WARRANT AGREEMENT
BETWEEN
NU-KOTE HOLDING, INC.
AND
THE WARRANTHOLDERS
---------------------------------------
DATED AS OF JULY 31, 1997
WARRANT AGREEMENT
WARRANT AGREEMENT (the "Agreement") dated as of July 31, 1997, between
Nu-kote Holding, Inc., a Delaware corporation (the Company"), and each of the
persons listed on the signature pages hereto (the "Warrantholders").
RECITALS:
The Company proposes to issue and deliver its warrant certificates to the
Warrantholders (the "Warrant Certificates") evidencing Warrants to purchase up
to an aggregate of 1,704,763 shares, subject to adjustment as provided herein,
of its Common Stock. Each such Warrant will entitle the registered owner
thereof to purchase one Stock Unit, subject to adjustment as provided herein.
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the record holders of the Warrants, the Company
and each of the Warrantholders hereby agrees as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
ADDITIONAL SHARES OF COMMON STOCK: All shares of Common Stock issued by the
Company after the date of this Agreement other than Underlying Common Stock.
AFFILIATE: Of any Person, any person directly or indirectly controlling
or controlled by or under direct or indirect common control with such Person.
For purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
BUSINESS DAY: Any day excluding Saturday, Sunday and any day which either
is a legal holiday under the laws of either the State of Texas or the State of
New York or is a day on which banking institutions located in either state are
authorized or required by law or other governmental action to close.
COMMON STOCK: The Class A Common Stock, par value $.01 per share, of the
Company and any other capital stock of the Company into which such Common Stock
may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution of, such Common Stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
COMPANY: Nu-kote Holding, Inc., a Delaware corporation, and its successors
and assigns.
CONVERTIBLE SECURITIES: Evidences of indebtedness, shares of stock or
other securities that are convertible into or exchangeable, with or without
payment of additional consideration in cash or property, for Additional Shares
of Common Stock, either immediately or upon the arrival of a specified date or
the happening of a specified event.
CURRENT MARKET PRICE: Per share of Common Stock, on any date herein
specified, shall be deemed to be (i) the average of the daily market prices
(determined as set forth in the next sentence), if any, for 30 consecutive
Business Days commencing 45 Business Days before such date; or (ii) in the
event that there is not a public market in the Common Stock and a Majority of
Holders shall, at their option, request such appraisal, the appraised value
thereof as determined by an investment banking firm selected by the Company
and acceptable to such Holders. The market price for each such Business Day
shall be (a) the average of the last sale prices on such day on all domestic
stock exchanges on which the Common Stock may then be listed; or (b) if no
sales take place on such day on any such exchange, the average of the closing
bid and asked prices on such as officially quoted on such exchanges; or (c)
if the Common Stock is not then listed or admitted to trading on any domestic
stock exchange, the average of the reported bid and asked prices on such day
in the over-the-counter market, as furnished by the National Quotation
Bureau, Inc. or, if such firm at the time is not engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business and selected by the Company or, if there is no such firm, as
furnished by any member of the National Association of Securities Dealers,
Inc. selected by the Company.
CURRENT WARRANT PRICE: Per share of Common Stock, at any date herein
specified, the amount equal to the quotient resulting from dividing the
applicable purchase price per Stock Unit provided for in this Agreement, as in
effect on such date, by the number of shares (including any fractional share) of
Common Stock comprising a Stock Unit on such date, but in no event shall the
Current Warrant Price be less than the par value of the Common Stock.
EMPLOYEE OPTIONS: Options granted after the date hereof to purchase in the
aggregate up to 1,088,765 shares of Common Stock to employees of the Company or
any of its subsidiaries.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXPIRATION DATE: July 31, 2002.
HOLDERS: From time to time, the registered holders of the Warrants and,
unless otherwise provided or indicated herein, the beneficial owners of shares
of Underlying Common Stock.
INITIAL HOLDERS: The Holders of the Warrants as of the date hereof.
MAJORITY OF HOLDERS: Holders of Warrants representing at least 50.1% in
the aggregate of the Underlying Common Stock.
NEW COMMON STOCK: Shares of Common Stock newly issued by the Company.
OTHER SECURITIES: Any stock and other securities of the Company (other
than the Common Stock) or of any other Person that the Holder of this Warrant
shall become entitled to receive upon exercise of a Warrant.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
SEC: The Securities and Exchange Commission, or any successor agency.
STOCKHOLDERS: The holders of all outstanding shares of Common Stock.
STOCK UNIT: Shall mean with respect to the Warrants, one share of Common
Stock, as such stock was constituted on the date hereof, and thereafter, in
either case, shall mean such number of shares (including any fractional share)
of such stock as shall result from the adjustments specified in
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Section 5 hereof.
UNDERLYING COMMON STOCK: The shares of Common Stock issuable or issued
upon the exercise of the Warrants.
WARRANT CERTIFICATES: The meaning set forth in the preamble to this
Agreement.
WARRANTS: Those certain Warrants to purchase initially up to an aggregate
of 1,704,763 shares of Common Stock, subject to adjustment, substantially in the
form of Exhibit A attached hereto.
2. ORIGINAL ISSUE OF WARRANTS.
2.1 FORM OF WARRANT CERTIFICATES. The Warrant Certificates representing
Warrants shall be in registered form only and substantially in the forms
attached hereto as Exhibit A, shall be dated the date on which signed by the
Company and may have such legends and endorsements typed, stamped, 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 pursuant thereto or with any
rule or regulation of any securities exchange on which the Warrants may be
listed, or to conform to usage, including, without limitation, the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED TO THE
REGISTERED OWNER IN RELIANCE UPON WRITTEN REPRESENTATION THAT THESE
SECURITIES HAVE BEEN TAKEN FOR INVESTMENT. THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY SHALL HAVE BEEN RECEIVED BY THE COMPANY TO
THE EFFECT THAT SUCH SALE, TRANSFER OR ASSIGNMENT WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS THEREUNDER, AND OTHER APPLICABLE STATE SECURITIES LAWS.
Pending the preparation of definitive Warrant Certificates, temporary
Warrant Certificates may be issued, which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, and which will be substantially
of the tenor of the definitive Warrant Certificates in lieu of which they are
issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Company, without charge
to the Holder. Until so exchanged, the temporary Warrant Certificates shall in
all respects be entitled to the same benefits under this Agreement as definitive
Warrant Certificates.
2.2 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Warrant Certificates
evidencing Warrants to purchase initially an aggregate of up to 1,704,763 shares
of New Common Stock may be executed, on or after the date of this Agreement, by
the Company, and the Company shall thereupon deliver such Warrant Certificates
upon the written order and at the direction of the Company to the respective
Persons entitled thereto. The Warrant Certificates shall be executed on behalf
of the Company by its Chairman of the Board, Chief Executive Officer or
President or by any of its Vice
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Presidents, either manually or by facsimile signature printed thereon. In
case any officer of the Company whose signature shall have been placed upon
any of the Warrant Certificates shall cease to be such officer of the Company
before issue and delivery thereof, such Warrant Certificates may,
nevertheless, be issued and delivered with the same force and effect as
though such person had not ceased to be such officer of the Company.
3. EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY.
3.1 EXERCISE PRICE. Each Warrant Certificate shall entitle the Holder
thereof, subject to the provisions of this Agreement, to receive one Stock Unit
for each Warrant represented thereby at the price of $3.57 per Stock Unit (the
"Exercise Price").
3.2 EXERCISE OF WARRANTS. Subject to the terms and conditions set forth
herein, the Warrants shall be exercisable at any time or from time to time on or
after the date hereof and prior to the Expiration Date.
3.3 EXPIRATION OF WARRANTS. The Warrants shall terminate and become void
as of the close of business on the Expiration Date. The Company shall give
notice not less than 90, and not more than 120, days prior to the Expiration
Date to the Holders of all then outstanding Warrants to the effect that the
Warrants will terminate and become void as of the close of business on the
Expiration Date.
3.4 METHOD OF EXERCISE. In order to exercise a Warrant or to sell a
Warrant to the Company, the Holder thereof must surrender the Warrant
Certificate evidencing such Warrant to the Company, with one of the forms on the
reverse of or attached to the Warrant Certificate duly executed.
If fewer than all the Warrants represented by a Warrant Certificate are
surrendered, such Warrant Certificate shall be surrendered and a new Warrant
Certificate of the same tenor and for the number of Warrants that were not
surrendered shall be executed by the Company. The Company shall sign the new
Warrant Certificate, register it in such name or names as may be directed in
writing by the Holder and deliver the new Warrant Certificate to the Person
or Persons entitled to receive the same.
Upon surrender of a Warrant Certificate in conformity with the foregoing
provisions, the Company shall transfer to the Holder of such Warrant
Certificate appropriate evidence of ownership of any shares of Underlying
Common Stock, or other securities or property (including any money) to which
the Holder is entitled, registered or otherwise placed in, or payable to the
order of, such name or names as may be directed in writing by the Holder, and
shall deliver such evidence of ownership and any other securities or property
(including any money) to the Person or Persons entitled to receive the same,
together with an amount in cash in lieu of any fraction of a share as
provided in Section 5.3 hereof.
4. DISSOLUTION, LIQUIDATION OR WINDING UP.
If, prior to the Expiration Date, the Company or any other Person shall
propose a voluntary or involuntary dissolution, liquidation or winding up of the
affairs of the Company, the Company shall give written notice thereof to the
Holders of Warrants, at the earliest practicable time, but in no event less than
30 days prior to the date on which such transaction is expected to become
effective or, if earlier, the record date for such transaction.
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5. ADJUSTMENTS AND DISTRIBUTIONS WITH RESPECT TO THE WARRANTS.
5.1 ANTIDILUTION PROVISIONS. The Exercise Price and the number of shares
of New Common Stock constituting a Stock Unit shall be subject to adjustment
from time to time as set forth below:
(a) ADJUSTMENT FOR STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS.
If at any time, or from time to time after the date hereof, the holders of
Common Stock (or Other Securities) shall have received, or (on or after the
record date fixed for determination of Stockholders eligible to receive
same) shall have become entitled to receive, without payment therefor:
(i) other or additional stock or other securities or property
(other than cash) by way of dividends; or
(ii) other or additional stock or other securities or property by
way of stock split, spin-off, split-up, recapitalization,
reclassification, combination of shares, or similar corporate
rearrangement, other than additional shares of Common Stock (or Other
Securities) or Convertible Securities or any rights or options to
acquire any of the foregoing, adjustments in respect of which are
provided for in paragraph (d) of this Section 5,
then in each such case the holder of this Warrant, upon the exercise
hereof, shall be entitled to receive the amount of stock and other
securities and property which such Holder would hold on the date of such
exercise if on the date of this Warrant (the "Original Issue Date") it had
been the holder of record of the number of shares of Common Stock called
for on the face of this Warrant and had thereafter, during the period from
the Original Issue Date to and including the date of such exercise,
retained such shares and all other or additional stock and other securities
and properties receivable by it as aforesaid during such period, giving
effect to all adjustments called for during such period by subparagraphs
(c) and (d) of this Section 5.
(b) ADJUSTMENT FOR CASH DIVIDENDS OR DISTRIBUTIONS. If at any time,
or from time to time, after the date hereof, the Holders of the Common
Stock (or Other Securities) shall have received, or (on or after the record
date fixed for determination of Stockholders eligible to receive same)
shall have become entitled to receive, any cash paid or payable (including,
without limitation, by way of dividends) then, in each such case, the
Current Warrant Price of each Warrant shall be reduced by an amount equal
to the amount of cash each Holder would receive or would be entitled to
receive if such Warrant had been exercised immediately prior to the date of
such cash distribution (or immediately prior to the record date fixed for
determination of Stockholders eligible to receive the same).
(c) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC. In
case of any reorganization of the Company (or any other issuer of Other
Securities) after the Original Issue Date, or in case, after such date, the
Company (or such other issuer) shall transfer all or substantially all of
its properties or assets to or consolidate with or merge into any other
person (corporate or otherwise), then and in each such case the Holder of
this Warrant, upon the exercise hereof, at any time after the consummation
of such reorganization, conveyance, consolidation or merger, shall be
entitled to receive, in lieu of the Common Stock (or Other Securities)
issuable upon such exercise prior to such consummation, the stock and Other
Securities or properties (including cash) to which such Holder would have
been entitled upon
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such consummation, if such Holder had so exercised this Warrant
immediately prior thereto, all subject to further adjustments
thereafter as provided in subparagraphs (a) and (d); in each such case, the
terms of this Warrant shall be applicable to the shares of Common Stock and
Other Securities receivable upon the exercise of this Warrant after such
consummation, and shall be binding upon the issuer thereof.
(d) ADJUSTMENT FOR ISSUE OR SALE OF COMMON STOCK AT LESS THAN FAIR
VALUE.
(i) ADJUSTMENT OF EXERCISE PRICE. In the event the Company
shall issue or sell any shares of Common Stock or Other Securities for
a consideration per share less than the Current Market Price in effect
immediately prior to the time of such issue or sale, the Exercise
Price shall be reduced by multiplying the then existing Exercise Price
by a fraction the numerator of which is (A) the sum of (x) the number
of shares of Common Stock outstanding immediately prior to such issue
or sale multiplied by the applicable Current Market Price immediately
prior to such issue or sale PLUS (y) consideration received by the
Company upon such issue or sale, DIVIDED BY (B) the total number of
shares of Common Stock outstanding immediately after such issue or
sale, and the denominator of which shall be the Current Market Price
immediately prior to such issue or sale. For purposes of this
subparagraph, the date as of which the Current Market Price shall be
computed shall be the earlier of the date upon which the Company shall
either enter into a firm contract for the issuance of such shares, or
issue such shares.
(ii) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. Upon any
adjustment of the Exercise Price as provided in subparagraph (d)(i)
above, the Holder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of
Common Stock (calculated to the nearest 1/100th of a share) obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock purchasable
hereunder immediately prior to such adjustment, and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(iii) ISSUANCE OF RIGHTS, OPTIONS OR WARRANTS. In case at
any time the Company shall grant (whether directly or by assumption in
a merger or otherwise) or issue any rights to subscribe for or to
purchase, or any option for the purchase of, Common Stock or
Convertible Securities (other than Employee Options), whether or not
such rights or options or warrants or the right to convert or exchange
any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon the exercise
of such rights or options or warrants or upon conversion or exchange
of such Convertible Securities (determined by dividing (a) the total
amount, if any, received or receivable by the Company as consideration
for the granting of such rights or options or warrants, plus the
minimum aggregate amount of additional consideration payable to the
Company upon the exercise of such rights or options or warrants, plus
in the case of such rights or options or warrants which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by
(b) the total maximum number of shares of Common Stock issuable upon
the exercise of such rights or options or warrants or upon the
conversion or exchange of all such rights or options or warrants)
shall be less than the Current Market Price existing immediately prior
to the time of the granting thereof, then the number of shares of
Common Stock constituting a Stock Unit and the
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respective Exercise Price shall be adjusted as provided in
subsections (d)(i) and (d)(ii) above, on the basis that the
maximum number of shares of Common Stock issuable upon the
exercise of such rights or options or upon conversion or exchange
at the maximum amount of such Convertible Securities issuable upon
the exercise of such rights or options shall be deemed to be
outstanding and to have been issued for such price per share.
Adjustments of the Exercise Price shall be made upon the
actual issue of such Common Stock or, with respect to Convertible
Securities, upon exercise of such rights or options or warrants or
upon the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities. For purposes of this subparagraph
(iii), the date on which the Current Market Price shall be computed
shall be the earlier of the date upon which the Company shall either
enter into a firm contract for the issuance of such rights or other
options, or issue such rights or other options.
(iv) ISSUANCE OF CONVERTIBLE SECURITIES. In case the Company
shall in any manner issue or sell (whether directly or by assumption
in a merger or otherwise) any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which shares of Common Stock
are issuable upon such conversion or exchange shall be less than the
Current Market Price existing immediately prior to the time of such
issue or sale, then the number of shares of Common Stock constituting
a Stock Unit and the respective Exercise Price shall be adjusted as
provided in subsections (d)(i) and (d)(ii) above on the basis that the
maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall (as of the date for
the determination of the Current Market Price as hereinafter provided)
be deemed to be outstanding and to have been issued for such price per
share; provided, however (1) no further adjustments of the Exercise
Price or the number of shares of Common Stock for which this Warrant
is exercisable shall be made upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities, and
(2) if any such issue or sale of such Convertible Securities is made
upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which
adjustments of the Exercise Price have been or are to be made pursuant
to other provisions of this Section 5, no further adjustment of the
Exercise Price or the number of shares of Common Stock for which the
Warrant is exercisable shall be made by reason of such issue or sale.
The price per share for which shares of Common Stock are issuable upon
conversion or exchange shall be determined by dividing (x) the total
amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (y) the total
maximum number of shares of Common Stock, issuable upon the conversion
or exchange of all Convertible Securities. For purposes hereof, the
date on which the Current Market Price of Common Stock shall be
computed shall be the earlier of the date upon which either the
Company shall enter into a firm contract for the issuance of such
Convertible Securities, or the date such Convertible Securities are
actually issued.
(e) RIGHTS OFFERINGS. In the event the Company shall effect an
offering of Common Stock or Other Securities pro rata among its
Stockholders, the Holder shall be entitled, at its option, to elect to
participate in each and every offering as though this Warrant had been
exercised and the Holder were, at the time of any such rights offering,
then a holder of that number of shares of Common Stock to which the Holder
is then entitled on the exercise hereof.
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(f) DISTRIBUTIONS TO HOLDERS. In the event the Company shall make
any distribution of its assets (other than cash) or any debt securities or
any rights, options or warrants to purchase assets (other than cash) or
debt securities of the Company, the Holder of each Warrant shall be
entitled to receive, at the time of such distribution, such non-cash assets
or debt securities as such Holder would have been entitled to receive if
such Warrant had been exercised immediately prior to such distribution (or
immediately prior to the record date fixed for determination of
Stockholders eligible to receive the same).
(g) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS.
(i) ADJUSTMENTS NOT REQUIRED. In the event any adjustment of
the Exercise Price pursuant to this Section 5 shall result in an
adjustment of less than one percent (1%) of the Exercise Price in
effect immediately preceding such adjustment, no adjustment shall be
made, but any such lesser adjustment shall be carried forward and
shall be made at the time and together with the next subsequent
adjustment, subject to the provisions of this subsection (g)(i).
(ii) DETERMINATION OF CONSIDERATION. Any stock dividends or
distributions of securities shall be deemed to have been issued or
sold without consideration. If any shares of Common Stock, or
Convertible Securities or any rights or options to purchase same shall
be issued for a consideration other than cash, the amount of the
consideration other than cash shall be deemed to be the fair market
value on the date of issuance of the securities, as determined in good
faith by the board of directors of the Company. Any securities issued
in connection with any merger and consolidation in which the Company
is a surviving corporation shall be valued at the fair market value
thereof on the date of issue, as determined in good faith by the board
of directors of the Company. In the event of any merger or
consolidation of the Company in which the Company is not the surviving
corporation or in the event of the sale of all or substantially all
the assets of the Company, stock or other securities of any other
corporation, the Company shall be deemed to have issued a number of
shares of its Common Stock for stock or securities of the other
corporation, computed on the basis of the actual exchange ratio on
which the transaction was predicated, for a consideration equal to the
fair market value on the date of such transaction of such stock or
securities of the other corporation.
(iii) CERTIFICATE OF ADJUSTMENT. Upon any adjustment of the
Exercise Price or the number of shares of Common Stock constituting a
Stock Unit, a certificate signed by the President or any Vice
President of the Company setting forth in reasonable detail the event
requiring the adjustment and the method by which such adjustment was
calculated, shall be mailed (by certified mail, return receipt
requested, postage prepaid) to the Holder specifying the adjusted
Exercise Price and the number of shares of Common Stock purchasable on
exercise of this Warrant after giving effect of the adjustment of such
number of shares pursuant to Section 5 hereof.
(h) OTHER ACTION AFFECTING COMMON STOCK. If at any time or from time
to time the Company shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections (a) through
(g) and in this Section 5, then, unless in the opinion of the board of
directors of the Company such action will not have a materially adverse
effect upon the rights of the Holders of the Warrants, the number of shares
of New Common Stock, constituting a Stock Unit, or the purchase price
thereof, shall be adjusted in such
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manner and at such time as the board of directors of the Company may in
good faith determine to be equitable in the circumstances.
(i) CERTAIN ADJUSTMENT EVENTS. Anything herein to the contrary
notwithstanding, the Company agrees not to enter into any transaction that
would cause an adjustment of the Current Warrant Price per share to an
amount that is less than the par value per share of the Common Stock.
5.2 STATEMENT ON WARRANTS. Irrespective of any adjustment in the number
or kind of shares issuable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
5.3 FRACTIONAL INTEREST. The Company may, but shall not be required to
issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon such exercise thereof shall be computed on the basis of the aggregate
number of shares of Common Stock purchasable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section 5.3, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company may, in lieu of issuing fractional
shares, at its option, but it shall have no obligation to do so, pay an amount
in cash calculated by it to be equal to the then Current Market Value per share
of Common Stock multiplied by such fraction computed to the nearest whole cent.
6. WARRANT TRANSFER BOOKS.
The Warrant Certificates shall be issued in registered form only. The
Company shall cause to be kept a register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Warrant Certificates and of transfers or exchanges of Warrant Certificates as
herein provided.
At the option of the Holder, Warrant Certificates may be exchanged at such
office, upon payment of the charges hereinafter provided. Whenever any Warrant
Certificates are so surrendered for exchange, the Company shall execute and
deliver the Warrant Certificates that the Holder making the exchange is entitled
to receive.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by the Company) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company, duly executed by the Holder thereof or his attorney duly authorized in
writing. Before any disposition is made of any Warrant, or any part thereof, by
sale, gift, pledge or otherwise, the Holder thereof shall deliver to the Company
written notice describing briefly the manner of such proposed disposition. No
such disposition shall be made unless and until (i) the Holder shall have
furnished to the Company an opinion of counsel in form and substance
satisfactory to the Company to the effect that such proposed disposition does
not require registration pursuant to the Securities Act of 1933, as amended, and
the Company shall have advised the holder in writing that such opinion of
counsel is satisfactory to the Company, or (ii) an appropriate registration
statement
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with respect to the Warrants shall have been declared effective by the
SEC. Any attempted transfer of any Warrants without compliance with the
foregoing requirement shall be null and void.
No service charge shall be made for any registration of transfer or
exchange of Warrant Certificates. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Warrant
Certificates.
Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable and when a Warrant Certificate shall have been so endorsed, the
Holder thereof may be treated by the Company and all other persons dealing
therewith as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented thereby, or to the transfer thereof
on the register of the Company, any notice to the contrary notwithstanding; but
until such transfer on such register, the Company may treat the registered
Holder thereof as the owner for all purposes.
7. WARRANT HOLDERS.
7.1 VOTING RIGHTS. Prior to the exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to consent or
to exercise any preemptive right, except as may be specifically provided for
herein.
7.2 RIGHT TO APPROVE RECLASSIFICATION. Notwithstanding the foregoing,
the Holders of the Warrants shall be entitled to vote on any proposed
recapitalization or reclassification of the Common Stock if such
recapitalization or reclassification would, notwithstanding Sections 5 and 6
hereof, adversely affect, in any manner, the Holders of the Warrants. In such
event, any such proposed recapitalization or reclassification shall require the
approval of a Majority of Holders.
7.3 RIGHT OF ACTION. All rights of action in respect of this Agreement
are vested in the Holders of the Warrants, and any Holder of any Warrant,
without the consent of the Warrant Agent or the Holder of any other Warrant,
may, in such Holder's own behalf and for such Holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's right to exercise
such Holder's Warrants in the manner provided in this Agreement.
8. COVENANTS OF THE COMPANY.
8.1 RESERVATION OF STOCK FOR ISSUANCE ON EXERCISE OF WARRANTS. The
Company covenants that it will at all times reserve and keep available, free
from pre-emptive rights, out of its authorized but unissued Common Stock solely
for the purpose of issuance upon exercise of Warrants as herein provided, 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 so issuable shall, upon such issuance, be duly and validly issued
and fully paid and nonassessable.
8.2 NOTICES TO HOLDERS. If the Company shall propose (a) to pay any
dividend payable in stock of any class to the holders of its Common Stock or to
make any other distribution to the holders of its Common Stock; (b) to offer to
the holders of its Common Stock rights to subscribe for or to purchase any
Convertible Securities or Additional Shares of Common Stock, Other Securities or
shares of stock of any class or any other securities, rights or options; (c) to
effect any reclassification of its Common Stock; (d) to effect any capital
reorganization; (e) to effect any consolidation, merger or sale, transfer or
other disposition of all or substantially all its property, assets or business;
(f) to effect the
-10-
liquidation, dissolution or winding up of the Company; or (g) to hold a
special meeting of the holders of its Common Stock (a "Stockholders'
Meeting"), then in each such case, the Company shall give to each Holder of a
Warrant, in accordance with Section 9.5 hereof, a notice of such proposed
action. Such notice (i) shall specify the date on which a record is to be
taken for the purposes of such stock dividend, distribution or rights or the
date on which such reclassification, reorganization, consolidation, merger,
sale, transfer, disposition, liquidation, dissolution or winding up is to
take place and the date of participation therein by the holders of Common
Stock, if any such date is to be fixed, and (ii) shall set forth such facts
as shall be reasonably necessary to indicate the effect of such action on the
Common Stock, the number and kind of any other shares of stock that will
constitute a Stock Unit and the purchase price or prices thereof after giving
effect to any adjustment that will be required as a result of such action.
Such notice shall be given, in the case of any action covered by clause (a)
or (b) above, at least 30 days prior to the record date for determining
holders of the Common Stock for purposes of such action and, in the case of
any action covered by clauses (c) through (g), at least 30 days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock, whichever shall be the earlier. The
Company will allow each Holder of Warrants to attend any Stockholders'
Meeting held during the terms of this Agreement.
8.3 REPORTS TO HOLDERS.
(a) The Company will supply without cost to each Holder within 15
days after the Company is required to file the same with the SEC, copies of
the annual reports and quarterly reports which the Company may be required
to file with the SEC pursuant to Section 13(a), 13(c) or 15(d) of the
Exchange Act.
(b) If the Company is not required to file with the SEC such reports
and other information and documents referred to in Section 8.3(a) hereof,
the Company shall supply without cost to each Holder of the Warrants (i)
within 90 days after the end of each fiscal year, annual reports containing
substantially the information required to be contained in Form 10-K
promulgated under the Exchange Act, or substantially the same information
required to be contained in any successor form, (ii) within 45 days after
the end of each of the first three fiscal quarters of each fiscal year,
quarterly reports containing substantially the information required to be
contained in Form 10-Q promulgated under the Exchange Act, or substantially
the same information required to be contained in any successor form, and
(iii) promptly from time to time after the occurrence of an event required
to be therein reported, such other reports containing information required
to be contained in Form 8-K promulgated under the Exchange Act, or
substantially the same information required to be contained in any
successor form. The Company shall also make such reports available to
Holders upon their request.
9. MISCELLANEOUS.
9.1 MONEY AND OTHER PROPERTY. Any moneys, securities or other property
which at any time shall be held by the Company pursuant to this Agreement shall
be set over in trust for the purpose for which such moneys, securities or other
property shall have been held; but such moneys, securities or other property
need not be segregated from other funds, securities or other property, except to
the extent required by law. The Company shall distribute any money held by it
for payment and distribution to the Holders by mailing by first-class mail a
check in such amount as is appropriate, to each such Holder at the address shown
on the Warrant register of the Company, or as it may be otherwise directed in
writing by such Holder, upon surrender of such Holder's Warrants or shares of
Underlying Common Stock, as the case may be.
9.2 PAYMENT OF TAXES. The Company shall pay all taxes and other
governmental charges
-11-
that may be imposed on the Company or on the Warrants or on any securities
deliverable upon exercise of Warrants with respect thereto. The Company
shall not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for
shares of Common Stock or other securities underlying the Warrants or payment
of cash to any Person other than the Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and in case of such transfer, the
Company shall not be required to issue any stock certificate or pay any cash
until such tax or charge has been paid or it has been established to the
Company's satisfaction that no such tax or other charge is due.
9.3 SURRENDER OF CERTIFICATES. Any Warrant Certificate surrendered for
exercise shall be surrendered to the Company and all Warrant Certificates
surrendered shall be promptly cancelled by the Company and shall not be reissued
by the Company.
9.4 MUTILATED, DESTROYED, LOST AND STOLEN WARRANT CERTIFICATES. If (a)
any mutilated Warrant Certificate is surrendered to the Company or (b) the
Company receives evidence to its satisfaction of the destruction, loss or theft
of any Warrant Certificate, and there is delivered to the Company such security
or indemnity as may be required by it to save it harmless, then, in the absence
of notice to the Company that such Warrant Certificate has been acquired by a
bona fide purchaser, the Company shall execute and deliver, in exchange for any
such mutilated Warrant Certificate or in lieu of any such destroyed, lost or
stolen Warrant Certificate, a new Warrant Certificate of like tenor and for a
like aggregate number of Warrants.
Upon the issuance of any new Warrant Certificate under this Section 9.4,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
expenses (including the reasonable fees and expenses of counsel to the Company)
in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this
Section 9.4 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.
The provisions of this Section 9.4 are exclusive and shall preclude (to the
extent lawful) all other rights or remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Warrant Certificates.
9.5 NOTICES. Any notice, demand or delivery authorized by this Agreement
shall be sufficiently given or made when mailed if sent by first-class mail,
postage prepaid, addressed to any Holder of a Warrant at such Holder's address
shown on the register of the Company and to the Company as follows:
If to the Company: Nu-kote Holding, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Secretary
With a copy to: Nu-kote Holding, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
-12-
Attn: General Counsel
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery.
9.6 APPLICABLE LAW. This Agreement and each Warrant issued hereunder and
all rights arising hereunder shall be governed by the laws of the State of
Texas.
9.7 PERSONS BENEFITING. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors, assigns, beneficiaries, executors
and administrators, and the Holders from time to time of the Warrants and their
respective successors, assigns, beneficiaries, executors and administrators.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person, other than the Company and the Holders of the Warrants, any right,
remedy or claim under or by reason of this Agreement or any part hereof.
9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
9.9 AMENDMENTS. The Company may, without the consent of the Holders of
the Warrants, by supplemental agreement or otherwise, make any changes or
corrections in this Agreement that it shall have been advised by counsel (a) are
required to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or (b)
add to the covenants and agreements of the Company for the benefit of the
Holders, or surrender any rights or power reserved to or conferred upon the
Company in this Agreement; PROVIDED, that, in each case, such changes or
corrections shall not adversely affect the interests of the Holders in any
material respect.
9.10 HEADINGS. The descriptive headings of the several Sections of this
Agreement are inserted for convenience and shall not control or affect the
meaning or construction of any of the provisions hereof.
9.11 ENTIRE AGREEMENT. This Agreement, together with the Warrant
Certificates and the Registration Rights Agreement referenced herein, shall
constitute the entire agreement of the Company and the Holders with respect to
the subject matter hereof.
10. AGREEMENT REGARDING REGISTRATION RIGHTS.
Concurrently with the original issuance of the Warrants to the Initial
Holders thereof, the Company and the Initial Holders have entered into a
Registration Rights Agreement (the "Registration Rights Agreement") granting the
Initial Holders (and certain of their permitted successors and assigns) certain
registration rights with respect to the Warrants and the Underlying Common
Stock. The terms of the Registration Rights Agreement are incorporated by
reference in this Agreement as fully as if the same were set forth herein. A
copy of the Registration Rights Agreement is on file and available for
inspection at the principal offices of the Company, and a copy of the
Registration Rights Agreement will be furnished, free of charge, to any Holder
hereof upon written request to the Company.
-13-
DA972030201
073197 v9
111:9766-391
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NU-KOTE HOLDING, INC.
By:
------------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
Initial Holders: NATIONSBANK OF TEXAS, N.A.
By:
-------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx, XX
Senior Vice President
BARCLAYS BANK PLC
By:
------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
Barclays Bank PLC
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xxxxxx X. Xxxxxxx
COMMERZBANK AKTIENGESELLSCHAFT
ATLANTA AGENCY
By:
------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
Commerzbank Aktiengesellschaft
Atlanta Agency
Promenade Two, Suite 3500
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
CREDIT LYONNAIS, NEW YORK BRANCH
By:
------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
Credit Lyonnais
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx, Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
SOCIETE GENERALE
By:
------------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Notice Address:
Societe Generale
Xxxxxxxx Xxxx Center, Suite 4800
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
FIRST AMERICAN NATIONAL BANK
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
First American National Bank
4th & Union Street AA-0310, 10th Floor
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
DEUTSCHE BANK, A.G., NEW YORK BRANCH
AND/OR CAYMAN ISLAND BRANCH
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
Deutsche Bank, A.G., New York Branch
and/or Cayman Islands Branch
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
ABN AMRO BANK, N.V.
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
Notice Address:
ABN AMRO Bank, N.V.
00 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED TO THE
REGISTERED OWNER IN RELIANCE UPON WRITTEN REPRESENTATION THAT THESE
SECURITIES HAVE BEEN TAKEN FOR INVESTMENT. THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED UNLESS AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY SHALL HAVE BEEN RECEIVED BY THE COMPANY TO THE EFFECT THAT SUCH SALE,
TRANSFER OR ASSIGNMENT WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, AND OTHER
APPLICABLE STATE SECURITIES LAWS.
THE STOCK ISSUABLE UPON EXERCISE OF THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED UNLESS AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY SHALL HAVE BEEN RECEIVED BY THE COMPANY TO THE EFFECT THAT SUCH SALE,
TRANSFER OR ASSIGNMENT WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF
1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER AND OTHER
APPLICABLE SECURITIES LAWS.
FORM OF FACE OF WARRANT CERTIFICATE
WARRANTS TO PURCHASE STOCK UNITS
OF NU-KOTE HOLDING, INC.
Certificate for
-------
No. Warrants
-----
This certifies that _________________, or registered assigns, is the
registered holder of the number of warrants set forth above. Each Warrant
entitles the holder thereof (a "Holder"), subject to the provisions contained
herein and in the Warrant Agreement referred to below, to receive from
Nu-kote Holding, Inc., a Delaware corporation (the "Company"), one Stock Unit
of the Company at the exercise price of $3.57 per Stock Unit. This Warrant
Certificate shall terminate and become void as of the close of business on
July 31, 2002 (the "Expiration Date").
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement, dated as of July 31, 1997 (the "Warrant Agreement"),
between the Company and the Warrantholders (as such term is defined in the
Warrant Agreement) and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions the Holder of
this Warrant Certificate consents by acceptance hereof. The Warrant
Agreement is hereby incorporated herein by reference and made a part hereof.
Reference is hereby made to the Warrant Agreement for a full statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company and the Holders of the Warrants.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable on or prior
to the Expiration Date at any time or from time to time on or after the date
hereof.
-1-
The number of shares of Common Stock constituting a Stock Unit is
subject to adjustment as provided in the Warrant Agreement.
All shares of Common Stock issuable by the Company upon the exercise of
Warrants shall, upon such issuance, be duly and validly issued and fully paid
and nonassessable.
In order to exercise a Warrant, the registered holder hereof must
surrender this Warrant Certificate at the office of the Company, with the
Exercise Subscription Form on the reverse hereof duly executed by the Holder
hereof, with signature guaranteed as therein specified.
The Company shall pay all taxes and other governmental charges that may
be imposed on the Company or on the Warrants or on any securities deliverable
upon exercise of Warrants. The Company shall not be required, however, to
pay any tax or other charge imposed in connection with any transfer involved
in the issue of any certificate for shares of Common Stock or other
securities underlying the Warrants or payment of cash to any person other
than the Holder of a Warrant Certificate surrendered upon the exercise of a
Warrant, and in case of such transfer, the Company shall not be required to
issue any stock certificate or pay any cash until such tax or other charge
has been paid or it has been established to the Company's satisfaction that
no such tax or other charge is due.
This Warrant Certificate and all rights hereunder are transferable by
the registered holder hereof, in whole or in part, on the register of the
Company, upon surrender of this Warrant Certificate for registration of
transfer at the office of the Company duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company, duly
executed by the Holder hereof or his attorney duly authorized in writing,
with signature guaranteed as specified in the attached Form of Assignment.
Upon any partial transfer, the Company will issue and deliver to such holder
a new Warrant Certificate or Certificates with respect to any portion not so
transferred.
No service charge shall be made for any registration of transfer or
exchange of the Warrant Certificates, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Each taker and holder of this Warrant Certificate by taking or holding
the same, consents and agrees that this Warrant Certificate when duly
endorsed in blank shall be deemed negotiable and that when this Warrant
Certificate shall have been so endorsed, the holder hereof may be treated by
the Company and all other persons dealing with this Warrant Certificate as
the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, or to the transfer hereof on the
register of the Company, any notice to the contrary notwithstanding, but
until such transfer on such register, the Company may treat the registered
Holder hereof as the owner for all purposes.
This Warrant Certificate and the Warrant Agreement are subject to
amendment as provided in the Warrant Agreement.
All terms used in this Warrant Certificate that are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
Copies of the Warrant Agreement are on file at the office of the Company
and may be obtained by writing to the Company at the following address: 00000
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Secretary.
-2-
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
Dated: , 199 .
--------------------- ----
NU-KOTE HOLDING, INC.
By:
------------------------------
Name:
-------------------------
Title:
------------------------
-3-
FORM OF REVERSE OF WARRANT CERTIFICATE
EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To:
-------------------------
The undersigned irrevocably exercises ___________________ of the
Warrants for the purchase of one Stock Unit of Nu-kote Holding, Inc., for
each Warrant represented by the Warrant Certificate, on the terms and
conditions specified in the within Warrant Certificate and the Warrant
Agreement therein referred to, surrenders this Warrant Certificate and all
right, title and interest therein to _____________________ and directs that
the shares of New Common Stock deliverable upon the exercise of such Warrants
be registered or placed in the name and at the address specified below and
delivered thereto.
Date: , .
---------------- --------
(1)
-------------------------------
(Signature of Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-------------------------------
--------------------
(1) The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
-4-
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
-5-
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by the within Warrant
Certificate not being assigned hereby) all of the right of the undersigned
under the within Warrant Certificate, with respect to the number of Warrants
set forth below.
Social Security
or other
identifying
Names of number of Number of
Assignee(s) Address Assignee(s) Warrants
----------- ------- --------------- ---------
and does hereby irrevocably constitute and appoint ____________________________
the undersigned's attorney to make such
transfer on the books of Nu-kote Holdings, Inc. maintained for that purpose,
with full power of substitution in the premises.
Date: , .
----------------- -----
(1)
-------------------------------
(Signature of Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-------------------------------
--------------------
(1) The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
-6-
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Additional Shares of Common Stock . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Convertible Securities. . . . . . . . . . . . . . . . . . . . . . . . . 2
Current Market Price. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Current Warrant Price . . . . . . . . . . . . . . . . . . . . . . . . . 2
Employee Options. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Initial Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Majority of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 3
New Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Stockholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Stock Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Underlying Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 3
Warrant Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. ORIGINAL ISSUE OF WARRANTS. . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Form of Warrant Certificates. . . . . . . . . . . . . . . . . . . 3
2.2 Execution and Delivery of Warrant Certificates. . . . . . . . . . 4
3. EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY. . . . . . . . . . . . . 4
3.1 Exercise Price. . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Exercise of Warrants. . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Expiration of Warrants. . . . . . . . . . . . . . . . . . . . . . 5
3.4 Method of Exercise. . . . . . . . . . . . . . . . . . . . . . . . 5
4. DISSOLUTION, LIQUIDATION OR WINDING UP. . . . . . . . . . . . . . . . . 5
5. ADJUSTMENTS AND DISTRIBUTIONS WITH RESPECT TO THE
WARRANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Antidilution Provisions . . . . . . . . . . . . . . . . . . . . . 5
(a) Adjustment For Stock Dividends, Subdivisions
and Combinations . . . . . . . . . . . . . . . . . . . . . . 5
(b) Adjustment For Cash Dividends or Distributions . . . . . . . 6
(c) Adjustment For Reorganization, Consolidation,
Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Adjustment For Issue or Sale of Common Stock at
Less Than Fair Value . . . . . . . . . . . . . . . . . . . . 7
(e) Rights Offerings . . . . . . . . . . . . . . . . . . . . . . 9
(f) Distributions to Holders . . . . . . . . . . . . . . . . . . 9
(g) Other Provisions Applicable to Adjustments . . . . . . . . . 9
-i-
TABLE OF CONTENTS
(continued)
(h) Other Action Affecting Common Stock. . . . . . . . . . . . . 10
(i) Certain Adjustment Events. . . . . . . . . . . . . . . . . . 10
5.2 Statement on Warrants. . . . . . . . . . . . . . . . . . . . . . 10
5.3 Fractional Interest . . . . . . . . . . . . . . . . . . . . . . . 10
6. WARRANT TRANSFER BOOKS. . . . . . . . . . . . . . . . . . . . . . . . . 11
7. WARRANT HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1 Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Right to Approve Reclassification . . . . . . . . . . . . . . . . 12
7.3 Right of Action . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . 12
8.1 Reservation of Stock for Issuance on Exercise of Warrants . . . . 12
8.2 Notices to Holders. . . . . . . . . . . . . . . . . . . . . . . . 12
8.3 Reports to Holders. . . . . . . . . . . . . . . . . . . . . . . . 13
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.1 Money and Other Property Deposited with the Warrant Agent . . . . 14
9.2 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 14
9.3 Surrender of Certificates . . . . . . . . . . . . . . . . . . . . 14
9.4 Mutilated, Destroyed, Lost and Stolen Warrant Certificates. . . . 14
9.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.6 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.7 Persons Benefiting. . . . . . . . . . . . . . . . . . . . . . . . 15
9.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.9 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.11 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 16
10. AGREEMENT REGARDING REGISTRATION RIGHTS . . . . . . . . . . . . . . . . 16
EXHIBIT A - Form of Warrant Certificate A-1
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