar organization if NASDAQ is no longer reporting such information
or as reported on the NASD's OTC Electronic Bulletin Board ("OTC"). If shares of
Common Stock are not listed or admitted to trading on any exchange or quoted
through NASDAQ or any similar organization or reported on OTC, the Market Price
shall be deemed to be the fair value thereof determined in good faith by the
Company's Board of Directors as expressed by a resolution of such board as of a
date which is within fifteen (15) days of the date as of which the determination
is to be made.
SECTION 4. PAYMENT OF TAXES AND EXPENSES.
(a) The Company will pay all expenses and taxes (other than any federal or
state income tax or similar obligations of the Registered Holder) and other
governmental charges attributable to the preparation, execution, issuance and
delivery of this Warrant, any new Warrant and the Warrant Shares; provided,
however, that the Company shall not be required to pay any tax in respect of the
transfer of this Warrant or the Warrant Shares, or the issuance or delivery of
certificates for Warrant Shares upon the exercise of this Warrant, to a person
or entity other than a Registered Holder or an Affiliate (as hereinafter
defined) of such Registered Holder; and further provided, that this paragraph
shall not obligate the Company to pay any expenses incurred by the Registered
Holder in connection with any registration of the Warrant, any new Warrant or
the Warrant Shares pursuant to the 0000 Xxx.
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(b) An "Affiliate" of any person or entity means any other person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such person or entity.
SECTION 5. MUTILATED OR MISSING WARRANT CERTIFICATE. If this Warrant shall
be mutilated, lost, stolen or destroyed, upon request by the Registered Holder,
the Company will issue, in exchange for and upon cancellation of the mutilated
Warrant, or in substitution for the lost, stolen or destroyed Warrant, a new
Warrant, in substantially the form of this Warrant, of like tenor, but, in the
case of loss, theft or destruction, only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of this Warrant
and, if requested by the Company, indemnity also reasonably satisfactory to it.
SECTION 6. RESERVATION AND ISSUANCE OF WARRANT SHARES.
(a) The Company will at all times have authorized, and reserve and keep
available, free from preemptive rights, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon the exercise of the rights
represented by this Warrant, the number of Warrant Shares deliverable upon
exercise of this Warrant.
(b) Before taking any action which could cause an adjustment pursuant to
Section 7 hereof reducing the Exercise Price below the par value of the Warrant
Shares, the Company will take any corporate action which may be necessary in
order that the Company may validly and legally issue at the Exercise Price, as
so adjusted, Warrant Shares that are fully paid and non-assessable.
(c) The Company covenants that all Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be (i) duly authorized, fully paid
and nonassessable, and (ii) free from all taxes with respect to the issuance
thereof and from all liens, charges and security interests.
SECTION 7. CERTAIN ADJUSTMENTS
(a) Subdivisions or Combinations of Stock. In case the Company shall at any
time subdivide the outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision shall
be proportionately reduced, and conversely, in case the outstanding shares of
Common Stock shall be combined into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased. Upon each such adjustment of the Exercise Price, the holder of this
Warrant shall thereafter prior to the Expiration Date thereof be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
Warrant Shares obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of Warrant Shares issuable upon exercise
of such Warrant immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
(b) CONSOLIDATION, MERGER, SALE OF ASSETS, REORGANIZATION, ETC. IN CASE THE
COMPANY (I) CONSOLIDATES WITH OR MERGES INTO ANY OTHER CORPORATION AND IS NOT
THE CONTINUING OR SURVIVING CORPORATION OF SUCH CONSOLIDATION OR MERGER, OR (II)
PERMITS ANY OTHER CORPORATION TO CONSOLIDATE WITH OR MERGE INTO THE COMPANY AND
THE COMPANY IS THE CONTINUING OR SURVIVING CORPORATION BUT, IN CONNECTION WITH
SUCH CONSOLIDATION OR MERGER, THE COMMON STOCK IS CHANGED INTO OR EXCHANGED FOR
STOCK OR OTHER SECURITIES OF ANY OTHER CORPORATION OR CASH OR ANY OTHER ASSETS,
OR (III) TRANSFERS ALL OR SUBSTANTIALLY ALL OF ITS PROPERTIES AND ASSETS TO ANY
OTHER CORPORATION, OR (IV) EFFECTS A CAPITAL REORGANIZATION OR RECLASSIFICATION
OF THE CAPITAL STOCK OF THE COMPANY IN SUCH A WAY THAT HOLDERS OF THE COMMON
STOCK SHALL BE ENTITLED TO RECEIVE STOCK, SECURITIES, CASH AND/OR ASSETS WITH
RESPECT TO OR IN EXCHANGE FOR THE COMMON STOCK, THEN, AND IN EACH SUCH CASE,
PROPER PROVISION SHALL BE MADE SO THAT THE HOLDER OF THIS WARRANT, UPON THE
EXERCISE OF THIS WARRANT AT ANY TIME AFTER THE CONSUMMATION OF SUCH
CONSOLIDATION, MERGER, TRANSFER, REORGANIZATION OR RECLASSIFICATION, SHALL BE
ENTITLED TO RECEIVE (AT THE AGGREGATE EXERCISE PRICE IN EFFECT FOR ALL WARRANT
SHARES ISSUABLE UPON SUCH EXERCISE IMMEDIATELY PRIOR TO SUCH CONSUMMATION AS
ADJUSTED TO THE TIME OF SUCH TRANSACTION), IN LIEU OF SHARES OF COMMON STOCK
ISSUABLE UPON SUCH EXERCISE PRIOR TO SUCH CONSUMMATION, THE STOCK AND OTHER
SECURITIES, CASH AND/OR ASSETS TO WHICH SUCH HOLDER WOULD HAVE BEEN ENTITLED
UPON SUCH CONSUMMATION IF SUCH HOLDER HAD SO EXERCISED SUCH WARRANT IMMEDIATELY
PRIOR THERETO (SUBJECT TO ADJUSTMENTS SUBSEQUENT TO SUCH CORPORATE ACTION AS
NEARLY EQUIVALENT AS POSSIBLE TO THE ADJUSTMENTS PROVIDED FOR IN THIS SECTION
7).
SECTION 8. CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event that the
Company shall at any time prior to the exercise of this Warrant declare a
dividend (other than a dividend consisting solely of shares of Common Stock or a
cash dividend or distribution payable out of current or retained earnings) or
otherwise distribute to its stockholders any monies, assets, property, rights,
evidences of indebtedness, securities (other than shares of Common Stock),
whether issued by the Company or by another person or entity, or any other thing
of value, the Registered Holder shall thereafter be entitled, in addition to the
3
shares of Common Stock receivable upon the exercise of the Warrant, to receive,
upon the exercise of the Warrant, the same monies, property, assets, rights,
evidences of indebtedness, securities or any other thing of value that the
Registered Holder would have been entitled to receive at the time of such
dividend or distribution had the Registered Holder been an owner of record of
the shares of Common Stock into which the Warrant is then being exercised as of
the record date or other date of determination for such dividend or distribution
and an appropriate provision shall be made a part of any such dividend or
distribution. Notwithstanding any provision herein to the contrary, no
adjustment under this Section 8 shall be made with respect to any cash dividend
or distribution payable solely out of current or retained earnings of the
Company.
SECTION 9. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. The Registered Holder
shall not be entitled to vote or be deemed the holder of Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained herein be construed to confer upon
the holder of this Warrant, as such, the rights of a stockholder of the Company
or the right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
stockholders (except as provided herein), or to receive dividends or
subscription rights or otherwise, until the Date of Exercise shall have
occurred. No provision of this Warrant, in the absence of affirmative action by
the Registered Holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights and privileges of the Registered Holder, shall
give rise to any liability of such holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
SECTION 10. FRACTIONAL WARRANT SHARES. The Company shall not be required to
issue fractions of Warrant Shares upon exercise of the Warrant or to distribute
certificates which evidence fractional Warrant Shares. If any fraction of a
Warrant Share would, except for the provisions of this Section 10, be issuable
on the exercise of this Warrant (or specified portion thereof), the Company
shall pay to the Registered Holder an amount in cash equal to the Market Price
as of the Exercise Date, multiplied by such fraction.
SECTION 11. TRANSFER RESTRICTIONS; REGISTRATION OF THE WARRANT AND WARRANT
SHARES.
(a) Neither the Warrant nor the Warrant Shares have been registered under
the Act. The Registered Holder, by acceptance hereof, represents that it is
acquiring this Warrant to be issued to it for its own account and not with a
view to the distribution thereof, and agrees not to sell, transfer, pledge or
hypothecate this Warrant, any purchase rights evidenced hereby or any Warrant
Shares unless a registration statement is effective for this Warrant or the
Warrant Shares under the Act or in the opinion of such Registered Holder's
counsel reasonably satisfactory to the Company, a copy of which opinion shall be
delivered to the Company, such transaction is exempt from the registration
requirements of the Act.
(b) Subject to the provisions of the following paragraph of this Section
11, each Certificate for Warrant Shares shall be stamped or otherwise imprinted
with a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE 1933
ACT, OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER HEREOF, TO
THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.
(c) The restrictions and requirements set forth in the foregoing paragraph
shall apply with respect to Warrant Shares unless and until such Warrant Shares
are sold or otherwise transferred pursuant to an effective registration
statement under the Act or are otherwise no longer subject to the restrictions
of the Act, at which time the Company agrees to promptly cause such restrictive
legends to be removed and stop transfer restrictions applicable to such Warrant
Shares to be rescinded.
SECTION 12. REGISTRATION RIGHTS. The Registered Holder is entitled to
certain registration rights with respect to the Warrant Shares pursuant to a
Registration Rights Agreement dated as of October ___, 1999, by and between the
Company and U.S. Bancorp Republic Commercial Finance, Inc. (the "Registration
Rights Agreement"). Upon any transfer of this Warrant or the Warrant Shares by
the Registered Holder, such registration rights may be transferred to the
transferee of the Warrant or the Warrant Shares only in accordance with the
terms of the Registration Rights Agreement.
SECTION 13. NOTICES. All notices, requests, demands and other
communications relating to this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by United States
certified or registered first-class mail, postage prepaid, return receipt
4
requested, to the parties hereto at the following addresses or at such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
(a) If to the Registered Holder of this Warrant or the holder of the
Warrant Shares, addressed to the address of such Registered Holder or holder as
set forth on books of the Company or otherwise furnished by the Registered
Holder or holder to the Company.
(b) If to the Company, addressed to:
Xxxxx Brothers, Inc.
0000 Xxxxx Xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
SECTION 14. BINDING EFFECT. This Warrant shall be binding upon and inure to
the sole and exclusive benefit of the Company, its successors and assigns, and
the holder or holders from time to time of this Warrant and the Warrant Shares.
SECTION 15. SURVIVAL OF RIGHTS AND DUTIES. This Warrant shall terminate and
be of no further force and effect on the earlier of (i) 5:00 p.m., Phoenix time,
on the Expiration Date and (ii) the date on which this Warrant and all purchase
rights evidenced hereby have been exercised, except that the provisions of
Sections 4, 6(c), 11 and 12 hereof shall continue in full force and effect after
such termination date.
SECTION 16. GOVERNING LAW. This Warrant shall be construed in accordance
with and governed by the laws of the State of Arizona.
SECTION 17. AMENDMENT; WAIVER. This Warrant and any term hereof may be
amended, waived, discharged or terminated only by and with the written consent
of the Company and the holder of this Warrant.
SECTION 18. SECTION HEADINGS. The Section headings in this Warrant are for
purposes of convenience only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
under its corporate seal by its officers thereunto duly authorized as of the
date hereof.
XXXXX BROTHERS, INC.
By:
------------------------------------
Name:
Title:
ATTEST:
----------------------------------------
Name:
Title:
5
FORM OF ELECTION TO PURCHASE
(To Be Executed Upon Exercise of this Warrant)
To Xxxxx Brothers, Inc.:
The undersigned, the record holder of this Warrant, hereby irrevocably
elects to exercise the right, represented by this Warrant (Warrant No. ___), to
purchase ___________ of the Warrant Shares and herewith tenders payment for such
Warrant Shares to the order Xxxxx Brothers, Inc. of $_________ representing the
full purchase price for such shares at the price per share provided for in such
Warrant and the delivery of any applicable taxes payable by the undersigned
pursuant to such Warrant.
In lieu of paying the purchase price as provided in the preceding
paragraph, the undersigned will/will not (circle appropriate word(s)) make a
cashless exercise pursuant to Section 3(c) of the attached Warrant.
The undersigned requests that certificates for such shares be issued in the
name of
------------------------------- PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER
-------------------------------
-------------------------------
-------------------------------
------------------------------- ----------------------------------
(Please print name and address)
In the event that not all of the purchase rights represented by the Warrant
are exercised, a new Warrant, substantially identical to the attached Warrant,
representing the rights formerly represented by the attached Warrant which have
not been exercised, shall be issued in the name of and delivered to
--------------------------------------------------------------------------------
(Please print name)
--------------------------------------------------------------------------------
(Please print address)
Dated: ________________ Name of Holder (Print):
By: ________________________________
(Name): ____________________________
(Title): ___________________________
6
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and
transfers to each assignee set forth below all of the rights of the undersigned
under the attached Warrant (Warrant No. _____) with respect to the number of
shares of Common Stock covered thereby set forth opposite the name of such
assignee unto:
Number of Shares of
Name of Assignee Address Common Stock
---------------- ------- -------------------
If the total of said purchase rights represented by the Warrant shall not
be assigned, the undersigned requests that a new Warrant Certificate evidencing
the purchase rights not so assigned be issued in the name of and delivered to
the undersigned.
Dated: _______________ Name of Holder (Print):
By: ________________________________
(Name): ____________________________
(Title): ___________________________
7
