EXHIBIT 1.2
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED, EXCEPT UPON SUCH
REGISTRATION OR UPON DELIVERY TO MAKER OF AN OPINION OF COUNSEL SATISFACTORY
TO MAKER THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.
XXXX GROUP, INC.
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
NO. [ ] [_______] SHARES
FOR VALUE RECEIVED, XXXX GROUP, INC., a Delaware corporation (the
"Company"), hereby certifies that CRUTTENDEN XXXX INCORPORATED or its
permitted assigns, is entitled to purchase from the Company, at any time or
from time to time commencing on [ , 1998] and prior to 5:00 P.M., New
York City time, on [ , 2003], One Hundred Thousand (100,000) fully
paid and non-assessable shares of the common stock, $.01 par value per share,
of the Company for an aggregate purchase price of $[ ] (computed on
the basis of $ PER SHARE). Hereinafter, (i) said common stock,
together with any other equity securities which may be issued by the Company
with respect thereto or in substitution therefor, is referred to as the
"Common Stock," (ii) the shares of the Common Stock purchasable hereunder or
under any other Warrant (as hereinafter defined) are referred to individually
as a "Warrant Share" and collectively as the "Warrant Shares," (iii) the
aggregate purchase price payable for the Warrant Shares hereunder is referred
to as the "Aggregate Warrant Price," (iv) the price payable for each of the
Warrant Shares hereunder is referred to as the "Per Share Warrant Price," (v)
this Warrant, all similar Warrants issued on the date hereof and all Warrants
hereafter issued in exchange or substitution for this Warrant or such similar
Warrants are referred to as the "Warrants", and (vi) the holder of this
Warrant is referred to as the "Holder" and the holder of this Warrant and all
other Warrants or Warrant Shares issued upon the exercise of any Warrant are
referred to as the "Holders." The Aggregate Warrant Price is not subject to
adjustment. The Per Share Warrant Price is subject to adjustment as
hereinafter provided, and in the event of any such adjustment, the number of
Warrant Shares shall be adjusted to equal the number determined by dividing
the Aggregate Warrant Price by the Per Share Warrant Price in effect
immediately after such adjustment.
1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in whole at any time or in part from
time to time, during the period commencing on [______________, 1998] and ending
prior to 5:00 P.M., New York City time, on [__________, 2003] (such period, the
"Exercise Period"), by the Holder by the surrender of this Warrant (with the
subscription form at the end of this Warrant duly executed) at the address set
forth in Section 10(a) hereof, together with proper payment of the Aggregate
Warrant Price, or the proportionate part thereof if this Warrant is exercised in
part. Payment for Warrant Shares shall be made by certified or official bank
check payable to the order of the Company. If this Warrant is exercised in
part, this Warrant must be exercised for a number of whole shares of the Common
Stock, and the Holder is entitled to receive a new Warrant covering the Warrant
Shares in respect of which this Warrant has not been exercised and setting forth
the proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such exercise and surrender of this Warrant, the Company will
(i) issue a certificate or certificates in the
name of the Holder for the largest number of whole shares of the Common Stock
to which the Holder shall be entitled and, if this Warrant is exercised in
whole, in lieu of any fractional share of the Common Stock to which the
Holder shall be entitled, pay to the Holder cash in an amount equal to the
fair value of such fractional share (determined in such reasonable manner as
the Board of Directors of the Company shall determine) and (ii) deliver the
other securities and properties receivable upon the exercise of this Warrant,
or the proportionate part thereof if this Warrant is exercised in part,
pursuant to the provisions of this Warrant.
(b) In lieu of exercising this Warrant in the manner set forth in
Section 1(a) above, this Warrant may be exercised in whole at any time or in
part from time to time during the Exercise Period, by the Holder by
surrendering the Warrant at the address set forth in Section 10(a) hereof,
without payment of any other consideration, commission or remuneration,
together with the subscription form at the end of this Warrant, duly
executed. The number of shares of the Common Stock to be issued by the
Company shall be calculated using the following formula:
X=Y(A-B)
------
A
Where X= the number of shares of the Common Stock to
be issued to the Holder
Y= the number of shares of the Common Stock purchasable
under this Warrant or, if this Warrant is being
exercised in part, under the portion of the Warrant
being exercised (at the date of the surrender of this
Warrant and the subscription form)
A= the Market Price (at the date of the surrender of this
Warrant and the subscription form)
B= the Per Share Warrant Price (as adjusted to the date of
the surrender of this Warrant and the subscription form)
If this Warrant is exercised in part pursuant to this Section 1(b),
this Warrant must be exercised for a number of whole shares of the Common
Stock, and the Holder is entitled to receive a new Warrant covering the
Warrant Shares in respect of which this Warrant has not been exercised and
setting forth the proportionate part of the Aggregate Warrant Price
applicable to such Warrant Shares. Upon such exercise and surrender of this
Warrant, the Company will (i) issue a certificate or certificates in the name
of the Holder for the largest number of whole shares of the Common Stock to
which the Holder shall be entitled and, if this Warrant is exercised in
whole, in lieu of any fractional share of the Common Stock to which the
Holder shall be entitled, pay cash equal to the fair value of such fractional
share (determined in such reasonable manner as the Board of Directors of the
Company shall determine) and (ii) deliver the other securities and properties
receivable upon the exercise of this Warrant, or the proportionate part
thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
(c) The market price of a share of the Common Stock (the "Market
Price") on any date of determination shall be (i) the last reported sale
price per share of the Common Stock on the business
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day immediately preceding the date of determination as reported on the Nasdaq
National Market (the "Nasdaq National Market"), or (ii) if there is no such
reported sale on the date in question, the average of the closing bid and
asked quotations as so reported on the Nasdaq National Market, or (iii) if
the Common Stock is not then listed on the Nasdaq National Market, the last
reported sale price per share of the Common Stock on such national securities
exchange upon which the Common Stock is then listed, or (iv) if the Common
Stock is not then listed on any national securities exchange, the average of
the closing bid and asked quotations in the over-the-counter market as
reported by Nasdaq, or if not so reported, as reported by the National
Quotations Bureau or a similar organization. In the absence of such
quotations, the Board of Directors of the Company shall determine in good
faith the fair market value per share of the Common Stock, which shall for
these purposes be deemed to be the Market Price, which determination shall be
set forth in a certificate executed by an officer of the Company showing the
facts upon which the Market Price is based.
2. RESERVATION OF WARRANT SHARES; LISTING. The Company agrees that,
prior to the expiration of this Warrant, the Company will at all times (a) have
authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists the Common Stock on any national
securities exchange, use its best efforts to keep the shares of the Common Stock
receivable upon the exercise of this Warrant authorized for listing on such
exchange upon notice of issuance.
3. PROTECTION AGAINST DILUTION.
(a) If, at any time or from time to time after the date of this
Warrant, the Company shall issue or distribute to the holders of shares of
the Common Stock (i) securities, other than shares of the Common Stock, or
(ii) property, other than cash, without payment therefor, with respect to the
Common Stock, then, and in each such case, the Holder, upon the exercise of
this Warrant, shall be entitled to receive the securities and property which
the Holder would hold on the date of such exercise if, on the date of this
Warrant, the Holder had been the holder of record of the number of shares of
the Common Stock subscribed for upon such exercise and, during the period
from the date of this Warrant to and including the date of such exercise, had
retained such shares and the securities and properties receivable by the
Holder during such period. Notice of each such distribution shall be
forthwith mailed to the Holder.
(b) If, at any time or from time to time after the date of this
Warrant, the Company shall (i) pay a dividend or make a distribution on its
capital stock in shares of the Common Stock, (ii) subdivide its outstanding
shares of the Common Stock into a greater number of shares, (iii) combine its
outstanding shares of the Common Stock into a smaller number of shares or
(iv) issue by reclassification of the Common Stock any shares of capital
stock of the Company, the Per Share Warrant Price shall be adjusted so that
the Holder upon the exercise hereof shall be entitled to receive the number
of shares of the Common Stock or other capital stock of the Company which the
Holder would have owned immediately following such action had such Warrant
been exercised immediately prior thereto. An adjustment made pursuant to
this Section 3(b) shall become effective immediately after the record date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
(c) In case of any consolidation or merger to which the Company is
a party other than a merger or consolidation in which the Company is the
continuing corporation, or in case of any sale or
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conveyance to another entity of the property of the Company as an entirety or
substantially as an entirety, or in the case of any statutory exchange of
securities with another entity (including any exchange effected in connection
with a merger of another corporation with the Company), the Holder of this
Warrant shall have the right thereafter to receive on the exercise of this
Warrant the kind and amount of securities, cash or other property which the
Holder would have owned or have been entitled to receive immediately after
such consolidation, merger, statutory exchange, sale or conveyance had this
Warrant been exercised immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and, in any
such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Section 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Section 3 shall thereafter correspondingly
be made applicable, as nearly as may reasonably be, in relation to any shares
of stock or other securities or property thereafter deliverable on the
exercise of this Warrant. The above provisions of this Section 3(c) shall
similarly apply to successive consolidations, mergers, statutory exchanges,
sales or conveyances. The issuer of any shares of stock or other securities
or property thereafter deliverable on the exercise of this Warrant shall be
responsible for all of the agreements and obligations of the Company
hereunder. Notice of any such consolidation, merger, statutory exchange, sale
or conveyance and of said provisions so proposed to be made, shall be mailed
to the Holders of the Warrants not less than 30 days prior to such event. A
sale of all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
(d) No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least
$0.05 per share of the Common Stock; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 3(d) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment; PROVIDED
FURTHER, HOWEVER, that adjustments shall be required and made in accordance
with the provisions of this Section 3 (other than this Section 3(d)) not
later than such time as may be required in order to preserve the tax-free
nature of a distribution to the Holder of this Warrant or the Common Stock
issuable upon exercise hereof. All calculations under this Section 3 shall
be made to the nearest cent or to the nearest 1/100th of a share, as the case
may be. Anything in this Section 3 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Per Share Warrant
Price, in addition to those required by this Section 3, as it in its
discretion shall deem to be advisable in order that any stock dividend,
subdivision of shares or distribution of rights to purchase stock or
securities convertible or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable.
(e) Whenever the Per Share Warrant Price is adjusted as provided in
this Section 3 and upon any modification of the rights of a Holder of
Warrants in accordance with this Section 3, the Company shall promptly
prepare a notice (the "Adjustment Notice"), which shall be certified by the
Company's Chief Executive Officer to be true and correct. The Adjustment
Notice shall set forth the Per Share Warrant Price and the number of Warrant
Shares after such adjustment or the effect of such modification, a brief
statement of the facts requiring such adjustment or modification and the
manner of computing the same, and copies of such notice shall be mailed to
the Holders of the Warrants not later than thirty (30) days following the
occurrence of the event giving rise to the adjustment.
(f) If the Board of Directors of the Company shall (i) declare any
dividend or other distribution with respect to the Common Stock, other than a
cash dividend payable otherwise than out of earnings or earned surplus, (ii)
offer to the holders of shares of the Common Stock any additional shares of
the Common Stock, any securities convertible into or exercisable for shares
of the Common Stock or any rights to subscribe thereto or (iii) propose a
dissolution, liquidation or winding up of the Company, the Company shall mail
notice thereof to the Holders of the Warrants not less than 15 days prior to
the
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record date fixed for determining stockholders entitled to participate in
such dividend, distribution, offer or subscription right or to vote on such
dissolution, liquidation or winding up.
(g) If, as a result of an adjustment made pursuant to this Section
3, the Holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive shares of two or more classes of capital stock or shares
of the Common Stock and other capital stock of the Company, the Board of
Directors of the Company (whose determination shall be conclusive and shall
be described in a written notice to the Holder of any Warrant promptly after
such adjustment) shall determine the allocation of the adjusted Per Share
Warrant Price between or among shares or such classes of capital stock or
shares of the Common Stock and other capital stock and any subsequent
adjustments made pursuant to this Section 3 shall apply equally to each such
resulting class of capital stock.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares
of the Common Stock represented by each and every certificate for Warrant
Shares delivered on the exercise of this Warrant shall, at the time of such
delivery, be validly issued and outstanding, fully paid and nonassessable,
and not subject to preemptive rights, rights of first refusal or other
contractual rights to purchase securities of the Company, and the Company
will take all such actions as may be necessary to assure that the par value
or stated value, if any, per share of the Common Stock is at all times equal
to or less than the then Per Share Warrant Price. The Company further
covenants and agrees that it will pay, when due and payable, any and all
federal and state stamp, original issue or similar taxes which may be payable
in respect of the issue of any Warrant Share or certificate therefor.
5. REGISTRATION UNDER SECURITIES ACT OF 1933.
(a) The Company agrees that if, at any time during the period
commencing on [_________,1998] and ending on [_________,2003], (i) the Holder
and/or the Holders of any other Warrants and/or Warrant Shares who or which
shall hold, collectively, not less than 50% of the Warrants and/or Warrant
Shares outstanding at such time and not previously sold pursuant to this
Section 5 shall request that the Company file a registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), covering not
less than 50% of the Warrant Shares issued or issuable upon the exercise of
the Warrants, and not so previously sold, the Company will (i) promptly
notify each Holder of the Warrants and each holder of Warrant Shares not so
previously sold that such registration statement will be filed and that the
Warrant Shares which are then held, and/or may be acquired upon exercise of
the Warrants by the Holder and such Holders, will be included in such
registration statement at the Holder's and such Holders' request, (ii) cause
such registration statement to cover all Warrant Shares which it has been so
requested to include, (iii) use its best efforts to cause such registration
statement to become effective as soon as practicable and (iv) take all other
action necessary under any federal or state law or regulation of any
governmental authority to permit all Warrant Shares which it has been so
requested to include in such registration statement to be sold or otherwise
disposed of, and will maintain such compliance with each such federal and
state law and regulation of any governmental authority for the period
necessary for such Holders to effect the proposed sale or other disposition.
The Company shall be required to effect a registration or qualification
pursuant to this Section 5(a) on one occasion only and shall be required to
effect such registration only at such time as the Company is eligible to use
Form S-3 (or any successor form) for the resale of shares by persons other
than the Company. The Company agrees to exercise its best efforts to obtain
eligibility to use Form S-3 at the earliest possible time, and to maintain
such eligibility through the term of this Warrant.
(b) The Company agrees that if, at any time and from time to time
during the period commencing [__________,1998] and ending on
[___________,2003], the Board of Directors of the
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Company shall authorize the filing of a registration statement (any such
registration statement being hereinafter called a "Subsequent Registration
Statement") under the Securities Act (otherwise than pursuant to Section 5(a)
hereof, and other than a registration statement on Form X-0, Xxxx X-0 or
other form which does not permit secondary sales or include substantially the
same information as would be required in a form for the general registration
of securities) in connection with the proposed offer of any of its securities
by it or any of its stockholders, the Company will (i) promptly notify the
Holder and each of the Holders, if any, of other Warrants and/or Warrant
Shares not previously sold pursuant to this Section 5 that such Subsequent
Registration Statement will be filed and that the Warrant Shares which are
then held, and/or which may be acquired upon the exercise of the Warrants, by
the Holder and such Holders, will, at the Holder's and such Holders' request,
be included in such Subsequent Registration Statement, (ii) upon the written
request of a Holder made within 20 days after the giving of such notice by
the Company, include in the securities covered by such Subsequent
Registration Statement all Warrant Shares which it has been so requested to
include, (iii) use its best efforts to cause such Subsequent Registration
Statement to become effective as soon as practicable and (iv) take all other
action necessary under any federal or state law or regulation of any
governmental authority to permit all Warrant Shares which it has been so
requested to include in such Subsequent Registration Statement to be sold or
otherwise disposed of, and will maintain such compliance with each such
federal and state law and regulation of any governmental authority for the
period necessary for the Holder and such Holders to effect the proposed sale
or other disposition.
(c) Whenever the Company is required pursuant to the provisions of
this Section 5 to include Warrant Shares in a registration statement or a
post-effective amendment to a registration statement, the Company shall (i)
furnish each Holder of any such Warrant Shares and each underwriter of such
Warrant Shares with such copies of the prospectus, including the preliminary
prospectus, conforming to the Securities Act (and such other documents as
each such Holder or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of the Warrant Shares, (ii) use its best
effort to register or qualify such Warrant Shares under the blue sky laws (to
the extent applicable) of such jurisdiction or laws (to the extent
applicable) of such jurisdiction or jurisdictions as the Holders of any such
Warrant Shares and each underwriter of Warrant Shares being sold by such
Holders shall reasonably request and (iii) take such other actions as may be
reasonably necessary or advisable to enable such Holders and such
underwriters to consummate the sale or distribution in such jurisdiction or
jurisdictions in which such Holders shall have reasonably requested that the
Warrant Shares be sold, provided that the Company shall not be required to
execute a general consent to service of process or qualify to do business as
a foreign corporation in any jurisdiction where it is not so qualified.
(d) The Company shall have the right to defer the filing of any
registration statement pursuant to Section 5(a) hereof and to suspend the
ability of Holders to sell Warrant Shares pursuant to any registration
statement declared effective under Section 5(a) or 5(b) hereof, in either
case for up to 60 days, if (i) in the opinion of counsel for the Company, the
Company would thereby be required to disclose nonpublic information relating
to pending corporate developments or business transactions involving the
Company or its subsidiaries not otherwise then required by law to be publicly
disclosed and (ii) in the good faith judgment of the Company's Board of
Directors, such disclosure at such time would adversely affect the Company or
such corporate development or business transaction contemplated by the
Company or its subsidiaries. Such period shall be referred to herein as the
"Black-Out Period," and the Company shall not be entitled to implement more
than two such Black-Out Periods during any 12-month period. In the event
that notice of a Black-Out Period is given, each Holder shall keep the fact
and subject matter of such notice confidential and refrain from any further
sales or other transfers of Warrant Shares pursuant to the registration
statement until the Holder receives either copies of a supplemented pr
amended prospectus or a notice from the Company advising the Holder that the
use of the existing
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prospectus may be resumed.
(e) Notwithstanding any provision in this Section 5 to the contrary,
the Company shall not be required to include in any registration requested
pursuant to this Section 5 any Warrant Shares issued or issuable upon
exercise of a Warrant and then held by any Holder who is able at such time to
sell all such Warrant Shares in one three-month period pursuant to Rule 144
under the Securities Act.
(f) The Company shall pay all expenses incurred in connection with
any registration or other action pursuant to the provisions of this Section,
other than underwriting discounts and applicable transfer taxes relating to
the Warrant Shares and fees and disbursements of counsel and accountants for
the Holders.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each selling
holder (including, for purposes of this Section 6, any Holder) of Warrant
Shares and each person who controls any such selling holder within the
meaning of Section 15 of the Securities Act, and each and all of them, from
and against any and all losses, claims, damages, liabilities or actions,
joint or several, to which any selling holder of Warrant Shares or they or
any of them may become subject under the Securities Act or otherwise and to
reimburse the persons indemnified above for any legal or other expenses
(including the cost of any investigation and preparation) reasonably incurred
by them in connection with any litigation or threatened litigation, whether
or not resulting in any liability, but only insofar as such losses, claims,
damages, liabilities or actions arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement pursuant to which Warrant Shares were registered under
the Securities Act (hereinafter called a "Registration Statement"), any
preliminary prospectus, the final prospectus or any amendment or supplement
thereto (or in any application or document filed in connection therewith) or
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that (i) the indemnity agreement contained in this Section 6(a)
shall not extend to any selling holder of Warrant Shares in respect of any
such losses, claims, damages, liabilities or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement, or any such
omission or alleged omission, if such statement or omission was based upon
and made in conformity with information furnished in writing to the Company
by a selling holder of Warrant Shares specifically for use in connection with
the preparation of such Registration Statement, any final prospectus, any
preliminary prospectus or any such amendment or supplement thereto. The
Company agrees to pay any legal and other expenses for which it is liable
under this Section 6(a) from time to time (but not more frequently than
monthly) within 30 days after its receipt of a xxxx therefor.
(b) Each selling holder of Warrant Shares, severally and not
jointly, will indemnify and hold harmless the Company, its directors, its
officers who shall have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act to the same extent as the foregoing indemnity from the
Company, but in each case to the extent, and only to the extent, that any
statement in or omission from or alleged omission from such Registration
Statement, any final prospects, any preliminary prospectus or any amendment
or supplement thereto was made in reliance upon information furnished in
writing to the Company by such selling holder specifically for use in
connection with the preparation of the Registration Statement, any final
prospectus or the preliminary prospectus or any such amendment or supplement
thereto; PROVIDED, HOWEVER, that the obligation of any holder of Warrant
Shares to indemnify the Company under the provisions of this
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Section 6(b) shall be limited to the Market Price of the Warrant Shares being
sold by the selling holder minus the Aggregate Warrant Price for such Warrant
Shares. Each selling holder of Warrant Shares agrees to pay any legal and
other expenses for which its liable under this Section 6(b) from time to time
(but not more frequently than monthly) within 30 days after receipt of a xxxx
therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing Section 6(a) or Section 6(b) (an
"indemnified party") in respect of which indemnity may by sought against a
person granting indemnification (an "indemnifying party") pursuant to such
section, such indemnified party shall promptly notify such indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party of any such action shall not release the indemnifying
party from any liability it may have to such indemnified party otherwise than
on account of the indemnity agreement contained in Section 6(a) or Section
6(b) hereof to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against an indemnified party and
it notifies an indemnifying party of the commencement thereof, the
indemnifying party against which a claim is to be made will be entitled to
participate therein at its own expense and, to the extent that it may wish,
to assume at its own expense the defense thereof, with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, that if the
indemnified party shall have reasonably concluded based upon advice of
counsel that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnified party shall have the right to
select separate counsel to assume such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section 6 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel), (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party. An indemnifying party shall not be liable for any
settlement of any action or proceeding effected without its written consent
(which consent shall not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 6(a)
or (b) hereof is unavailable in accordance with its terms, the Company and
the selling holder of Warrant Shares shall contribute to the aggregate
losses, claims, damages and liabilities, of the nature contemplated by said
indemnity agreement, incurred by the Company and the selling holder of
Warrant Shares, in such proportions as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the selling holder of
Warrant Shares, on the other hand, from any offering of the Warrant Shares;
PROVIDED, HOWEVER, that if such allocation is not permitted by applicable law
or if the indemnified party failed to give the notice required under Section
6(c), then the relative fault of the Company and the selling holder of
Warrant Shares in connection with the statements or omissions which result in
such losses, claims, damages and liabilities and other relevant equitable
considerations will be considered together with such relative benefits.
(e) The respective indemnity and contribution agreements by the
Company and the selling holder of Warrant Shares in Sections 6(a), (b), (c)
and (d) hereof shall remain operative and in full force and effect regardless
of (i) any investigation made by any selling holder of Warrant Shares or by
or
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on behalf of any person who controls such selling holder or by the Company or
any controlling person of the Company or any director or any officer of the
Company, (ii) the exercise of this Warrant or (iii) payment for any of the
Warrant Shares, and shall survive the delivery of the Warrant Shares, and any
successor of the Company, or of any selling holder of Warrant Shares, or of
any person who controls the Company, or of any selling holder of Warrant
Shares, as the case may be, shall be entitled to the benefit of such
respective indemnity and contribution agreements. The respective indemnity
and contribution agreements by the Company and the selling holders of Warrant
Shares contained in Sections 6(a), (b), (c) and (d) hereof shall be in
addition to any liability which the Company and the selling holders of
Warrant Shares may otherwise have.
7. LIMITED TRANSFERABILITY. This Warrant may not be sold,
transferred, assigned or hypothecated by the Holder (a) except in compliance
with the provisions of the Securities Act and any applicable state securities
laws and (b) until the first anniversary of the date hereof except (i) to
Cruttenden Xxxx Incorporated or any successor firm or corporation of
Cruttenden Xxxx Incorporated, (ii) to any of the officers of Cruttenden Xxxx
Incorporated, or of any such successor firm or corporation, or (iii) in the
case of an individual, pursuant to such individual's last will and testament
or the laws of descent and distribution, and is so transferable only upon the
books of the Company which it shall cause to be maintained for the purpose.
The Company may treat the registered Holder of this Warrant as he or it
appears on the Company's books at any time as the Holder for all purposes.
The Company shall permit any Holder of a Warrant or his or its duly
authorized attorney, upon written request during ordinary business hours, to
inspect and copy or make extracts from its books showing the registered
holders of Warrants. All Warrants issued upon the transfer or assignment of
this Warrant will be dated the same date as this Warrant, and all rights of
the Holder thereof shall be identical to those of the Holder of this Warrant.
8. LOSS, ETC., OF WARRANT. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like
date, tenor and denomination.
9. WARRANT HOLDER NOT STOCKHOLDER. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a stockholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
stockholder, prior to the exercise hereof.
10. COMMUNICATION. No notice or other communication under this
Warrant shall be effective unless, but any notice or other communication
shall be effective and shall be deemed to have been given if, the same is in
writing and is mailed by first-class mail, postage prepaid, addressed to:
(a) the Company at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx Xxx,
Xxxxxxxxxx, 00000, or such other address as the Company has designated
in writing to the Holder, or
(b) the Holder at Cruttenden Xxxx Incorporated, 00000 Xxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Attention: Corporate Finance
Department, or such other address as the Holder has designated in
writing to the Company.
11. HEADINGS. The headings of this Warrant have been inserted as
a matter of convenience and shall not affect the construction hereof.
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12. APPLICABLE LAW. This Warrant shall be governed by and
construed in accordance with the law of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
IN WITNESS WHEREOF, Xxxx Group, Inc. has caused this Warrant to be
signed by its [ ] and its corporate seal to be hereunto affixed and
attested by its Secretary this day of , 1998.
-- ------------
XXXX GROUP, INC.
By:
---------------------------------------
Xxxxxxx X. Xxxx
Chairman and Chief Executive Officer
ATTEST:
--------------------------
Name:
Title:
[Corporate Seal]
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ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells, assigns
and transfers unto _______________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_____________________________, attorney, to transfer said Warrant on the books
of Xxxx Group, Inc.
Dated: Signature:
--------------- -------------------------------
Address:
---------------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto __________________________ the right to purchase
_____________ shares of the Common Stock of Xxxx Group, Inc. covered by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced thereby, and does irrevocably constitute and appoint
__________________________, attorney, to transfer that part of said Warrant
on the books of Xxxx Group, Inc.
Dated: Signature:
-------------- ------------------------
Address:
-----------------------------
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SUBSCRIPTION FORM
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to purchase thereunder,
_____________ shares of the Common Stock of Xxxx Group, Inc., as provided for
in Section 1 thereof.
The undersigned herewith makes payment for such shares in full at
the price per share provided by such Warrant in the following manner (please
check the type or types of payment and indicate the portion of the aggregate
payment to be paid by each type of payment):
____ exercise for cash as provided in Section 1(a) of such Warrant.
____ exercise by surrender of such Warrant (or a portion thereof) in
accordance with Section 1(b) of such Warrant.
Please issue a certificate or certificates for such shares in the name
of, and pay any cash for any fractional share to:
Name
---------------------------------------
(Please Print Name, Address and Social Security No. or
Taxpayer Identification No.)
Address
-----------------------------------
-----------------------------------
Social Security No. or
Taxpayer Identification No.
---------------
Signature
----------------------------------
NOTE: The above signature should correspond exactly with the name on
the first page of such Warrant or with the name of the assignee
appearing in the assignment form attached to the Warrant.
And if such number of shares shall not be all the shares
purchasable under the attached Warrant, a new Warrant is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder and delivered to the address set forth above.
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