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EXHIBIT 10.18
DRAFT
WARRANT AGREEMENT
By and Between
JAYMARK, INC.
and
XXXXX XXXXXX & CO., INC.
Dated as of __________ __, 1997
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of ________ __, 1997 by and between
JAYMARK, INC., a Delaware corporation (the "Company"), and XXXXX XXXXXX & CO.,
INC. (the "Representative") (the Company and the Representative are referred to
collectively herein as the "Parties").
The Company proposes to issue to the Representative warrants
as hereinafter described (the "Warrants") to purchase up to an aggregate of
130,000 shares of the Company's Class A Common Stock, $0.01 par value per share
(the "Class A Common Stock"), subject to adjustment as provided in Section 8
hereof (such 130,000 shares, as adjusted, being hereinafter referred to as the
"Shares"), each Warrant entitling the holder ("Holder") thereof to purchase one
share of Class A Common Stock. All capitalized terms used herein and not
otherwise defined herein shall have the same meanings as in that certain
underwriting agreement, of even date herewith, by and between the Company and
the several underwriters named therein (the "Underwriting Agreement").
NOW, THEREFORE, in consideration of the following promises and
mutual agreements and for other good and valuable consideration, the Parties
agree as follows:
1. Issuance of Warrants; Form of Warrant. On the Closing Date
the Company will issue, sell and deliver the Warrants to the Representative or
its bona fide officers for an aggregate price of $100. The Warrants shall be
issued to the Representative or such designees in the amounts set forth on
Schedule I attached hereto. The form of the Warrant and of the form of election
to purchase Shares to be attached thereto shall be substantially as set forth on
Exhibit A attached hereto. The Warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the present or any future
President or any Vice President of the Company, under its corporate seal,
affixed or in facsimile, and attested by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
2. Registration. The Warrants shall be numbered and shall be
registered in a Warrant register (the "Warrant Register"). The Company shall be
entitled to treat the registered holder of any Warrant on the Warrant Register
as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or are to be registered in the name of
a fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a
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fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with such knowledge of such facts that its
participation therein amounts to bad faith. The Warrants shall be registered
initially in the name of the Representative in such denominations as the
Representative may request in writing from the Company; provided, however, that
the Representative may designate that all or a portion of the Warrants be issued
in varying amounts directly to its bona fide officers and not to the
Representative. Such designation will only be made by the Representative if it
determines that such issuances would not violate the interpretation of the Board
of Governors of the National Association of Securities Dealers, Inc. (the
"NASD"), relating to the review of corporate financing arrangements.
3. Transfer of Warrants. The Warrants will not be sold,
transferred, assigned or hypothecated, in part or in whole, prior to the first
anniversary of the effective date of the Registration Statement, and thereafter
only to bona fide officers, directors, shareholders, employees or registered
representatives of the Representative upon written request to the Company
delivered in accordance with Section 12 and upon delivery of the Warrant
Certificate duly endorsed by the Holder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or an official copy thereof, duly certified,
shall be deposited with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited with the Company in its discretion. Upon any registration of transfer,
the Company shall deliver a new Warrant or Warrants to the persons entitled
thereto. Any of the Warrants may be exchanged at the option of its Holder for
other Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of shares of Class A Common Stock
upon surrender to the Company or its duly authorized agent. The Company may
require payment of a sum sufficient to cover all taxes and other governmental
charges that may be imposed in connection with any voluntary transfer, exchange
or other disposition of the Warrants. However, the Company shall have no
obligation to cause Warrants to be transferred on its books to any person, if
such transfer would violate the Securities Act of 1933, as amended (the "Act"),
or applicable state securities laws.
4. Term of Warrants; Exercise of Warrants.
(a) Term of Warrants. Each Warrant entitles the
registered owner thereof to purchase one Share at a purchase price of
$____ per Share (as adjusted from time to time
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pursuant to the provisions hereof, the "Exercise Price") at any time
from the first anniversary of the effective date of the Registration
Statement until 5:00 p.m., New York City time, on ________ __, 2002
(the "Warrant Expiration Date").
(b) Exercise of Warrants. The Exercise Price and the
Shares issuable upon exercise of Warrants are subject to adjustment
upon the occurrence of certain events, pursuant to the provisions of
Section 8 of this Agreement. Subject to the provisions of this
Agreement, and in addition to the right to surrender warrants without
any cash payment as set forth in subsection (c) below, each Holder
shall have the right, which may be exercised as set forth in such
Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully paid and nonassessable Shares
specified in such Warrants, upon surrender to the Company, or its duly
authorized agent, of such Warrants, with the form of election to
purchase attached thereto duly completed and signed, with signatures
guaranteed by a member firm of a national securities exchange, a
commercial bank (not a savings bank or savings and loan association) or
trust company located in the United States or a member of the NASD and
upon payment to the Company of the Exercise Price, as adjusted in
accordance with the provisions of Section 8 of this Agreement, for the
number of Shares in respect of which such Warrants are then exercised.
No adjustment shall be made for any dividends on any Shares issuable
upon exercise of a Warrant. Upon each surrender of Warrants and payment
of the Exercise Price, the Company shall issue and cause to be
delivered with all reasonable dispatch, but in no event later than
three trading days following such surrender, to or upon the written
order of the Holder of such Warrants and in such name or names as such
Holder may designate, a certificate or certificates for the number of
full Shares so purchased upon the exercise of such Warrants, together
with cash, as provided in Section 9 of this Agreement, in respect of
any fractional Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become
a holder of record of such Shares as of the date of the surrender of
Warrants and payment of the Exercise Price as aforesaid; provided,
however, that if, at the date of surrender of such Warrants, the
transfer books for the Common Stock or other class of securities
issuable upon the exercise of such Warrants shall be closed, the
certificates for the Shares shall be issuable as of the date on which
such books shall next be opened (whether before, on or after the
Warrant Expiration Date) and until such date the Company shall be under
no duty to deliver any certificate for such Shares; provided, further,
however, that the transfer books of record, unless otherwise
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required by law, shall not be closed at any one time for a period
longer than twenty (20) days. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holder(s)
thereof, either in full or from time to time in part and, in the event
that any Warrant is exercised in respect of less than all of the Shares
issuable upon such exercise at any time prior to the Warrant Expiration
Date, a new Warrant or Warrants will be issued for the remaining number
of Shares specified in the Warrant so surrendered.
(c) Payment of Exercise Price. Payment of the
Exercise Price may be made in cash or by certified check or official
bank check payable to the order of the Company. In addition and in lieu
of any cash payment, the Holder of the Warrants shall have the right at
any time and from time to time to exercise the Warrants in full or in
part by surrendering the Warrant in exchange for the number of Shares
equal to the product of (x) the number of shares as to which the
Warrants are being exercised multiplied by (y) a fraction, the
numerator of which is the Market Price (as defined below) of the Shares
less the Exercise Price and the denominator of which is such Market
Price. Solely for the purposes of this paragraph, "Market Price" shall
be the average last reported sale price of the Common Stock as
calculated over the five (5) trading day period preceding the date on
which the Election to Purchase is sent to the Company.
5. Payment of Taxes. The Company will pay all documentary
stamp taxes, if any, attributable to the issuance of Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
taxes payable in respect of any transfer involved in the issue or delivery of
any certificates for Shares in a name other than that of the Holder of Warrants
in respect of which such Shares are issued.
6. Mutilated or Missing Warrants. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Company shall issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
Warrant, or in lieu of and substitution for the Warrant lost, stolen or
destroyed, a new Warrant of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence reasonably satisfactory to the
Company of such mutilation, loss, theft or destruction of such Warrant and
indemnity, if requested, reasonably satisfactory to the Company. An applicant
for such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges and expenses as the Company
may prescribe.
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7. Reservation of Shares, etc. The Company has reserved, and
shall at all times keep reserved, out of the authorized and unissued Class A
Common Stock, a number of shares of Class A Common Stock sufficient to provide
for the exercise of the rights of purchase represented by the outstanding
Warrants. U.S. Stock Transfer Corporation, transfer agent for the Class A Common
Stock (the "Transfer Agent"), and any subsequent transfer agent for the
Company's securities issuable upon the exercise of the Warrants will be
irrevocably authorized and directed at all times until the Warrant Expiration
Date to reserve such number of authorized and unissued shares as shall be
required for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent and with every subsequent transfer agent for any
shares of the Company's securities issuable upon the exercise of the Warrants.
The Company will supply the Transfer Agent or any subsequent transfer agent with
duly executed certificates for such purpose and will itself provide or make
available any cash distributable as provided in Section 9 of this Agreement. All
Warrants surrendered in the exercise of the rights thereby evidenced shall be
cancelled, and such cancelled Warrants shall constitute sufficient evidence of
the number of Shares that have been issued upon the exercise of such Warrants.
No shares of Class A Common Stock shall be subject to reservation in respect of
unexercised Warrants after the Warrant Expiration Date.
8. Adjustments of Exercise Price and Number of Shares. The
Exercise Price and the number and kind of securities issuable upon exercise of
each Warrant shall be subject to adjustment from time to time upon the happening
of certain events, as follows:
(a) If the Company (i) declares a dividend on its
Class A Common Stock in shares of Class A Common Stock or makes a
distribution in shares of Class A Common Stock, (ii) subdivides its
outstanding shares of Class A Common Stock, (iii) combines its
outstanding shares of Class A Common Stock into a smaller number of
shares of Class A Common Stock or (iv) issues by reclassification of
its shares of Class A Common Stock other securities of the Company
(including any such reclassification in connection with a consolidation
or merger in which the Company is the surviving entity), the number of
Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of Shares or other securities
of the Company which he would have owned or have been entitled to
receive after the happening of any of the events described above, had
such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the effective date of such event
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retroactive to immediately after the record date, if any, for such
event.
(b) If the Company issues rights, options or warrants
to all holders of its shares of Class A Common Stock, without any
charge to such holders, entitling them (for a period expiring within 45
days after the record date mentioned below in this paragraph (b)) to
subscribe for or to purchase shares of Class A Common Stock at a price
per share lower than the then current market price per share of Class A
Common Stock at the record date mentioned below (as defined in
paragraph (d) below), the number of Shares thereafter purchasable upon
exercise of each Warrant shall be determined by multiplying the number
of Shares theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares of Class
A Common Stock outstanding on such record date plus the number of
additional shares of Class A Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Class A Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of shares
of Class A Common Stock so offered would purchase at the then current
market price per share of Class A Common Stock. Such adjustment shall
be made whenever such rights, options or warrants are issued, and shall
become effective retroactively to immediately after the record date for
the determination of shareholders entitled to receive such rights,
options or warrants.
(c) If the Company distributes to all holders of its
shares of Class A Common Stock shares of stock other than Class A
Common Stock or evidences of its indebtedness or assets (excluding cash
dividends payable out of consolidated earnings or retained earnings and
dividends or distributions referred to in paragraph (a) above) or
rights, options or warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Class A
Common Stock (excluding those referred to in paragraph (b) above), then
in each case the number of Shares thereafter issuable upon the exercise
of each Warrant shall be determined by multiplying the number of Shares
theretofore issuable upon the exercise of each Warrant, by a fraction,
of which the numerator shall be the current market price per share of
Class A Common Stock (as defined in paragraph (d) below) on the record
date mentioned below in this paragraph (c), and of which the
denominator shall be the current market price per share of Class A
Common Stock on such record date, less the then fair value (as
determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive) of the portion of the shares
of stock other than Class A Common Stock or
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assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Class A Common
Stock. Such adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution
retroactive to immediately after the record date for the determination
of shareholders entitled to receive such distribution.
(d) For the purpose of any computation under
paragraphs (b) and (c) of this Section 8, the current market price per
share of Class A Common Stock at any date shall be the average of the
daily closing prices for fifteen (15) consecutive trading days
commencing twenty (20) trading days before the date of such
computation. The closing price for each day shall be the last reported
sale price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way
for such day, in either case on the principal national securities
exchange on which the shares are listed or admitted to trading, or if
they are not listed or admitted to trading on any national securities
exchange, but are traded in the over-the-counter market, the closing
sale price of the Class A Common Stock or, in case no sale is publicly
reported, the average of the representative closing bid and asked
quotations for the Class A Common Stock, on the NASDAQ system or any
comparable system, or if the Class A Common Stock is not listed on the
NASDAQ system or a comparable system, the closing sale price of the
Class A Common Stock or, in case no sale is publicly reported, the
average of the closing bid and asked prices as furnished by two members
of the NASD selected from time to time by the Company for that purpose.
(e) No adjustment in the number of Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Shares purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this paragraph (e) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment but not later than three years after the
happening of the specified event or events. All calculations shall be
made to the nearest one thousandth of a share.
(f) Whenever the number of Shares purchasable upon
exercise of each Warrant is adjusted, as herein provided, the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon the exercise
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of each Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of Shares so purchasable immediately
thereafter.
(g) For the purpose of this Section 8, the term
"shares of Class A Common Stock" shall mean (i) the class of stock
designated as the Class A Common Stock of the Company at the date of
this Agreement or (ii) any other class of stock resulting from
successive changes or reclassifications of such shares consisting
solely of changes in par value, or from no par value to par value, or
from par value to no par value. If at any time, as a result of an
adjustment made pursuant to paragraph (a) above, the Holders become
entitled to purchase any shares of capital stock of the Company other
than shares of Class A Common Stock, thereafter the number of such
other shares so purchasable upon exercise of each Warrant and the
Exercise Price of such shares shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Shares contained in paragraphs (a)
through (f), inclusive, and paragraphs (h) through (m), inclusive, of
this Section 8, and the provisions of Sections 4, 5, 7 and 10, with
respect to the Shares, shall apply on like terms to any such other
shares.
(h) Upon the expiration of any rights, options,
warrants or conversion rights or exchange privileges, if any thereof
have not been exercised, the Exercise Price and the number of shares
of Class A Common Stock purchasable upon the exercise of each Warrant
shall, upon such expiration, be readjusted and shall thereafter be
such as it would have been had it originally been adjusted (or had the
original adjustment not been required, as the case may be) as if (i)
the only shares of Class A Common Stock so issued were the shares of
Class A Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion rights or
exchange privileges and (ii) such shares of Class A Common Stock, if
any, were issued or sold for the consideration actually received
by the Company upon such exercise plus the aggregate consideration,
if any, actually received by the Company for the issuance, sale or
grant of all of such rights, options, warrants or conversion rights
or exchange privileges whether or not exercised; provided, however,
that no such readjustment shall have the effect of decreasing the
number of shares issuable upon the exercise of each Warrant or
increasing the Exercise Price by an amount in excess of the amount of
the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion rights or
exchange privileges.
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(i) The Company may, at its option at any time during
the term of the Warrants, reduce the then current Exercise Price to any
amount deemed appropriate by the Board of Directors of the Company.
(j) Whenever the number of Shares issuable upon the
exercise of each Warrant or the Exercise Price of such Shares is
adjusted, as herein provided, the Company shall promptly mail by first
class mail, postage prepaid, to each Holder notice of such adjustment
or adjustments. The Company shall retain a firm of independent public
accountants (who may be the regular accountants employed by the
Company) to make any computation required by this Section 8 and shall
cause such accountants to prepare a certificate setting forth the
number of Shares issuable upon the exercise of each Warrant and the
Exercise Price of such Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made. Such
certificate shall be conclusive as to the correctness of such
adjustment and each Holder shall have the right to inspect such
certificate during reasonable business hours.
(k) Except as provided in this Section 8, no
adjustment in respect of any dividends shall be made during the term of
a Warrant or upon the exercise of a Warrant.
(l) If the Company consolidates with or merges into
another corporation or if the Company sells or conveys all or
substantially all its property to another corporation, the Company or
such successor or purchasing corporation (or an affiliate of such
successor or purchasing corporation), as the case may be, agrees that
each Holder shall have the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase
upon exercise of each Warrant the kind and amount of shares and other
securities and property (including cash) which such Holder would have
owned or been entitled to receive after the happening of the
consolidation, merger, sale or conveyance had such Warrant been
exercised immediately prior to such action. The provisions of this
paragraph (l) shall apply to successive consolidations, mergers, sales
or conveyances.
(m) Notwithstanding any adjustment in the Exercise
Price or the number or kind of shares purchasable upon the exercise of
the Warrants pursuant to this Agreement, certificates for Warrants
issued prior or subsequent to such adjustment may continue to express
the same price and number and kind of Shares as are initially issuable
pursuant to this Agreement.
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9. Fractional Interests. The Company shall not be required to
issue fractions of Shares on the exercise of Warrants. If more than one Warrant
is presented for exercise in full at the same time by the same Holder, the
number of Shares issuable upon the exercise thereof shall be computed on the
basis of the aggregate number of Shares issuable on exercise of the Warrants so
presented. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of any Warrant (or specified portions
thereof), the Company shall purchase such fraction for an amount in cash equal
to the same fraction of the current market price per share of Class A Common
Stock (determined as provided in Section 8(d) of this Agreement) on the date of
exercise.
10. Registration Rights.
(a) Demand Registration Rights. The Company covenants and
agrees with the Representative and any other or subsequent Holders of the
Registrable Securities (as defined in paragraph (f) of this Section 10) that,
subject to the availability of audited financial statements complying with
Regulation S-X under the Act, upon written request of the then Holder(s) of at
least a majority of the Warrants or the Registrable Securities, or both, which
were originally issued to the Representative or its designees, made at any time
within the period commencing one year and ending five years after the Effective
Date, the Company will file as promptly as practicable and, in any event, within
60 days after receipt of such written request, at its expense (other than the
fees of counsel and sales commissions for such Holders), no more than once, a
post-effective amendment (the "Amendment") to the Registration Statement, or a
new registration statement under the Act, registering or qualifying the
Registrable Securities for sale. Within fifteen (15) days after receiving any
such notice, the Company shall give notice to the other Holders of the
Registrable Securities advising that the Company is proceeding with such
Amendment, registration statement and offering to include the Registrable
Securities of such Holders. The Company shall not be obligated to any other such
Holder unless that other Holder accepts such offer by notice in writing to the
Company within ten (10) days thereafter. The Company will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to file and cause such Amendment or registration statement to
become effective as promptly as practicable (but in no event within 90 days of
the initial filing of such Amendment or registration statement) and for a period
of 24 months thereafter to reflect in the Amendment or registration statement
financial statements which are prepared in accordance with Section 10(a)(3) of
the Act and any facts or events arising that, individually, or in the aggregate,
represent a fundamental or material change in the information set forth in the
Amendment or registration statement to enable any Holders of the Warrants
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to either sell such Warrants or to exercise such Warrants and sell Shares, or to
enable any holders of Shares to sell such Shares, during that nine-month period.
The Holders may sell the Registrable Securities pursuant to the Amendment or
registration statement without exercising the Warrants. If any registration
pursuant to this paragraph (a) is an underwritten offering, the Holders of a
majority of the Registrable Securities to be included in such registration shall
be entitled to select the underwriter or managing underwriter (in the case of a
syndicated offering) of such offering, subject to the Company's approval which
shall not be unreasonably withheld.
(b) Piggyback Registration Rights. The Company covenants and
agrees with the Representative and any other Holders or subsequent Holders of
the Registrable Securities that if, at any time within the period commencing one
year and ending five years after the Effective Date, it proposes to file a
registration statement with respect to any class of equity or equity-related
security (other than in connection with an offering to the Company's employees
or in connection with an acquisition, merger or similar transaction) under the
Act in a primary registration on behalf of the Company and/or in a secondary
registration on behalf of holders of such securities and the registration form
to be used may be used for registration of the Registrable Securities, the
Company will give prompt written notice (which, in the case of a registration
statement or notification pursuant to the exercise of demand registration rights
other than those provided in Section 10(a) of this Agreement, shall be within
ten (10) business days after the Company's receipt of notice of such exercise
and, in any event, at least 30 days prior to such filing) to the Holders of
Registrable Securities (regardless of whether some of the Holders have
theretofore availed themselves of the right provided in Section 10(a) of this
Agreement) at the addresses appearing on the records of the Company of its
intention to file a registration statement and will offer to include in such
registration statement any of the Registrable Securities subject to paragraphs
(i) and (ii) of this paragraph (b), such number of Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within ten (10) days after the giving of notice by the Company. All
registrations requested pursuant to this paragraph (b) are referred to herein as
"Piggyback Registrations". All Piggyback Registrations pursuant to this
paragraph (b) will be made solely at the Company's expense. This paragraph is
not applicable to a registration statement filed by the Company with the
Commission on Forms S-4 or S-8 or any successor forms.
(i) Priority on Primary Registrations. If a Piggyback
Registration includes an underwritten primary registration for the
Company, and the underwriter(s) for such offering determine in good
faith and advise the Company
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in writing that in their opinion the number of Registrable Securities
requested to be included in such registration exceeds the number that
can be sold in such offering without materially adversely affecting the
distribution of such securities by the Company, the Company will
include in such registration (A) first, the securities that the Company
proposes to sell and (B) second, the Registrable Securities requested
to be included in such registration, apportioned pro rata among the
Holders of Registrable Securities, provided, however, the Company will
use its best efforts to include not less than 20% of the Registrable
Securities, and (C) third, securities of the holders of other
securities requesting registration.
(ii) Priority on Secondary Registrations. If a
Piggyback Registration consists only of an underwritten secondary
registration for holders of securities of the Company (other than
pursuant to Section 10(a)), and the underwriter(s) for such offering
advise the Company in writing that in their opinion the number of
Registrable Securities requested to be included in such registration
exceeds the number which can be sold in such offering without
materially adversely affecting the distribution of such securities by
the Company, the Company will include in such registration (A) first,
the securities requested to be included therein by the holders
requesting such registration and the Registrable Securities requested
to be included in such registration, pro rata among all such holders on
the basis of the number of shares requested to be included by each such
holder, provided, however, the Company will use its best efforts to
include not less than 20% of the Registrable Securities, and (B)
second, other securities requested to be included in such registration.
Notwithstanding the foregoing, if any such underwriter
determines in good faith and advises the Company in writing that the
distribution of the Registrable Securities requested to be included in the
registration concurrently with the securities being registered by the Company
would materially adversely affect the distribution of such securities by the
Company, then the Holders of such Registrable Securities shall delay their
offering and sale for such period ending on the earliest of (1) 90 days
following the effective date of the Company's registration statement, (2) the
day upon which the underwriting syndicate, if any, for such offering has been
disbanded or, (3) such date as the Company, managing underwriter and Holders of
Registrable Securities otherwise agree. If such a delay occurs, the Company
shall file such supplements, post-effective amendments and take any other steps
necessary to permit such Holders to make their proposed offering and sale for a
period of 180 days immediately following the end of such delay. If any party
disapproves of the terms of any such underwriting, it may elect to withdraw
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therefrom by written notice to the Company, the underwriter, and the
Underwriters. However, the Company shall not be required to file a registration
statement to include Shares pursuant to this Section 10(b) if independent
counsel, reasonably satisfactory to counsel for the Company and counsel for the
Underwriters, renders an opinion to the Company that the Shares proposed to be
disposed of may be transferred pursuant to the provisions of Rule 144 under the
Act or otherwise without registration under the Act.
(c) Other Registration Rights. In addition to the rights above
provided, the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any registration statement, in addition to
the registration statements discussed above, required in order to sell or
transfer the Registrable Securities and will supply all information required
therefor, but such additional registration statement, shall be at the then
Holders' cost and expense; provided, however, that if the Company elects to
register or qualify additional shares of Class A Common Stock, the cost and
expense of such registration statement will be pro rated between the Company and
the Holders of the Registrable Securities according to the aggregate sales price
of the securities being issued. However, the Company will not be required to
file a registration statement pursuant to this paragraph (c), (i) at a time when
the audited financial statements required to be included therein are not
available, which time shall be limited to the period commencing 45 days after
the end of the Company's last fiscal year and ending 90 days after the end of
such fiscal year, or (ii) within 90 days after completion of a public offering
by the Company of any of its Class A Common Stock or equity-related securities
or (iii) if it would adversely impact the Company in its capital raising plans
or otherwise (in which latter case filing may be delayed no longer than 120
days).
(d) Action to be Taken by the Company. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or
qualification under paragraphs (a) or (b) of this Section 10,
including, but not limited to, legal, accounting and printing fees;
provided, however, that in no event shall the Company be obligated to
pay (A) any fees and disbursements of special counsel for Holders of
Registrable Securities, or (B) any underwriters' discount or commission
in respect of such Registrable Securities, (C) any stock transfer taxes
attributable to the sale of the Registrable Securities, or (D) upon the
exercise of any demand registration right provided for in paragraph (a)
of this Section 10, the cost of any liability or similar insurance
required by an underwriter, to the extent that such costs
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are attributable solely to the offering of such Registrable Securities,
payment of which shall, in each case, be the sole responsibility of the
Holders of the Registrable Securities; and
(ii) Use its best efforts to register or qualify the
Registrable Securities for offer or sale under state securities or Blue
Sky laws of such jurisdictions in which the Underwriters or such
Holders shall reasonably request, provided, however, that no
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject, and to do all other acts
necessary or advisable to enable the holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction.
(e) Action to be Taken by the Holders. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company's obligation shall be conditioned as to each
such public offering upon a timely receipt by the Company in writing of:
(i) Information as to the terms of such public
offering furnished by or on behalf of each Holder intending to make a
public offering of his or its Registrable Securities; and
(ii) Such other information as the Company may
reasonably require from such Holders, or any underwriter for any of
them, for inclusion in such Registration Statement.
(f) For purposes of this Section 10, (i) the term "Holder"
shall include holders of Shares, and (ii) the term "Registrable Securities"
shall mean the Shares, if issued.
11. Notices to Holders.
(a) Nothing in this Agreement or in any Warrants shall be
construed as conferring upon the Holders the right to vote or to receive
dividends or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company; provided,
however, that in the event that a meeting of shareholders shall be called to
consider and take action on a proposal for the voluntary dissolution of the
Company, other than in connection with a consolidation, merger or sale of all,
or substantially all, of its property, assets, business and good will as an
entirety, the Company shall cause a notice thereof to be sent by first-class
mail, postage prepaid, at least twenty (20) days
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prior to the date fixed as a record date or the date of closing the transfer
books in relation to such meeting, to each registered Holder of Warrants at such
Holder's address appearing on the Warrant Register; but failure to mail or to
receive such notice or any defect therein or in the mailing thereof shall not
affect the validity of any action taken in connection with such voluntary
dissolution.
(b) If the Company intends to make any distribution on its
Class A Common Stock (or other securities which may be issuable in lieu thereof
upon the exercise of Warrants), including, without limitation, any such
distribution to be made in connection with a consolidation or merger in which
the Company is the surviving entity, or to issue subscription rights or warrants
to holders of its Class A Common Stock, the Company shall cause a notice of its
intention to make such distribution to be sent by first-class mail, postage
prepaid, at least twenty (20) days prior to the date fixed as a record date or
the date of closing the transfer books in relation to such distribution, to each
registered Holder of Warrants at such Holder's address appearing on the Warrant
Register, but failure to mail or to receive such notice or any defect therein or
in the mailing thereof shall not affect the validity of any action taken in
connection with such distribution.
12. Notices. Any notice pursuant to this Agreement to be given
by the Holder of any Warrant or the holder of any Share to the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows or to such other address as the Company may designate by
notice given in accordance with this Section 12, to the Holders of Warrants or
the holders of Shares:
Jaymark, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Notices or demands authorized by this Agreement to be given or
made by the Company to or on the Holder of any Warrant or the holder of any
Share shall be sufficiently given or made (except as otherwise provided in this
Agreement) if sent by first-class mail, postage prepaid, addressed to such
Holder or such holder of Shares at the address of such Holder or such holder of
Shares as shown on the Warrant Register or the books of the Company, as the case
may be.
13. Governing Law. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the substantive
laws of the State of New York. The Company hereby agrees to accept service of
process by notice given to it pursuant to the provisions of Section 12.
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14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to
be duly executed as of the day, month and year first above written.
JAYMARK, INC.
By:_____________________________
Its: ________________________
XXXXX XXXXXX & CO., INC.
By:_____________________________
Its:_________________________
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SCHEDULE I
Name of Number of
Underwriter Warrants
----------- --------
Xxxxx Xxxxxx & Co., Inc.
Total 130,000
