Exhibit 10.12
WARRANT AGREEMENT
Between
AVIATION GROUP, INC.
And
SECURITIES TRANSFER CORPORATION, as Warrant Agent
Dated as of April 30, 2000
Series B Warrants
WARRANT AGREEMENT
(Series B Warrants)
This WARRANT AGREEMENT (the "Agreement") is dated as of April 30, 2000
between AVIATION GROUP, INC., a Texas corporation (the "Company"), and
SECURITIES TRANSFER CORPORATION, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, this Agreement is executed in connection with the consummation of
the merger (the "Merger") contemplated by the Agreement and Plan of Merger dated
as of March 17, 2000, as amended (the "Merger Agreement"), among the Company,
Global Leisure Travel, Inc., a Washington corporation ("Global"), AVGP Sub,
Inc., a Washington corporation ("New Sub"), and the equity holders and
debtholders of Global, whereby a newly formed subsidiary of the Company, New
Sub, will merge with and into Global;
WHEREAS, upon consummation of the Merger, pursuant to the Merger Agreement,
the holders of all outstanding common stock and rights to purchase common stock
of Global will be issued Series B Warrants (each, a "Warrant," collectively, the
"Warrants") to purchase up to an aggregate of 3,500,000 shares of Common Stock
(as defined in Section 8.5), U.S. $.01 par value, of the Company;
WHEREAS, 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, transfer, exchange and redemption of the Warrants, the issuance of
certificates representing the Warrants, the exercise of the Warrants, and the
rights of the holders thereof;
WHEREAS, the Warrants may not be exercised unless and until the Company
amends its articles of incorporation to increase its authorized shares of Common
Stock; and
WHEREAS, as a result of rules imposed by The Nasdaq Stock Market, the
Warrants may not be exercised unless and until the Company obtains the requisite
approval of its shareholders to the issuance of the Warrants.
NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth 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 hereto
agrees as follows:
1. Warrants; Expiration. Each Warrant shall initially entitle the
person in whose name any certificate representing Warrants (a "Warrant
Certificate") shall be registered on the books maintained by the Warrant Agent
pursuant to Section 9 (the "Holder") of the Warrant Certificate representing
such Warrant to purchase one (1) share of Common Stock upon the exercise
thereof, in accordance with the terms hereof, subject to modification and
adjustment as
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provided in Section 8. Each of the Warrants shall expire at the "Warrant
Expiration Date". The term "Warrant Expiration Date" shall mean the earlier of
(i) 5:00 p.m. (Dallas, Texas time) on March 31, 2005, or (ii) 5:00 p.m. (Dallas,
Texas time) on the second anniversary of the date the shares of Common Stock
issuable upon the exercise of the Warrants are registered for resale under the
Securities Act of 1933, as amended; provided that if such date shall be a
holiday or day on which banks are authorized to close then 5:00 p.m. (Dallas,
Texas time) from the next following day which is not a holiday nor a day in
which banks are authorized to close. Upon notice to all Warrant Holders, the
Company shall have the right to extend the Warrant Expiration Date. The exercise
price of each Warrant shall equal (subject to adjustment as provided in Section
8) U.S. $3.00 per share of Common Stock subject to the terms and conditions of
this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, none
of the Warrants shall be exercisable until the Company has obtained the approval
of its shareholders to the issuance of the Warrants, as required by the rules of
The Nasdaq Stock Market, and until the Company has amended its articles of
incorporation to increase the authorized number of shares of Common Stock. The
Company shall use commercially reasonable efforts to obtain the approval of its
shareholders for the issuance of the Warrants and the amendment of its articles
of incorporation in connection with the solicitation of approval of its
shareholders to the Merger (as defined in Section 7 hereof).
2. Warrant Certificates.
2.1 Form of Certificate. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
2.2 Issuance of Warrant Certificates and Warrant Securities. Warrant
Certificates representing the number of Warrants issued in connection with the
consummation of the Merger shall be executed by the Company and delivered to the
Warrant Agent. Upon written order of the Company signed by its President or
Chairman or a Vice President and by its Secretary or an Assistant Secretary, the
Warrant Certificates shall be countersigned, issued and delivered by the Warrant
Agent. The Company shall provide a written order to the Warrant Agent to issue
Warrants to the holders of common stock and rights to purchase common stock of
Global who will be receiving the Warrants upon consummation of the Merger upon
satisfaction of the terms and conditions for delivery of the Warrant
Certificates set forth in the Merger Agreement.
2.3 From time to time up to the Warrant Expiration Date, Securities
Transfer Corporation, as the Company's transfer agent, or its authorized
successor as such (the "Transfer Agent"), shall countersign and deliver stock
certificates in required whole number denominations representing up to an
aggregate of 3,500,000 shares of Common Stock upon the exercise of Warrants in
accordance with this Agreement.
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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; provided that no Warrant Certificates
shall be issued except (i) those initially issued hereunder; (ii) those issued
upon any transfer or exchange pursuant to Section 9; or (iii) those issued in
replacement of lost, stolen, destroyed or mutilated Warrant Certificates
pursuant to Section 10.
The Warrant Certificates and the certificates representing the Shares
(and/or other securities, property or rights issuable upon the exercise of the
Warrants) shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant Secretary of the Company. Warrant Certificates
shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer.
3. Exercise of Warrant.
3.1 Method of Exercise. Each Warrant may be exercised by the Holder
thereof at any time but not after the Warrant Expiration Date, upon the terms
and subject to the conditions set forth herein and in the applicable Warrant
Certificate. A Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of exercise (the "Exercise Date") and the
person entitled to receive the securities deliverable upon such exercise shall
be treated for all purposes as the Holder upon such exercise thereof as of the
close of business on the Exercise Date. As soon as practicable on or after the
Exercise Date, the Warrant Agent shall deposit the cash or check received from
the exercise of a Warrant in an account for the benefit of the Company and shall
notify the Company in writing of the exercise of the Warrants. Promptly
following, and in any event within five (5) days after the date of such notice
from the Warrant Agent, the Warrant Agent, on behalf of the Company, shall cause
to be issued and delivered by the Transfer Agent to the person or persons
entitled to receive the same a certificate or certificates for the securities
deliverable upon such exercise (plus a Warrant Certificate for any remaining
unexercised Warrants of the Holder), provided that the Warrant Agent shall
refrain from causing such issuance of certificates pending clearance of checks
received in payment of the Exercise Price pursuant to such Warrants. Upon the
exercise of any Warrant and clearance of the funds received, the Warrant Agent
shall promptly remit the payment received for the Warrant to the Company or as
the Company may direct in writing. The purchase rights represented by each
Warrant Certificate are exercisable at the option of the Holders thereof, in
whole or part (but not as to fractional shares of the Common Stock). In the
case of the purchase of less than all Warrant Securities purchasable under any
Warrant Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Warrant Securities purchasable thereunder.
3.2 Definition of Market Price. As used herein, the phrase "Market
Price" at any date shall be deemed to be the last reported sale price, or, in
case no such reported sale takes
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place on such day, the average of the last reported sale prices for the last
three (3) trading days, in either case as officially reported by the principal
securities exchange on which the Common Stock is listed or admitted to trading
or by The Nasdaq Stock Market's National Market or Smallcap Market ("Nasdaq"),
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted by Nasdaq, the average closing bid price as
furnished by the National Association of Securities Dealers, Inc. ("NASD")
through Nasdaq or similar organization if Nasdaq is no longer reporting such
information, or if the Common Stock is not quoted by the NASD or such similar
organization, the fair market value of a share of Common Stock as determined in
good faith by resolution of the Board of Directors of the Company, based on the
best information available to it.
4. Payment of Taxes. The Company shall pay all documentary or similar
taxes and other governmental charges that may be imposed with respect to the
issuance of the Warrants or the issuance or delivery of any shares of Common
Stock upon exercise of the Warrants; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
5. Restrictions On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof. This Agreement is binding upon any Holder(s) of a Warrant Certificate
and their respective heirs, successors, and permitted assigns. The Holder may
transfer a Warrant, subject to any other limitations in the Agreement, provided
that the transferee agrees to be bound by the terms of this Agreement as if such
transferee were a Holder and, provided further, that the transfer is made
pursuant to an effective registration statement under the Securities Act or a
valid exemption from registration under the Securities Act of 1933, as amended
(the "Securities Act"). If requested by the Company, the Holder must also
furnish to the Company an opinion of counsel reasonably satisfactory to the
Company to such effect.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each Warrant shall
be U.S. $3.00 per share of Common Stock. The adjusted exercise price shall be
the price which shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of Section 8
hereof.
6.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
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7. Registration Rights.
7.1 Registration of Underlying Shares. The Company agrees to use
commercially reasonable efforts to cause the underlying shares of Common Stock
to be registered for resale by the Holders under the Securities Act in
connection with the consummation of the Merger. The Company shall use its
commercially reasonable efforts to cause any resale registration statement to
remain effective and current until the earlier of (a) all such securities having
been sold pursuant to such registration statement or (b) two years from the date
such securities were initially issued.
7.2 Restrictive Legends. The Warrant Certificates, any certificates
representing the shares of Common Stock underlying the Warrants and any of the
other securities issuable upon exercise of the Warrants shall bear the following
restrictive legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"),
and may not be offered or sold except pursuant to (i) an
effective registration statement under the Act, (ii) to the
extent applicable, Rule 144 under the Act (or any similar rule
under such Act relating to the disposition of securities), or
(iii) an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from
registration under such Act is available.
8. Adjustments to Exercise Price and Number of Shares.
8.1 Adjustments for Change in Capital Stock. If at any time after the
date of this Agreement, the Company:
(a) pays a dividend or makes a distribution on its Common Stock
exclusively in shares of its Common Stock;
(b) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(c) combines its outstanding shares of Common Stock into a
smaller number of shares;
(d) pays a dividend or makes a distribution on its common stock
in shares of its capital stock other than Common Stock; or
(e) issues by reclassification of its Common Stock any shares of
its capital stock;
then the Holders of the unexercised Warrants shall thereafter be entitled to
receive, upon the exercise of such Warrants, the same shares of Common Stock and
other securities that they
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would have owned or been entitled to receive immediately after such event as if
the Warrants had been exercised immediately prior to such event. The adjustment
pursuant to this Section 8.1 shall be made successively each time that any event
listed in this Section 8.1 above shall occur. Upon each adjustment in the number
of shares for which a Warrant is exercisable pursuant to this Section 8.1, the
Exercise Price for such Warrants shall be adjusted to equal an amount per share
of Common Stock equal to the Exercise Price before such adjustment multiplied by
a fraction, of which the numerator is the number of shares of Common Stock for
which a Warrant is exercisable immediately before giving effect to such
adjustment, and the denominator of which is the number of shares of Common Stock
for which a Warrant is exercisable immediately after giving effect to such
adjustment.
8.2 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 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 Section 8. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.
8.3 No Adjustment in Certain Cases. No adjustment of the Exercise
Price or number of shares of Common Stock shall be made:
(a) If the amount of such adjustment shall be less than two cents
(U.S. $.02) per share, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least two cents (U.S. $.02) per
share; or
(b) If the Exercise Price would be less than the par value per
share of Common Stock.
8.4 Statement on Warrant Certificate. Irrespective of any
adjustments in the Exercise Price or the number or kind of shares purchasable
upon the exercise of the Warrants, the Warrant Certificate or certificates
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
8.5 Definition of Common Stock. For the purpose of this Agreement,
the term "Common Stock" shall mean (i) the class of stock designated as Common
Stock in the Articles
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of Incorporation of the Company as amended as of the date hereof, (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, (iii) in the case of any
consolidation or merger, the stock, securities or property receivable on the
exercise of the Warrant pursuant to Section 8.2 hereof, or (iv) in the case of
any change in the outstanding shares of Common Stock issuable upon exercise of
the Warrants as a result of a subdivision or combination, such shares of Common
Stock as so changed.
8.6 Notice of Adjustment. On the happening of an event requiring an
adjustment of the Exercise Price or the shares of Common Stock purchasable under
the Warrants, the Company shall promptly give written notice to the registered
Holders stating the adjusted Exercise Price and the adjusted number and kind of
shares of Common Stock and other securities purchasable under the Warrants
resulting from the event and setting forth in reasonable detail the method of
calculation and the facts upon which the calculation is based. The Board of
Directors of the Company, acting in good faith, shall determine the calculation.
9. Exchange and Registration of Transfer.
9.1 Exchange of Warrant Certificates. Warrant Certificates may be
exchanged for other Warrant Certificates representing an equal aggregate number
of Warrants of the same class or may be transferred in whole or in part subject
to the restrictions of Section 5. Warrant Certificates to be exchanged shall be
surrendered to the Warrant Agent, and upon satisfaction of all the terms and
provisions hereof, the Company shall execute and the Warrant Agent shall
countersign, issue and deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange shall be entitled
to receive.
9.2 Books and Records. The Warrant Agent shall keep at its office
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof in accordance with
its regular practice. Subject to the restrictions in Section 5, 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 the aggregate number of Warrants so transferred.
9.3 Forms. With respect to all Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the "Election to
Purchase" or "Assignment" form, in substantially the form attached thereto, as
appropriate, 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 Holder or his attorney-in-fact
authorized in writing.
9.4 Charges to Holder. A service charge may be imposed by the
Warrant Agent for any exchange or registration of transfer of Warrant
Certificates requested by a Holder. In addition, the Company may require
payment by such Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
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9.5 Mutilated Warrant Certificates. 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 this Agreement or resignation
as Warrant Agent, or disposed of or destroyed at the direction of the Company.
9.6 Holder is Absolute Owner. Prior to due presentment for
registration of transfer thereof, the Company and the Warrant Agent may deem and
treat the Holder of any Warrant Certificates as the absolute owner thereof and
of each Warrant represented thereby (notwithstanding any notations of ownership
or writing thereon made by anyone other than a duly authorized officer of the
Company or the Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary.
10. Loss or Mutilation. Upon receipt by the Company and the Warrant
Agent of evidence satisfactory to them of the ownership of and loss, theft,
destruction or mutilation of any Warrant Certificate and (in 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 (in the absence of notice to the Company and/or
Warrant Agent that the Warrant Certificate has been acquired by a bona fide
purchaser) countersign and deliver to the Holder in lieu thereof a new Warrant
Certificate of like tenor representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall comply with such other
reasonable regulations and pay such other reasonable charges as the Warrant
Agent may prescribe pursuant to Section 9.4 or otherwise.
11. Elimination of Fractional Interests. The Company shall not be
required to issue fractional shares of Common Stock upon the exercise of
Warrants. Warrants may only be exercised in such multiples as are required to
permit the issuance by the Company of one or more whole shares of Common Stock.
If one or more Warrants shall be presented for exercise in full at the same time
by the same Holder, the number of whole shares of Common Stock which shall be
issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of shares of Common Stock purchasable on exercise of the
Warrants so presented. If any fraction of a share of Common Stock would, except
for the provisions provided herein, be issuable on the exercise of any Warrant
(or specified portion thereof), the Company shall pay an amount in cash equal to
such fraction multiplied by the then current Market Price of a share of Common
Stock, determined in accordance with Section 3.2 hereof.
12. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all shares of Common Stock and other securities issuable upon such exercise
shall be duly and validly issued, fully paid, non-assessable and not subject to
the preemptive rights of any stockholder.
13. Concerning the Warrant Agent. The Warrant Agent acts hereunder
as agent and in a ministerial capacity for the Company, and its duties shall be
determined solely by the
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provisions of this Agreement. 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, value or 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.
The Warrant Agent shall not at any time be under any duty or responsibility
to any holder of Warrant Certificates to make or cause to be made any adjustment
of the Exercise Price or the Redemption Price provided in this Agreement, or to
determine whether any fact exists which may require any such adjustments, or
with respect to the nature or extent of any such adjustment, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
(i) be liable for any recital or statement of facts 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.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be 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 of advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand of
the Company shall be sufficiently evidenced by an instrument signed by the
Chairman of the Board, President, any Vice President, its Secretary, or
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 believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder 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 losses, expenses and liabilities arising as a
result of the Warrant Agent's negligence or willful misconduct.
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 the Holder of each Warrant Certificate at
the Company's expense. Upon such resignation, or any inability of the Warrant
Agent to act as such hereunder, the Company shall appoint a new warrant agent in
writing. If the Company shall fail to make such appointment within a period of
15 days after it has been notified in writing of such resignation by the
resigning Warrant Agent, then the Holder of any Warrant Certificate may
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apply to any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the Company or by
such a court shall be a bank or trust company having a capital and surplus as
shown by its last published report to its stockholders, of not less than Ten
Million (U.S. $10,000,000.00) Dollars, or a stock transfer company. 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 named herein as the
Warrant Agent, without any further assurance, conveyance, act or deed; but 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 the Holder
of each Warrant Certificate.
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 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 to the Company and to the Holders of the Warrant Certificates.
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 effects as though it were not Warrant Agent. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
14. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a dividend
or distribution payable other than in cash, or a cash dividend or
distribution payable other than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock
of the Company, or any option, right or warrant to subscribe therefor;
or
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(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed;
then, in any one or more of such events, the Company shall give written notice
of such event to the Holders at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer book, as the case
may be. Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
15. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or three days after such is mailed by first
class registered or certified mail, postage prepaid:
(a) If to the registered Holder of the Warrants, to the address
of such Holder as shown on the books of the Company;
(b) If to the Company, to Aviation Group, Inc., 000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: President, or to
such other address as the Company may designate by notice to the
Holders; or
(c) If to the Warrant Agent, to Securities Transfer Corporation,
00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
16. Supplements and Amendments. This Agreement may be amended or
supplemented by the Company and Warrant Agent with the written consent of the
Holders of a majority of the then outstanding Warrants; provided, however, the
Company and Warrant Agent may from time to time supplement or amend this
Agreement without the approval of any Holders of the Warrant Certificates in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and Warrant Agent may deem necessary or desirable and which
the Company and Warrant Agent deem shall not adversely affect the interests of
the Holders of the Warrant Certificates.
17. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
11
18. Governing Law; Submission to Jurisdiction. This Agreement and
each Warrant Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Texas and for all purposes shall be construed in
accordance with the laws of such State without giving effect to the rules of
such State governing the conflicts of laws.
The Company, Warrant Agent and any registered Holders hereby agree
that any action, proceeding or claim against it arising out of, or relating in
any way to, this Agreement shall be brought and enforced in the courts of the
State of Texas or of the United States of America for the Northern District of
Texas, and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company, Warrant Agent and any registered Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum. Any such process or summons to be served upon any of the Company,
Warrant Agent and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof, by registered
or certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 15 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the party so served in any
action, proceeding or claim. The Company, Warrant Agent and any registered
Holders agree that the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all of its/their
reasonable legal costs and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
19. Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly signed
by the party against whom enforcement of the modification or amendment is
sought.
20. Severability. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
21. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor shall they be
construed as, a part of this Agreement and shall be given no substantive effect.
22. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, Warrant
Agent and any registered Holder(s) of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole benefit of the Company, Warrant Agent and any registered Holders
of Warrant Certificates.
23. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
AVIATION GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
SECURITIES TRANSFER CORPORATION
By: /s/ Xxxxx Xxxxxx
-------------------
Name: Xxxxx Xxxxxx, Xx.
Title: President
13
EXHIBIT A
[FORM OF SERIES B WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
VOID AFTER
5:00 P.M., DALLAS, TEXAS TIME, MARCH 31, 2005
No. W-_________ Series B Warrants to Purchase
________ Shares of Common Stock
SERIES B
WARRANT CERTIFICATE
This Warrant Certificate certifies that ______________________, or
registered assigns, is the registered holder of _______________ Series B
Warrants to purchase initially, at any time prior to the Expiration Date (as
herein defined), up to _______________ fully-paid and non-assessable shares of
common stock, U.S. $.01 par value ("Common Stock") of AVIATION GROUP, INC., a
Texas corporation (the "Company"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of U.S. $3.00 per share of
Common Stock upon surrender of this Warrant Certificate with the Election to
Purchase Form duly executed and payment of the Exercise Price at the corporate
office in Dallas, Texas of Securities Transfer Corporation as Warrant Agent, or
its successor (the "Warrant Agent"), but subject to the conditions set forth
herein and in the Warrant Agreement dated as of April ___, 2000 between the
Company and Securities Transfer Corporation (the "Warrant Agreement"). Payment
of the Exercise Price shall be made in cash or by certified or official bank
check payable to the order of the Warrant Agent.
Notwithstanding anything in this Warrant Certificate to the contrary,
none of the Warrants shall be exercisable unless and until the Company amends
its articles of incorporation to increase its authorized Common Stock.
1
Notwithstanding anything in this Warrant Certificate to the contrary,
none of the Warrants shall be exercisable until the Company has obtained the
approval of its shareholders to the issuance of the Warrants, as required by the
rules of The Nasdaq Stock Market.
No Warrant may be exercised after 5:00 p.m., Dallas, Texas time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void. The term "Expiration
Date" means the earlier of (i) 5:00 p.m. (Dallas, Texas time) on March 31, 2005,
or (ii) 5:00 p.m. (Dallas, Texas time) on the second anniversary of the date the
shares of Common Stock issuable upon the exercise of the Warrants are registered
for resale under the Securities Act of 1933, as amended; provided that if such
date shall be a holiday or day on which banks are authorized to close then 5:00
p.m. (Dallas, Texas time) from the next following day which is not a holiday nor
a day in which banks are authorized to close.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Warrant Agent will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Warrant Agent to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate to the Warrant Agent, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Warrant Agent shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
2
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
3
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of ________________________.
AVIATION GROUP, INC.
[SEAL] By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Attest:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
COUNTERSIGNED:
SECURITIES TRANSFER CORPORATION,
As Warrant Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
4
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ___________ shares of
Common Stock and herewith tenders in payment for such shares of Common Stock
cash or a certified or official bank check payable to the order of
___________________________________ in the amount of $__________, all in
accordance with the terms hereof. The undersigned requests that a certificate
for such shares be registered in the name of
_____________________________________, whose address is ___________________
_____________________________, and that such Certificate be delivered to whose
address is _____________________________________________________.
Dated: Signature:
----------------------- -------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
--------------------------------------
--------------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
1
ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED ________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Warrant Certificate on the books of the within-
named Company, with full power of substitution.
Dated: Signature:
------------------ -------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate)
--------------------------------------
--------------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
1
