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EXHIBIT 99.3
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
XXXXXXXXX INDUSTRIES, INC.
COMMON STOCK PURCHASE WARRANT
dated as of November 13, 2000
THIS CERTIFIES THAT, for value received, KEY PRINCIPAL PARTNERS,
L.L.C., or its successors or assigns (such Person and such successors and
assigns each being the "Warrant Holder" with respect to the Warrant held by it),
at any time and from time to time on any Business Day on or prior to 5:00 p.m.
(New York City time), on the Expiration Date (as herein defined), is entitled
(a) to subscribe for the purchase from XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation (the "Company"), of (i) 368,381 shares of Common Stock, as to which
this Warrant is immediately exercisable and (ii) an additional 324,851 shares of
Common Stock, as to which this Warrant is exercisable on and after December 31,
2000 if the AVS Transaction has not been consummated on or before such date (as
evidenced by the certificate of the chief financial officer of the Company
delivered to the Warrant Holder on or before such date), at a price per share,
in the case of (i) and (ii) above, equal to the Exercise Price (as herein
defined), and (b) to the other rights set forth herein; PROVIDED that the number
of shares of Common Stock issuable upon any exercise of this Warrant and the
Exercise Price shall be adjusted and readjusted from time to time in accordance
with Section 5. By accepting delivery hereof, the Warrant Holder agrees to be
bound by the provisions hereof.
IN FURTHERANCE THEREOF, the Company irrevocably undertakes and agrees
for the benefit of Warrant Holder as follows:
Section 1. DEFINITIONS AND CONSTRUCTION.
(a) CERTAIN DEFINITIONS. As used herein (the following definitions
being applicable in both singular and plural forms):
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with such Person.
"APPRAISED VALUE" means at any time the fair market value of a share of
the Common Stock as determined as of that time by an independent investment bank
of national repute selected jointly by Requisite Holders and the Company and
retained pursuant to an engagement letter between the Company and such
investment bank with respect to such valuation in form and substance acceptable
to Requisite Holders; such Appraised Value shall be determined without deduction
for liquidity considerations or minority shareholder status. The costs of
engagement of such investment bank for any such determination of Appraised Value
shall be paid by the Company.
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"AVS TRANSACTION" means the acquisition by the Company and/or one or
more joint ventures in which the Company is an equity participant of
substantially all of the parts business of Aviation Sales Company.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City are authorized by law to close.
"CAPITAL REORGANIZATION" has the meaning set forth in SECTION 5(d).
"CLOSING DATE" has the meaning set forth in the Subordinated Credit
Agreement.
"CLOSING PRICE" means, for any trading day with respect to a share of
Common Stock, (a) the last reported sale price on such day on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if no such reported sale takes place on any such day, the average of
the closing bid and asked prices thereon, as reported in THE WALL STREET
JOURNAL, or (b) if such Common Stock shall not be listed or admitted to trading
on a national securities exchange, the last reported sales price on the NASDAQ
National Market System or, if no such reported sale takes place on any such day,
the average of the closing bid and asked prices thereon, as reported in THE WALL
STREET JOURNAL, or (c) if such Common Stock shall not be quoted on such National
Market System nor listed or admitted to trading on a national securities
exchange, then the average of the closing bid and asked prices, as reported by
THE WALL STREET JOURNAL for the over-the-counter market; provided that if CLAUSE
(A), (B), OR (C) applies and no price is reported in THE WALL STREET JOURNAL for
any trading day, then the price reported in THE WALL STREET JOURNAL for the most
recent prior trading day shall be deemed to be the price reported for such
trading day.
"COMMISSION" means the Securities and Exchange Commission or any other
Federal agency administering the Securities Act at the time.
"COMMON STOCK" means the Company's currently authorized capital stock,
par value $.001, and stock of any other class or other consideration into which
such currently authorized capital stock may hereafter have been changed.
"COMMON STOCK DISTRIBUTION" has the meaning set forth in SECTION
5(b)(i).
"COMMON STOCK REORGANIZATION" has the meaning set forth in SECTION
5(a).
"COMPANY" has the meaning set forth in the introductory paragraph to
this Warrant.
"CONTINGENT OPTIONS" has the meaning set forth in the Subordinated
Credit Agreement.
"CONVERTIBLE SECURITIES" means any stock or securities, other than
Options, convertible into or exchangeable for Common Stock.
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"DESIGNATED HOLDER" means, for any purpose, any holder (or a
representative designated by such holder) of Warrants and Warrant Shares which
is designated for such purpose by holders representing more than 50% of all the
Warrant Shares outstanding, or issuable upon the exercise of all then
outstanding Warrants.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.
"EXERCISE AMOUNT" means for any number of Warrant Shares as to which
this Warrant is being exercised the product of (i) such number of Warrant Shares
TIMES (ii) the Exercise Price.
"EXERCISE PRICE" means $0.01 per Warrant Share, as adjusted from time
to time pursuant to Section 5.
"EXPIRATION DATE" means November 13, 2007.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 6(f).
"INDEMNIFYING PARTY" has the meaning set forth in SECTION 6(f).
"INITIAL HOLDER" means Key Principal Partners, L.L.C.
"INSPECTOR" has the meaning set forth in SECTION 6(b)(xi).
"MARKET PRICE" on any day means (a) the higher of (i) the unweighted
average of the daily Closing Prices per share of Common Stock for the 20
consecutive trading days prior to such date and (ii) the Closing Price per share
of Common Stock for the trading day preceding such day or (b) if CLAUSES (A),
(B) AND (C) of the definition of "Closing Price" are inapplicable, then the
Appraised Value as of such day; PROVIDED that for purposes of the application of
Section 5(b) to a Common Stock Distribution pursuant to a public offering
registered under the Securities Act, "Market Price" means the Closing Price per
share of Common Stock for the trading day preceding the effective date of the
registration statement with respect to such public offering (or in the case of
an initial public offering, the price per share in such offering).
"NOTICE OF EXERCISE" has the meaning set forth in SECTION 2(a).
"OPTIONS" means any rights to subscribe for or to purchase, or any
warrants or options for the purchase of Common Stock or Convertible Securities.
"PARTICIPATING HOLDERS" has the meaning set forth in SECTION 6(c)(i).
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PUBLIC OFFERING" means a public offering of the Common Stock of the
Company pursuant to a Registration Statement filed with the Commission in
compliance with the Securities Act.
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"RECORDS" has the meaning set forth in SECTION 6(b)(xi).
"REGISTRABLE SECURITIES" means any Warrant Shares until (a) a
registration statement under the Securities Act covering such Warrant Shares
shall have been declared effective and such Warrant Shares shall have been
disposed of pursuant to such effective registration statement, (b) all Warrant
Shares are eligible to be immediately sold under circumstances in which all of
the conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met or such Warrant Shares may be sold pursuant to Rule
144(k), or (c) such Warrant Shares shall have been otherwise transferred, the
Company shall have delivered one or more certificates or other evidence of
ownership of such Warrant Shares not bearing the legend required pursuant to
Section 2 and such Warrant Shares may be resold without subsequent registration
under the Securities Act.
"REGISTRATION REQUEST" has the meaning set forth in SECTION 6(a)(i).
"REQUISITE HOLDERS" means at any time holders of Warrant Shares and
Warrants representing at least 51% of the Warrant Shares outstanding or issuable
upon the exercise of all the outstanding Warrants.
"SECURITIES ACT" means the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time. Reference to a particular section of
the Securities Act shall include a reference to the comparable section, if any,
of any such successor Federal statute.
"SENIOR CREDIT AGREEMENT" has the meaning set forth in the Subordinated
Credit Agreement, including any amendments thereto to which Requisite Holders
have consented in writing.
"SPECIAL DIVIDENDS" has the meaning set forth in SECTION 5(c).
"SUBORDINATED CREDIT AGREEMENT" means that certain Senior Subordinated
Note and Warrant Purchase Agreement, dated as of November 13, 2000, between the
Company and Key Principal Partners, L.L.C., and any amendments thereto; unless
otherwise specifically stated references herein to the Subordinated Credit
Agreement or to provisions thereof, and the incorporation herein of any
provisions thereof, shall remain operative notwithstanding the termination of
the Subordinated Credit Agreement or the payment of the indebtedness of the
Company thereunder.
"SUBORDINATED NOTE" means a "Note" as defined in the Subordinated
Credit Agreement.
"WARRANT" means, as the context requires, (a) this warrant or (b) any
of the other Common Stock purchase warrants originally issued pursuant the
Subordinated Credit Agreement and, in either case, any successor warrant or
warrants issued upon a whole or partial transfer or assignment of any such
Common Stock purchase warrant or of any such successor warrant.
"WARRANT HOLDER" has the meaning set forth in the introductory
paragraph to this Warrant.
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"WARRANT SHARES" means the number of shares of Common Stock issued or
issuable upon exercise of this Warrant as set forth in the introduction hereto,
as adjusted from time to time pursuant to SECTION 5, or in the case of other
Warrants, issuable upon exercise of those Warrants.
(b) ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared, in accordance with generally accepted
accounting principles. When used herein, the term "financial statements" shall
include the notes and schedules thereto. References to fiscal periods are to
fiscal periods of the Company.
(c) COMPUTATION OF TIME PERIODS. With respect to the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." Periods of days shall be counted in calendar days unless otherwise
stated.
(d) CONSTRUCTION. Unless the context requires otherwise, references to
the plural include the singular and to the singular include the plural,
references to any gender include any other gender, the part includes the whole,
the term "including" is not limiting, and the term "or" has, except where
otherwise indicated, the inclusive meaning represented by the phrase "and/or."
The words "hereof," "herein," "hereby," "hereunder," and similar terms in this
Warrant refer to this Warrant as a whole and not to any particular provision of
this Warrant. Section, subsection, clause, exhibit and schedule references are
to this Warrant, unless otherwise specified. Any reference to this Warrant, or
the other Subordinated Credit Documents (as defined in the Subordinated Credit
Agreement) includes any and all permitted alterations, amendments, changes,
extensions, modifications, renewals, or supplements thereto or thereof, as
applicable. Definitions from the Subordinated Credit Agreement which are
referenced herein are incorporated herein in full (together with any necessary
constituent definitions) and remain operative notwithstanding any termination of
the Subordinated Credit Agreement.
(e) EXHIBITS AND SCHEDULES. All of the exhibits and schedules attached
hereto shall be deemed incorporated herein by reference.
(f) NO PRESUMPTION AGAINST ANY PARTY. Neither this Warrant nor any
uncertainty or ambiguity herein or therein shall be construed or resolved using
any presumption against any party hereto or thereto, whether under any rule of
construction or otherwise. On the contrary, this Warrant has been reviewed by
each of the parties and their counsel and, in the case of any ambiguity or
uncertainty, shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of all parties hereto.
Section 2. EXERCISE OF WARRANT.
(a) EXERCISE AND PAYMENT. The Warrant Holder may exercise this Warrant
in whole or in part, at any time or from time to time on any Business Day on or
prior to the Expiration Date, by delivering to the Company a duly executed
notice (a "Notice of Exercise") in the form of EXHIBIT A and by payment to the
Company of the Exercise Price per Warrant Share, at the election of the Warrant
Holder, either (a) by wire transfer of immediately available funds to the
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account of the Company in an amount equal to the Exercise Amount, (b) by
receiving from the Company the number of Warrant Shares equal to (i) the number
of Warrant Shares as to which this Warrant is being exercised minus (ii) the
number of Warrant Shares having a value, based on the Closing Price on the
trading day immediately prior to the date of such exercise (or if there is no
such Closing Price, then based on the Appraised Value as of such day), equal to
the Exercise Amount, (c) by surrendering that portion of any Subordinated Note
held by the Warrant Holder in an amount equal to the Exercise Amount, or (d) any
combination of the foregoing.
(b) EFFECTIVENESS AND DELIVERY. As soon as practicable but not later
than five Business Days after the Company shall have received such Notice of
Exercise and payment, the Company shall execute and deliver or cause to be
executed and delivered, in accordance with such Notice of Exercise, a
certificate or certificates representing the number of shares of Common Stock
specified in such Notice of Exercise, issued in the name of the Warrant Holder
or in such other name or names of any Person or Persons designated in such
Notice of Exercise. This Warrant shall be deemed to have been exercised and such
share certificate or certificates shall be deemed to have been issued, and the
Warrant Holder or other Person or Persons designated in such Notice of Exercise
shall be deemed for all purposes to have become a holder of record of shares of
Common Stock, as of the date that such Notice of Exercise and payment shall have
been received by the Company.
(c) SURRENDER OF WARRANT. The Warrant Holder shall surrender this
Warrant Certificate to the Company when it delivers the Notice of Exercise, and
in the event of a partial exercise of the Warrant, the Company shall execute and
deliver to the Warrant Holder, at the time the Company delivers the share
certificate or certificates issued pursuant to such Notice of Exercise, a new
Warrant Certificate for the unexercised portion of the Warrant, but in all other
respects identical to this Warrant Certificate; PROVIDED that in the event of a
partial exercise of the Warrant by an Initial Holder or any Affiliate of an
Initial Holder, this Warrant Certificate need not be surrendered to the Company
if such Initial Holder or its Affiliate, as the case may be, agrees to make a
notation of this Warrant Certificate of such partial exercise on the Warrant.
(d) LEGEND. Each certificate for Warrant Shares issued upon exercise of
this Warrant, unless at the time of exercise such Warrant Shares are registered
under the Securities Act, shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
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Any certificate for Warrant Shares issued at any time in exchange or
substitution for any certificate bearing such legend (unless at that time such
Warrant Shares are registered under the Securities Act) shall also bear such
legend unless, in the written opinion of counsel selected by the holder of such
certificate (who may be an employee of such holder), which counsel and opinion
shall be reasonably acceptable to the Company, the Warrant Shares represented
thereby need no longer be subject to restrictions on resale under the Securities
Act.
(e) FRACTIONAL SHARES. The Company shall not be required to issue
fractions of shares of Common Stock upon an exercise of the Warrant. If any
fraction of a share would, but for this restriction, be issuable upon an
exercise of the Warrant, in lieu of delivering such fractional share, the
Company shall pay to the Warrant Holder, in cash, an amount equal to the same
fraction times the Closing Price on the trading day immediately prior to the
date of such exercise (or if there is no such Closing Price, then based on the
Appraised Value as of such day).
(f) EXPENSES AND TAXES. The Company shall pay all expenses and taxes
payable in connection with the preparation, issuance and delivery of
certificates for the Warrant Shares and any new Warrant Certificates, except
that if the certificates for the Warrant Shares or the new Warrant Certificates
are to be registered in a name or names other than the name of the Warrant
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Warrant Holder at the time of its delivery of the
Notice of Exercise or promptly upon receipt of a written request by the Company
for payment.
Section 3. INVESTMENT REPRESENTATION. By accepting the Warrant, the
Warrant Holder represents that it is acquiring the Warrant for its own account
or the account of an Affiliate for investment purposes and not with the view to
any sale or distribution, that the Warrant Holder will not offer, sell or
otherwise dispose of the Warrant or the Warrant Shares except under
circumstances as will not result in a violation of applicable securities laws,
and that the Warrant Holder is an "accredited investor" as that term is defined
in Rule 501 under the Securities Act.
Section 4. VALIDITY OF WARRANT AND ISSUANCE OF SHARES; PERCENTAGE
INTEREST.
(a) The Company represents and warrants that this Warrant has been duly
authorized, is validly issued, and constitutes the valid and binding obligation
of the Company.
(b) The Company further represents and warrants that on the date hereof
it is duly authorized and reserved, and the Company hereby agrees that it will
at all times until the Expiration Date have duly authorized and reserved, such
number of shares of Common Stock as will be sufficient to permit the exercise in
full of the Warrant, and that all such shares are and will be duly authorized
and, when issued upon exercise of the Warrant, will be validly issued, fully
paid and non-assessable, and free and clear of all security interests, claims,
liens, equities and other encumbrances.
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Section 5. ANTIDILUTION PROVISIONS. The Exercise Price in effect at any
time, and the number of Warrant Shares that may be purchased upon any exercise
of the Warrant, shall be subject to change or adjustment as follows:
(a) COMMON STOCK REORGANIZATION. If the Company shall subdivide its
outstanding shares of Common Stock into a greater number of shares, by way of
stock split, stock dividend or otherwise, or consolidate its outstanding shares
of Common Stock into a smaller number of shares (any such event being herein
called a "COMMON STOCK REORGANIZATION"), then (i) the Exercise Price shall be
adjusted, effective immediately after the effective date of such Common Stock
Reorganization, to a price determined by multiplying the Exercise Price in
effect immediately prior to such effective date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such
effective date before giving effect to such Common Stock Reorganization and the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such Common Stock Reorganization, and (ii) the number of
shares of Common Stock subject to purchase upon exercise of this Warrant shall
be adjusted, effective at such time, to a number determined by multiplying the
number of shares of Common Stock subject to purchase immediately before such
Common Stock Reorganization by a fraction, the numerator of which shall be the
number of shares outstanding after giving effect to such Common Stock
Reorganization and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before giving effect to such Common Stock
Reorganization.
(b) COMMON STOCK DISTRIBUTION.
(i) If the Company shall issue, sell or otherwise distribute any share
of Common Stock (a "Common Stock Distribution") other than (A) pursuant to a
Corporate Reorganization (which is governed by SECTION 5(A)), (B) pursuant to
the exercise of Options and Convertible Securities that were outstanding as of
the Closing Date (which in the case of the Contingent Options shall be subject
to the provisions of SECTION 5(E)(V)), or (C) pursuant to the exercise of any
Warrant, for a consideration per share less than the Market Price immediately
prior to such Common Stock Distribution (or, in the case of a Public Offering,
for a consideration per share less than 95% of the Market Price immediately
prior to such Common Stock Distribution), then, effective upon such Common Stock
Distribution, the Exercise Price shall be reduced to a price determined by
multiplying the Exercise Price by a fraction, the numerator of which shall be
the sum of (A) the number of shares of Common Stock outstanding immediately
prior to such Common Stock Distribution multiplied by such Market Price, plus
(B) the consideration, if any, received by the Company upon such Common Stock
Distribution, and the denominator of which shall be the product of (1) the total
number of shares of Common Stock outstanding immediately after such Common Stock
Distribution multiplied by (2) such Market Price.
If any Common Stock Distribution shall require an adjustment to the
Exercise Price pursuant to the foregoing provisions of this SECTION 5(B),
including by operation of paragraph (ii) or (iii) below, then, effective at the
time such adjustment is made, the number of shares of Common Stock subject to
purchase upon exercise of this Warrant shall be increased to a number determined
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by multiplying the number of shares of Common Stock subject to purchase
immediately before such Common Stock Distribution by a fraction, the numerator
of which shall be the Exercise Price in effect immediately prior to such event
and the denominator of which shall be the Exercise Price as adjusted in
accordance with this SECTION 5(b).
The provisions of this SECTION 5(b), including by operation of
paragraph (ii) or (iii) below, shall not operate to increase the Exercise Price
or reduce the number of shares of Common Stock subject to purchase upon exercise
of this Warrant (except for corrective re-adjustments under SECTION 5(b)(iv)).
(ii) If the Company shall issue, sell, distribute or otherwise grant in
any manner (including by assumption) any Options (including options to purchase
Convertible Securities), whether or not such Options or the rights to convert or
exchange any such Convertible Securities in respect of such Options are
immediately exercisable or exercisable prior to the Expiration Date or
thereafter, and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such Convertible
Securities in respect of such Options (determined by dividing (x) the aggregate
amount, if any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of Options to acquire Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon issuance or
sale of such Convertible Securities and upon the conversion or exchange thereof,
by (y) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options) shall be less
than the Market Price immediately prior to the granting of such Options, then,
for purposes of SECTION 5(b)(i), the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued as of the date of
granting of such Options and thereafter shall be deemed to be outstanding and
the Company shall be deemed to have received as consideration of such price per
share, determined as provided above, therefor. Except as otherwise provided in
paragraph (iv) below, no additional adjustment of the Exercise Price shall be
made upon the actual exercise of such Options or upon conversion or exchange of
such Convertible Securities.
(iii) If the Company shall issue, sell or otherwise distribute
(including by assumption) any Convertible Securities, whether or not the rights
to exchange or convert thereunder are immediately exercisable or exercisable
prior to the Expiration Date or thereafter, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (x) the aggregate amount received or
receivable by the Company as consideration for the issuance, sale or
distribution of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (y) the maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities)
shall be less than the Market Price immediately prior to such issuance, sale or
distribution, then, for purposes of SECTION 5(b)(i), the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
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Convertible Securities shall be deemed to have been issued as of the date of the
issuance, sale or distribution of such Convertible Securities thereafter shall
be deemed to be outstanding and the Company shall be deemed to have received as
consideration such price per share, determined as provided above, therefor.
Except as otherwise provided in paragraph (iv) below, no additional adjustment
of the Exercise Price shall be made upon the actual conversion or exchange of
such Convertible Securities.
(iv) If (x) the purchase price provided for in any Option referred to
in SECTION 5(B)(II) or the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in SECTIONS 5
(B)(II) or 5(B)(III) or the rate at which any Convertible Securities referred to
in SECTIONS 5(B)(II) or 5(B)(III) are convertible into or exchangeable for
Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution upon an event which results in a
related adjustment pursuant to this SECTION 5), or (y) any of such Options or
Convertible Securities shall have terminated, lapsed or expired, the Exercise
Price then in effect shall forthwith be readjusted (effective only with respect
to any exercise of this Warrant after such readjustment) to the Exercise Price
which would then be in effect had the adjustment made upon the issuance, sale,
distribution or grant of such Options or Convertible Securities been made based
upon such changed purchase price, additional consideration or conversion rate,
as the case may be (in the case of any event referred to in clause (x) of this
paragraph (iv)) or had such adjustment not been made (in the case of any event
referred to in clause (y) of this paragraph (iv)).
(v) If the Company shall pay a dividend or make any other distribution
upon any capital stock of the Company payable in Common Stock, Options or
Convertible Securities, other than pursuant to a Common Stock Reorganization
(which is governed by SECTION 5(A)), then, for purposes of this SECTION 5(B),
such Common Stock, Options or Convertible Securities shall be deemed to have
been issued or sold without consideration.
(vi) If any shares of Common Stock, Options or Convertible Securities
shall be issued, sold or distributed for cash, the consideration received
therefor shall be deemed to be the amount received by the Company therefor, less
any expenses in excess of reasonable and customary expenses incurred in
connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair market value of such consideration at the time of
its receipt by the Company as determined in good faith by the Board of Directors
of the Company, less any expenses in excess of reasonable and customary expenses
incurred in connection therewith. If any shares of Common Stock, Options or
Convertible Securities shall be issued in connection with any merger in which
the Company is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair market value of such portion of the assets and
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business of the non-surviving corporation as shall be attributable to such
Common Stock, Options or Convertible Securities, as the case may be, at the time
of the merger as determined in good faith by the Board of Directors of the
Company (in making such determination the directors may give effect to the
proposed acquisition and incorporate the prospects of the performance of the
assets and business of the non-surviving corporation over the 12 month period
following the acquisition, including any reasonably demonstrable synergistic or
value enhancing factors). If any Options shall be issued in connection with the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
without consideration.
(c) SPECIAL DIVIDENDS. If the Company shall issue or distribute to any
holder or holders of shares of Common Stock evidences of indebtedness, any other
securities of the Company or any cash, property or other assets (excluding (i) a
Common Stock Reorganization and (ii) a Common Stock Distribution), whether or
not accompanied by a purchase, redemption or other acquisition of shares of
Common Stock (any such nonexcluded event being herein called a "Special
Dividend"), then the Warrant Holder shall be entitled to a pro-rata share of
such Special Dividend as though the Warrant Holder had fully exercised this
Warrant immediately prior to the record date for such Special Dividend, and the
Company shall pay or distribute such pro-rata share to Warrant Holder when paid
or distributed to the holders of the Common Stock, OR the Warrant Holder may at
its option decline to accept such payment or distribution in which case the (x)
the Exercise Price shall be decreased, effective immediately after the effective
date of such Special Dividend, to a price determined by multiplying the Exercise
Price then in effect by a fraction, the numerator of which shall be the Market
Price immediately prior to such effective date MINUS any cash and the then fair
market value, as determined in good faith by the Board of Directors of the
Company, of any evidences of indebtedness, securities or property or other
assets issued or distributed in such Special Dividend with respect to one share
of Common Stock and PLUS the then fair market value, as determined in good faith
by the Board of Directors of the Company, of any evidences of indebtedness,
securities or property or other assets received by the Company in exchange for
such Special Dividend, and the denominator of which shall be the Market Price
immediately prior to such effective date, and (y) the number of shares of Common
Stock subject to purchase upon exercise of this Warrant shall be increased to a
number determined by multiplying the number of shares of Common Stock subject to
purchase immediately before such Special Dividend by a fraction, the numerator
of which shall be the Exercise Price in effect immediately before such Special
Dividend and the denominator of which shall be the Exercise Price in effect
immediately after such Special Dividend. A reclassification of the Common Stock
(other than a change in par value, or from par value to no par value or from no
par value to par value) into shares of Common Stock and shares of any other
class of stock shall be deemed to be a distribution by the Company to the
holders of its Common Stock of such shares of such other class of stock and, if
the outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as part of such reclassification, a Common
Stock Reorganization.
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(d) CAPITAL REORGANIZATION. If there shall be any consolidation or
merger to which the Company is a party, other than a consolidation or a merger
of which the Company is the continuing corporation and which does not result in
any reclassification of, or change (other than a Common Stock Reorganization)
in, outstanding shares of Common Stock, or any sale or conveyance of the
property of the Company as an entirety or substantially as an entirety, or any
recapitalization of the Company (any such event being called a "CAPITAL
REORGANIZATION"), then, effective upon the effective date of such Capital
Reorganization, the Warrant holder shall no longer have the right to purchase
Common Stock, but shall have instead the right to purchase, upon exercise of
this Warrant, the kind and amount of shares of stock and other securities and
property (including cash) which the Warrant Holder would have owned or have been
entitled to receive pursuant to such Capital Reorganization if the Warrant had
been exercised immediately prior to the effective date of such Capital
Reorganization. As a condition to effecting any Capital Reorganization, the
Company or the successor or surviving corporation, as the case may be, shall
execute and deliver to the Warrant Holder an agreement as to the Warrant
Holder's rights in accordance with this Section 5(d), providing, to the extent
of any right to purchase equity securities hereunder, for subsequent adjustments
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 5. The provisions of this Section 5(d) shall similarly apply to
successive Capital Reorganizations.
(e) ADJUSTMENT RULES.
(i) Any adjustments pursuant to this Section 5 shall be made
successively whenever any event referred to herein shall occur, except that,
notwithstanding any other provision of this Section 5, no adjustment shall be
made to the number of Warrant Shares to be delivered to the Warrant Holder (or
to the Exercise Price) if such adjustment represents less than 1% of the number
of Warrant Shares previously required to be so delivered, but any lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which together with any adjustments so
carried forward shall amount to 1% or more of the number of Warrant Shares to be
so delivered.
(ii) No adjustments shall be made pursuant to this Section 5
in respect of the issuance of Warrant Shares upon exercise of the Warrant.
(iii) If the Company shall take a record of the holders of its
Common Stock for any purpose referred to in this Section 5, then (x) such record
date shall be deemed to be the date of the issuance, sale, distribution or grant
in question and (y) if the Company shall legally abandon such action prior to
effecting such action, no adjustment shall be made pursuant to this Section 5 in
respect of such action.
(iv) In computing adjustments under this Section 5, (A)
fractional interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share, and (B) calculations of the Exercise Price shall be
carried to the nearest one-thousandth of one cent.
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(v) For the purpose of the adjustments pursuant to this
Section 5, each Contingent Options shall be deemed to have been issued on the
earlier of (A) the date such Contingent Option is exercised and (B) the date of
the exercise of this Warrant if such Contingent Option has not expired or been
otherwise terminated before such date.
(f) PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this SECTION 5, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the Warrant Holder is
entitled to receive upon exercise of the Warrant.
(g) NOTICE OF ADJUSTMENT. Not less than 10 days after the record date
or effective date, as the case may be, of any action which requires or might
require an adjustment or readjustment pursuant to this SECTION 5 (or the date of
the exercise of this Warrant, if sooner), the Company shall give notice to the
Warrant Holder of such event, describing such event in reasonable detail and
specifying the record date or effective date, as the case may be, and, if
determinable, the required adjustment and computation thereof. If the required
adjustment is not determinable as the time of such notice, the Company shall
give notice to the Warrant Holder of such adjustment and computation as soon as
reasonably practicable after such adjustment becomes determinable.
(h) SUBSEQUENT WARRANT CERTIFICATES. Irrespective of any adjustments in
the Exercise Price or the number of Warrant Shares issuable upon exercise of the
Warrants, Warrant certificates theretofore or thereafter issued may continue to
express the same Exercise Price per share of Common Stock and number and kind of
Warrant Shares as are stated in this Warrant certificate.
(i) DISPUTES. Any dispute which arises between the Warrant Holder and
the Company with respect to the adjusted Exercise Price or Warrant Shares
issuable upon exercise shall be determined by the independent auditors of the
Company, and such determination shall be binding upon the Company and the
holders of the Warrants and the Warrant Shares if made in good faith and without
manifest error.
(j) ADJUSTMENT OF PAR VALUE. If for any reason (including the operation
of the adjustment provisions set forth in this Warrant), the Exercise Price on
any date of exercise of this Warrant shall not be lawful and adequate
consideration for the issuance of the relevant Warrant Shares, whether by reason
of Section 153 of the Delaware General Corporation Law or otherwise, then the
Company shall take such steps as are necessary (including the amendment of its
certificate of incorporation so as to reduce the par value of the Common Stock)
to cause such Exercise Price to be adequate and lawful consideration on the date
the payment thereof is due, but if the Company shall fail to take such steps,
then the Company acknowledges that the Warrant Holder shall have been damaged by
the Company in an amount equal to an amount, which, when added to the total
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Exercise Price for the relevant Warrant Shares, would equal lawful and adequate
consideration for the issuance of such Warrant Shares, and the Company
irrevocably agrees that if the Warrant Holder shall then forgive the right to
recover such damages from the Company, such forgiveness shall constitute, and
Company shall accept such forgiveness as, additional lawful consideration for
the issuance of the relevant Warrant Shares.
Section 6. REGISTRATION OF WARRANT SHARES. Neither the Warrant nor the
Warrant Shares have been registered with the Commission under the Securities Act
or qualified for sale pursuant to any state blue sky law, and neither may be
sold or transferred without such registration or qualification, except pursuant
to an exemption therefrom. No rights shall be hereby granted which are in
violation of applicable securities laws or regulations.
(a) DEMAND REGISTRATION.
(i) At any time upon delivery to the Company by the holder or
holders of at least 50% of all Warrants and Warrant Shares (such percentage
determined by aggregating the number of Warrant Shares into which Warrants are
then exercisable and the number of Warrant Shares then outstanding) (the
"INITIATING HOLDERS") of a written request (a "REGISTRATION REQUEST") that the
Company effect a registration under the Securities Act of Registrable
Securities, which Registration Request shall specify the number of shares of
Registrable Securities proposed to be sold (which number of shares for all such
Initiating Holder(s) must aggregate at least 50% of the Common Stock represented
by all outstanding Warrants and Warrant Shares, and the intended method of
disposition thereof, the Company will:
(x) promptly (but in any case within 10 days) give written
notice of such Registration Request to all other holders of Warrants and to all
other holders of Registrable Securities, which holders shall be entitled to join
such Registration Request by delivering to the Company within 30 days a notice
specifying the number of shares of Registrable Securities proposed to be sold
and the intended method of disposition thereof, in which case the term
"Initiating Holders" shall include such other holders and the Registration
Request shall be deemed to cover such holders and such number of shares of
Registrable Securities proposed to be sold by such holders; and
(y) use its best efforts to effect, as expeditiously as
possible, the registration of all Registrable Securities covered by such
Registration Request; PROVIDED that (A) subject to SECTION 6(a)(ii) the Company
shall not be obligated to effect a registration of Registrable Securities
pursuant to the Warrants on more than one occasion for Registration Requests
from the Initial Holders and their transferees and assignees under all Warrants
and Warrant Shares, together as a group (PROVIDED that in the event that
notwithstanding its best efforts, the Company is unable to register 100% of the
Registrable Securities, the holders of the Warrants, together as a group, shall
be entitled to one additional Registration Request), (B) the Company shall not
be obligated to effect a registration of Registrable Securities pursuant to the
Warrants on more than one occasion in any six month period, and (C)
notwithstanding any provision to the contrary herein, the Company may delay the
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filing of a registration statement for such Registrable Securities for a period
of up to 90 days, measured from the date that the Company receives the
applicable Registration Request, by furnishing to each Initiating Holder within
five Business Days of such receipt a certified resolution of the Board of
Directors of the Company stating that in the good faith judgment of the Board it
would be detrimental or otherwise disadvantageous to the Company or its
shareholders for such a registration statement to be filed as expeditiously as
possible. If the Company furnishes such certified resolution, the Initiating
Holders may, in their discretion, elect to relieve the Company of its obligation
to proceed to effect the requested registration of the Registrable Securities
upon the expiration of the 90-day period by withdrawing their Registration
Request. A Registration Request withdrawn pursuant to the previous sentence
shall not be counted as a Registration Request.
(ii) If the Initiating Holders so elect, the offering of the
Registrable Securities to be registered following a Registration Request shall
be in the form of an underwritten offering, in which case (x) the Initiating
Holders and the Company shall mutually agree upon and select the managing
underwriters and any additional investment bankers and managers to be used in
connection with the offering; PROVIDED that if the Initiating Holders and the
Company cannot mutually agree, the Company will be entitled to select the
managing underwriters and additional investment bankers, but the managing
underwriters and additional investment bankers so selected must by reasonably
satisfactory to the Initiating Holders, (y) the right of any Initiating Holder
to cause the Company to register its Registrable Securities pursuant to this
SECTION 6(a) shall be conditioned upon the inclusion of such Initiating Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
such Initiating Holder and a majority in interest of all Initiating Holders) to
the extent provided herein and (z) all Initiating Holders proposing to include
their Registrable Securities in the registration and underwritten offering shall
enter into an underwriting agreement in customary form with the
representative(s) of the underwriters for such underwritten offering; PROVIDED
FURTHER that the Company may decline to have the offering of such Registrable
Securities be in the form of an underwritten offering, in which case such
Registration Request shall not be counted as a Registration Request for the
purposes of the limitation on the number of Registration Requests contained in
the proviso to SECTION 6(a)(i).
(iii) Any registration statement filed pursuant to a
Registration Request may include other securities of the Company being sold for
the account of the Company or for the account of any other holders. If the
representative(s) of the underwriters for an offering which includes any such
other securities advises the Company that marketing factors require a limitation
on the amount of securities to be underwritten, the amount of securities that
shall be entitled to be included in the registration and underwriting shall be
allocated first to the Registrable Securities, and second to securities being
sold for the account of the Company and any other holders.
(iv) In lieu of registering the Registrable Securities
proposed to be sold pursuant to a Registration Request, the Company shall have
the right, exercisable by the delivery of a written notice to the Initiating
Holders within 20 Business Days after the Company receives the applicable
Registration Request, to purchase all but not part of the Registrable Securities
proposed to be sold in such Registration Request for cash at a price per share
equal to the Market Price on the date of such Registration Request. Upon
delivery by the Company of such written notice, the Company and the Initiating
Holders shall be legally obligated to consummate the purchase contemplated
hereby within 30 days after the Company delivers its written notice, which
period may be extended only with the consent of the Company and each Initiating
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Holder. Without limiting the rights of the Initiating Holders to pursue all
other legal and equitable remedies, if the Company shall fail to consummate the
purchase within the requisite time period, the Company shall remain obligated to
effect a registration of such Registrable Securities pursuant to this SECTION
6(a).
(b) PIGGYBACK REGISTRATION.
(i) If the Company at any time or from time to time proposes
to file a registration statement under the Securities Act with respect to an
offering of shares of Common Stock for cash (x) for the Company's own account
(other than registration statement on Form S-4 or S-8 (or any successor or
similar form that may be adopted by the Commission)) or (y) for the account of
any holders of shares of Common Stock, Options, or Convertible Securities other
than Warrants and Warrant Shares, then the Company at each such time shall give
prompt written notice of such proposed filing to each holder of Warrants and to
each holder of Registrable Securities (but in no event less then 10 Business
Days before the anticipated filing date), and such notice shall offer each
holder of Warrants and each holder of Registrable Securities the opportunity to
register such number of Registrable Securities as the such holder may request,
by notice to the Company within 5 Business Days, on the same terms and
conditions as the other shares of Common Stock to be included in such offering.
(ii) If the registration of which the Company gives notice
pursuant to this SECTION 6(b) is for an underwritten public offering, (x) the
notice provided by the Company shall so state, (y) the right of any holder of
Registrable Securities to cause the Company to register such holders'
Registrable Securities pursuant to this SECTION 6(b) shall be conditioned upon
the inclusion of such holder's Registrable Securities in the underwriting to the
extent provided herein and (z) all holders of Registrable Securities proposing
to include their Registrable Securities in the registration shall enter into an
underwriting agreement in customary form for such an underwritten offering with
the representative(s) of the underwriters selected by the Company. The Company
shall have no obligation to consult with or obtain the consent of any holder of
Warrants or any holder of Registrable Securities in selecting any underwriters
or investment bankers for an offering registered pursuant to this SECTION 6(b).
(iii) Notwithstanding any other provision of this SECTION
6(b), if an offering for which the Company gives notice pursuant to SECTION
6(b)(I) is to be underwritten and the representative(s) of the underwriters for
the offering advises the Company that marketing factors require a limitation on
the amount of securities to be underwritten, (x) the Company shall so advise all
holders of Registrable Securities requesting registration pursuant to this
Section 6(b) and (y) the amount of Registrable Securities requested to be
offered may be excluded or reduced to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount recommended
by such representative(s) of the underwriters; PROVIDED that the amount of
securities entitled to be included in the registration and underwriting shall be
allocated first to the securities being sold for the Company's own account
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(based on the number of such securities specified in the notice given by the
Company pursuant to SECTION 6(b)(i)), then to the securities being sold for the
account of The Equitable Life Assurance Society of the United States (or its
successors or assigns) to the extent such securities are entitled to such
priority pursuant to agreements of the Company in effect on the Closing Date,
and then PRO RATA among the Registrable Securities and any other securities
entitled to be included in such registration, but PROVIDED FURTHER that with
respect to the each of the first two underwritten registrations for the account
of the Company following the initial issuance of this Warrant, the holders shall
be entitled to have included in each such registration at least 50% of the
Registrable Securities (the amount of Registrable Securities to be determined as
to each registration at the time the Company gives notice thereof to the holders
under CLAUSE (B)(II) above).
(iv) The Company may withdraw its notice of proposed
registration given pursuant to Section 6(b)(i) at any time by giving written
notice to each holder of Warrants and each holder of Registrable Securities,
whereupon the Company shall not be required to cause such proposed registration
to be effected.
(c) REGISTRATION PROCEDURES. Upon receipt of a request for registration
of Registrable Securities pursuant to SECTION 6(b), the Company will thereupon
use its best efforts to effect the registration of the Registrable Securities
that are the subject of such request as expeditiously as possible, subject to
the provisions of SECTION 6(b) and in connection therewith:
(i) The Company will as expeditiously as possible prepare and
file with the Commission a registration statement on any form for which the
Company then qualifies and which counsel for the Company shall deem appropriate
and available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof; the
Company will include in such registration statement all information that any
holder of such Registrable Securities (collectively, the "Participating
Holders") shall reasonably request for the purpose of conforming such
registration statement to the requirements of applicable law or of correcting
any material misstatement or omission therein; and the Company will use its best
efforts to cause such filed registration statement to become and remain
effective until the securities covered by such registration statement are sold
but not for more than 180 days;
(ii) Prior to filing such registration statement or any
amendment or supplement thereto, the Company will furnish to the Participating
Holders, their counsel and to each managing underwriter, if any, copies thereof,
and thereafter furnish to the Participating Holders, their counsel and to each
managing underwriter, if any, such number of copies of such registration
statement, amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein) in the prospectus
included in such registration statement (including each preliminary prospectus)
as the Participating Holders, their counsel or any managing underwriter may
reasonably request in order to facilitate the sale of the Registrable
Securities.
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(iii) After the filing of the registration statement, the
Company will promptly notify each Participating Holder of any stop order issued
or, to the Company's Knowledge, threatened to be issued by the Commission and
take all reasonable actions as soon as reasonably practicable to prevent the
entry of such stop order or to remove it if entered.
(iv) The Company will use its best efforts to register or
qualify the Registrable Securities to be offered by the Participating Holders
for offer and sale under such other securities or blue sky laws of such
jurisdictions in the United States as any Participating Holder shall reasonably
request; PROVIDED that the Company will not be required to (x) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (iv), (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction.
(v) At any time when a prospectus relating to a sale of
Registrable Securities is required by law to be delivered in connection with
sales by an underwriter or dealer, the Company will promptly notify each
Participating Holder of the occurrence of any event requiring the preparation of
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
the Company will promptly make available to each Participating Holder and to the
underwriters any such supplement or amendment. Upon receipt of any notice from
the Company of the occurrence of any event of the kind described in the
preceding sentence, the Warrant Holder will forthwith discontinue the offer and
sale of Registrable Securities pursuant to the registration statement covering
such Registrable Securities until receipt by the Warrant Holder and the
underwriters of the copies of such supplemented or amended prospectus and, if so
directed by the Company, the Warrant Holder will deliver to the Company all
copies, other than permanent file copies then in the Warrant Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the 180-day period during which such registration statement is required
to be maintained effective as provided in SECTION 6(c)(i) shall be extended by
the number of days during the period from and including the date of the giving
of such notice to the date when the Company shall make available to the Warrant
Holder such supplemented or amended prospectus.
(vi) The Company will enter into customary agreements
(including an underwriting agreement in customary form if the offering is to be
underwritten) and take such other actions as are reasonably required in order to
expedite or facilitate the sale of such Registrable Securities.
(vii) The Company will furnish to each Participating Holder
and to each underwriter a signed counterpart, addressed to the Participating
Holder or underwriter, of (x) an opinion or opinions of counsel to the Company
and (y) a comfort letter or comfort letters from the Company's independent
public accountants, each in customary form and reasonably satisfactory in form
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and substance to each Participating Holder and underwriter, and covering such
matters of the type customarily covered by opinions or comfort letters, as the
case may be, as any Participating Holder or the managing underwriter or
underwriters reasonably request.
(viii) The Company will use its best efforts to comply with
all applicable rules and regulations of the Commission, and will make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 10(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(ix) The Company will use its best efforts to cause all
Registrable Securities registered pursuant to this Section 6 to be listed on
each securities exchange on which securities issued by the Company of the same
class as such Registrable Securities are then listed or to cause such
Registrable Securities to be quoted on the NASDAQ National Market System if
other securities issued by the Company of the same class are quoted thereon.
(x) The Company will promptly notify each Participating Holder
and the managing underwriter or underwriters, if any, (A) when the registration
statement, the prospectus or any prospectus supplement related thereto or
post-effective amendment to the registration statement has been filed, and, with
respect to the registration statement or any post-effective amendment thereto,
when the same has become effective; (B) of any request by the Commission for any
amendment or supplement to the registration statement or the prospectus or for
additional information; and (C) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the securities or blue sky laws or any
jurisdiction or the initiation or threat of any proceeding for such purpose.
(xi) The Company will make available for inspection by a
representative of a Participating Holder, by any underwriter participating in
any disposition pursuant to the registration and by any attorney or account
retained by a Participating Holder or underwriters (each, an "Inspector") such
financial and other records, pertinent corporate documents and properties of the
Company as the Company may reasonably request (the "Records"), and the Company
will cause the officers, directors and employees of the Company to supply all
information reasonably requested by any such Inspector in connection with such
registration.
(xii) The Company may require any Participating Holder to
furnish in writing to the Company such information regarding the Participating
Holder, as the case may be, the plan of distribution of the Registrable
Securities and other information as may be legally required as the Company may
from time to time reasonably request in writing.
(xiii) As a condition to the inclusion of Registrable
Securities owned by any Participating Holder in a registration pursuant to
SECTIONS 6(a) or 6(b), each such Participating Holder shall, if reasonably
requested by the Company or by the representative(s) of the underwriters (if
any) for such registered offering, agree to deliver to the Company and such
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representative(s) a legal opinion of such holder's counsel, covering such
matters customarily requested of selling shareholders in connection with a
public offering of shares as the Company or such representative(s) may
reasonably request and in a form reasonably satisfactory to the Company or such
representative(s), upon the closing of such offering.
(d) REGISTRATION EXPENSES. The entire costs and expenses of any
registration and qualification pursuant to this SECTION 6 shall be borne by the
Company. Such costs and expenses shall include (i) all costs and expenses
incident to the preparation, printing and filing of the registration statement
and all amendments and supplements thereto, including all reasonable word
processing, duplicating and printing expenses, (ii) all registration and filing
fees payable to the Commission or The National Association of Securities
Dealers, Inc., (iii) all fees and expenses (including reasonable fees and
expenses of counsel) of compliance with securities or blue sky laws, (iv) the
fees and expenses of counsel for the Company, of its independent accountants and
of any other experts retained by the Company, (v) the cost of furnishing a
reasonable number of copies of each preliminary prospectus, each final
prospectus and each amendment or supplement thereto to underwriters, dealers and
other purchasers of the Registrable Securities, (vi) all necessary and
appropriate messenger and delivery expenses and (vii) all fees and expenses
incurred in connection with any listing of the Registrable Securities on any
securities exchange or providing for the quotation of the Registrable Securities
on the NASDAQ National Market System; PROVIDED that each Participating Holder
shall pay any underwriting fees, discounts or commissions, taxes and transfer
taxes attributable to the sale of its Registrable Securities.
(e) INDEMNIFICATION BY THE COMPANY. In the event of any registration
pursuant to SECTION 6(a) OR (b) hereof, the Company agrees to indemnify and hold
harmless each Participating Holder, its officers and directors, and each Person,
if any, who controls any Participating Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement of omission or alleged untrue statement or omission based upon
information relating to the Participating Holder or the plan of distribution
furnished in writing to the Company by the Participating Holder expressly for
use therein. The Company also agrees to indemnify any underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Participating Holder provided in this SECTION 6(e).
(f) INDEMNIFICATION BY THE PARTICIPATING HOLDER. Each Participating
Holder agrees to indemnify and hold harmless the Company, its officers and
directors, and each Person, if any, who controls the Company within the meaning
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of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to the Participating
Holder, but only with reference to information relating to such Participating
Holder or the plan of distribution furnished in writing by the Participating
Holder expressly for use in any registration statement or prospectus relating to
the Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus. Each Participating Holder also agrees to indemnify and
hold harmless any underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
SECTION 6(f).
(g) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to SECTION 6(e) or
6(f), such Person (the "Indemnified Party") shall promptly notify the Person
against whom such Indemnity may be sought (the "Indemnifying Party") in writing
and the Indemnifying Party, upon the request of the Indemnified Party, shall
retain counsel reasonably satisfactory to such Indemnified Party to represent
such Indemnified Party and any others the Indemnifying Party may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnified Party and the Indemnifying Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than two separate firms of attorneys (in addition to any legal
counsel to such Indemnifying Party) at any time for all such Indemnified
Parties, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Indemnified Parties,
such firm shall be designated in writing by the Indemnified Parties. The
Indemnifying Parties shall not be liable for any settlement of any proceeding
effected without its written consent (which shall not be unreasonably withheld),
but if settled with such consent, or if there by a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment.
(h) LOCK UP. In connection with any underwritten public offering of
shares of Common Stock of the Company registered pursuant to the Securities Act,
if the managing underwriter for such registration shall so request, the holders
of Registrable Securities shall not sell, make any short sale of, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
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(other than those shares of Common Stock included in such registration) without
the prior written consent of the underwriters for a period designated by the
underwriters in writing to the holders of Registrable Securities, which period
shall begin not more than 10 days prior to the effectiveness of the registration
statement pursuant to which such public offering shall be made and shall not
last more than 180 days after the effective date of such registration statement.
Section 7. TRANSFER OF WARRANT. The Warrant Holder upon transfer of the
Warrant must deliver to the Company a duly executed Warrant Assignment in the
form of EXHIBIT B, with, in the case of any transfer other than a transfer by an
Initial Holder or its Affiliates, funds sufficient to pay any transfer tax
imposed in connection with such assignment (if any), and upon surrender of this
Warrant Certificates to the Company, the Company shall execute and deliver a new
Warrant Certificate or Certificate in the form of this Warrant Certificate with
appropriate changes to reflect such Assignment, in the name or names of the
assignee or assignees specified in the Warrant Assignment or other instrument of
assignment and, if the Warrant Holder's entire interest is not being transferred
or assigned, in the name of the Warrant Holder, and upon the Company's execution
and delivery of such new Warrant Certificate or Certificates, this Warrant
Certificate shall promptly be cancelled; and PROVIDED that only an assignee
which is an Affiliate of an Initial Holder shall have the rights limited to an
Initial Holder hereunder. Any transfer or exchange of this Warrant Certificate
shall be without charge to the Warrant Holder (except as provided above with
respect to transfer taxes, if any) and any new Warrant Certificate or
Certificates issued shall be dated the date hereof. Any transfer of this Warrant
shall be in compliance with the other provisions hereof.
Section 8. ASSISTANCE IN DISPOSITION OF WARRANT OR WARRANT SHARES.
Notwithstanding any other provision herein, in the event that it becomes
unlawful for the Warrant Holder to continue to hold the Warrant, in whole or in
part, or some or all of the shares of Common Stock held by it, or restrictions
are imposed on any the Warrant Holder by any statute, regulation or governmental
authority which, in the reasonable judgment of the Warrant Holder, make it
unduly burdensome to continue to hold the Warrant or such shares of Common
Stock, the Warrant Holder may sell or otherwise dispose of the Warrant (subject
to the restrictions on transfer provided in Section 7) or its shares of Common
Stock, and the Company agrees to provide reasonable assistance to the Warrant
Holder in disposing of the Warrant and such shares of Common Stock in a prompt
and orderly manner and, at the request of the Warrant Holder, to provide (and
authorize the Warrant Holder to provide) financial and other information
concerning the Company to any prospective purchaser of the Warrant or shares of
Common Stock owned by the Warrant Holder, provided that such purchasers shall
agree to be bound by the confidentiality provisions of Section 14(h) hereof.
Section 9. DRAG-ALONG RIGHTS. In connection with the sale (directly or
indirectly, in a single transaction or series of related transactions) of the
Company whether through (a) the disposition of all or substantially all of the
assets or businesses of the Company followed by a distribution of the
consideration received in such disposition to the Company's shareholders, (b)
the sale or issuance to a purchaser of all or a controlling interest in the
outstanding Common Stock, or (c) the merger or consolidation of the Company with
or into another corporation, where the consideration to be received by the
Company's shareholders in connection with such sale consists solely of cash or
readily marketable securities, the Company shall have the right to require the
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holder of this Warrant, to sell this Warrant to the transferee in connection
with such sale. The sale price for this Warrant shall be paid for at a price
equal to the difference between the exercise price for the Warrant Shares and
the price per share to be paid to the Company or its shareholders for its Common
Stock in the proposed sale; and, otherwise, upon the same terms and conditions
as the proposed sale by the Company or its shareholders (the "Drag-Along
Right"). The Company shall notify the holder of such proposed transfer. Such
notice (the "Drag-Along Notice") shall set forth: (w) the name and address of
the proposed transferee, (x) the amount of consideration and terms and
conditions of payment offered by the proposed transferee, (y) confirmation that
the proposed transferee has been informed of the Drag-Along Right provided for
in this SECTION 9 and has agreed to purchase this Warrant in accordance with the
terms hereof and (z) the date, location and other provisions with respect to the
closing of the transaction.
Section 10. COVENANTS. The Company agrees that from the Closing Date
through the first to occur of (x) the Expiration Date and (y) the exercise of
all Warrants as to all Warrant Shares:
(a) INFORMATION. The Company will deliver to the Warrant Holder:
(i) As soon as available and in any event within 90 days after
the end of each fiscal year, an audited consolidated balance sheet of the
Company and its consolidated subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, of cash flows, and of changes in
stockholders' equity for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and reported on without qualification by Xxxxxx Xxxxxxxx, LLP or other
public accountants of nationally recognized standing;
(ii) Simultaneously with the delivery of each set of financial
statements referenced in SUBSECTION (a)(i) of this SECTION 10, a consolidating
balance sheet in reasonable detail of the Company and its consolidated
subsidiaries as of the end of such fiscal year and the related consolidating
statement of income for such fiscal year, setting forth, in each case, in
comparative form the figures for the previous fiscal year, all certified by the
chief financial officer, the treasurer, or chief accounting officer of the
Company;
(iii) As soon as available but not later than 50 days after
the end of each fiscal quarter, a consolidated and consolidating balance sheet
of the Company as of the end of such fiscal quarter, and the related
consolidated and consolidating statements of income, cash flows, and changes in
stockholders' equity for such fiscal quarter and for the portion of the fiscal
year ended at the end of such fiscal quarter, setting forth, in each case, in
comparative form the figures for the corresponding fiscal quarter and the
corresponding portion of the previous fiscal year, together with a management
report on and analysis of the Company's prospects and operations, all certified
(subject to normal year-end audit adjustments) as to fairness of presentation
and consistency by the chief financial officer, the treasurer, or the chief
accounting officer of the Company;
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(iv) Promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) that the Company or any of its subsidiaries shall
have filed with the Securities and Exchange Commission;
(v) Promptly all statements and notices sent to the Company's
shareholders or the holders of any indebtedness of the Company;
(vi) Promptly upon receipt thereof, copies of each report
submitted to the Board of Directors (or the Audit Committee thereof) of the
Company by independent public accountants in connection with any annual,
interim, or special audit made by them of the consolidated financial statements
of the Company and its Consolidated Subsidiaries including each report submitted
to the Board of Directors (or the Audit Committee thereof) of the Company
concerning its accounting practices and systems and any final "management
letter" submitted by such accountants to management in connection with the
annual audit of the Company and its consolidated subsidiaries (PROVIDED that if
the Company is not required to provide such reports under the Senior Credit
Agreement, then such reports need not be provided under this SECTION
10(a)(vi));and
(vii) From time to time, such additional information regarding
the business, properties, financial position, results of operations, or
prospects of the Company or any of its subsidiaries as the Warrant Holder may
reasonably request;
PROVIDED that the Company shall not be required to deliver information and
notices under this SECTION 10(a) to the Warrant Holder if the Warrant Holder is
already receiving the same information and notices as a Lender under the
Subordinated Credit Agreement.
(b) MAINTENANCE OF BUSINESS. The Company will continue, and will cause
each of its Subsidiaries to continue, to engage in the business the Company and
its Subsidiaries are engaged in at the Closing Date and business activities
reasonably related thereto, will not, and will not permit any of its
Subsidiaries to, expand into any other lines of business except as permitted
above, whether related or unrelated, and will preserve, renew, and keep in full
force and effect, and will, and will cause each of its Subsidiaries to,
preserve, renew, and keep in full force and effect, its corporate existence and
all material rights, privileges, and franchises necessary or desirable in the
customary conduct of business.
(c) AFFILIATE TRANSACTIONS. The Company will not, and will not permit
any of its subsidiaries to engage in any transaction to make any payment that
would violate Section 5.14 of the Subordinated Credit Agreement.
(d) AMENDMENTS OF ORGANIZATIONAL DOCUMENTS. The Company shall not amend
its Certificate or Articles of Incorporation or other organizational documents
in any way which could adversely affect the Warrant Holder or the holders of
Warrant Shares.
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(e) SECURITIES FILINGS; RULES 144 & 144A. The Company will (i) file any
reports required to be filed by it under the Securities Act, the Exchange Act or
the rules and regulations adopted by the Commission thereunder, (ii) use all
reasonable efforts to cooperate with the Warrant Holder and each holder of
Warrant Shares in supplying such information concerning the Company as may be
necessary for the Warrant Holder or holder to complete and file any information
reporting forms currently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrants or Warrant Shares, (iii) take such further action as the Warrant Holder
may reasonably request to the extent required from time to time to enable the
Warrant Holder to sell Warrant Shares without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 or 144A under
the Securities Act, as such Rules may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission, and (iv) upon
the request of the Warrant Holder, deliver to the Warrant Holder a written
statement as to whether it has complied with such reporting requirements.
(f) OBTAINING OF GOVERNMENTAL APPROVALS AND STOCK EXCHANGE LISTINGS.
The Company will, at its own expense, (i) obtain and keep effective any and all
permits, consents and approvals of governmental agencies and authorities which
may from time to time be required of the Company in order to satisfy its
obligations hereunder, and (ii) take all action which may be necessary so that
the Warrant Shares, immediately upon their issuance upon the exercise of the
Warrants, will be listed on each securities exchange, if any, on which the
Common Stock is then listed.
Section 11. LOST, MUTILATED OR MISSING WARRANT CERTIFICATES. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of any Warrant Certificate, and, in the case of
loss, theft or destruction, upon receipt of indemnification satisfactory to the
Company (in the case of an Initial Holder its unsecured, unbonded agreement of
indemnity or affidavit of loss shall be sufficient) or, in the case of
mutilation, upon surrender and cancellation of the mutilated Warrant
Certificate, the Company shall execute and deliver a new Warrant Certificate of
like tenor and representing the right to purchase the same aggregate number of
Warrant Shares.
Section 12. WAIVERS; AMENDMENTS. Any provision of this Warrant may be
amended or waived with (but only with) the written consent of the Company and
the Requisite Holders; PROVIDED that no such amendment or waiver shall, without
the written consent of the Company and the Warrant Holder, (a) change the number
of Warrant Shares issuable upon exercise of the Warrant or the Exercise Price,
(b) shorten the Expiration Date, or (c) amend, modify or waive the provisions of
this Section or the definition of "Requisite Holders." Any amendment or waiver
effected in compliance with this Section shall be binding upon the Company and
the Warrant Holder. The Company shall give notice as soon as reasonably
practicable to the Warrant Holder of any amendment or waiver effected in
compliance with this Section. No failure or delay of the Company or the Warrant
Holder in exercising any power or right hereunder shall operate as a waiver
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thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereon or the exercise of any other
right or power. No notice or demand on the Company in any case shall entitle the
Company to any other or future notice or demand in similar or other
circumstances. The rights and remedies of the Company and the Warrant Holder
hereunder are cumulative and not exclusive of any rights or remedies which it
would otherwise have.
Section 13. SUBORDINATION. THIS WARRANT AND THE INDEBTEDNESS AND
OBLIGATIONS OF THE COMPANY HEREUNDER, IS SUBORDINATE AND JUNIOR IN RIGHT OF
PAYMENT TO CERTAIN INDEBTEDNESS IN THE MANNER AND TO THE EXTENT SET FORTH IN THE
SUBORDINATION PROVISIONS OF THE SUBORDINATED CREDIT AGREEMENT. THE WARRANT
HOLDER ACKNOWLEDGES RECEIPT OF A COPY OF SUCH SUBORDINATION PROVISIONS AND, BY
ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY SUCH SUBORDINATION PROVISIONS.
Section 14. MISCELLANEOUS.
(a) SHAREHOLDER RIGHTS. The Warrant shall not entitle the Warrant
Holder, prior to the exercise of the Warrant, to any voting rights as a
shareholder of the Company.
(b) EXPENSES. The Company shall pay all reasonable expenses of the
Warrant Holder, including reasonable fees and disbursements of counsel, in
connection with the preparation of the Warrant, any waiver or consent hereunder
or any amendment or modification hereof, or the enforcement of the provisions
hereof; PROVIDED that the Company shall not be required to pay any expenses of
the Warrant Holder arising solely in connection with a transfer of the Warrant.
(c) SUCCESSORS AND ASSIGNS. All the provisions of this Warrant by or
for the benefit of the Company or the Warrant Holder shall bind and inure to the
benefit of their respective successors and assigns.
(d) SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
(e) NOTICES. Any notice or other communication hereunder shall be in
writing and shall be sufficient if sent by first-class mail or courier, postage
prepaid, and addressed as follows: (a) if to the Company, addressed to the
Company at its address for notices as set forth below its signature hereon or
any other address as the Company may hereafter notify to the Warrant Holder and
(b) if to the Warrant Holder, addressed to such address as the Warrant Holder
may hereafter from time to time notify to the Company for the purposes of notice
hereunder.
(f) EQUITABLE REMEDIES. Without limiting the rights of the Company and
the Warrant Holder to pursue all other legal and equitable rights available to
such party for the other parties' failure to perform its obligations hereunder,
the Company and the Warrant Holder each hereto acknowledge and agree that the
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remedy at law for any failure to perform any obligations hereunder would be
inadequate and that each shall be entitled to specific performance, injunctive
relief or other equitable remedies in the event of any such failure.
(g) CONTINUED EFFECT. Rights and benefits conferred on the holders of
Warrant Shares pursuant to the provisions hereof (including SECTION 6), and
Persons entitled to the benefit of SECTION 9(b)(v), shall continue to inure to
the benefit of, and shall be enforceable by, such holders, notwithstanding the
surrender of the Warrant to, and its cancellation by, the Company upon the full
or partial exercise or repurchase hereof.
(h) CONFIDENTIALITY. The Warrant Holder agrees to keep confidential any
financial information relating to the Company delivered by the Company hereunder
(the "Information"); PROVIDED that nothing herein shall prevent the Warrant
Holder from disclosing such information: (i) to any holder of Warrants or
Warrant Shares, (ii) to any Affiliate of any holder of Warrants or Warrant
Shares or any actual or potential transferee of the rights or obligations
hereunder, that agrees to be bound by this SECTION 14(h), (iii) upon order,
subpoena, or other process of any court or administrative agency, (iv) upon the
request or demand of any regulatory agency or authority having jurisdiction over
such party, (v) which has been publicly disclosed, (vi) which has been obtained
from any Person that is not a party hereto or an affiliate of any such party,
(vii) in connection with the exercise of any remedy, or the resolution of any
dispute, hereunder (viii) to the legal counsel or certified public accountants
for any holder of Warrants or Warrant Shares, or (ix) as otherwise expressly
contemplated by this Warrant. Warrant Holder expressly understands and
acknowledges (i) that the Information may constitute material, non-public
information regarding the Company, (ii) that the Company is subject to the
Exchange Act, (iii) that Federal and state securities laws prohibit a Person in
possession of material non-public information regarding a publicly-held issuer
from, among other things, trading in the securities of such issuer, and (iv)
such laws provide strict penalties for the violation thereof. Warrant Holder
agrees that neither it, or anyone acting on its behalf, will, directly or
indirectly, trade in Company securities in violation of any such Federal or
state securities laws.
(i) GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE
REQUIRED BY MANDATORY PROVISIONS OF LAW.
(j) SECTION HEADINGS. The section headings used herein are for
convenience of reference only and shall not be construed in any way to affect
the interpretation of any provisions of the Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized signatory as of the day and year first above written.
XXXXXXXXX INDUSTRIES, INC., a Delaware corporation
By /s/ Zivi X. Xxxxxx
------------------------------------------
Name: Zivi X. Xxxxxx
Title: President and Chief Executive Officer
Address for Notices:
Attn: Xxxxx Xxxxxx
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: 000.000.0000
Facsimile: 954.858.2449
Attest:
---------------------------
Asst. Secretary
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EXHIBIT A TO WARRANT
FORM OF NOTICE OF EXERCISE
____________________,20___
To: XXXXXXXXX INDUSTRIES, INC.
Reference is made to the Common Stock Purchase Warrant dated
__________. Terms defined therein are used herein as therein defined.
The undersigned, pursuant to the provisions set forth in the Warrant,
hereby irrevocably elects and agrees to purchase _______ shares of Common Stock,
and makes payment herewith in full therefor at the Exercise Price of
$_______________ in the following form:
___________________________________________________________.
[If the number of shares as to which the Warrant is being exercised is
less than all of the shares purchasable thereunder, the undersigned hereby
requests that a new Warrant Certificate representing the remaining balance of
the shares be registered in the name of ______________, whose address is:
_______________________________.]
The undersigned hereby represents that it is exercising the Warrant for
its own account or the account of an Affiliate for investment purposes and not
with the view to any sale or distribution and that the Warrant Holder will not
offer, sell or otherwise dispose of the Warrant or any underlying Warrant Shares
in violation of applicable securities laws.
[NAME OF WARRANT HOLDER]
By
----------------------------
Name:
Title:
[ADDRESS OF WARRANT HOLDER]
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EXHIBIT B TO WARRANT
FORM OF WARRANT ASSIGNMENT
Reference is made to the Common Stock Purchase Warrant dated
____________, issued by XXXXXXXXX INDUSTRIES, INC. Terms defined therein are
used herein as therein defined.
FOR VALUE RECEIVED ____________________ (the "Assignor") hereby sells,
assigns and transfers all of the rights of the Assignor as set forth in such
Common Stock Purchase Warrant, with respect to the number of Warrant Shares
covered thereby as set forth below, to the Assignee(s) as set forth below:
NUMBER OF WARRANT SHARES
NAME(S) OF ASSIGNEE(S) ADDRESS(ES) NUMBER OF WARRANT SHARES
---------------------- ----------- ------------------------
All notices to be given by the Company to the Assignor as Warrant
Holder shall be sent to the Assignee(s) at the above listed address(es), and, if
the number of shares being hereby assigned is less than all of the shares
covered by the Warrant held by the Assignor, then also to the Assignor.
In accordance with Section 7 of the Warrant Certificate, the Assignor
requests that the Company execute and deliver a new Warrant Certificate or
Warrant Certificates in the name or names of the assignee or assignees, as is
appropriate, or, if the number of shares being hereby assigned is less than all
of the shares covered by the Warrant held by the Assignor, new Warrant
Certificates in the name or names of the assignee or the assignees, as is
appropriate, and in the name of the Assignor.
The undersigned represents that the Assignee has represented to the
Assignor that the Assignee is acquiring the Warrant for its own account or the
account of an Affiliate for investment purposes and not with the view to any
sale or distribution, and that the Assignee will not offer, sell or otherwise
dispose of the Warrant or the Warrant Shares except under circumstances as will
not result in a violation of applicable securities laws.
Dated: _________________, 20___
[NAME OF ASSIGNOR]
By
------------------------
Name:
Title:
[ADDRESS OF ASSIGNOR]
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