EXHIBIT 4.3
COMMON STOCK PURCHASE WARRANT AGREEMENT
THIS AGREEMENT, dated as of this ____ day of ________, 1996,
is between THE TRANSLATION GROUP, LTD., a Delaware corporation (the "Company"),
XXXXXX- XXXX SECURITIES, INC. (the "Underwriter") and AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
RECITALS
A. The Company is issuing, in connection with a public
offering, up to 1,100,000 shares of the Company's common stock, $.001 par value
(the "Common Stock"), and up to 1,500,000 Common Stock Purchase Warrants (the
"Public Warrants" or "Warrants"), not including, in both cases, over-allotments.
B. The Company has as of the date hereof 300,000 issued and
outstanding Common Stock Purchase Warrants, which shall be treated herein as
Public Warrants.
C. One Warrant entitles the registered holder to purchase one
share of Common Stock.
D. The Company desires to provide for the issuance of
certificates representing the Warrants.
E. The Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
AGREEMENTS
In consideration of the recitals and the mutual agreements set
forth below, and for the purpose of defining the terms and provisions of the
Warrants and the certificates representing the Warrants and the respective
rights and obligations thereunder of the Company, the holders of certificates
representing the Warrants and the Warrant Agent, the parties agree as follows:
1. Definitions. As used herein, the following terms shall have
the following meanings, unless the context shall otherwise require.
(a) "Common Stock" shall mean common stock of the Company
of any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage, which at the date hereof consists of 15
million shares of authorized Common Stock, $.001 par value per share, and as
further defined in section 8(e) below.
(b) "Warrant Expiration Date" shall mean 5:00 p.m. (New
York City time) on ____________, 1999, or if such a date shall in the State of
New York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. (New York City time) on the next following day which in the State of New
York is not a holiday on which banks are authorized to close. Unless exercised
during the Warrant Exercise Period, the Warrants will automatically expire. The
Warrants may be called for redemption and the expiration date therefor
accelerated, on the terms and conditions set forth in sections 4(b) and 4(c) of
this Agreement. If so called for redemption, Warrant Certificate holders shall
have a period of at least thirty (30) days after the date of the call notice
within which to exercise the Warrants. However, Warrant Certificate holders will
receive the redemption price only if such certificates are surrendered to the
Corporate Office (defined below) within the redemption period.
(c) "Warrant Exercise Period" shall mean from ___________,
1996 until the Warrant Expiration Date.
(d) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal business
is conducted, currently located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(e) "Exercise Date" shall mean the date a certificate
representing a Warrant is surrendered for exercise. "Surrender" for purposes
hereof shall mean in the event of (i) personal delivery by a Registered Holder,
the date it is received by the Warrant Agent, (ii) mailing, the postmark date,
and (iii) delivery by a messenger or similar service the date of dispatch, as
reflected on the delivery receipt.
(f) "Purchase Price" shall mean $4.00 per share for the
Public Warrants, unless such purchase price has been adjusted as hereinafter
provided. Each Warrant is exercisable for one share of Common Stock upon payment
of the Purchase Price at any time during the Warrant Exercise Period. The
Warrants, which are being publicly offered pursuant to a registration statement
and prospectus filed by the Company with the Securities and Exchange Commission,
will trade on NASDAQ (as defined below) as a small cap issue under the symbol
[THEOW] immediately after the effective date of such registration statement.
(g) "Registered Holder" shall mean the person or persons in
whose name or names any certificates representing the Warrants shall be
registered from time to time on the books maintained by the Warrant Agent
pursuant to section 6.
(h) "Subsidiary" or "Subsidiaries" shall mean any
corporation or corporations, as the case may be, of which stock having ordinary
power to elect a majority of the Board of Directors of such corporation
(regardless of whether or not at the time stock of any other class or classes of
such corporation shall have or may have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by
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the Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
(i) "Transfer Agent" shall mean American Stock Transfer &
Trust Company or its authorized successor.
(j) "Warrant Certificate" shall mean a certificate
representing Warrants.
2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall entitle the Registered Holder
thereof to purchase one share of Common Stock upon its exercise. The Warrants
will be separately transferable once the Underwriter determines to separate the
Units.
(b) Upon closing of the offering, Warrant Certificates
representing an aggregate of not more than 1,800,000 Warrants (or up to
2,025,000 in the event the Underwriters over-alotment option is exercised) to
purchase an aggregate of not more than a like number of shares of Common Stock,
shall be executed by the Company and delivered to the Warrant Agent and shall be
countersigned, issued and delivered by the Warrant Agent upon written order of
the Company signed by its President or a Vice President and its Treasurer or an
Assistant Treasurer or its Secretary or Assistant Secretary.
(c) From time to time, up to the Warrant Expiration Date,
plus such additional time as may reasonably be required to perform, accomplish
and complete necessary administrative functions connected with the exercise of
the Warrants, the Warrant Agent, in its capacity as the Company's Transfer
Agent, shall countersign and deliver stock certificates representing an
aggregate of not more than 1,800,000 shares of Common Stock, or up to 2,025,000
in the event the Underwriters over-alotment option is exercised (subject to
adjustment pursuant to section 8 of this Agreement), upon the exercise of the
Warrants pursuant to the terms of this Agreement.
(d) From time to time, up to the Warrant Expiration Date,
the Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement. Except as provided in
section 7 hereof, no Warrant Certificates shall be issued except (i) Warrant
Certificates initially issued hereunder, (ii) upon the exercise of any Warrants,
to evidence the unexercised Warrants held by the exercising Registered Holder
and (iii) upon any transfer or exchange of Warrants.
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3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or automated
quotation system on which the Warrants may be listed, or to conform to usage.
The Warrant Certificates shall be dated the date of issuance thereof (whether
upon initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen
or destroyed Warrant Certificates). Warrant Certificates shall be numbered
serially with the letters, "__" on Warrant Certificates of all denominations.
(b) Warrant Certificates shall be executed on behalf of the
Company by its President or any Vice President and its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary, by manual signatures or by
facsimile signatures printed thereon. Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to hold such position with the Company
before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
4. Exercise; Redemption.
(a) Each Warrant represented by a Warrant Certificate may
be exercised during the Warrant Exercise Period, upon the terms and subject to
the conditions set forth herein and in the Warrant Certificate. A Warrant shall
be deemed to have been exercised immediately prior to the close of business on
the Exercise Date, provided that the Warrant Certificate representing such
Warrant, with the appropriate exercise form thereon duly executed by the
Registered Holder thereof or his or her attorney duly authorized in writing,
together with payment in cash, or by official bank or certified check made
payable to the Company, of an amount equal to the Purchase Price has been timely
received by the Warrant Agent. Payment must be made in United Sates funds. The
person entitled to receive the securities deliverable upon such exercise shall
be treated for all purposes as the holder of such securities as of the close of
business on the Exercise Date. The Company shall not be obligated to issue any
fractional share interests or fractional warrant interests upon the exercise of
any Warrants. Computations resulting in the issuance of fractional shares be
rounded to the nearest whole share. As soon as practicable on or after the
Exercise Date and in any event within 10 days after having received
authorization from the
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Company, the Warrant Agent, on behalf of the Company, shall cause to be issued
to the person or persons entitled to receive the same a certificate or
certificates for the shares of Common Stock, and the Warrant Agent shall deliver
the same to the person or persons entitled thereto. No adjustment shall be made
in respect of cash dividends on any shares delivered upon exercise of any
Warrant. Upon the exercise of any Warrants, the Warrant Agent shall promptly
notify the Company in writing of such fact and of the number of securities
delivered upon such exercise and shall cause all payments of an amount in cash
or check made payable to the order of the Company, equal to the Purchase Price,
less any Warrant solicitation fee, as hereinafter described.
(b) If at the time of exercise of any Warrant after
____________, 1996 (i) the market price of the Company's Common Stock is equal
to or greater than the then Purchase Price of the Warrant, (ii) the exercise of
the Warrant is solicited by the underwriter at such time while the Underwriter
is a member of the National Association of Securities Dealers, Inc. ("NASD"),
(iii) the Warrant is not held in a discretionary account, (iv) disclosure of the
compensation arrangement is made in documents provided to the holders of the
Warrants; and (v) the solicitation of the exercise of the Warrant is not in
violation of Rule 10b-6 (as such rule or any successor rule may be in effect as
of such time of exercise) promulgated under the Securities Exchange Act of 1934,
then the Underwriter shall be entitled to receive from the Company upon exercise
of each of the Warrant(s) so exercised a fee of four percent (4%) of the
aggregate price of the Warrants so exercised (the "Exercise Fee"). The
procedures for payment of the warrant solicitation fee are set forth in
subparagraph (c) below.
(c) (1) Within five (5) days of the last day of the each
month commencing with ____________ 1997, the Warrant Agent will notify the
Underwriter of each Warrant Certificate which has been properly completed for
exercise by holders of Warrants during the last month. The Company and Warrant
Agent shall determine, in their sole and absolute discretion, whether a Warrant
Certificate has been properly completed. The Warrant Agent will provide the
Underwriter with such information, in connection with the exercise of each
Warrant, as the Underwriter shall reasonably request.
(2) The Company hereby authorizes and instructs the
Warrant Agent to deliver to the Underwriter the Exercise Fee promptly after
receipt by the Warrant Agent from the Company of a check payable to the order of
the Underwriter in the amount of the Exercise Fee. The Warrant Agent shall not
issue the shares of Common Stock issuable upon exercise of the Warrants until
receipt and forwarding of such check to the Underwriter. In the event that an
Exercise Fee is paid to the Underwriter with respect to a Warrant which the
Company or the Warrant Agent determines is not properly completed for exercise
or in respect of which the Underwriter is not entitled to an Exercise Fee, the
Underwriter will promptly return such Exercise Fee to the Warrant Agent which
shall forthwith return such fee to the Company.
The Underwriter and the Company may at any time, after
_________________, 1997, and during business hours, examine the records of the
Warrant Agent, including its
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ledger of original Warrant certificates returned to the Warrant Agent upon
exercise of Warrants. Notwithstanding any provision to the contrary, the
provisions of this paragraph and of subparagraph (b) above may not be modified,
amended or deleted without the prior written consent of the Underwriter.
(d) The Warrants may be redeemed at any time during the
exercise period by the Company beginning on ____________, 1997, unless earlier
permitted by the Underwriter, on 30 days' prior written notice to all Registered
Holders of the Warrants, at a redemption price of $.25 per Warrant, if the
closing bid price of the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System (NASDAQ) (or a national securities
exchange or the National Quotation Bureau or the NASD Bulletin Board, as the
case may be) is at least $6.00 on 20 consecutive trading days ending three (3)
days prior to the date of the written notice of redemption. All Warrants must be
redeemed if any are redeemed.
(e) If the Company calls the Warrants for redemption, the
price at which such Warrants are to be redeemed shall not be paid to any Warrant
holder unless the certificates representing such Warrants are surrendered to the
Corporate Office within the redemption period specified in the Company's notice
to Registered Holders. At the end of any such redemption period respecting
Warrants called for redemption, any Warrants not exercised or tendered for
redemption shall expire and the certificate(s) therefor shall become void.
5. Reservation of Shares; Listing; Payment of Taxes, Etc.
(a) The Company covenants that it will at all times reserve
and keep available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise
of Warrants shall be duly and validly issued any fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue thereof,
and that upon issuance such shares shall be listed on each national securities
exchange or automated quotation system, if any, on which the other shares of
outstanding Common Stock of the Company are then listed.
(b) If any Common Stock reserved for issuance upon exercise
of Warrants hereunder requires registration with or approval of any governmental
authority under any federal or state law, before such securities may be validly
issued or delivered upon such exercise, then the Company covenants that it will
in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that the
Company need not endeavor to seek such registration or approval in a state in
which the Warrants were not sold by the Company pursuant to the registration
statement unless an exemption from registration under such state's laws is
available; provided, further, that Warrants may not be exercised by, or shares
of Common
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Stock issued to, any Registered Holder in any state in which such exercise would
be unlawful.
(c) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect to the
issuance of Warrants, or the issuance or delivery of any shares upon exercise of
Warrants; provided, however, that if shares of Common Stock are to be delivered
in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent, unless it is acting as such, is
hereby irrevocably authorized to requisition the Company's Transfer Agent from
time to time for certificates representing shares of Common Stock required upon
exercise of the Warrants, and the Company will authorize its Transfer Agent to
comply with all such requisitions. The Company will file with the Warrant Agent
a statement setting forth the name and address of its Transfer Agent for shares
of Common Stock or other capital stock issuable upon exercise of the Warrants
and of each successor Transfer Agent.
6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be so exchanged shall
be surrendered to the Warrant Agent at its Corporate Office, accompanied by an
Assignment, when necessary, and the Company shall execute and the Warrant Agent
shall countersign, issue and deliver in exchange therefor the Warrant
Certificate(s) which the Registered Holder shall be entitled to receive.
(b) The Warrant Agent shall keep at such office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the Company
shall execute and the Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal
aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the subscription form on
the reverse thereof shall be duly endorsed, or be accompanied by a written
instrument or instruments of transfer and subscription, in form satisfactory to
the Company and the Warrant Agent, duly executed by the Registered Holder
thereof or his or her attorney duly authorized in writing.
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(d) The Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed upon any
exchange, registration or transfer of any Warrant Certificates.
(e) All Warrant Certificates surrendered for exercise or
for exchange in case of mutilated Warrant Certificates shall be promptly
canceled by the Warrant Agent and thereafter retained by the Warrant Agent until
termination of the agency.
(f) Prior to due presentment for registration of transfer
thereof the Company and the Warrant Agent may deem and treat the Registered
Holder of any Warrant Certificate as the absolute owner thereof and of each
Warrant represented thereby (notwithstanding any notations of ownership or
writing thereon made by anyone other than the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the contrary.
7. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Warrant Certificate and (in the case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the case
of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall countersign and deliver a new Warrant
Certificate representing an equal aggregate number of Warrants. Applicants for a
substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.
8. Adjustments to Exercise Price and Number of Securities.
(a) Computation of Adjusted Exercise Price. Except as
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in subparagraph (g) of this section 8), including shares held
in the Company's treasury and shares of Common Stock issued upon the exercise of
any options, rights or warrants to subscribe for shares of Common Stock and
shares of Common Stock issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock, for a consideration per share less
than the Purchase Price in effect immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Purchase Price shall (until another such issuance or sale) be reduced
to the price (calculated to the nearest full cent) equal to the quotient derived
by dividing (i) an amount equal to the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to the issuance or sale of such
shares, multiplied by the Purchase Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Purchase Price be adjusted
pursuant to this computation to an amount in excess
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of the Purchase Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock, as provided by
subparagraph (c) of this section 8.
For the purposes of any computation to be made in accordance
with this subparagraph (a), the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of
Common Stock for a consideration part or all of which shall be cash, the amount
of the cash consideration therefor shall be deemed to be the amount of cash
received by the Company for such shares (or, if shares of Common Stock are
offered by the Company for subscription, the subscription price, or, if either
of such securities shall be sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others performing
similar services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale (otherwise than
as a dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than cash,
the amount of the consideration therefor other than cash shall be deemed to be
the value of such consideration as determined in good faith by the Board of
Directors of the Company and shall include any amounts payable to security
holders or any affiliates thereof, including without limitation, pursuant to any
employment agreement, royalty, consulting agreement, covenant not to compete,
earnout or contingent payment right or similar arrangement, agreement or
understanding, whether oral or written; all such amounts being valued for the
purposes hereof at the aggregate amount payable thereunder, whether such
payments are absolute or contingent, and irrespective of the period or
uncertainty of payment, the rate of interest, if any, or the contingent nature
thereof.
(iii) Shares of Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the day following
the record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
(iv) The reclassification of securities of the
Company other than shares of Common Stock into securities including shares of
Common Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such shares
of Common Stock shall be determined as provided in subparagraph (a) of this
section 8.
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(v) The number of shares of Common Stock at any one
time outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise of
options, rights, warrants and upon the conversion or exchange of convertible or
exchangeable securities exclusive of any option under the Company 1996 Stock
Option Plan and any additional options which are not vested or then exercisable.
(b) Options, Rights, Warrants and Convertible and
Exchangeable Securities. In case the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock, for a consideration per share less than the Purchase Price in
effect immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration, the
Purchase Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of subparagraph (a) of this section 8., provided
that:
(i) The aggregate maximum number of shares of Common
Stock, as the case may be, issuable under such options, rights or warrants shall
be deemed to be issued and outstanding at the time such options, rights or
warrants were issued, and for a consideration equal to the minimum purchase
price per share provided for in such options, rights or warrants at the time of
issuance, plus the consideration (determined in the same manner as consideration
received on the issue or sale of shares in accordance with the terms of the
Warrants), if any, received by the Company for such options, rights or warrants.
(ii) The aggregate maximum number of shares of
Common Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding at the time
of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Common Stock in accordance with the terms of the
Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof.
(iii) If any change shall occur in the price per
share provided for in any of the options, rights or warrants referred to in
subparagraph (i) of section 8(b), or in the price per share at which the
securities referred to in subparagraph (ii) of this section 8(b) are convertible
or exchangeable, such options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or terminated on the
date when such price change became effective in respect of shares not
theretofore issued pursuant to the exercise or conversion or exchange thereof,
and the Company shall be deemed to have issued upon such date new options,
rights or warrants or convertible or exchangeable securities at the new price in
respect of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such convertible or
exchangeable securities, provided, however, in no event shall the adjustment
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provide the Holder with any greater rights arising from consecutive adjustments
than if the last adjustment occurred initially.
(c) Subdivision and Combination. In case the Company shall
at any time subdivide or combine the outstanding shares of Common Stock, the
Purchase Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
(d) Adjustment in Number of Securities. Upon each
adjustment of the Purchase Price pursuant to the provisions of this section 8,
the number of securities issuable upon the exercise at the adjusted Purchase
Price of each Warrant shall be adjusted to the nearest full amount by
multiplying a number equal to the Purchase Price in effect immediately prior to
such adjustment by the number of securities issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Purchase Price.
(e) Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock designated
as Common Stock in the Certificate of Incorporation of the Company as may be
amended as of the date hereof, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par value
to par value. In the event that the Company shall after the date hereof issue
securities with greater or superior voting rights than the shares of Common
Stock outstanding as of the date hereof, the Registered Holder, at its option,
may receive upon exercise of any Warrant either shares of Common Stock or a like
number of such securities with greater or superior voting rights.
(f) Merger or Consolidation. In case of any consolidation
of the Company with, or merger of the Company with, or merger of the Company
into, another corporation (other than a consolidation or merger which does not
result in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Registered Holder a supplemental warrant agreement providing that the holder
of each Warrant then outstanding or to be outstanding shall have the right
thereafter (until the expiration of such Warrant) to receive, upon exercise of
such Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such Warrant might have been
exercised immediately prior to such consolidation, merger, sale or transfer.
Such supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in this section 8. The above provision of
this subsection shall similarly apply to successive consolidations or mergers.
(g) No Adjustment of Purchase Price in Certain Cases. No
adjustment of the Purchase Price shall be made:
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(i) Upon the issuance or sale of the Warrants, the
shares issuable upon the exercise of the Warrants; the securities issuable upon
the exercise of the Representative's warrants, and the shares of Common Stock
issuable upon the exercise of any of them;
(ii) If the amount of said adjustment shall be less
than two cents (2(cent)) per security, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to at least two cents (2(cent)) per security;
(iii) Upon the issuance of up to 300,000 Shares of
Common Stock under the Company's Stock Option Plan; or
(iv) Upon the issuance of shares Common Stock upon
exercise of the 340,000 warrants currently outstanding.
(h) Dividends and Other Distributions. In the event that
the Company shall at any time prior to the exercise of all Warrants fix a record
date for the determination of stockholders entitled to receive (including any
such distribution made to the stockholders of the Company in connection with
consolidation or merger in which the Company is the continuing corporation in a
distribution to all holders of Common Stock) evidence of its indebtedness, cash,
or assets (other than distributions and dividends payable in shares of Common
Stock), or rights, options,or warrants to subscribe for or or purchase shares of
Common Stock, or securities convertible into, or exchangeable for, shares of
Common Stock in a distribution to all holders of Common Stock, then, in each
case, the Purchase Price in effect at the time of such record date shall be
adjusted by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the market price per
share of Common Stock on such record date, less the fair market value (as
determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the
evidence of indebtedness or assets so to be distributed, or such rights,
options, or warrants, or convertible or exchangeable securities, or the amount
of cash, applicable to one share of Common Stock, and the denominator of which
shall be the market price per share of Common Stock on such record date. Such
adjustment shall be made successively whenever any event listed above shall
occur and become effective at the close of business on such record date.
9. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company, and its duties shall be determined solely
by the provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make any
representations as to the validity or value or
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authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
(b) The Warrant Agent shall not at any time (i) be liable
for any recital or statement of fact contained herein or for any action taken,
suffered or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be responsible for
any failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or (iii)
be liable for any act or omission in connection with this Agreement except for
its own negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
for the Company and shall incur no liability or responsibility for any action
taken, suffered or omitted by it in good faith in accordance with the opinion or
advice of such counsel.
(d) Any notice, statement, instruction, request, direction,
order or demand of the Company shall be sufficiently evidenced by an instrument
signed by its President, a Vice President, its Treasurer, an Assistant
Treasurer, its Secretary, or an Assistant Secretary (unless other evidence in
respect thereof is herein specifically prescribed). The Warrant Agent shall not
be liable for any action taken, suffered or omitted by it in accordance with
such notice, statement, instruction, request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent the usual
and customary compensation it normally receives for its services of this nature
and to reimburse it for its reasonable expenses hereunder; it further agrees to
indemnify the Warrant Agent and save it harmless against any and all losses,
expenses and liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of its duties and
powers hereunder except those arising as a result of the Warrant Agent's
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or willful
misconduct), after giving 30 days' prior written notice to the Company. At least
15 days prior to the date such resignation is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to each
Registered Holder at the Company's expense. Upon such resignation the Company
shall appoint in writing a new warrant agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified in
writing of such resignation by the resigning Warrant Agent, then any Registered
Holder may apply in any court of competent jurisdiction for the appointment of a
new warrant agent. After acceptance in writing of such appointment by the new
warrant agent is received by the Company, such new warrant agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any
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further assurance, conveyance, act or deed; provided, however, that if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the resigning
Warrant Agent. Not later than the effective date of any such appointment the
Company shall file notice thereof with the resigning Warrant Agent and shall
forthwith cause a copy of such notice to be mailed to each Registered Holder.
(g) Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor warrant agent under this Agreement without
any further act, provided that such corporation is eligible for appointment as
successor to the Warrant Agent under the provisions of the preceding paragraph.
Any such successor warrant agent shall promptly cause notice of its succession
as warrant agent to be mailed, at its expense, to the Company and to each
Registered Holder.
(h) The Warrant Agent, its subsidiaries and affiliates, and
any of its or their officers or directors, may buy and hold or sell Warrants or
other securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effect as though it were not the
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.
10. Modification of Agreement. The Warrant Agent and the
Company may by supplemental agreement make any changes or corrections in this
Agreement (a) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; or (b) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
Registered Holders representing not less than 50% of the Warrants then
outstanding; provided, further, that no change shall be made in the terms or
provisions of any Warrant which would adversely affect such registered Holders,
other than such changes as are expressly permitted by this Agreement as
originally executed, without the consent in writing of the Registered Holders of
the Warrants affected.
11. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when mailed, first-class postage prepaid, when delivered to a telegraph
office for transmission, or when delivered to any commercial overnight air
courier service or other commercial messenger or delivery service which
regularly retains its receipts; if to a Registered Holder, at the
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address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
Attention: President, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company, with a copy to the Company's counsel,
Xxxxxx, Xxxxxxxx & Xxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxxxxxx, Esq.; and, if to the Warrant Agent, at the
Corporate Office.
12. Governing Law; Section Headings. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
Section headings in this Agreement appear for convenience of reference only and
shall not be used in any interpretation of this Agreement.
13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and their respective
successors and assigns, and the Registered Holders from time to time of Warrant
Certificates or any of them. Nothing in this Agreement shall be construed to
confer any right, remedy or claim upon any other person.
14. Counterparts. This Agreement may be executed in
counterparts, which taken together shall constitute a single document.
THE TRANSLATION GROUP, LTD.
BY: _________________________
AMERICAN STOCK TRANSFER & TRUST COMPANY
BY: _________________________
Authorized Officer
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