AGREEMENT, dated this 6th day of April 1998 by and between XXXXXX
ELECTRONICS, INC., a New York corporation (the "Company"), and REGISTRAR AND
TRANSFER COMPANY, as Warrant Agent (the "Warrant Agent").
WHEREAS, in connection with (i) the offering to the public of up to
1,380,000 shares of Common Stock, par value $.01 per share of the Company
("Common Stock"), and up to 2,104,500 redeemable warrants each warrant entitling
the holder thereof to purchase one share of Common Stock ("Redeemable Warrants";
the shares of Common Stock and Redeemable Warrants sometimes collectively
referred to as the "Securities"); (ii) the over-allotment option to purchase up
to 180,000 shares of Common Stock from the selling shareholder as to all such
shares and/or 274,500 Redeemable Warrants from the Company (the "Over-allotment
Option"); and (iii) the sale to The Thornwater Company, L.P. ("Representative"),
as representative of the several underwriters (individually "Underwriter" and
collectively "Underwriters"), its successors and assigns of a warrant (the
"Representative's Warrant") to purchase up to 120,000 shares of Common Stock
and/or 183,000 Redeemable Warrants, being identical to the Securities being sold
to the public except the price to purchase one share of common stock shall be
$8.80 (the warrants issuable upon the exercise of the Representative's Warrant
are referred to as the "Common Stock Warrants"), the Company will issue up to
1,474,500 Redeemable Warrants and may issue up to 183,000 Common Stock Warrants
(subject to increase as provided in the Representative's Warrant Agreement); and
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Redeemable Warrants and the Common Stock Warrants
(collectively, the "Warrants"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the Underwriters,
the holders of certificates representing the Warrants and the Warrant Agent, the
parties hereto agree as follows:
SECTION 1. Definitions
Capitalized terms used herein and not otherwise defined shall have the
meaning given thereto in the Underwriting Agreement. As used herein, the
following terms shall have the following meanings, unless the context shall
other-wise require:
(a) "Common Stock" shall mean the common stock of the Company, par value
$.01 per share.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business shall be
administered, which office is located on the date hereof at 00 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000.
(c) "Exercise Date" shall mean, subject to the provisions of Section 5(b)
hereof, as to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder hereof with such
Registered Holder's signature guaranteed, and (ii) payment in cash or by bank or
cashier's check made payable to the Warrant Agent for the account of the
Company, of the amount in lawful money of the United States of America equal to
the applicable Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean March 30, 2000, or such
earlier date as to which the Representative shall have consented, provided if
the Representative shall have consented to an earlier Initial Warrant Redemption
Date the Initial Warrant Exercise Date shall be the same as the Initial Warrant
Redemption Date.
(e) "Initial Warrant Redemption Date" shall mean March 30, 2000 or such
earlier date as to which the Representative shall have consented.
(f) "Purchase Price" shall mean, subject to modification and adjustment as
provided in Section 8, $[5.50] per share of Common Stock as to the Redeemable
Warrants or $8.80 per share of Common Stock, as to the Common Stock Warrants.
(g) "Registered Holder" shall mean the person in whose name any certificate
representing the Warrants shall be registered on the books maintained by the
Warrant Agent pursuant to Section 6.
(h) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to elect
a majority of the Board of Directors of such corporation (regardless of whether
or not at the time stock of any other class or classes of such corporation shall
have or may have voting power by reason of the happening of any contingency) is
at the time directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
(i) "Transfer Agent" shall mean Registrar and Transfer Company, or its
authorized successor.
(j) "Underwriting Agreement" shall mean the underwriting agreement dated as
of March 31, 1998 between the Company and Representative, relating to the
purchase for resale to the public of the Securities.
(k) "Representative's Warrant Agreement" shall mean the agreement dated as
of April 6, 1998 between the Company and Representative relating to and
governing the terms and provisions of the Representative's Warrants.
(l) "Warrant Certificate" shall mean a certificate representing each of the
Warrants substantially in the form annexed hereto as Exhibit A.
(m) "Warrant Expiration Date" shall mean, unless the Warrants are redeemed
as provided in Section 9 hereof prior to such date, 5:00 p.m. (Eastern time) on
March 30, 2003 or, if such date shall in the State of New York be a holiday or a
day on which banks are authorized to close, than 5:00 p.m. (Eastern time) on the
next following day which in the State of New York is not a holiday or a day on
which banks are authorized to close.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the Purchase Price
therefor from the Initial Warrant Exercise Date until the Warrant Expiration
Date one share of Common Stock upon the exercise thereof, subject to
modification and adjustment as provided in Section 8.
(b) Upon execution of this Agreement, Warrant Certificates representing
1,830,000 Redeemable Warrants to purchase up to an aggregate of 1,830,000 shares
of Common Stock (subject to modification and adjustment as provided in Section
8) shall be executed by the Company and delivered to the Warrant Agent.
(c) Upon exercise of the Over-allotment Option, in whole or in part as to
the Redeemable Warrants, and payment of the applicable sums, Warrant
Certificates representing up to 274,500 Redeemable Warrants to purchase up to an
aggregate of 274,500 shares of Common Stock (subject to modification and
adjustment as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(d) Upon exercise of the Representative's Warrant as to the Common Stock
Warrants as provided therein, and payment of the applicable exercise price,
Warrant Certificates representing 183,000 Common Stock Warrants to purchase up
to an aggregate of up to 183,000 shares of Common Stock (subject to modification
and adjustment as provided in Section 8 hereof and in the Underwriter's Warrant
Agreement), shall be executed by the Company and delivered to the Warrant Agent.
(e) From time to time, up to the Warrant Expiration Date, as the case may
be, the Warrant Agent shall countersign and deliver Warrant Certificates in
required denominations of one or whole number multiples thereof to the person
entitled thereto in connection with any transfer or exchange permitted under
this Agreement. Except as provided in Section 7 hereof, no Warrant Certificates
shall be issued except (i) Warrant Certificates initially issued hereunder, (ii)
Warrant Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7, (iv) Warrant Certificates
issued upon exercise of the Representative's Warrants (including Common Stock
Warrants in excess of 183,000 Representative's Warrants issued as a result of
the anti-dilution provisions contained in the Underwriter's Warrant Agreement),
and (v) at the option of the Company, Warrant Certificates in such form as may
be approved by its Board of Directors, to reflect any adjustment or change in
the Purchase Price, the number of shares of Common Stock purchasable upon
exercise of the Warrants or the Redemption Price therefor made pursuant to
Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a)The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A (the provisions of which are hereby incorporated herein) and
may have such letters, numbers or other marks of identification or designation
and such legends, summaries or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of issuance thereof
(whether upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates). Warrant Certificates shall be
executed on behalf of the Company by its Chairman of the Board, President or any
Vice President and by its Treasurer or an Assistant Treasurer or its Secretary
or an Assistant Secretary, by manual signatures or by facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of the Company's
seal. Warrant Certificates shall be manually countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the warrant Certificates
shall cease to be such officer of the Company before the date of issuance of the
Warrant Certificates or before countersignature by the Warrant Agent and issue
and delivery thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent, issued and delivered with the same force and
effect as though the person who signed such Warrant Certificates had not ceased
to be such officer of the Company.
SECTION 4. Exercise.
(a) Warrants may be exercised commencing at any time on or after the
Initial Warrant Exercise Date, but not after the Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein (including the
provisions set forth in Sections 5 and 9 hereof) and in the applicable Warrant
Certificate. A Warrant shall be deemed to have been exercised immediately prior
to the close of business on the Exercise Date, provided that the Warrant
Certificate representing such Warrant, with the exercise form thereon duly
executed by the Registered Holder thereof with such Registered Holder's
signature guaranteed, together with payment in cash or by bank or cashier's
check made payable to the order of the Company, of an amount in lawful money, of
the United States of America equal to the applicable Purchase Price, has been
received in good funds by the Warrant Agent. The person entitled to receive the
securities deliverable upon such exercise shall be treated for all purposes as
the holder of such securities as of the close of business on the Exercise Date.
As soon as practicable on or after the Exercise Date and in any event within
five business days after such date, the Warrant Agent on behalf of the Company
shall cause to be issued to the person or persons entitled to receive the same a
Common Stock certificate or certificates for the shares of Common Stock
deliverable upon such exercise, and the Warrant Agent shall deliver the same to
the person or persons entitled thereto. Upon the exercise of Warrants, the
Warrant Agent shall promptly notify the Company in writing of such fact and of
the number of securities delivered upon such exercise and, subject to subsection
(b) below, shall cause all payments of an amount in cash or by check made
payable to the order of the Company, equal to the Purchase Price, to be
deposited promptly in the Company's bank account.
(b) At any time upon the exercise of Warrants after one year and one day
from the date hereof, (i) the Market Price (as hereinafter defined) of the
Company's Common Stock is equal to or greater than the Purchase Price, (ii) the
exercise of the Warrant is solicited by an Underwriter at such time as such
Underwriter is a member of the National Association of Securities Dealers, Inc.
("NASD"), (iii) the Warrant is not held in a discretionary account, (iv)
disclosure of the compensation arrangement is made in documents provided to the
holders of the Warrants, and (v) the solicitation of the Warrant is not in
violation of Regulation M promulgated under the Securities Exchange Act of 1934,
then the soliciting Underwriter shall be entitled to receive from the Company
upon exercise of each of the Warrants so exercised, a fee of five percent (5%)
of the aggregate price of the Warrants so exercised (the "Exercise Fee"). Within
five (5) days after the end of each month, commencing in March 1999, the Warrant
Agent will notify the Representative of each Warrant Certificate which has been
properly completed for exercise by holders of Warrants during the last month.
The Warrant Agent will provide the Representative with such information, in
connection with the exercise of each Warrant, as the Representative shall
reasonably request. The Company hereby authorizes and instructs the Warrant
Agent to deliver to the soliciting Underwriters, if known to the Warrant Agent,
or to the Representative if not so known, the Exercise Fee promptly after
receipt by the Warrant Agent from the Company of a check payable to the order of
the appropriate Underwriter in the amount of the Exercise Fee. The Warrant Agent
shall not issue the shares of Common Stock issuable upon exercise of the
Warrants until receipt and forwarding of such check, provided that no check need
be issued unless the amount thereof is at least $1,000 (including Exercise Fees
previously earned, but not paid by reason of the application of this provision).
In the event that an Exercise Fee is paid to an Underwriter with respect to a
Warrant which was not properly completed for exercise or in respect of which
such Underwriter is not entitled to an Exercise Fee, such Underwriter will
return such Exercise Fee to the Warrant Agent which shall forthwith return such
fee to the Company. The Representative and the Company may at any time after
March 30, 1999, and during business hours, examine the records of the Warrant
Agent, including its ledger of original Warrant Certificates returned to the
Warrant Agent upon exercise of warrants. Notwithstanding any provision to the
contrary, the provisions of this Section 4(b) may not be modified, amended or
deleted without the prior consent of the Representative.
(c) The Company shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Warrant or
Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of
fractional interests. Any fractional interest shall be eliminated.
(d) Anything in this Section 4 notwithstanding, no Warrant will be
exercisable unless at the time of exercise the Company has filed with the
Securities and Exchange Commission a registration statement under the Securities
Act of 1933, as amended (the "Act") covering the shares of Common Stock issuable
upon exercise of such Warrant and such shares have been so registered or
qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of such Warrant.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon exercise of warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of the
Warrants shall, at the time of delivery thereof, be duly and validly issued and
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issuance thereof, and that upon
issuance such shares shall be listed on each securities exchange, if any, on
which the other shares of outstanding Common Stock of the Company are then
listed.
(b) The Company covenants that, so long as any unexpired Warrants remain
outstanding, the Company will file such post-effective amendments to the
registration statement, Form SB-2, Registration No. 333-42121 (the "Registration
Statement"), filed pursuant to the Act with respect to the Warrants (or other
appropriate registration statements or post-effective amendment or supplements)
as may be necessary to permit it to deliver to each person exercising a Warrant,
a prospectus meeting the requirements of Section 10(a)(3) of the Act and
otherwise complying therewith, and will deliver such a prospectus to each such
person. To the extent that during any period it is not reasonably likely that
the Warrants will be exercised, due to market price or otherwise, the Company
need not file such a post-effective amendment during such period. The Company
will use its reasonable efforts to obtain appropriate approvals or registrations
under state "blue sky" securities laws; provided the Company shall not be
required to qualify to do business as a foreign corporation or file a general
consent to the services of process in any such jurisdiction. With respect to any
such securities, however, Warrants may not be exercised by, or shares of Common
Stock issued to, any Registered Holder in any state in which such exercise would
be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes and other
governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock or other securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants or may be transferred in
whole or in part. Warrant Certificates to be so exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and, upon satisfaction of the
terms and conditions hereof, the Company shall execute and the Warrant's Agent
shall countersign, issue and deliver in exchange therefor the Warrant
Certificate or Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which, subject
to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof. Upon due presentment for registration of
transfer of any Warrant Certificate at such office, the Company shall execute
and the Warrant Agent shall issue and deliver to the transferee or transferees a
new Warrant Certificate or Certificates representing an equal aggregate number
of Warrants.
(c) With respect to any Warrant Certificates presented for registration of
transfer, or for exchange or exercise, the subscription or exercise form, as the
case may be, on the reverse thereof shall be duly endorsed or be accompanied by
a written instrument or instruments of transfer and subscription, in form
satisfactory to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof with such Registered Holder's signature guaranteed.
(d) A service charge may be imposed by the Warrant Agent for any exchange,
registration or transfer of Warrant Certificates. However, the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange shall
be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof of each Warrant represented
thereby (notwithstanding any notations of ownership or writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes and shall
not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation.
Upon receipt by the Company and the Warrant Agent of evidence satisfactory
to them of the ownership of and the loss, theft, destruction or mutilation of
any Warrant Certificate and (in the case of loss, theft or destruction) of
indemnity satisfactory to them, and (in case of mutilation) upon surrender and
cancellation thereof, the Company shall execute and the Warrant Agent shall
countersign and deliver in lieu thereof a new Warrant Certificate representing
an equal aggregate number of Warrants. Applicants for a substitute Warrant
Certificate shall also comply with such other reasonable regulations and pay
such other reasonable costs and expenses as the Warrant Agent may impose.
SECTION 8. Adjustment of Purchase Price and reasonable charges as the
Warrant Agent may prescribe.
(a) Except as hereinafter provided, in the event the Company shall, at any
time or from time to time after the date hereof, sell any shares of Common Stock
for a consideration per share less than the closing bid price of the Common
Stock as reported on NASDAQ, if traded on the OTC Electronic Bulletin Board or
NASDAQ Small Cap Market or the last sales price, if listed on NASDAQ National
Market or a national exchange, in either case, on the trading date next
preceding such sale (the "Market Price"), or issue any shares of Common Stock as
a stock dividend to the holders of Common Stock, or subdivide or combine the
outstanding shares of Common Stock into a greater or lesser number of shares
(any such sale, issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter immediately before the date of such
sale or the record date for each Change of Shares, the Purchase Price for the
shares of Common Stock issuable upon exercise of the Warrants (whether or not
the same shall be issued and outstanding) in effect immediately prior to such
Change of Shares shall be changed to a price (including any applicable fraction
of a cent to the nearest cent) determined by dividing (1) the product of (a) the
Purchase Price in effect immediately before such Change of Shares and (b) the
sum of (i) the total number of shares of Common Stock outstanding immediately
prior to such Change of Shares, and (ii) the number of shares determined by
dividing (A) the aggregate consideration, if any, received by the Company upon
such sale, issuance, subdivision or combination, by (B) the Market Price; by (2)
the total number of shares of Common Stock outstanding immediately after such
Change of Shares, however, that in no event shall the Purchase Price be adjusted
pursuant too this computation to an amount in excess of the Purchase Price in
effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock, as provided by Section 8(h)
hereof.
(b) For the purposes of any adjustment to be made in accordance with this
Section 8(a) the following provisions shall be applicable:
(A) In case of the issuance or sale of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be cash, the amount of the
cash portion of the consideration therefor deemed to have been received by the
Company shall be (i) the subscription price (before deducting any commissions or
any expenses incurred in connection therewith), if shares of Common Stock are
offered by the Company for subscription, or (ii) the public offering price
(before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection therewith),
if such securities are sold to underwriters or dealers for public offering
without a subscription offering, or (iii) the gross amount of cash actually
received by the Company for such securities, in any other case.
(B) In case of the issuance or sale (otherwise than as a dividend or other
distribution on any stock of the Company, and otherwise than on the exercise of
options, rights or warrants or the conversion or exchange of convertible or
exchangeable securities) of shares of Common Stock (or of other securities
deemed hereunder to involve the issuance or sale of shares of Common Stock) for
a consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash deemed to have been received by the
Company shall be the value of such consideration as determined in good faith by
the Board of Directors of the Company.
(C) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(D) The reclassification of securities of the Company other than shares of
Common Stock into securities including shares of Common Stock shall be deemed to
involve the issuance of such shares of Common Stock for a consideration other
than cash immediately prior to the close of business on the date fixed for the
determination of security holders entitled to receive such shares, and the value
of the consideration allocable to such shares of Common Stock shall be
determined as provided in subsection (B) of this Section 8(a).
(E) The number of shares of Common Stock at any one time outstanding shall
be deemed to include the aggregate maximum number of shares issuable (subject to
readjustment upon the actual issuance thereof) upon the exercise of options,
rights or warrants and upon the conversion or exchange of convertible or
exchangeable securities.
(ii) Upon each adjustment of the Purchase Price pursuant to this Section 8,
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained by
the applicable adjusted Purchase Price.
(c) In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock, for
a consideration per share (determined as provided in Section 8(a) and as
provided below) less than the Market Price, (including the issuance of any such
securities without consideration such as by way of dividend or other
distribution), the Purchase Price for the Warrants (whether or not the same
shall be issued and outstanding) in effect immediately prior to the issuance of
such options, rights or warrants, or such convertible or exchangeable
securities, as the case may be, shall be reduced to a price determined by making
the computation in accordance with the provisions of Section 8(a) hereof,
provided that:
(A) The aggregate maximum number of shares of Common Stock issuable or that
may become issuable under such options, rights or warrants (assuming exercise in
full even if not then currently exercisable or currently exercisable in full)
shall be deemed to be issued and outstanding at the time such options, rights or
warrants were issued, for a consideration equal to the minimum purchase price
per share provided for in such options, rights or warrants at the time of
issuance, plus the consideration, if any, received by the Company for such
options, rights or warrants; provided, however, that upon the expiration or
other termination of such options, rights or warrants, if any thereof shall not
have been exercised, the number of shares of Common Stock deemed to be issued
and outstanding pursuant to this subsection (A) (and for the purposes of
subsection (E) of Section 8(a) hereof) shall be reduced by the number of shares
as to which options, warrants and/or rights shall have expired, and such number
of shares shall no longer be deemed to be issued and outstanding, and the
Purchase Price then in effect shall forthwith be readjusted and thereafter be
the price that it would have been had adjustment been made on the basis of the
issuance only of the shares actually issued plus the shares remaining issuable
upon the exercise of those options, rights or warrants as to which the exercise
rights shall not have expired or terminated unexercised.
(B) The aggregate maximum number of shares of Common Stock issuable or that
may become issuable upon conversion or exchange of any convertible or
exchangeable securities (assuming conversion or exchange in full even if not
then currently convertible or exchangeable in full) shall be deemed to be issued
and outstanding at the time of issuance of such securities, for a consideration
equal to the consideration received by the Company for such securities, plus the
minimum consideration, if any, receivable by the Company upon the conversion or
exchange thereof; provided, however, that upon the expiration or other
termination of the right to convert or exchange such convertible or exchangeable
securities (whether by reason of redemption or otherwise), the number of shares
of Common Stock deemed to be issued and outstanding pursuant to this subsection
(B) (and for the purposes of subsection (E) of Section 8(a) hereof) shall be
reduced by the number of shares as to which the conversion or exchange rights
shall have expired or terminated unexercised, and such number of shares shall no
longer be deemed to be issued and outstanding, and the Purchase Price then in
effect shall forthwith be readjusted and thereafter be the price that it would
have been had adjustment been made on the basis of the issuance only of the
shares actually issued plus the shares remaining issuable upon conversion or
exchange of those convertible or exchangeable securities as to which the
conversion or exchange rights shall not have expired or terminated unexercised.
(C) If any change shall occur in the exercise price per share provided for
in any of the options, rights or warrants referred to in subsection (A) of this
section 8(c), or in the price per share or ratio at which the securities
referred to in subsection (3) of this Section 8(c) are convertible or
exchangeable and if a change in the Purchase Price has not occured by reason of
the event giving rise to the change in the price per share of such other
options, rights, warrants or convertible or exchangeable securities, such
options, rights or warrants or conversion or exchange rights, as the case may
be, to the extent not theretofore exercised, shall be deemed to have expired or
terminated on the date when such price change became effective in respect of
shares not theretofore issued pursuant to the exercise or conversion or exchange
thereof, and the Company shall be deemed to have issued upon such date new
options, rights or warrants or convertible or exchangeable securities.
(d) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger with
a subsidiary in which merger the Company is the continuing corporation and which
does not result in any reclassification or change of the then outstanding shares
of Common Stock or other capital stock issuable upon exercise of the Warrants)
or in case of any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety, then, as a condition
of such reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and the Company shall forthwith file at the Corporate Office of the
Warrant Agent a statement signed by its President or a Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary
evidencing such provision. Such provisions shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8(a) and (b). The above provisions of this
Section 8(d) shall similarly apply to successive reclassifications and changes
of shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.
(e) Irrespective of any adjustments or changes in the Purchase Price or the
number of shares of Common Stock purchasable upon exercise of the Warrants, the
Warrant Certificates theretofore and thereafter issued shall, unless the Company
shall exercise its option to issue new Warrant Certificates pursuant to Section
2(e) hereof, continue to express the Purchase Price per share and the number of
shares purchasable thereunder as the Purchase Price per share and the number of
shares purchasable thereunder were expressed in the Warrant Certificates when
the same were originally issued.
(f) After each adjustment of the Purchase Price pursuant to this Section 8,
the Company will promptly prepare a certificate signed by the Chairman or
President, and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, of the Company setting forth: (i) the Purchase Price as so
adjusted, (ii) the number of shares of Common Stock purchasable upon exercise of
each Warrant, after such adjustment, and (iii) a brief statement of the facts
accounting for such adjustment. The Company will promptly file such certificate
with the Warrant Agent and cause a brief summary thereof to be sent by ordinary
first class mail to each Registered Holder at his last address as it shall
appear on the registry books of the Warrant Agent. No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity thereof. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has been
mailed shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(g) No adjustment of the Purchase Price shall be made as a result of or in
connection with (A) the issuance or sale of the Representative's Warrant or the
Securities underlying the Representative's Warrant, (B) the issuance or sale of
the securities pursuant to the Initial Public Offering, including the Option
Securities and the securities underlying the Securities, (C) the issuance or
sale of shares of Common Stock pursuant to options, warrants, stock purchase
agreements and convertible or exchangeable securities outstanding or in effect
on the date hereof, or (D) the issuance or sale of shares of Common Stock if the
amount of said adjustment shall be less than $.02 for one share of Common Stock,
provided, however, that in such case, any adjustment that would otherwise be
required then to be made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustment that shall amount, together
with any adjustment so carried forward, to at least $.02 for one share of Common
Stock. In addition, Registered Holders shall not be entitled to cash dividends
paid by the Company prior to the exercise of any Warrant or Warrants held by
them.
(h) Subdivision and Combination. In case the Company shall at any time
issue any shares of Common Stock in connection with a stock dividend in shares
of Common Stock or subdivide or combine the outstanding shares of Common Stock,
the Purchase Price shall forthwith be proportionately decreased in the case of a
stock dividend or a subdivision or increased in the case combination.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date, the Company may, on
thirty (30) days prior written notice redeem all the Redeemable Warrants at $.10
per Redeemable Warrant, provided, however, that before any such call for
redemption of Warrants can take place, the (A) average closing bid price for the
Common Stock in the over-the-counter market as reported by the NASD Automated
Quotation System or (B) the average closing sale price on the primary exchange
on which the Common Stock is traded, if the Common Stock is traded on a national
securities exchange, shall have for twenty (20) consecutive trading days ending
on the 3rd day prior to the notice of redemption exceeded 150% of the public
offering price of the shares of Common Stock (initially $7.50 per share of
Common Stock) (subject to adjustment in the event of any stock splits or other
similar events as provided in Section 8 hereof). All Redeemable Warrants must be
redeemed if any are redeemed.
(b) In the event the Company exercises its right to redeem all of the
Redeemable Warrants, it shall give or cause to be given notice to the Registered
Holders of the Redeemable Warrants, by mailing to such Registered Holders a
notice of redemption, first class, postage prepaid, within 30 calendar days of
the aforementioned twenty (20) consecutive trading days and not later than the
twentieth (20th) day before the date fixed for redemption, at their last address
as shall appear on the records of the Warrant Agent. Any notice mailed in the
manner provided herein shall be conclusively presumed to have been duly given
whether or not the Registered Holder receives such notice. At the time of the
mailing to the Registered Holders of the Warrants of the notice of redemption,
the Company shall deliver or cause to be delivered to the Representative a
similar notice telephonically and confirmed in writing together with a list of
the Registered Holders (including their respective addresses and number of
Warrants beneficially owned) to whom such notice of redemption has been or will
be given.
(c) The notice of redemption shall specify (i) the redemption price, (ii)
the date fixed for redemption, (iii) the place where the Warrant Certificate
shall be delivered and the redemption price shall be paid, and (iv) that the
right to exercise the Warrant shall terminate at 5:00 p.m. (New York time) on
the business day immediately preceding the date fixed for redemption. The date
fixed for the redemption of the Warrants shall be the Redemption Date. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity of the proceedings for such redemption except as to a
Registered Holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary or Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a warrant shall terminate at 5:00 p.m. (New York
time) on the business day immediately preceding the Redemption Date. The
redemption price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial capacity
for the Company and the Representative, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not, by issuing and
delivering Warrant Certificates or by any other act hereunder, be deemed to make
any representations as to the validity or value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any stock issued upon
exercise of any Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same, it shall not (i) be liable for any
recital or statement of fact contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement except for its own
gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed by the
Chairman of the Board of Directors, Vice-Chairman or Secretary (unless other
evidence in respect thereof is herein specifically prescribed). The Warrant
Agent shall not be liable for any action taken, suffered or omitted by it in
accordance with such notice, statement, instruction, request, direction, order
or demand.
(e) The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse it for its reasonable expenses
hereunder; the Company further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's gross
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct), after giving 30
days prior written notice to the Company. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation the Company shall
appoint in writing a new warrant agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation by the resigning Warrant Agent, then the Registered Holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a bank or trust company having a
capital and surplus, as shown by its last published report to its stockholders,
of not less than $10,000,000 or a stock transfer company doing business in New
York, New York. After acceptance in writing of such appointment by the new
warrant agent is received by the Company, such new warrant agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not later than
the effective date of any such appointment the Company shall file notice thereof
with the resigning Warrant Agent and shall forthwith cause a copy of such notice
to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged, any corporation resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant Agent or
any new warrant agent shall be a successor warrant agent under this Agreement
without any further act, provided that such corporation is eligible for
appointment as successor to the Warrant Agent under the provisions of the
preceding paragraph. Any such successor warrant agent shall promptly cause
notice of its succession as warrant agent to be mailed to the Company and to the
Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two years from the date
of exercise any Warrant Certificate received by it upon such exercise, marked to
indicate its cancellation thereof in accordance with Section 6(e) hereof.
SECTION 12. Modification of Agreement
The Warrant Agent and the Company may by supplemental agreement make any
changes or corrections in this Agreement without the approval of any holders of
Warrants (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; (ii) that they may deem necessary or desirable and which shall
not adversely affect the interests of the holders of warrant certificates; or
(iii) which may be required by law; provided, however, that this Agreement shall
not otherwise be modified, supplemented or altered in any respect except with
the consent in writing of the Registered Holders representing not less than 50%
of the Warrants then outstanding; provided, further, that no change in the
number of the securities purchasable upon the exercise of any Warrant, or the
Purchase Price therefor, shall be, made without the consent in writing of the
Registered Holder of the Warrant Certificate, other than such changes as are
specifically permitted or prescribed by this Agreement as originally executed.
In addition, this Agreement may not be modified, amended or supplemented without
the prior written consent of the Representative, other than (i) to cure any
ambiguity or to correct any provision which is inconsistent or which is a
manifest mistake or error; (ii) to make any such change that is necessary or
desirable and which shall not adversely affect the interests of the
Representative; or (iii) except as may be required by-law.
SECTION 13. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made when delivered or five days
after mailed first-class postage prepaid, or upon receipt when sent by
facsimile, with confirmation received, if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company at 000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000, Attention: Chairman, or at such other address as
may have been furnished to the Warrant Agent in writing by the Company; and if
to the Warrant Agent, at its Corporate Office. Copies of any notice delivered
pursuant to this Agreement shall be delivered to The Thornwater Company, L.P.,
000X Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President, or at
such other addresses as may have been furnished to the Company and the Warrant
Agent in writing. SECTION 14. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to conflicts of laws.
SECTION 15. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and the
holders from time to time of Warrant Certificates or any of them. Except as
hereinafter stated, nothing in this Agreement is intended or shall be construed
to confer upon any other person any right, remedy or claim or to impose upon any
other person any duty, liability or obligation. The Representative is, and shall
at all times irrevocably be deemed to be, a third-party beneficiary of this
Agreement, with full power, authority and standing to enforce the rights granted
to it hereunder. In the event of any conflict relating to the Representative's
Warrant between the terms hereof and the terms of the Underwriter's Warrant
Agreement, the terms of the Underwriter's Warrant Agreement shall prevail.
SECTION 16. Counterparts.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXXX ELECTRONICS, INC.
By: /s/Xxxxxxx Xxxxx
---------------------------
Xxxxxxx Xxxxx, Chairman
[SEAL]
REGISTRAR AND TRANSFER COMPANY
By:
[SEAL]
Exhibit A
No. HEW________ VOID AFTER 5:00 P M on March 30, 2003
_________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
XXXXXX ELECTRONICS, INC.
NO. _______ CUSIP:
THIS CERTIFIES THAT, FOR VALUE RECEIVED _____________________ or registered
assigns (the "Registered Holder") is the owner of the number of Redeemable
Warrants (the "Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter defined), one fully
paid and non-assessable share of Common Stock, $.01 par value, of Xxxxxx
Electronics, Inc., a New York corporation (the "Company"), at any time from
March 30, 2000 and prior to the Expiration Date (as hereinafter defined) upon
the presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of Registrar
and Transfer Company, as Warrant Agent, or its successor (the "Warrant Agent"),
accompanied by payment of $5.50 per share, subject to adjustment (the "Purchase
Price"), in lawful-money of the United States of America in cash or by check
made payable to the Warrant Agent for the account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated April 6, 1998,
by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all the warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York time) on March
30, 2003. If such date shall in the State of New York be a holiday or a day on
which the banks are authorized to close, then the Expiration Date shall mean
5:00 P.M. (New York time) the next following day which in the State of New York
is not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that, if required by the Act, and unless during any period it is not
reasonably likely that the Warrants will be exercised, it will file a
registration statement under the Act, use its best efforts to cause the same to
become effective, keep such registration statement current, if required under
the Act, while any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration or
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a shareholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $.10 per
Warrant, at any time commencing after March 30, 2000 provided that (i) the
average closing bid price for the Common Stock in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System, or (ii) the average closing sale price on the primary exchange on which
the Common Stock is traded, if the Common Stock is traded on a national
securities exchange, or (iii) the average closing sale price on NASDAQ, if the
Common Stock is quoted on NASDAQ, shall have for twenty (20) consecutive trading
days ending on the third (3rd) day prior to the Notice of Redemption, as defined
below, exceeded 150% of the public offering price of the shares of Common Stock
Price (initially $7.50 per share) (subject to adjustment in the event of any
stock splits or other similar events). Notice of redemption (the "Notice of
Redemption") shall be given not later than the twentieth day before the date
fixed for redemption, all as provided in the Warrant Agreement. On and after the
date fixed for redemption, the Registered Holder shall have no rights with
respect to this Warrant except to receive the $.10 per Warrant upon surrender of
this Certificate.
Under certain circumstances, The Thornwater Company, L.P., its successors
and assigns shall be entitled to receive an aggregate of five percent (5%) of
the Purchase Price of the Warrants represented hereby.
Prior to due presentment for registration or transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant-represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts of
laws.
This Warrant Certificate is not, valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: __________, 1998
XXXXXX ELECTRONICS, INC.
By:/s/Xxxxxxx Xxxxx
-------------------------------------
SEAL Name: Xxxxxxx Xxxxx
Title: Chairman
By:/s/Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
COUNTERSIGNED:
REGISTRAR AND TRANSFER COMPANY as Warrant Agent
By: ________________________
Authorized Officer
SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably elects to exercise
______________ Warrants represented by this Warrant Certificate, and to purchase
the securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
=======================================
---------------------------------------
(please print or type name and address)
and be delivered to:
=======================================
---------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by
The Thornwater Company, L.P. [ ]
2. The exercise of this Warrant was solicited by
------------------. [ ]
3. If the exercise of this Warrant was not solicited, please check the
following box. [ ]
X____________________________ Dated: _____________, 199__
----------------------------
----------------------------
Address
----------------------------
Social Security or Taxpayer
Identification Number
----------------------------
Signature Guaranteed
----------------------------
ASSIGNMENT
To Be Executed by the Registered Holder in Order to Assign Warrants
FOR VALUE RECEIVED, ______________________________, hereby sells, assigns
and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
--------------------------------------
--------------------------------------
--------------------------------------
(please print or type name and address)
_______________________________________________________ of the Warrants
represented by this Warrant Certificate, and hereby irrevocably constitutes and
appoints ------------------------------------
Attorney to transfer this Warrant Certificate on the books of the Company,
with full power of substitution in the premises.
Dated: ___________________, 199____
X______________________
Signature Guaranteed
----------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST
BE MEDALLION GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM
OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE, WHO IS A MEMBER OF THE
MEDALLION PROGRAM.
