EXHIBIT 10.32
CECO ENVIRONMENTAL CORP.
AND
XXXXXXX XxXXXXXX
WARRANT AGREEMENT
Dated as of November 7, 1996
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WARRANT AGREEMENT (the "Agreement") dated as of November 7, 1996
between CECO Environmental Corp., a New York corporation (the "Company"),
Xxxxxxx XxXxxxxx (hereinafter referred to as a "Holder" or "DeZwirek").
W I T N E S S E T H :
WHEREAS, DeZwirek is an employee, officer and director of the Company;
and
WHEREAS, DeZwirek has, and continues to provide valuable services to
the Company; and
WHEREAS, the Company desires to grant to DeZwirek, and DeZwirek
desires to accept from the Company, warrant certificates giving DeZwirek the
right to purchase shares of the Company's Common Stock.
NOW, THEREFORE, in consideration of the premises, the payment by
DeZwirek to the Company of an aggregate of ten dollars ($10.00), the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. DeZwirek is granted the right to purchase, from the Company,
at any time from November 7, 1996 until 5:30 p.m., New York time, on November 7,
2006 (the "Expiration Date"), at which time the Warrants expire, up to an
aggregate of 750,000 shares (subject to adjustment as provided in Section 8
hereof) of common stock, par value $.01 per share, of the Company ("Common
Stock") at an initial exercise price (subject to adjustment as provided in
Section 11 hereof) of $1.75 per share (the "Exercise Price").
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2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Registration of Warrant. The Warrants shall be numbered and shall
be registered on the books of the Company when issued.
4. Exercise of Warrant.
4.1 Method of Exercise. The Warrants initially are exercisable
at the product of (i) the Exercise Price multiplied by (ii) the number of shares
of Common Stock purchased (subject to adjustment as provided in Section 11
hereof), as set forth in Section 8 hereof payable by certified or official bank
check in United States dollars. The product of the number of Warrants exercised
at any one time multiplied by the Exercise Price shall be referred to as the
"Purchase Price." Upon surrender of a Warrant Certificate with the annexed Form
of Election to Purchase duly executed, together with payment of the Purchase
Price for the shares of Common Stock purchased at the Company's principal
offices located at 000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, Xxxxxx,
the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased. The purchase rights represented by each Warrant Certificate are
exercisable at the option of the Holder thereof, in whole or in part (but not as
to fractional shares of the Common Stock). In the case of the purchase of less
than all the shares of Common Stock purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate
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upon the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the shares of Common Stock
purchasable thereunder.
5. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for shares of Common Stock shall be made forthwith (and
in any event within five (5) business days thereafter) without charge to the
Holder thereof including, without limitation, any tax which may be payable in
respect of the issuance thereof, and such certificates shall (subject to the
provisions of Sections 7 and 9 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificates and the certificates representing the shares
of Common Stock, or other securities, property or rights issued upon exercise of
the Warrants shall be executed on behalf of the Company by the manual or
facsimile signature of the then present President or any Vice President of the
Company under its corporate seal reproduced thereon, attested to by the manual
or facsimile signature of the then present Secretary or any Assistant Secretary
of the Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
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6. Transfer of Warrant. The Warrants shall be transferable only on the
books of the Company maintained at its principal office, where its principal
office may then be located, upon delivery thereof duly endorsed by the Holder or
by its duly authorized attorney or representative accompanied by proper evidence
of succession, assignment or authority to transfer. Upon any registration
transfer, the Company shall execute and deliver new Warrants to the person
entitled thereto.
7. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof.
8. Exercise Price and Number of Securities. Except as otherwise
provided in Section 10 hereof, each of the Warrants are exercisable to purchase
one share of Common Stock at an initial exercise price equal to the Exercise
Price. The Exercise Price and the number of shares of Common Stock for which the
Warrant may be exercised shall be the price and the number of shares of Common
Stock which shall result from time to time from any and all adjustments in
accordance with the provisions of Section 11 hereof.
9. Registration Rights.
9.1 Registration Under the Securities Act of 1933. Each
Warrant Certificate and each certificate representing the shares of Common
Stock, and any of the other securities issuable upon exercise of the Warrants
and the securities underlying the securities issuable upon exercise of the
Warrants (collectively, the "Warrant Shares") shall bear the following legend,
unless (i) such Warrants or Warrant Shares are distributed to the public or sold
for distribution
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to the public pursuant to this Section 9 or otherwise pursuant to a registration
statement filed under the Securities Act of 1933, as amended (the "Act"), (ii)
such Warrants or Warrant Shares are subject to a currently effective
registration statement under the Act; or (iii) the Company has received an
opinion of counsel, in form and substance reasonably satisfactory to counsel for
the Company, that such legend is unnecessary for any such certificate:
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER
SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE
DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS OR OTHER
SECURITIES REPRESENTED BY THE CERTIFICATE IS RESTRICTED
IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED
TO HEREIN.
9.2 Piggyback Registration. If, at any time commencing on the
date of this Agreement, and expiring on the Expiration Date, the Company
proposes to register any of its securities, not registered on the date hereof,
under the Act (other than in connection with a merger or pursuant to Form S-4 or
Form S-8) it will give written notice by registered mail, at least thirty (30)
days prior to the filing of each such registration statement, to the Holders of
the Warrants and/or the Warrant Shares of its intention to do so. If any of the
Holders of the Warrants and/or Warrant Shares notify the Company within twenty
(20) days after mailing of any such notice of its or their desire to include any
such securities in such proposed registration
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statement, the Company shall afford such Holders of the Warrants and/or Warrant
Shares the opportunity to have any such Warrant Shares registered under such
registration statement. In the event that the managing underwriter for said
offering advises the Company in writing that in the underwriter's opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without causing a diminution in the
offering price or otherwise adversely affecting the offering, the Company will
include in such registration (a) first, the securities the Company proposes to
sell, (b) second, the securities held by the entities that made the demand for
registration, (c) third, the Warrants and/or Warrant Shares requested to be
included in such registration which in the opinion of such underwriter can be
sold, pro rata among the Holders of Warrants and/or Warrant Shares on the basis
of the number of Warrants and/or Warrant Shares requested to be registered by
such Holders, and (d) fourth, other securities requested to be included in such
registration.
Notwithstanding the provisions of this Section 9.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 9.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement or to withdraw the same after the filing but prior to the
effective date thereof.
9.3 Demand Registration.
(a) At any time commencing January 1, 1997 and
expiring on the Expiration Date, the Holders of the Warrants and/or Warrant
Shares representing a "Majority" (as hereinafter defined) of the Warrants and/or
Warrant Shares shall have the right on one
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occasion (which right is in addition to the registration rights under Section
9.2 hereof), exercisable by written notice to the Company, to have the Company
prepare and file with the Securities and Exchange Commission (the "Commission"),
a registration statement and such other documents, including a prospectus, as
may be necessary in the opinion of both counsel for the Company and counsel for
the Holders, in order to comply with the provisions of the Act, so as to permit
a public offering and sale by such Holders and any other Holders of the Warrants
and/or Warrant Shares who notify the Company within fifteen (15) days after the
Company mails notice of such request pursuant to Section 9.3(b) hereof
(collectively, the "Requesting Holders") of their respective Warrant Shares so
as to allow the unrestricted sale of the Warrant Shares to the public from time
to time until the earlier of the following: (i) the Expiration Date, or (ii) the
date on which all of the Warrant Shares requested to be registered by the
Requesting Holders have been sold (the "Registration Period").
(b) The Company covenants and agrees to give written
notice of any registration request under this Section 9.3 by any Holder or
Holders representing a Majority of the Warrants and/or Warrant Shares to all
other registered Holders of the Warrants and the Warrant Shares within ten (10)
days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under
Section 9.2 and subsection (a) of this Section 9.3, at any time commencing
January 1, 1997 and expiring on the Expiration Date, the Holders of Warrants
and/or Warrant Shares shall have the right on one occasion, exercisable by
written request to the Company, to have the Company prepare and file with the
Commission a registration statement so as to permit a public offering and sale
by such Holders
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of their respective Warrant Shares from time to time until the first to occur of
the following: (i) the expiration of this Agreement, or (ii) all of the Warrant
Shares requested to be registered by such Holders have been sold; provided,
however, that the provisions of Section 9.4(b) hereof shall not apply to any
such registration request and registration and all costs incident thereto shall
be at the expense of the Holder or Holders making such request.
9.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 9.2 or 9.3 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a
registration statement within ninety (90) days of receipt of any demand
therefor, and to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell Warrant
Shares such number of prospectuses as shall reasonably be requested. The Company
shall also file such applications and other documents as may be necessary to
permit the sale of the Warrant Shares to the public during the Registration
Period in those states to which the Company and the holders of the Warrants
and/or Warrant Shares shall mutually agree.
(b) The Company shall pay all costs (excluding fees
and expenses of Holder(s)' counsel and any underwriting or selling commissions),
fees and expenses in connection with all registration statements filed pursuant
to Sections 9.2 and 9.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, blue sky fees and expenses. The
Holder(s) will pay all costs, fees and expenses in connection with the
registration statement filed pursuant to Section 9.3(c).
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(c) The Company will take all necessary action which
may be required in qualifying or registering the Warrant Shares included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s), provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the
Warrant Shares to be sold pursuant to any registration statement and each
person, if any, who controls such Holder(s) within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject
under the Act, the Exchange Act or otherwise, arising from such registration
statement.
(e) In order to provide for just and equitable
contribution under the Act in any case in which (i) any Holder of the Warrant
Shares or controlling person thereof makes a claim for indemnification but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 9.4(d) hereof
provide for indemnification in such case or (ii) contribution under the Act may
be required on the part of any Holder of the Warrant Shares, or controlling
person thereof, then the Company, any such Holder of the Warrant Shares, or
controlling person thereof shall contribute to the aggregate
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losses, claims, damages or liabilities to which they may be subject (which
shall, for all purposes of this Agreement, include, but not be limited to, all
costs of defense and investigation and all attorneys fees), in either such case
(after contribution from others) on the basis of relative fault as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
a Holder of Warrant Shares, or controlling person thereof on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and such Holders of
such securities and such controlling persons agree that it would not be just and
equitable if contribution pursuant to this Section 9.4(e) were determined by pro
rata allocation or by any other method which does not take account of the
equitable considerations referred to in this Section 9.4(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section
9.4(e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The Holder(s) of the Warrant Shares to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the
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Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any loss, claim, damage or expense or liability (including
all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from information furnished in writing, by
or on behalf of such Holders, or their successors or assigns, for specific
inclusion in such registration statement.
(g) Nothing contained in this Agreement shall be
construed as requiring the Holder(s) to exercise their Warrants prior to the
initial filing of any registration statement or the effectiveness thereof.
(h) The Company shall not permit the inclusion of any
securities other than the Warrant Shares to be included in any registration
statement filed pursuant to Section 9.3 hereof, or permit any other registration
statement (other than a registration statement on Form S-4 or S-8) to be or
remain effective during a one hundred and eighty (180) day period following the
effective date of a registration statement filed pursuant to Section 9.3 hereof,
without the prior written consent of the Holder(s) of the Warrants and Warrant
Shares representing a Majority of such securities or as otherwise required by
the terms of any existing registration rights granted prior to the date of this
Agreement by the Company to the holders of any of the Company's securities.
(i) The Company shall furnish to each Holder
participating in the offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion of
counsel to the Company, dated the effective date of such registration
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statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the underwriting agreement), and
(ii) a "cold comfort" letter dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering, a
"cold comfort" letter dated the date of the closing under the underwriting
agreement) signed by the independent public accountants who have issued a report
on the Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(j) The Company shall as soon as practicable after
the effective date of the registration statement, and in any event within 15
months thereafter, make "generally available to its security holders" (within
the meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(k) The Company shall enter into an underwriting
agreement with the managing underwriters selected for such underwriting by
Holders holding a Majority of the Warrant Shares requested to be included in
such underwriting. Such agreement shall be satisfactory in form and substance to
the Company, each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company
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and such other terms as are customarily contained in agreements of that type
used by the managing underwriter. The Holder(s) shall be parties to any
underwriting agreement relating to an underwritten sale of their Warrant Shares
and may, at their option, require that any or all of the representations,
warranties and covenants of the Company to or for the benefit of such
underwriters shall also be made to and for the benefit of such Holder(s). Such
Holder(s) shall not be required to make any representations or warranties to or
agreements with the Company or the underwriters except as they may relate to
such Holder(s) and their intended methods of distribution.
(l) For purposes of this Agreement, the term
"Majority" in reference to the Warrants or Warrant Shares, shall mean in excess
of fifty percent (50%) of the then outstanding Warrants or Warrant Shares that
(i) are not held by the Company, or (ii) have not been resold to the public
pursuant to a registration statement filed with the Commission under the Act or
Rule 144 promulgated under the Act.
10. Obligations of Holders. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 9 hereof that
each of the selling Holders shall:
(a) Furnish to the Company such information regarding
themselves, the Warrant Shares held by them, the intended method of sale or
other disposition of such securities, the identity of and compensation to be
paid to any underwriters proposed to be employed in connection with such sale or
other disposition, and such other information as may reasonably be required to
effect the registration of their Warrant Shares.
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(b) Notify the Company, at any time when a prospectus
relating to the Warrant Shares covered by a registration statement is required
to be delivered under the Act, of the happening of any event with respect to
such selling Holder as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
11. Adjustments to Exercise Price and Number of Securities. The
Exercise Price in effect at any time and the number and kind of securities
purchasable upon the exercise of the Warrants or the securities underlying the
Warrants shall be subject to adjustment from time to time upon the happening of
certain events as follows:
11.1 Dividend, Subdivision and Combination. In case the
Company shall (i) declare a dividend or make a distribution on its outstanding
shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify
its outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect at the time of the record date
for such dividend or distribution or of the effective date of such subdivision,
combination or reclassification shall be adjusted so that it shall equal the
price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur.
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11.2 Adjustment in Number of Securities. Upon each adjustment
of the Exercise Price pursuant to the provisions of this Section 11, the number
of Warrant Shares issuable upon the exercise at the adjusted Exercise Price of
each Warrant shall be adjusted to the nearest number of whole shares of Common
Stock determined by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of the applicable Warrant
Shares issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
11.3 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock designated
as Common Stock in the Articles of Incorporation of the Company as of the date
hereof, or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
11.4 Merger or Consolidation. In case of any consolidation of
the Company with, or merger of the Company into, another corporation (other than
a consolidation or merger which does not result in any reclassification or
change of the outstanding Common Stock), the corporation formed by such
consolidation or merger shall execute and deliver to each Holder a supplemental
warrant agreement providing that the Holder of each Warrant then outstanding
shall have the right thereafter (until the Expiration Date) to receive, upon
exercise of such Warrant, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger to which
the Holder would have been entitled if the Holder had exercised such Warrant
immediately prior to such consolidation, merger, sale or transfer. Such
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supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in this Section 11. The above provision of
this subsection shall similarly apply to successive consolidations or mergers.
11.5 No Adjustment of the Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the
Warrant Shares;
(b) Upon the issuance or sale of Common Stock (or any
other security convertible, exercisable, or exchangeable into shares of Common
Stock) upon the direct or indirect conversion, exercise, or exchange of any
options, rights, warrants, or other securities or indebtedness of the Company
outstanding as of the date of this Agreement or granted pursuant to any stock
option plan of the Company in existence as of the date of this Agreement,
pursuant to the terms thereof or issued pursuant to any stock purchase plan in
existence as of the date of this Agreement, pursuant to the terms thereof; or
(c) If the amount of said adjustment shall be less
than ten cents ($.10) per share, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least ten cents ($.10) per share.
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12. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable, without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company for a new
Warrant Certificate of like tenor and date representing in the aggregate the
Holder's right to purchase the same number of Warrant Shares in such
denominations as shall be designated in such Warrant Certificate at the time of
such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
13. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
or other securities upon the exercise of the Warrants, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
14. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock or other securities,
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properties or rights as shall be issuable upon the exercise thereof or the
exercise or conversion of any other exercisable or convertible securities
underlying the Warrants. Every transfer agent and warrant agent (collectively
"Transfer Agent") for the Common Stock and other securities of the Company
issuable upon the exercise of the Warrants will be irrevocably authorized and
directed at all times to reserve such number of authorized shares of Common
Stock and other securities as shall be requisite for such purpose. The Company
will keep a copy of this Agreement on file with every Transfer Agent for the
Common Stock and other securities of the Company issuable upon the exercise of
the Warrants. The Company will supply every such Transfer Agent with duly
executed stock and other certificates, as appropriate, for such purpose. The
Company covenants and agrees that, upon each exercise of the Warrants and
payment of the Purchase Price, all shares of Common Stock and other securities
issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any stockholder. As
long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock and other securities issuable upon
the exercise of the Warrants and the securities underlying the securities
issuable upon exercise of the Warrants to be listed (subject to official notice
of issuance) on all securities exchanges or securities associations on which the
Common Stock issued to the public in connection herewith may then be listed
and/or quoted.
15. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holder(s) of the Warrants the right to
vote or to consent or to receive notice as a stockholder in respect of any
meetings of stockholders for the election of directors or any other matter, or
as having any rights whatsoever as a stockholder of the
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Company. If, however, at any time prior to the expiration of the Warrants and
their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an entirety
shall be proposed; then in any one or more of said events, the Company shall
give written notice to the registered holders of the Warrants of such event at
least fifteen (15) days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholders entitled to
such dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any
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such dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:
(a) if to the registered Holder of the Warrants, to
the address of such Holder as shown on the books of the Company; or
(b) if to the Company, to the address set forth in
Section 4 hereof or to such other address as the Company may designate by notice
to the Holders.
17. Supplements; Amendments; Entire Agreement. This Agreement contains
the entire understanding between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly signed
by the party against whom enforcement of the modification or amendment is
sought. The Company and DeZwirek may from time to time supplement or amend this
Agreement without the approval of any Holders of Warrant Certificates (other
than DeZwirek) in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and DeZwirek may deem necessary or
desirable and which the Company and DeZwirek deem shall not adversely affect the
interests of the Holders of Warrant Certificates.
74
18. Successors. All of the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holder(s) and
their respective successors and assigns hereunder.
19. Survival of Representations and Warranties. All statements in any
schedule, exhibit or certificate or other instrument delivered by or on behalf
of the parties hereto, or in connection with the transactions contemplated by
this Agreement, shall be deemed to be representations and warranties hereunder.
Notwithstanding any investigations made by or on behalf of the parties to this
Agreement, all representations, warranties and agreements made by the parties to
this Agreement or pursuant hereto shall survive.
20. Governing Law; Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Illinois and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
21. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
22. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
75
23. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and
DeZwirek and any other registered Holder(s) of the Warrant Certificates or
Warrant Shares any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of the
Company and DeZwirek and any other Holder(s) of the Warrant Certificates or
Warrant Shares.
24. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ATTEST: CECO ENVIRONMENTAL
/s/ Xxxxxxxxx Xxxxxx By: /s/ Xxxxxxx XxXxxxxx
--------------------------- ------------------------------
Xxxxxxxxx Xxxxxx, Secretary President
/s/ Xxxxxxx XxXxxxxx
-----------------------
Xxxxxxx XxXxxxxx
76
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS OR OTHER SECURITIES
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, NOVEMBER 7, 2006
Warrant No.
WARRANT CERTIFICATE
This Warrant Certificate certifies that ______________________, or
registered assigns, is the registered holder of Warrants to purchase initially,
at any time from November 7, 1996 until 5:30 p.m., New York time, on November 7,
2006 ("Expiration Date"), up to ____________ shares, of fully-paid and
non-assessable common stock, $.01 par value ("Common Stock") of CECO
Environmental Corp., a New York corporation (the "Company"), at the initial
exercise price, subject to adjustment in certain events of ($1.75) per share
upon surrender of this Warrant Certificate and payment of the CS Exercise Price
at the principal executive office of the Company, but subject to the conditions
set forth herein. Payment of the Exercise Price shall be made by certified or
official bank check in United States dollars payable to the order of the
Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter expire and shall be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby
EXH A-1
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 holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at the principal executive office of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
This Warrant Certificate does not entitle any Warrant holder to any of
the rights of a shareholder of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of __________________, 199__.
ATTEST: CECO ENVIRONMENTAL CORP.
EXH A-2
By: [SEAL]
-------------------------- -------------------------------------
Secretary Name:
------------------------------
Title:
-----------------------------
EXH A-3
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 4.1 OF THE
WARRANT AGREEMENT]
The undersigned hereby irrevocably elects to exercise the right,
represented by Warrant Certificate No._____ , to purchase ______ shares of
Common Stock (as defined in the Warrant Agreement described below) and herewith
tenders in payment for such securities a certified or official bank check
payable in United States dollars to the order of CECO Environmental Corp., a New
York corporation (the "Company") in the amount of $____________, all in
accordance with the terms of Section 4.1 of the Warrant Agreement dated as of
November 7, 1996 among the Company and Xxxxxxx XxXxxxxx. The undersigned
requests that a certificate for such securities be registered in the name of
_________________________, whose address is __________________________________
and that such certificate be delivered to
_________________________________________, whose address is
_________________________________________________, and if said number of shares
of Common Stock shall not be all the shares of Common Stock purchasable
hereunder, that a new Warrant Certificate for the balance of the shares of
Common Stock purchasable under the within Warrant Certificate be registered in
the name of the undersigned warrantholder or his assignee as below indicated and
delivered to the address stated below.
Dated:____________
Signature: _____________________
(Signature must conform in
all respects to name of holder
as specified on the face of the
Warrant Certificate.)
Address: _____________________________________________
_____________________________________________
______________________________________________________
(Insert Social Security or Other Identifying Number of
Holder)
Signature Guaranteed:_________________________________________________________
(Signature must be guaranteed by a bank, savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH A-4
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto
[NAME OF TRANSFEREE] Warrant Certificate No. _____, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
________________ Attorney, to transfer the within Warrant Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ______________
Signature: ______________________________________________
(Signature must conform in all respects to name of holder
as specified on the face of the Warrant Certificate.)
Address:_________________________________________________
_________________________________________________
_________________________________________________________
(Insert Social Security or Other Identifying Number of
Holder)
Signature Guaranteed: _________________________________________________________
(Signature must be guaranteed by a bank, savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to
EXH A-5
