EXHIBIT 2
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LUMINENT MORTGAGE CAPITAL, INC.
CAPITAL STOCK WARRANT AGREEMENT
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Dated as of August 17, 2007
Section 1. Issuance of Warrants......................................................................... 1
Section 2. Form of Warrant Certificates................................................................. 1
Section 3. Execution of Warrant Certificates............................................................ 1
Section 4. Registration................................................................................. 2
Section 5. Transfers and Exchanges...................................................................... 2
Section 6. Mutilated or Missing Warrant Certificates.................................................... 2
Section 7. Exercisability or Cancellation of Warrants; Exercise of Warrants; Voting Control Limitation.. 3
Section 8. Adjustment of Number of Warrant Shares Issuable upon Exercise of a Warrant................... 5
Section 9. Reservation of Shares........................................................................ 7
Section 10. No Impairment; Certain Company Actions....................................................... 7
Section 11. No Rights or Liabilities as Stockholder...................................................... 8
Section 12. Fractional Interests......................................................................... 9
Section 13. Registration Rights.......................................................................... 9
Section 14. Representations and Warranties by the Company................................................ 16
Section 15. Definitions.................................................................................. 17
Section 16. Notices...................................................................................... 19
Section 17. Supplements, Amendments and Waivers.......................................................... 20
Section 18. Representations and Warranties of the Warrantholders......................................... 20
Section 19. Successors and Assigns....................................................................... 20
Section 20. Termination.................................................................................. 20
Section 21. Governing Law; Jurisdiction.................................................................. 20
Section 22. Third Party Beneficiaries.................................................................... 21
Section 23. Headings..................................................................................... 21
Section 24. Entire Agreement............................................................................. 21
Section 25. Joint Drafting............................................................................... 21
SCHEDULE A List of Warrantholders
EXHIBIT A Form of Warrant Certificate
Form of Election to Purchase
Form of Assignment
i
THIS WARRANT AGREEMENT (this "Agreement"), dated as of August 17,
2007, is made by Luminent Mortgage Capital, Inc., a Maryland corporation
(including any successor, the "Company"), for the benefit of the holders from
time to time (the "Warrantholders") of the Capital Stock Warrants to be issued
pursuant hereto. Certain capitalized terms used herein are defined in Section 15
hereof.
Section 1. Issuance of Warrants.
In consideration for the entry by GGRE LLC into the Repurchase
Agreements (defined below) as "Buyer" thereunder, the Company hereby authorizes
a series of warrants known as the Luminent Mortgage Capital, Inc. Capital Stock
Warrants (the "Warrants") and issues and grants to the Warrantholders listed on
Schedule A hereto warrants to purchase common stock of the Company, par value
$0.001 per share (the "Common Stock") and/or nonvoting preferred stock of the
Company, par value $0.001 ("Preferred Stock"), representing aggregate economic
ownership of 51% of the Company and 49% of the voting power of all classes of
capital stock of the Company on a fully-diluted basis as of the date hereof
(after giving effect to exercise of the Warrants to be issued pursuant hereto,
the conversion of all convertible debt securities of the company and exercise of
any and all outstanding options or other purchase rights relating to the Common
Stock). Each Warrantholder shall receive the number of Warrants set forth
opposite the name of such Warrantholder on Schedule A attached hereto under the
heading "Aggregate Number of Warrants". Each Warrant shall entitle the holder,
subject to the conditions relating to exercisability and exercise set forth in
Section 7 of this Agreement, to purchase on or after August 30, 2007 (the
"Initial Exercise Date") and prior to 5:00 p.m., New York City time, on the
Expiration Date one share of Common Stock or Preferred Stock equivalent in
economic ownership to one share of Common Stock, in each case, at the Exercise
Price. The number of Warrants issued to each Warrantholder pursuant to this
Agreement and the number of shares of Common Stock and/or Preferred Stock, as
the case may be, issuable upon exercise of each Warrant (the "Warrant Shares")
are all subject to adjustment pursuant to Section 8 hereof. Every reference to
"Stock" shall mean, as the context requires, (i) the Common Stock or the
Preferred Stock, as applicable, or (ii) the Common Stock and the Preferred Stock
collectively.
Section 2. Form of Warrant Certificates.
The Company shall cause to be executed and delivered on or about the
Closing Date to each Warrantholder one or more certificates evidencing the
Warrants (the "Warrant Certificates") to be issued to such Warrantholder.
Warrant Certificates shall be issued in registered form only, shall be
substantially in the form set forth in Exhibit A attached hereto, and may have
such letters, numbers or other identification marks and legends, summaries or
endorsements printed thereon as the Company may deem appropriate and that are
not inconsistent with the terms of this Agreement or as may be required by
applicable law, rule or regulation. Each Warrant Certificate shall be dated the
date of execution by the Company.
Section 3. Execution of Warrant Certificates.
Each Warrant Certificate delivered hereunder shall be signed on
behalf of the Company by its Chief Executive Officer, its President, a Vice
President of the Company or any other officer, employee or agent of the Company
authorized by the board of directors of the Company (the "Board") to sign on
behalf of the Company. Each such signature may be in the form of a facsimile
thereof and may be imprinted or otherwise reproduced on the Warrant
Certificates.
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If any officer of the Company who signed any Warrant Certificate
ceases to be an officer of the Company before the Warrant Certificate so signed
shall have been delivered by the Company, such Warrant Certificate nevertheless
may be delivered as though such person had not ceased to be such officer of the
Company.
Section 4. Registration.
The Company will keep or cause to be kept books for registration of
ownership and transfer of each Warrant Certificate issued pursuant to this
Agreement. Each Warrant Certificate issued pursuant to this Agreement shall be
numbered by the Company and initially shall be registered by the Company in the
name of the applicable Warrantholder set forth on Schedule A hereto. The Company
may deem and treat the registered holder of any Warrant Certificate as the
absolute owner thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone), for the purpose of any exercise thereof and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.
Section 5. Transfers and Exchanges.
A. Transfers. Subject to the following provisions of this Section 5,
the Warrants are transferable, in whole or in part, upon surrender of the
Warrant Certificates evidencing such Warrants at the office of the Company
referred to in Section 16, together with a written assignment in the form of the
Assignment appearing at the end of the form of Warrant Certificate attached
hereto as Exhibit A, duly executed by Warrantholder or its agent or attorney.
Upon such surrender, the Company shall, subject to this Section 5, register or
cause the registration of the transfer upon the books maintained by or on behalf
of the Company for such purpose. If the Warrants evidenced by any Warrant
Certificate are to be transferred in whole, the Company shall execute and
deliver a new Warrant Certificate or Warrant Certificates in the name of the
assignee or assignees in the denominations specified in the instrument of
assignment. If the Warrants evidenced by any Warrant Certificate are to be
transferred in part, the Company shall execute and deliver a new Warrant
Certificate or Warrant Certificates to and in the name of the assignee or
assignees in the denominations specified in the instrument of assignment and a
new Warrant Certificate to and in the name of the applicable Warrantholder in an
amount equal to the number of Warrants evidenced by the surrendered Warrant
Certificate that were not transferred.
B. Restrictions on Transfer. No Warrant may be sold, pledged,
hypothecated, assigned, conveyed, transferred or otherwise disposed of (each a
"transfer") unless the transfer complies with all applicable securities laws and
the provisions of this Agreement.
C. Exchanges. A Warrant Certificate may be exchanged, at the option
of the applicable Warrantholder, upon surrender of such Warrant Certificate at
the office of the Company referred to in Section 16, for one or more other
Warrant Certificates of like tenor and representing in the aggregate the same
number of Warrants as was represented by the surrendered Warrant Certificate.
D. Cancellation. Warrant Certificates surrendered for transfer or
exchange shall be canceled by the Company.
Section 6. Mutilated or Missing Warrant Certificates.
If any Warrant Certificate is mutilated, lost, stolen or destroyed,
the Company shall issue, upon surrender and cancellation of any mutilated
Warrant Certificate, or in lieu of and substitution for any lost, stolen or
destroyed Warrant Certificate, a new Warrant Certificate of like tenor and
representing an equal number of Warrants. In the case of a lost, stolen or
destroyed Warrant Certificate, a new Warrant
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Certificate shall be issued by the Company only upon the Company's receipt of a
reasonably satisfactory affidavit regarding such loss, theft or destruction.
Section 7. Exercisability or Cancellation of Warrants; Exercise of Warrants;
Voting Control Limitation.
A. Exercisability and Cancellation of Warrants.
(i) Warrants shall only be exercisable in accordance with the
terms of this Section 7A.
(ii) Each Warrantholder's Warrants shall become immediately
exercisable on the Initial Exercise Date and shall not be canceled except as
provided in Section 7B.
(iii) If an exercise of Warrants would otherwise result in any
Warrantholder (or "person" or "group" including such Warrantholder(s)) being
deemed to be the "beneficial owner" or "beneficial owners" of 49% or more of the
voting power of the Company's issued and outstanding capital stock during any
time that the Convertible Notes contain a change in control provision whereby
the holders thereof would have a right, as a result of such exercise by such
Warrantholder, to cause the Company to repurchase the Convertible Notes, such
exercise request shall be deemed to be an election by the exercising
Warrantholder to receive nonvoting Preferred Stock to the extent necessary to
keep its ownership of voting capital stock below 49%. For the avoidance of
doubt, during any such time referred to in the preceding sentence, the Warrants:
(a) in the aggregate shall not be exercisable for more
than 49% the total voting power in the aggregate of all
classes of beneficial interest of the Company then outstanding
entitled to vote generally in elections of the Company's
directors;
(b) in the aggregate, when added to all voting equity
holdings of any and all Warrantholders, shall not be
exercisable for more than 49% the total voting power in the
aggregate of all classes of beneficial interest of the Company
then outstanding entitled to vote generally in elections of
the Company's directors; and
(c) no Warrantholder (or "person" or "group") shall, by
virtue of holding Warrants, be deemed the "beneficial owner"
or "beneficial owners", of more than 49% of the issued and
outstanding shares of the Common Stock or any voting
securities of the Company.
For the purposes of this Section 7A(iii), the terms "person", "group" and
"beneficial owner" shall have the meanings used for purposes of Sections 13(d)
and 14(d) of the Exchange Act.
(iv) Notwithstanding Section 7A(ii) and subject to
Section 7A(iii), each Warrantholder may at any time irrevocably elect to receive
nonvoting Preferred Stock with respect to the Warrants represented by any
Warrant Certificate held by it.
B. Exercise. Subject to the terms and conditions set forth in this
Section 7, Warrants may be exercised, in whole or in part (but not as to any
fractional part of a Warrant), at any time or from time to time on and from the
Initial Exercise Date until 5:00 p.m., New York City time, on the Expiration
Date.
To exercise any Warrant that has become exercisable in accordance
with Section 7A, a Warrantholder shall deliver to the Company at its office
referred to in Section 16 the following: (i) a
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written notice in the form of the Election to Purchase appearing at the end of
the form of Warrant Certificate attached as Exhibit A hereto of such
Warrantholder's election to exercise exercisable Warrants, which notice shall
specify the number of such Warrantholder's Warrants being exercised; (ii) the
Warrant Certificate or Warrant Certificates evidencing the Warrants being
exercised; and (iii) payment of the aggregate Exercise Price.
All rights of Warrantholder with respect to any Warrant that has
become exercisable in accordance with Section 7A but that has not been exercised
on or prior to 5:00 p.m., New York City time, on the Expiration Date shall
immediately cease and such Warrants shall be automatically canceled without any
further action on the part of the Company or any Warrantholder.
C. Payment of Exercise Price. Payment of the aggregate Exercise
Price with respect to Warrants being exercised hereunder may, at the election of
Warrantholder, be made as follows: (i) by the payment to the Company, in cash,
by check or wire transfer, of an amount equal to the Exercise Price multiplied
by the number of Warrants then being exercised; or (ii) by surrendering to the
Company for cancellation Warrant Certificates evidencing Warrants to acquire a
number of Warrant Shares equal to (x) the aggregate Exercise Price divided by
(y) the Fair Market Value of one Warrant Share (a "cashless exercise").
If a Warrantholder elects a cashless exercise, the number of Warrant
Shares to be issued to Warrantholder upon such exercise shall be computed using
the following formula:
X = Y(A-B)
-----
A
X = the number of Warrant Shares to be issued to
Warrantholder
Y = the number of Warrant Shares underlying the Warrants
being exercised
A = the Fair Market Value of one Warrant Share
B = the Exercise Price
Anything herein to the contrary notwithstanding, in connection with
a cashless exercise a Warrantholder shall only be entitled to surrender for
cancellation Warrant Certificates that are currently exercisable in accordance
with Section 7A.
D. Payment of Taxes. The Company shall be responsible for paying any
and all issue, documentary, stamp or other taxes that may be payable in respect
of any issuance or delivery of Warrant Shares on the exercise of a Warrant.
E. Delivery of Warrant Shares. Upon receipt of the items referred to
in Section 7B, the Company shall, as promptly as practicable, and in any event
within three (3) Business Days thereafter, execute and deliver or cause to be
executed and delivered, to or upon the written order of the applicable
Warrantholder, and in the name of such Warrantholder or such Warrantholder's
designee, a stock certificate or stock certificates representing the number of
Warrant Shares to be issued on exercise of the Warrant(s). Such certificates may
bear any restrictive legend required under applicable law, rule or regulation.
The stock certificate or certificates so delivered shall be registered in the
name of the applicable Warrantholder or such other name as shall be designated
in said notice. A Warrant shall be deemed to
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have been exercised and such stock certificate or stock certificates shall be
deemed to have been issued, and such holder or any other Person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date that such notice, together with payment
of the aggregate Exercise Price and the Warrant Certificate or Warrant
Certificates evidencing the Warrants to be exercised, is received by the Company
as aforesaid. If the Warrants evidenced by any Warrant Certificate are exercised
in part, the Company shall, at the time of delivery of the certificates
representing the Warrant Shares, deliver to the holder thereof a new Warrant
Certificate evidencing the Warrants that were not exercised or surrendered,
which shall in all respects (other than as to the number of Warrants evidenced
thereby) be identical to the Warrant Certificate being exercised. Any Warrant
Certificates surrendered upon exercise of Warrants shall be canceled by the
Company.
F. Legend on Warrant Shares. If required under applicable law, rule
or regulation, the Warrant Shares to be issued upon exercise of any Warrant
shall be stamped or imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH,
OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT AND LAWS.
If the Warrant Shares are issued with the aforementioned legend, upon the
occurrence of any event permitting the removal of such legend, the Company, upon
the surrender of certificates containing such legend, shall, at its own expense,
deliver to the holder one or more new certificates evidencing Warrant Shares not
bearing such legend.
Section 8. Adjustment of Number of Warrant Shares Issuable upon Exercise of a
Warrant.
A. Adjustment for Stock Splits, Stock Dividends, Recapitalizations. The
number of Warrant Shares issuable upon exercise of each Warrant and the Exercise
Price thereof shall be proportionately adjusted to reflect any stock dividend,
stock split, reverse stock split, recapitalization or the like affecting the
number of outstanding shares of Stock that occurs after the date hereof.
B. Adjustments for Reorganization, Consolidation, Merger. If after the
date hereof, the Company (or any other entity, the stock or other securities of
which are at the time receivable upon the exercise of the Warrants),
consolidates with or merges into another entity or conveys all or substantially
all of its assets to another entity, then, in each such case, each
Warrantholder, upon any permitted exercise of a Warrant (as provided in Section
7), at any time after the consummation of such reorganization, consolidation,
merger or conveyance, shall receive, in lieu of the stock or other securities
and property receivable upon the exercise of the Warrant prior to such
consummation, the stock or other securities or property to which such
Warrantholder would have been entitled upon the consummation of such
reorganization, consolidation, merger or conveyance if such Warrantholder had
exercised the Warrant immediately prior thereto, all subject to further
adjustment as provided in this Section 8. The successor or purchasing entity in
any such reorganization, consolidation, merger or conveyance (if other than the
Company) shall, upon the effectiveness of such reorganization, consolidation,
merger or conveyance, duly execute and deliver to each Warrantholder a written
acknowledgment of such entity's obligations under the Warrants and this
Agreement. The provisions of this Section 8B shall similarly apply to successive
reorganizations, consolidations, mergers or conveyances.
C. Other Adjustments. If any event shall occur as to which the provisions
of Sections 8A and B are not strictly applicable but as to which the failure to
make any adjustment would adversely affect the purchase rights represented by
the Warrants in accordance with the essential intent and
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principles of such sections (which are to place the holders of Warrants in a
position as nearly equal as possible to the position such holders would have
occupied had such holders purchased shares of Common Stock on the date hereof),
then, in each such case, the Board, in its good faith, shall cause the Company
to make such adjustments, on a basis consistent with the essential intent and
principles established in Sections 8A and B, necessary to preserve, without
dilution, the purchase rights represented by the Warrants.
D. Adjustments for Dilutive Issuances. The number of Warrant Shares
issuable upon exercise of each Warrant shall be subject to adjustment from time
to time as follows:
(i) (a) If the Company shall issue, after the date of this
Agreement, any Additional Stock, the number of Warrant Shares issuable upon
exercise of each Warrant shall be adjusted by dividing the number of Warrant
Shares issuable upon exercise of each Warrant by a fraction, the numerator of
which shall be the number of shares of Stock (as determined in accordance with
subsection 8(D)(i)(b) below) that the aggregate consideration received by the
Company for such issuance would purchase at the Fair Market Value of the Stock
plus the number of shares of Stock outstanding immediately prior to the issuance
of such Additional Stock and the denominator of which shall be the number of
shares of Stock outstanding immediately prior to such issuance plus the number
of shares of such Additional Stock;
(b) In the case of the issuance (whether before, on or after the
date of this Agreement) of options to purchase or rights to subscribe for Stock,
securities by their terms convertible into or exchangeable for Stock or options
to purchase or rights to subscribe for such convertible or exchangeable
securities, the following provisions shall apply for all purposes of this
subsection 8(D)(i) and subsection (8)(D)(ii):
(1) The aggregate maximum number of shares of Stock
deliverable upon exercise (to the extent then exercisable) of such options to
purchase or rights to subscribe for Stock shall be deemed to have been issued at
the time such options or rights were issued.
(2) The aggregate maximum number of shares of Stock
deliverable upon conversion of or in exchange (to the extent then convertible or
exchangeable) for any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued.
(3) In the event of any change in the number of shares
of Stock deliverable upon exercise of such options or rights or upon conversion
of or in exchange for such convertible or exchangeable securities, including,
but not limited to, a change resulting from the antidilution provisions thereof,
the number of shares of Stock deemed issued pursuant to subsections
8(D)(i)(b)(l) and (2) shall be appropriately adjusted to reflect such change.
(4) Upon the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable securities,
the number of shares of Stock deemed issued pursuant to subsections
8(D)(i)(b)(l) and (2) shall be appropriately adjusted to reflect such expiration
or termination.
(ii) "Additional Stock" shall mean any shares of Common Stock or
Preferred Stock issued (or deemed to have been issued pursuant to subsection
8(D)(i)(b)) by the Company after the date of this Agreement other than:
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(a) Stock issued pursuant to a transaction described in
Section 8A hereof;
(b) shares of Stock issuable or issued to officers, directors
or employees of, or consultants to, the Company pursuant to a stock option plan,
stock purchase plan or restricted stock plan approved by the Board; provided
that (1) in the case of any option, such options are issued at an exercise price
not less than the par value of the Stock and otherwise in accordance with the
Company's past practices, and (2) in the case of all other issuances, such
issuances are made in accordance with the Company's past practices (including,
without limitation, as to the amounts issued and in the case of any stock
purchase plan, the prices at which shares are issued).
(c) shares of Stock issued upon conversion or exercise of
convertible or exercisable securities outstanding as of the date hereof
including the Warrants to be issued pursuant hereto.
E. Certificate of Adjustments.
Upon the occurrence of any event resulting in an adjustment in the
number of Warrant Shares (or other stock or securities or property) receivable
upon the exercise of the Warrants, the Company shall promptly thereafter (i)
compute such adjustment in accordance with the terms of the Warrants, (ii)
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, and (iii) mail copies of such
certificate to each Warrantholder.
Section 9. Reservation of Shares.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock and its authorized and issued Common Stock held in its treasury the
aggregate number of the Common Stock Warrant Shares deliverable upon the
exercise of all outstanding Warrants (whether or not currently), for the purpose
of enabling it to satisfy in Common Stock any obligation to issue the Warrant
Shares upon the due and punctual exercise of the Warrants, through 5:00 p.m.,
New York City time, on the Expiration Date. The Company shall and reserve and
keep available, free from preemptive rights, its entire class of authorized but
unissued Preferred Stock in order to satisfy any election by a Warrantholder to
receive nonvoting Preferred Stock with a liquidation preference reflecting
economic ownership that would otherwise be equivalent to the Common Stock
Warrant Shares. The Company shall designate the Preferred Stock as further set
forth in Section 10 hereof.
Section 10. No Impairment; Certain Company Actions.
The Company shall not, by amendment of its certificate of
incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issuance or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants or this Agreement, and shall at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholders under the Warrants and this Agreement against wrongful
impairment. Without limiting the generality of the foregoing, the Company: (i)
shall not set or increase the par value of any Warrant Shares above the amount
payable therefor upon exercise, (ii) shall designate before the Initial Exercise
Date a series of 10 million shares of nonvoting Preferred Stock in form and
substance acceptable to the Warrantholders, each share of which will represent
economic ownership of the Company equal to 5.1 shares of Common Stock, subject
to anti-dilution adjustments, and in conformity with the principles outlined in
this Agreement and (iii) shall take all actions that are necessary or
appropriate in order that the
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Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of the Warrants.
Section 11. No Rights or Liabilities as Stockholder.
A. No holder, as such, of any Warrant Certificate shall be entitled
to vote, receive dividends or be deemed the holder of Stock which may at any
time be issuable on the exercise of the Warrants represented thereby for any
purpose whatsoever, nor shall anything contained herein or in any Warrant
Certificate be construed to confer upon the holder of any Warrant Certificate,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value or change of stock to no par value, consolidation,
merger, conveyance or otherwise), or to receive notice of meetings or, except as
set forth in Section 11B, other actions affecting stockholders or to receive
dividend or subscription rights, or otherwise, until such Warrant Certificate
shall have been exercised in accordance with the provisions hereof and the
receipt and collection by the Company of the Exercise Price and any other
amounts payable upon such exercise. No provision hereof, in the absence of
affirmative action by a Warrantholder to purchase Warrant Shares shall give rise
to any liability of such holder for the Exercise Price or as a stockholder of
the Company, whether such liability is asserted by the Company or any other
Person.
B. Notice to Warrantholders. The Company shall give notice to the
Warrantholder by registered mail if at any time prior to the expiration or
exercise in full of the Warrants, any of the following events shall occur:
(i) the Company shall authorize the payment of any
distribution upon Stock in any securities or authorize the making of any
distribution to all holders of Stock;
(ii) the Company shall authorize the issuance to all holders
of Stock of any additional Stock or securities convertible into or exchangeable
for Stock or of rights, options or warrants to subscribe for or purchase Stock
or securities convertible into or exchangeable for Stock or of any other
subscription rights, options or warrants;
(iii) a dissolution, liquidation or winding up of the Company;
or
(iv) a capital reorganization or reclassification of Stock
(other than a subdivision or combination of the outstanding Stock) or any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing company
and that does not result in any reclassification or change of Stock outstanding)
or in the case of any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety.
Such giving of notice shall be initiated at least 20 Business Days
prior to the date fixed as a record date or effective date or the date of
closing of the Company's transfer books for the determination of the holders
entitled to such distribution or subscription rights, or for the determination
of the holders entitled to vote on such proposed merger, consolidation, sale,
conveyance, dissolution, liquidation or winding up. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
In addition, the Company shall provide to Warrantholder, at the same time such
notice is provided, such information relating to such distribution or
subscription rights, or proposed merger, consolidation, sale, conveyance,
dissolution, liquidation, winding up or conversion to corporate
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or other form as may be reasonably necessary for Warrantholder to make an
informed decision whether to exercise its rights, to the extent exercisable,
hereunder.
Section 12. Fractional Interests.
The Company shall not be required to issue fractional shares of
Common Stock upon exercise of the Warrants or to distribute certificates that
evidence fractional shares of Common Stock. If any fraction of a Common Stock
Warrant Share would, except for the provisions of this Section 12, be issuable
to a Warrantholder, the number of Common Stock Warrant Shares to be issued by
the Company to such Warrantholder shall be rounded up. Warrant Shares comprised
of Preferred Stock may be issued as fractional interests.
Section 13. Registration Rights.
A. Demand Registration.
(i) Request for Registration. If the Company shall receive a
request from Demand Holders that the Company file a Registration Statement under
the Securities Act (a "Demand Registration"), the Company as promptly as
practicable thereafter shall file a Registration Statement with respect to all
Registrable Securities that it has been so requested to include; provided,
however, the Company shall be entitled to defer such registration for a period
of up to sixty (60) days if and to the extent that the Board reasonably believes
that the filing thereof at the time requested, or the offering of securities
pursuant thereto, would be materially detrimental to the interests of the
Company or the Company's stockholders, provided, further, that no registration
may be deferred, pursuant to the provisions of this sentence, on more than one
occasion in any twelve (12) month period. The Company shall also promptly give
written notice to all other Holders of any Registrable Securities of its
intention to effect any Demand Registration within five (5) days after such
notice has been received by the Company and the Company shall include in the
Registration Statement the Registrable Securities which the Company has been so
requested to register by the Holders thereof. The Company shall only be required
to effect three (3) Demand Registrations pursuant to this Section 13A(i).
(ii) Payment of Registration Expenses for Demand Registration.
The Company shall pay all Registration Expenses in connection with the Demand
Registration.
(iii) Selection of Underwriters. If any Demand Registration is
requested to be in the form of an underwritten offering, the managing
underwriter shall be selected and obtained by the Holders of a majority of the
Registrable Securities to be registered. Such selection shall be subject to the
Company's consent, which consent shall not be unreasonably withheld or delayed.
(iv) Priority in Demand Registration. Notwithstanding any
other provision contained in this Section 13A, if a Demand Registration involves
an offering by or through underwriters, and the underwriter managing the
offering reasonably believes in good faith that the inclusion of all Registrable
Securities requested by Holders to be included in the Registration Statement
would materially adversely affect such offering, such managing underwriter shall
so advise each Holder of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Securities
of Holders that may be included in the underwriting shall be allocated among all
such Holders pro rata in proportion to the number of Registrable Securities such
Holders have requested to be registered; provided however that the number of
shares of Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities are first entirely excluded from the
underwriting.
-9-
B. Piggyback Registration.
(i) Right to Include Registrable Securities. If the Company
proposes to register any of its securities under the Securities Act on any form
for the registration of securities under such Act, whether or not for its own
account (other than by a registration statement on Form S-8 or other form which
does not include substantially the same information as would be required in a
form for the general registration of securities or would not be available for
the Registrable Securities) (a "Piggyback Registration"), it shall give prompt
written notice thereof to all Holders of such Holders' rights under this Section
13B(i). Upon the written request of any such Holder made within twenty (20) days
after receipt of any such notice (which request shall specify the type and
amount of the Registrable Securities intended to be disposed of by such Holder),
the Company shall include in the Registration Statement the Registrable
Securities which the Company has been so requested to register by the Holders
thereof.
(ii) Withdrawal of Piggyback Registration by Company. If, at
any time after giving written notice of the intention to register any securities
in a Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such Piggyback
Registration. All reasonable efforts obligations of the Company pursuant to
Section 13D shall cease if the Company determines to terminate prior to such
effective date any registration where Registrable Securities are being
registered pursuant to this Section 13B.
(iii) Piggyback Registration of Underwritten Public Offerings.
If a Piggyback Registration involves an offering by or through underwriters,
then, (a) all Holders requesting to have their Registrable Securities included
in the Company's Registration Statement must sell their Registrable Securities
to the underwriters selected by the Company on the same terms and conditions as
apply to other selling unitholders and (b) any Holder requesting to have its
Registrable Securities included in such Registration Statement may elect in
writing, not later than five (5) Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
its Registrable Securities so included in connection with such registration.
(iv) Payment of Registration Expenses for Piggyback
Registration. The Company shall pay all Registration Expenses in connection with
any Piggyback Registration.
(v) Priority in Piggyback Registration. Notwithstanding any
other provision contained in this Section 13B, if a Piggyback Registration
involves an offering by or through underwriters, the Company shall not be
required to include Registrable Securities therein if and to the extent the
underwriter managing the offering reasonably believes in good faith and advises
each Holder requesting to have Registrable Securities included in the Company's
Registration Statement that such inclusion would materially adversely affect
such offering; provided that (a) if other selling stockholders who are
employees, officers, directors or other Affiliates of the Company have requested
registration of securities in the proposed offering, the Company will reduce or
eliminate such other selling stockholders' securities before any reduction or
elimination of Registrable Securities; and (b) any such reduction or elimination
(after taking into account the effect of clause (a)) shall be pro rata to all
other holders of the securities of the Company exercising piggyback registration
rights similar to those set forth herein in proportion to the respective number
of securities they have requested to be registered.
C. Form S-3 Registration on Request.
(i) Request for Registration. If the Company shall receive a
request from any Holder of Registrable Securities then outstanding that the
Company file a Registration Statement
-10-
under the Securities Act on Form S-3 (a "Form S-3 Registration"), the Company
will: (a) promptly give written notice of the proposed registration to all other
holders of any other securities of the Company; and (b) as soon as practicable,
file a Form S-3 Registration Statement covering all or such portion of such
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holders joining
in such request (to the extent such other Holders make their written request for
inclusion within fifteen (15) days after receipt of written notice from the
Company); provided, however, that the Company shall not be obligated to effect
any such registration pursuant to this Section 13C(i): (1) if the Form S-3 is
not available for such offering by the Holders; (2) if the Holders, together
with the holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $100,000; (3) if the
Company shall furnish to the Holders a certificate signed by the Chairman and
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
Registration Statement for a period of not more than ninety (90) days after
receipt of the request of the Holders under this Section 13C(i); provided,
however, that the Company shall not utilize this right more than once in any
twelve (12) month period; (4) during the period ending one hundred eighty (180)
days after the effective date of a Piggyback Registration, provided that the
Holders making the request for the Form S-3 Registration were entitled to sell
all securities they requested to be included in the Piggyback Registration; or
(5) if the Company has, within the twelve month period preceding the date of
such request, already effected three Form S-3 Registrations for Holders pursuant
to this Section 13C(i). Subject to the foregoing, the Company shall file a
Registration Statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request of the Holders. Registrations effected pursuant to this Section 13C(i)
shall not be counted as a Demand Registration effected pursuant to Section
13A(i).
(ii) Payment of Registration Expenses for Registration. The
Company shall pay all Registration Expenses in connection with any Registration.
(iii) Selection of Underwriters. If any Registration is
requested to be in the form of an underwritten offering, the managing
underwriter shall be selected and obtained by the Holders of a majority of the
Registrable Securities to be registered. Such selection shall be subject to the
Company's consent, which consent shall not be unreasonably withheld or delayed.
D. Registration Procedures. In order to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Section 13, the Company shall, as expeditiously as practicable:
(i) prepare and file with the SEC, a Registration Statement
under the Securities Act on any appropriate form chosen by the Company, in the
Company's sole discretion, which shall be available for the sale of all
Registrable Securities in accordance with the intended method(s) of distribution
thereof set forth in all applicable Holder notices, and use the Company's
reasonable efforts to cause such Registration Statement to become effective as
soon thereafter as reasonably practicable but in no event more than one hundred
twenty (120) days after receipt of such notices or requests; provided, that, at
least five (5) business days before filing with the SEC of such Registration
Statement (or any amendment thereto), the Company shall furnish to each Holder
whose Registrable Securities are included therein draft copies of such
Registration Statement (or amendment), including all exhibits thereto and
documents
-11-
incorporated by reference therein. The Company shall provide to each Holder such
number of copies of the Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus), all exhibits thereto and documents incorporated by
reference therein and such other documents as such Holder may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such Holder included in such Registration Statement. The Company shall modify or
amend the Registration Statement as it relates to any Holder as reasonably
requested by such Holder on a timely basis, and shall reasonably consider other
changes to the Registration Statement (but not including any exhibit or document
incorporated therein by reference) reasonably requested by such Holder on a
timely basis, in light of the requirements of the Securities Act and any other
applicable laws and regulations;
(ii) prepare and file with the SEC such amendments and
post-effective amendments to a Registration Statement as may be necessary to
keep such Registration Statement effective for up to two (2) years; and cause
the related Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed to the extent required pursuant to Rule 424
promulgated under the Securities Act, during such two (2) year period; and
otherwise comply with the provisions of the Securities Act and any other
applicable Federal and state laws with respect to the disposition of all
Registrable Securities covered by such Registration Statement during the
applicable period in accordance with the intended method(s) of disposition of
such Registrable Securities set forth in such Registration Statement, Prospectus
or supplement to such Prospectus;
(iii) notify the Holders whose Registrable Securities are
included in such Registration Statement and the underwriter(s), if any, of an
underwritten offering of any of the Registrable Securities included in such
Registration Statement, and confirm such advice in writing, (a) when a
Prospectus or any prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (b) of any request by the SEC for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (c) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (d) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and (e) of the happening of any
event which makes any statement made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement or Prospectus
so that such Registration Statement, Prospectus or document incorporated by
reference shall not contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) use reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of such Registration Statement at the
earliest possible moment or to prevent the entry of such an order;
(v) use reasonable efforts, to the extent necessary, to
register or qualify the Registrable Securities included in such Registration
Statement under such other securities or blue sky laws of such jurisdictions as
any Holder whose Registrable Securities are included in such Registration
Statement reasonably requests in writing, and do any and all other acts and
things which may be necessary or advisable to enable such Holder to consummate
the disposition in such jurisdictions of such Registrable Securities; provided,
that the Company shall not be required to (a) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify, (b)
subject itself to taxation in any such jurisdiction, or (c) take any action
which would subject it to general service of process in any such jurisdiction;
(vi) make available for inspection by each Holder whose
Registrable Securities are included in such registration, any underwriter(s)
participating in any disposition pursuant to
-12-
such Registration Statement, and any representative, agent or employee of or
attorney or accountant retained by any such Holder or underwriter(s)
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records"),
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility (or establish a due diligence defense), and cause the officers,
directors and employees of the Company to supply all information reasonably
requested by any such Inspector in connection with such Registration Statement;
provided, that records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors, unless (a) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction or
(b) the disclosure of such Records is required by any applicable law or
regulation or any governmental or regulatory authority with jurisdiction over
the Holders or underwriter(s); provided, further, that such Holders or
underwriter(s) agree that such Holders or underwriter(s) shall, upon learning
the disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
(vii) cooperate with the Holders whose Registrable Securities
are included in such Registration Statement and the underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold thereunder, not bearing any restrictive
legends, and enable such Registrable Securities to be in such denominations and
registered in such names as such Holders or any underwriter(s) may reasonably
request at least two (2) business days prior to any sale of Registrable
Securities;
(viii) comply with all applicable rules and regulations of the
SEC;
(ix) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other actions
reasonably requested by the Holders holding a majority of the Registrable
Securities included in such Registration Statement or the underwriter(s) in
order to expedite and facilitate the disposition of such Registrable Securities
and in such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration, (a) make
such representations and warranties, if any, to the Holders of such Registrable
Securities and any underwriter(s) with respect to the Registration Statement,
Prospectus and documents incorporated by reference, if any, in form, substance
and scope as are customarily made by issuers to underwriter(s) in underwritten
offerings and confirm the same if and when requested, (b) obtain opinions of
counsel to the Company and updates thereof addressed to each such Holder and the
underwriter(s), if any, with respect to the Registration Statement, Prospectus
and documents incorporated by reference, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and underwriter(s),
(c) obtain a "cold comfort" letter and updates thereof from the Company's
independent certified public accountants addressed to such Holders and to the
underwriter(s), if any, which letters shall be in customary form and cover
matters of the type customarily covered in cold comfort letters by accountants
in connection with underwritten offerings, and (d) deliver such documents and
certificates as may be reasonably requested by the Holders holding a majority of
such Registrable Securities and underwriter(s), if any, to evidence compliance
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company; each such action required by this clause
(ix) shall be done at each closing of the disposition of Registrable Securities
under such underwriting or similar agreements or as and to the extent required
thereunder;
(x) if requested by the holders of a majority of the
Registrable Securities included in such Registration Statement, use its
reasonable efforts to cause all Registrable Securities which are included in
such Registration Statement to be listed, subject to notice of issuance, by the
date of
-13-
the first sale of such Registrable Securities pursuant to such Registration
Statement, on each securities exchange, if any, on which securities similar to
the Registered Securities are listed; and
(xi) provide a transfer agent and registrar (which may be the
same entity) for such Registrable Shares.
E. Indemnification.
(i) Indemnification by Company. In connection with each
Registration Statement relating to disposition of Registrable Securities, the
Company shall indemnify and hold harmless each Holder and each underwriter of
Registrable Securities and each Person, if any, who controls such Holder or
underwriter (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement of
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading; provided, however,
that such indemnity shall not inure to the benefit of any Holder or underwriter
(or any Person controlling such Holder or underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) on account
of any losses, claims, damages or liabilities arising from the sale of
Registrable Securities if (a) such untrue statement or omission or alleged
untrue statement or omission was made in such Registration Statement, Prospectus
or preliminary prospectus, or such amendment or supplement, in reliance upon and
in conformity with information furnished in writing to the Company by the Holder
or underwriter, as applicable, specifically for use therein or (b) such Holder
or underwriter was informed by the Company, pursuant to Section 13D, that a
Prospectus or preliminary prospectus contained an untrue statement or omission
or alleged untrue statement or omission and such Holder or underwriter, as
applicable, continued to effect sales of Registrable Securities using such
Prospectus or preliminary prospectus. The Company shall also indemnify selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each Person
who controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if
requested. This indemnity agreement shall be in addition to any liability that
the Company may otherwise have.
(ii) Indemnification by Holder. In connection with each
Registration Statement, each Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 13E(i), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information relating to such Holder and furnished in writing by such Holder to
the Company specifically for use therein. In no event shall the liability of any
selling Holder of Registrable Securities hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry
-14-
professionals participating in the distribution, to the same extent as provided
above, with respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus, Registration Statement or
preliminary prospectus or any amendment thereof or supplement thereto.
(iii) Conduct of Indemnification Procedure. Any party that
proposes to assert the right to be indemnified hereunder will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served. No indemnification provided for in Section 13E(i) or 13E(ii) shall be
available to any party who shall fail to give notice as provided in this Section
13E(iii) if the party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was materially prejudiced by the
failure to give such notice, but the omission so to notify such indemnifying
party of any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or
otherwise than under this Section. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and the approval by the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable time
after notice of the commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action, suit,
proceeding or claim effected without its written consent, such consent not to be
unreasonably withheld. If an indemnifying party has assumed the defense of any
action, suit, proceeding or claim, the indemnifying party shall not settle any
such action, suit, proceeding or claim without the consent of the indemnified
party unless such settlement contains, as a term thereof, a full and
unconditional release of such indemnified party.
(iv) Contribution. If the indemnification provided for in this
Section 13E is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omission that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by a Holder
under this Section 13E exceed the net proceeds from the offering received by
such Holder. The relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a
-15-
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent.
(v) Waiver, Release or Settlement. The Company hereby agrees
not to enter into any waiver, release or settlement of any action, suit or
proceeding arising under this Section 13 (whether or not the Holder is a formal
party to any action, suit or proceeding) without the prior written consent of
the Holder (such consent not to be unreasonably withheld).
(vi) Specific Performance. The Company and the Holder
acknowledge that remedies at law for the enforcement of this Section 13E may be
inadequate and intend that this Section 13E shall be specifically enforceable.
Section 14. Representations and Warranties by the Company.
The Company hereby covenants, represents and warrants to each
Warrantholder that:
(a) it is a corporation organized and validly existing under the
laws of the State of Maryland;
(b) this Agreement has been duly authorized, executed and delivered
on its behalf and constitutes the legal, valid and binding obligation of the
Company;
(c) the execution, delivery and performance of this Agreement by the
Company does not and will not violate any applicable law or regulation and does
not require the consent of any governmental or other regulatory body except for
such consents and approvals as have been obtained and are in full force and
effect;
(d) it has not adopted, and will not adopt, any resolution electing
to be, or to make any share of Stock, subject to any of the provisions of the
Maryland Control Share Acquisition Act or the Maryland Business Combination Act
(as amended or supplemented from time to time and collectively, the "Maryland
Interested Shareholder Statutes") and all shares of Stock currently outstanding
or issued in the future are and will be exempt from the Maryland Interested
Shareholder Statutes to the fullest extent permitted by Maryland law;
(e) the Board has on or prior to the Closing Date (i) on the basis
of representations and warranties of the Warrantholders in Section 18(c), duly
exempted the Warrantholders from the ownership limitation imposed by section
5.2(b)(i)(w) of the Company's charter (as amended and restated as of the date
hereof, the "Company's Articles") pursuant to and in accordance with Article
5.2(f) the Company's Articles, (ii) approved, and the Audit Committee of the
Board has expressly approved, the exception set forth in Paragraph 312.05 of the
NYSE Listed Company Manual to the shareholder approval policy set forth in
Paragraph 312.03 thereof (the "Exception") and (iii) directed that there be
promptly mailed (and in no event later than 10 days prior to the Initial
Exercise Date) to all shareholders a letter alerting them to the Company's
omission to seek the shareholder approval that would otherwise be required
absent the Exception and indicating that the Audit Committee of the Board has
expressly approved the Exception; and
(f) all transactions contemplated by this Agreement are in
compliance with, and not in violation of any applicable securities laws,
regulations or rules, including, without limitation, the Securities Act or the
Exchange Act.
-16-
Section 15. Definitions.
Unless the context otherwise requires, the terms defined in this
Section 15, whenever used in this Agreement shall have the respective meanings
hereinafter specified and words in the singular or in the plural shall each
include the singular and the plural and the use of any gender shall include all
genders.
"Affiliate" shall mean, with respect to any Person, any officer of
director of such Person, or any other Person directly or indirectly controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of
such person, directly or indirectly, whether through ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" shall mean any day on which banking institutions are
generally open for business in the City of New York.
"Closing" shall mean 4:00 p.m., New York City time.
"Closing Date" shall mean the date hereof..
"Convertible Notes" shall mean the 8.125% Convertible Senior Notes
due 2027 issued by the Company.
"Demand Holders" shall mean Holders of Registrable Securities
representing at least twenty percent (20%) of the Registrable Securities that
would be outstanding if all Warrants issued hereunder were exercised.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall mean an amount per Warrant Share equal to
$0.18.
"Expiration Date" shall mean the fifth anniversary of the Initial
Exercise Date.
"Fair Market Value" shall mean when used with respect to the Warrant
Shares or any other shares of Stock,
(a) the average over the twenty (20) trading-day period ending on
the trading day which is two (2) trading days prior to the date of the event
giving rise to the computation of Fair Market Value (e.g. the surrender of any
Warrant Certificate in connection with a cashless exercise or the issuance of
any Additional Stock), of:
(i) the Closing sales prices of the Stock on the primary
national securities exchange on which the Stock may at the time be listed, or
(ii) if there were no sales on such exchange on any such
trading day, the average of the highest bid and lowest asked prices on such
exchange at the Closing, on such day, or
(iii) if on any such trading day the Stock is not so listed,
the Closing sales prices (or, if on any day there is no Closing sales price, the
average of the representative bid and asked prices) quoted on Nasdaq on such
day, or
-17-
(iv) if on any such trading day the Stock is not quoted on
Nasdaq, the Closing sales prices (or, if on any day there is no Closing sales
price, the average of the highest bid and lowest asked price) on such day in the
domestic over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization; or
(b) if the Stock is not listed, traded, or quoted as set forth in
subsection (a) above, an amount equal to the most recent per share price at
which shares of Stock (or securities convertible, exchangeable or exercisable
for shares of Stock) were sold by the Company to a third party purchaser that is
neither an Affiliate nor an employee of the Company in a bona-fide, arms'-length
transaction (a "Bona-Fide Private Sale"). In determining the price at which any
such shares of Stock (or convertible, exchangeable or exercisable securities)
were sold, any non-cash consideration shall be valued at the fair value thereof
as determined by the Board acting in good faith (irrespective of any accounting
treatment) and, in the case of the issuance of any securities convertible,
exchangeable or exercisable for shares of Stock, shall include in addition to
the consideration, if any, received on the issuance of such securities, the
minimum price, if any, provided in such securities that is payable to the
Company on the conversion, exchange or exercise thereof for the shares of Stock
covered thereby. If no Bona-Fide Private Sale has occurred within six (6) months
of the date of the event giving rise to the computation of Fair Market Value
(e.g. the surrender of any Warrant Certificate in connection with a cashless
exercise or the issuance of any Additional Stock), the Fair Market Value of the
Stock shall be determined in good faith by the Board after taking reasonable
steps to determine such value including obtaining third party appraisals or
valuation opinions from nationally recognized investment banks.
"Holder" shall mean a holder of Registrable Securities.
"Person" shall mean any corporation, association, partnership,
limited liability company, joint venture, trust, organization, business,
individual, government or political subdivision thereof or governmental body.
"Prospectus" shall mean any prospectus included in any Registration
Statement, as amended or supplemented, with respect to the terms of the offering
of any portion of the Registrable Securities covered by such Registration
Statement and all other amendments and supplements to the Prospectus, including
post-effective amendments and all material incorporated by reference in such
Prospectus.
"Registration Expenses" shall mean any and all expenses incurred in
connection with any registration or action incident to performance of or
compliance by the Company with Section 13, including, without limitation, (i)
all SEC, national securities exchange and NASD registration and filing fees; all
listing fees and all transfer agent fees; (ii) all fees and expenses of
complying with state securities or blue sky laws (including the fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expenses; (iv) all fees and disbursements of counsel for
the Company and of its accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance; and (v) the fees and disbursements of one counsel retained by the
holders of Registrable Securities to advise them in their capacity as Holders of
Registrable Securities, but excluding underwriting discounts and commissions,
brokerage fees and transfer taxes, if any.
"Registrable Securities" means (a) any Warrant Shares issued to the
Warrantholders, and (b) any other Securities of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares described in clause (a); provided
that any Warrant Share or such other Security shall cease to be a Registrable
Security when it is sold pursuant to a Registration Statement or Rule 144 under
the Securities Act, or is eligible for resale under Rule 144(k) under the
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Securities Act and the Company has agreed to remove any restrictive legends
imprinted on such Warrant Share or other Security.
"Registration Statement" means any registration statement of the
Company filed or to be filed with the SEC which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including all
amendments (including post-effective amendments) and supplements thereto, all
exhibits thereto and all material incorporated therein by reference.
"Repurchase Agreements" shall mean, collectively, the repurchase
agreements, dated as of August 14, 2007 (as such agreements may be amended,
amended and restated, supplemented or otherwise modified, renewed or replaced
from time to time), among each of Saturn Portfolio Management, Mercury Mortgage
Statutory Trust and ▇▇▇▇▇▇▇ Mortgage Finance Corporation as respective "Sellers"
thereunder and GGRE LLC.
"SEC" The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
"Securities" shall mean the Common Stock, the Preferred Stock or any
other securities into which the Common Stock or the Preferred Stock may
hereafter be converted or for which the Common Stock or Preferred Stock may be
exchanged.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute as at the time in effect, and any reference to a
particular section of such Act shall include a reference to the comparable
section, if any, of such successor federal statute.
Section 16. Notices.
All notices, consents, requests, waivers or other communications
required or permitted under this Agreement (each a "Notice") shall be in writing
and shall be sufficiently given (a) if hand delivered, (b) if sent by nationally
recognized overnight courier, or (c) if sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
if to the Company:
Luminent Mortgage Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
if to a Warrantholder:
At the address of such Warrantholder set forth on Schedule A.
or such other address as shall be furnished by the Company or any of the
Warrantholders (including any transferee of an original Warrantholder) in a
Notice. Any Notice shall be deemed given upon receipt.
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Section 17. Supplements, Amendments and Waivers.
This Agreement may be supplemented or amended only by a subsequent
writing signed by the Company and Warrantholders holding a majority of the
outstanding Warrants; provided that no supplement or amendment may be made to
Section 7, Section 8 or this Section 17 (or any of the defined terms used in
Section 7, Section 8 or this Section 17) without a subsequent writing signed by
the Company and each Warrantholder.
Section 18. Representations and Warranties of the Warrantholders.
Each Warrantholder, by its acceptance of the Warrants to be issued
herewith represents and warrants to the Company that (a) such Warrantholder is
an "accredited investor" as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act, (b) such Warrantholder is acquiring the
Warrants and the Warrant Shares to be issued upon exercise of such Warrants for
investment, for its own account, and not with a view to, or for sale in
connection with, any distribution. and (c) solely in relation to the Warrants it
receives and the Warrant Shares it may receive in the future, (i) no
individual's (as defined in Section 542(a)(2) of the Code, as modified by
Section 856(h)(3)(A)(i) of the Code) Beneficial Ownership or Constructive
Ownership of Capital Stock has or will violate the Ownership Limit or the
restriction contained in sections 5.2(b)(i)(x), 5.2(b)(i)(y) or 5.2(b)(z) of the
Company's Articles and (ii) to its knowledge, it does not own and will not own
an interest in a tenant of the Company (or a tenant of any entity owned or
controlled by the Company) that would cause the Company to own actually or
Constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B)
of the Code) in such tenant and (iii) it agrees that any violation or attempted
violation of any of its representations and warranties set out in Section
18(c)(i) and (ii) will result in such transfer to the Trust of Capital Stock
pursuant to Section 5.2(c) of the Company's Articles (capitalized terms used but
not defined in this Section 18(c) shall have the meanings ascribed to them in
the Company's Articles).
Section 19. Successors and Assigns.
Except as otherwise provided herein, the provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the successors and permitted assigns of the parties hereto. Warrants issued
under this Agreement may be assigned by a Warrantholder only to the extent such
assignment satisfies the restrictions on transfer set forth in this Agreement;
any attempted assignment of Warrants in violation of the terms hereof shall be
void ab initio.
Section 20. Termination.
This Agreement (other than Sections 7D, 11 and Sections 15 through
22, inclusive, and all related definitions, all of which shall survive such
termination) shall terminate on the earlier of (i) the Expiration Date and (ii)
the date on which all Warrants have been exercised or canceled in accordance
with Section 7.
Section 21. Governing Law; Jurisdiction.
A. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be governed by and construed in accordance with the laws of the
State of New York.
B. Submission to Jurisdiction. The Company and each Warrantholder by
its acceptance of a Warrant hereby irrevocably and unconditionally submits, for
itself and its property, to the jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
for the Southern District of New York, and any appellate court from any thereof,
in respect
- 20 -
of actions brought against it as a defendant, in any action, suit or proceeding
arising out of or relating to this Agreement or the Warrant Certificates and
Warrants to be issued pursuant hereto, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action, suit or proceeding may be
heard and determined in such courts. Each of the parties hereto agrees that a
final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
C. Venue. The Company and each Warrantholder irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any action, suit or proceeding arising out of or relating to this Agreement, or
the Warrant Certificates and Warrants to be issued pursuant hereto, in any court
referred to in subsection B. The Company and each Warrantholder hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action, suit proceeding in any
such court.
Section 22. Third Party Beneficiaries.
This Agreement shall not benefit or create any right or cause of
action in or on behalf of any Person other than the Company, the Warrantholders
and their respective successors and permitted assigns.
Section 23. Headings.
The headings in this Agreement are for convenience only and shall
not affect the construction or interpretation of this Agreement.
Section 24. Entire Agreement.
This Agreement, together with the Warrant Certificates, Schedules
and Exhibits, constitutes the entire agreement and understanding between the
Company and the Warrantholders hereto with respect to the subject matter hereof
and shall supersede any prior agreements and understandings between the Company
and the Warrantholders with respect to such subject matter.
Section 25. Joint Drafting.
This Warrant Agreement shall be deemed to have been jointly drafted
by the Company and the Warrantholders, and no provisions of it shall be
interpreted or construed for or against the Company or the Warrantholders
because such party purportedly prepared or requested such provision, any other
provision, this Warrant Agreement or a Warrant Certificate.
[SIGNATURE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed as of the day and year first above written.
LUMINENT MORTGAGE CAPITAL, INC.
By: _________________________________
Name:
Title:
- 22 -
SCHEDULE A
LIST OF WARRANTHOLDERS
AGGREGATE NUMBER OF
NAME OF WARRANTHOLDER ADDRESS WARRANTS
------------------------- --------------------------- ----------------------
Arco ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 51,000,000
Ltd. ▇▇▇▇ ▇▇▇ ▇▇ 1.2
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Schedule A-1
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH,
OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT AND LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF, AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH, A
WARRANT AGREEMENT MADE BY LUMINENT MORTGAGE CAPITAL, INC. FOR THE BENEFIT
OF THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE. THE
HOLDER OF THIS CERTIFICATE BY THE ACCEPTANCE HEREOF AGREES TO BE BOUND BY
THE TERMS OF THE WARRANT AGREEMENT. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO LUMINENT MORTGAGE CAPITAL, INC.
NO.___ _______ WARRANTS
FORM OF
Warrant Certificate
LUMINENT MORTGAGE CAPITAL, INC.
This Warrant Certificate certifies that _________________________, a
____________________, or its registered assigns (the "Warrantholder"), is the
registered holder of 51,000,000 Warrants to purchase up to 51 million shares
(the "Warrant Shares") of common stock of Luminent Mortgage Capital, Inc. (the
"Company"), par value $0.001 per share (the "Common Stock"), and/or, at the
holder's option or as required by the Warrant Agreement, nonvoting preferred
stock of the Company, par value $0.001 ("Preferred Stock") representing economic
ownership of the Company equivalent to 5.1 Warrant Shares per share of Preferred
Stock, as adjusted pursuant to, and as further described in, that certain
Warrant Agreement dated as of August 17, 2007, made by the Company for the
benefit of the Warrantholders from time to time, so that the Warrant Shares
issued upon exercise represent aggregate economic ownership of no more than 51%
of the Company and 49% of the voting power of all classes of capital stock of
the Company on a fully-diluted basis as of the date hereof (after giving effect
to exercise of the Warrants, the conversion of all convertible debt securities
of the company and exercise of any and all outstanding options or other purchase
rights relating to the Common Stock, the "Voting Issuance Cap"); provided,
however, that the number of shares of Common Stock that may be purchased upon
exercise of the Warrants shall not at any time exceed (i) 41,604,846 shares of
Common Stock, minus all shares held by Warrantholders comprising a "group" under
the Exchange Act, unless the aggregate number of issued and outstanding shares
of Common Stock of the Company exceeds 43,303,004 shares immediately prior to
such exercise of Warrants and (ii) 48,594,970 shares of Common Stock unless a
greater number of unreserved authorized shares of Common Stock are available at
the time of such exercise of Warrants to allow for a higher share issuance
without any Warrantholder or "group" surpassing the Voting Issuance Cap. Each
Warrant entitles the holder, subject to the conditions relating to
exercisability, cancellation and exercise set forth in Section 7 of the Warrant
Agreement referred to below, to purchase from the Company at any time on or
after the Initial Exercise Date (as defined in the Warrant Agreement) prior to
5:00 p.m., New York City time, on the Expiration Date (as defined in the Warrant
Agreement) one fully paid and nonassessable Warrant Share at the Exercise Price
(as defined in
Exhibit A-1
the Warrant Agreement). The number of Warrant Shares for which each Warrant is
exercisable and the Exercise Price are subject to adjustment as provided in the
Warrant Agreement.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants to purchase Warrant Shares and are issued
pursuant to a Warrant Agreement, dated as of August 17, 2007 (the "Warrant
Agreement"), made by the Company for the benefit of the holders from time to
time of the Warrants and the Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Warrantholders. Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Warrant Agreement.
Warrantholder may exercise the Warrants represented by this Warrant
Certificate (to the extent exercisable in accordance with Section 7A of the
Warrant Agreement) by surrendering this Warrant Certificate, with the Election
to Purchase attached hereto properly completed and executed, together with
payment of the aggregate Exercise Price, at the offices of the Company specified
in Section 16 of the Warrant Agreement. If upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or its assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
This Warrant Certificate, when surrendered at the offices of the
Company specified in Section 16 of the Warrant Agreement, by the registered
holder thereof in person, by legal representative or by attorney duly authorized
in writing, may be exchanged, in the manner and subject to the limitations
provided in the Warrant Agreement, for one or more other Warrant Certificates of
like tenor evidencing in the aggregate a like number of Warrants.
Warrantholder may transfer the Warrants evidenced by this Warrant
Certificate, in whole or in part, only in accordance with Sections 5 of the
Warrant Agreement.
The Company may deem and treat the registered holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
The Warrant Agreement and each Warrant Certificate, including this
Warrant Certificate, shall be governed by and construed in accordance with the
laws of the State of New York.
Exhibit A-2
WITNESS the signature of the duly authorized officer of the Company.
Dated: As of August 17, 2007 LUMINENT MORTGAGE CAPITAL, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Jr.
----------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
Exhibit A-3
FORM OF
Election to Purchase
(To be executed and delivered to the Company upon exercise of a
Warrant on or after the Initial Exercise Date and prior to the Expiration Date)
The undersigned hereby irrevocably elects to exercise _________ of
the Warrants evidenced by the attached Warrant Certificate to purchase ________
Warrant Shares in the form of Common Stock and _________ Warrant Shares in the
form of Preferred Stock, and herewith tenders (or is concurrently tendering)
payment for such Warrant Shares in an amount determined in accordance with the
terms of the Warrant Agreement. The undersigned requests that, in the case of
Warrant Shares solely in the form of Common Stock or Preferred Stock, a
certificate or, in the case of Warrant Shares in the form of Common Stock and
Preferred Stock, two certificates representing such Warrant Shares be registered
in the name of _________________________, whose address is _______________
_________________________, and that such certificate or certificates, as the
case may be, be delivered to _________________________, whose address is
_________________________. If said number of Warrants is less than the number of
Warrants evidenced by the Warrant Certificate, the undersigned requests that a
new Warrant Certificate evidencing the number of Warrants evidenced by this
Warrant Certificate that are not being exercised be registered in the name of
_________________________, whose address is _________________________
_________________________ and that such Warrant Certificate be delivered to
_________________________, whose address is _________________________.
Dated___________________________,
Name of holder of Warrant Certificate:
________________________________________
________________________________________
(Please Print)
Address: ____________________________
____________________________
Federal Tax ID No.: ___________________
Signature: ___________________________
Note: The above signature must correspond with the name as
written in the first sentence of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatever, and if the
certificate evidencing the Warrant Shares or any Warrant
Certificate representing Warrants not exercised is to be
registered in a name other than that in which this
Warrant Certificate is registered, the signature above
must be guaranteed.
- 1 -
Signature Guaranteed:
Dated: __________________,
- 2 -
FORM OF
Assignment
For value received, ________________ hereby sells, assigns and
transfers unto _______________, _____________ of the Warrants evidenced by the
attached Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ___________________
as its due and lawful attorney, to register the transfer of said Warrants on the
books of Luminent Mortgage Capital, Inc., and to execute a new Warrant
Certificate in the name of _________________________ whose address is
____________________________ evidencing the number of Warrants so sold, assigned
and transferred hereby. If the number of Warrants sold, assigned or transferred
hereunder is less than the number of Warrants evidenced by the attached Warrant
Certificate, then the undersigned requests that a new Warrant Certificate for an
amount of Warrants equal to the number of Warrants evidenced by the attached
Warrant Certificate that were not sold, transferred or assigned be registered in
the name of the undersigned.
Dated___________________________,
Name of holder of Warrant Certificate:
________________________________________
________________________________________
(Please Print)
Address: _______________________________
________________________________________
Federal Tax ID No.: ____________________
Signature: _____________________________
Note: The above signature must correspond with the name
as written in the first sentence of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatever, and such signature
must be guaranteed.
Signature Guaranteed:
Dated: ___________, __________
- 3 -
