THE MAJESTIC COMPANIES, LTD.
A Delaware corporation
Not Transferable or Exercisable Except
Upon Conditions Herein Specified
Void After 5:00 O'Clock P.M.,
Eastern Daylight Time, August 27, 2001
WARRANT
-------
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933
(THE "ACT") OR APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS") AND SHALL NOT
BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE TRANSFERRED (WHETHER OR
NOT FOR CONSIDERATION) BY THE HOLDER IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THIS WARRANT AND/OR THE SHARES OF COMMON STOCK ISSUABLE UPON
THE EXERCISE OF THIS WARRANT EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL AND/OR SUBMISSION TO THE COMPANY OF SUCH EVIDENCE
AS MAY BE SATISFACTORY TO COUNSEL TO THE COMPANY, IN EACH SUCH CASE, TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE STATE
ACTS.
WARRANT TO PURCHASE AN AGGREGATE of ONE HUNDRED THOUSAND (100,000) SHARES
OF COMMON STOCK.
THE MAJESTIC COMPANIES, LTD.
a Delaware corporation
Not Transferable Or Exercisable Except
Upon Conditions Herein Specified
Void after 5:00 O'clock P.M.,
Eastern Daylight Time, August 27, 2001
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WARRANT TO PURCHASE 100,000 SHARES
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The Majestic Companies, Ltd., a Nevada Corporation (the "Company") hereby
certifies that, Xxxxxxxx X. Xxxxxx with an address of 0000 X. Xxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000-0000 and its registered successors and permitted assigns
registered on the books of the Company maintained for such purposes as the
registered holder hereof (the "Holder"), for value received, is entitled to
purchase from the Company one hundred thousand (100,000) fully paid and
nonassessable shares (the "Shares") of common stock of the Company, par value
one cent ($.001) per share, (the "Common Stock"), at a purchase price equal to
the Current Market Price per Share on the date hereof (the "Exercise Price")
(the number of Shares being subject to adjustment as hereinafter provided) upon
the terms and conditions herein provided.
1. Exercise of Warrants.
(a) Cash Exercise. Subject to subsection (d) of this Section 1, upon
presentation and surrender of this Warrant with the Purchase Form in the form of
Exhibit A hereto duly executed, at the principal office of the Company at 8880
Rio San Diego Drive, 8th Floor, Xxx Xxxxx, Xxxxxxxxxx 00000, or at such other
place as the Company may designate by notice to the Holder hereof, together with
a wire transfer or certified or bank cashier's check payable to the Company in
the amount of the Exercise Price times the number of Shares being purchased, the
Company shall promptly deliver to the Holder hereof, certificates representing
the Shares being purchased.
(b) Cashless Exercise. Subject to subsection (d) of this Section 1,
the Holder hereof may effect a cashless exercise of this Warrant by delivery of
this Warrant, upon presentation and surrender of this Warrant Certificate with
the Purchase Form in the form of Exhibit B hereto duly executed, to the
principal office of the Company at 8880 Rio San Diego Drive, 8th Floor, Xxx
Xxxxx, Xxxxxxxxxx 00000, or at such other place as the Company may designate by
notice to the Holder hereof, in which case no payment of cash will be required,
and the Company shall promptly deliver to the Holder hereof certificates
representing the Shares being purchased pursuant to such cashless exercise. Upon
such cashless exercise, the number of Shares to be received by the Holder hereof
shall be that number of Shares having an aggregate fair market value, based upon
the Current Market Price (as defined in Section 6(e) hereof), on the date of
such exercise equal to the difference between (x) the fair market value of the
number of
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Shares subject to the Warrant designated by the Holder on the date of the
exercise and (y) the aggregate exercise price of the Warrant otherwise payable
by the Holder for such designated Shares. Upon any such exercise, the number of
Shares purchasable upon the exercise of the Warrant shall be reduced by such
designated number of Shares and, if a balance of purchasable Shares remains
after such exercise, the Company shall execute and deliver to the Holder a new
Warrant for such balance of Shares. No payment of any cash or other
consideration by the Holder shall be required. Such exchange shall be effective
upon the date of receipt by the Company of the original Warrant surrendered for
cancellation and a written request from the Holder that the exchange pursuant to
this Section 1(b) be made, or at such later date as may be specified in such
request. No fractional shares arising out of the above formula for determining
the number of Shares issuable in such exchange shall be issued, and the Company
shall in lieu thereof make payment to the Holder of cash in the amount of such
fraction multiplied by the Current Market Price per Share on the date of the
exchange.
(c) Installments. Subject to subsection (d) of this Section 1, this
Warrant may be exercised in whole or in part in installments of ten thousand
(10,000) Shares each; and, in case of exercise hereof in part only, the Company,
upon surrender hereof, will deliver to the Holder a new Warrant or Warrants of
like tenor entitling the Holder to purchase the number of Shares as to which
this Warrant has not been exercised.
(d) Expiration. This Warrant may be exercised in whole or in part in
installments as set forth above at any time following the satisfaction of the
aforesaid condition pursuant and prior to August 27, 2001 (the "Expiration
Date"), provided that at the time of each exercise the requirements of all
applicable statutes regarding the issuance of shares are satisfied. Upon such
expiration or any exercise of this Warrant in whole, this Warrant shall
terminate and be null, void and of no further force or effect.
2. Exchange and Transfer of Warrant. This Warrant (a) at any time prior to
the exercise hereof, upon presentation and surrender to the Company, may be
exchanged, alone or with other Warrants of like tenor registered in the name of
the Holder, for another Warrant or other Warrants of like tenor in the name of
such transferee Holder exercisable for the same aggregate number of Shares as
the Warrant or Warrants surrendered, and (b) may be sold, transferred,
hypothecated, or assigned, in whole or in part, but only upon compliance with
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions reasonably satisfactory to the Company, if requested by the
Company).
3. Rights and Obligations of Warrant Holder.
(a) The Holder of this Warrant shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or in
equity; provided, however, in the event that any certificate representing the
Shares is issued to the
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Holder hereof upon exercise of this Warrant, such Holder shall, for all
purposes, be deemed to have become the holder of record of such Shares on the
date on which this Warrant was surrendered pursuant to the terms of this
Warrant, irrespective of the date of delivery of such Share certificate. The
rights of the Holder of this Warrant are limited to those expressed herein and
the Holder of this Warrant, by its acceptance hereof, consents to and agrees to
be bound by and to comply with all the provisions of this Warrant, including,
without limitation, all the obligations imposed upon the Holder hereof by
Sections 2 and 5 hereof. In addition, the Holder of this Warrant, by accepting
the same, agrees that the Company may deem and treat the person in whose name
this Warrant is registered on the books of the Company maintained for such
purpose as the absolute, true and lawful owner for all purposes whatsoever,
notwithstanding any notation of ownership or other writing thereon, and the
Company shall not be affected by any notice to the contrary.
(b) No Holder of this Warrant, as such, shall be entitled to vote or
receive dividends or to be deemed the holder of Shares for any purpose, nor
shall anything contained in this Warrant be construed to confer upon any Holder
of this Warrant, as such, any of the rights of a stockholder of the Company or
any right to vote, give or withhold consent to any action by the Company,
whether upon any recapitalization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise, receive notice of meetings or
other action affecting stockholders (except for notices provided for herein),
receive dividends, subscription rights, or otherwise, until this Warrant shall
have been exercised and the Shares purchasable upon the exercise thereof shall
have become deliverable as provided herein; provided, however, that any such
exercise on any date when the stock transfer books of the Company shall be
closed shall constitute the person or persons in whose name or names the
certificate or certificates for those Shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open, and the Warrant
surrendered shall not be deemed to have been exercised, in whole or in part as
the case may be, until the next succeeding day on which stock transfer books are
open for the purpose of determining entitlement to dividends on the Company's
common stock.
4. Shares Underlying Warrants. The Company covenants and agrees that all
Shares delivered upon exercise of this Warrant shall, upon delivery and payment
therefor, be duly and validly authorized and issued, fully-paid and
non-assessable, and free from all stamp-taxes, liens, and charges with respect
to the purchase thereof. The Company further covenants and agrees that, at all
times prior to the Expiration Date, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for and
permit the exercise in full of this Warrant and, should the need in the future
arise, the Company shall take any such actions as are necessary to authorize the
requisite number of Shares therefor.
5. Disposition of Warrants or Shares.
(a) The Holder of this Warrant and any transferee hereof or of the
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Shares issuable upon the exercise of the Warrant, by their acceptance hereof,
hereby understand and agree that the Warrant, and the Shares issuable upon the
exercise hereof, have not been registered under either the Securities Act of
1933 (the "Act") or applicable state securities laws (the "State Acts") and
shall not be sold, pledged, hypothecated, donated, or otherwise transferred
(whether or not for consideration) except upon the issuance to the Company of a
favorable opinion of counsel and/or submission to the Company of such evidence
as may be satisfactory to counsel to the Company, in each such case, to the
effect that any such transfer shall not be in violation of the Act and the State
Acts. It shall be a condition to the transfer of this Warrant that any
transferee thereof deliver to the Company its written agreement to accept and be
bound by all of the terms and conditions of this Warrant.
(b) The stock certificates of the Company that will evidence the
shares of Common Stock with respect to which this Warrant may be exercisable
will be imprinted with a conspicuous legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS, OFFERED OR
SOLD PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENT OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
Except as provided in Section 9 of this Warrant, the Company
has not agreed to register any of the holder's shares of Common Stock of the
Company with respect to which this Warrant may be exercisable for distribution
in accordance with the provisions of the Act or the State Acts, and the Company
has not agreed to comply with any exemption from registration under the Act or
the State Acts for the resale of the holder's shares of Common Stock of the
Company with respect to which this Warrant may be exercised. Hence, it is the
understanding of the holders of this Warrant that by virtue of the provisions of
certain rules respecting "restricted securities" promulgated by the Securities
and Exchange Commission (the "SEC"), the shares of Common Stock of the Company
with respect to which this Warrant may be exercisable may be required to be held
indefinitely, unless and until registered under the Act and the State Acts,
unless an exemption from such registration is available, in which case the
holder may still be limited as to the number of shares of Common Stock of the
Company with respect to which this Warrant may be exercised that may be sold.
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6. Adjustments. The number of Shares purchasable upon the exercise of
each Warrant is subject to adjustment from time to time upon the occurrence of
any of the events enumerated below.
(a) In case the Company shall: (i) pay a dividend in Shares, (ii)
subdivide its outstanding Shares into a greater number of Shares, (iii) combine
its outstanding Shares into a smaller number of Shares, or (iv) issue, by
reclassification of its Shares, any shares of its capital stock, the number of
Shares purchasable upon the exercise of each Warrant immediately prior thereto
shall be adjusted so that the Holder shall be entitled to receive upon exercise
of the Warrant that number of Shares which such Holder would have owned or would
have been entitled to receive after the happening of such event had such Holder
exercised the Warrant immediately prior to the record date, in the case of such
dividend, or the effective date, in the case of any such subdivision,
combination or reclassification. An adjustment made pursuant to this subsection
(a) shall be made whenever any of such events shall occur, but shall become
effective retroactively after such record date or such effective date, as the
case may be, as to Warrants exercised between such record date or effective date
and the date of happening of any such event.
(b) In case the Company shall (i) issue or sell any Shares for less
than the Current Market Price per Share at the time of such issuance or sale, or
(ii) grant (whether directly or by assumption in a merger or otherwise) any
rights to subscribe for or to purchase, or any options or warrants for the
purchase of, Shares or any stock or securities convertible into or exchangeable
for Shares, whether or not immediately exercisable, convertible or exchangeable
(such rights, options or warrants being herein called "Options" and such
convertible or exchangeable stock or securities being herein called "Convertible
Securities"), or issue or sell (whether directly or by assumption in a merger or
otherwise) options or Convertible Securities, and the price per Share for which
Shares are issuable upon exercise, conversion or exchange of such Options or
Convertible Securities (determined by dividing (x) the aggregate amount received
or receivable by the Company as consideration for the issue, sale or grant of
such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof, by (y) the total maximum number of Shares
issuable upon the exercise, conversion or exchange of all such Options or
Convertible Securities) shall be less than the Current Market Price per Share on
the date of such issue, sale or grant, whether or not the rights to exercise,
exchange or convert thereunder are immediately exercisable, then (A) the
Exercise Price shall be reduced to a price determined by multiplying the
Exercise Price in effect prior to the adjustment referred to in this Section
6(b) by a fraction, the numerator of which is an amount equal to the sum of (x)
the number of Shares outstanding immediately prior to such issue, sale or grant,
plus (y) the consideration, if any, received by the Company upon any such issue
or sale divided by the Current Market Price per Share at the time of such issue
or sale, and the denominator of which is the total number of Shares outstanding
immediately after such issue, sale or grant, and (b) the number of Shares for
which this Warrant is exercisable shall be adjusted to equal the number obtained
by dividing (x) the Exercise Price in
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effect immediately prior to such issue, sale or grant multiplied by the number
of Shares for which this Warrant is exercisable immediately prior to such issue,
sale or grant by (y) the Exercise Price resulting from the adjustment made
pursuant to this Section 6(b).
(c) In case the Company shall pay a dividend or make a distribution
of shares of its capital stock (other than Shares), evidences of its
indebtedness, assets or rights, warrants or options (excluding (i) dividends or
distributions payable in cash out of the current year's or retained earnings of
the Company, (ii) distributions relating to subdivisions and combinations
covered by Section 6(a), (iii) distributions relating to reclassifications,
changes, consolidations, mergers, sales or conveyances covered by Section 6(d)
and (iv) rights, warrants, or options to purchase or subscribe for Shares or
Convertible Securities), then in each such case (A) the Exercise Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Exercise Price in effect immediately prior to the record date mentioned below by
a fraction, the numerator of which shall be (x) the total number of Shares then
outstanding multiplied by the Current Market Price per Share on the record date
mentioned below, less, (y) the fair market value (as determined by the board of
directors of the Company or any duly authorized committee thereof) as of such
record date of said shares of stock, evidences of indebtedness or assets so paid
or distributed or of such rights, warrants or options, and the denominator of
which is the total number of Shares then outstanding multiplied by the Current
Market Price per Share on the record date mentioned below; and (B) the number of
shares of Common Stock for which this Warrant is exercisable shall be adjusted
to equal the number obtained by dividing (x) the purchase price in effect
immediately prior to such dividend or distribution multiplied by the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to such dividend or distribution by (y) the purchase price resulting from the
adjustment made pursuant to this Section 6(c). Such adjustment shall be made
whenever any such dividend is paid or such distribution is made and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution.
In the event of a distribution by the Company of stock or a subsidiary or
securities convertible into or exercisable for such stock, then in lieu of an
adjustment in the Exercise Price, the Holder of this Warrant, upon the exercise
thereof at any time after such distribution, shall be entitled to receive from
the Company, such subsidiary or both, as the Company shall determine, the stock
or other securities to which such Holder would have been entitled if such Holder
had exercised such Warrant immediately prior thereto, all subject to further
adjustment as provided in this Section 6.
(d) If any capital reorganization, reclassification or similar
transaction involving the capital stock of the Company (other than as provided
in Section 6(a)), any consolidation, merger or business combination of the
Company with another corporation, or the sale or conveyance of all or
substantially all of its assets to another corporation, shall be effected in
such a way that holders of Shares shall be entitled to receive stock,
securities, or assets with respect to or in exchange for Shares, then, prior to
and as a condition of such reorganization, reclassification, consolidation,
merger,
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business combination, sale or conveyance, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions specified in this
Warrant and in lieu of the Shares immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby, such shares of
stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding Shares equal to the number of Shares
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such reorganization, reclassification,
consolidation, merger, business combination, sale or conveyance not taken place.
In any such case, appropriate provision shall be made with respect to the rights
and interests of the Holder to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the number of Shares
purchasable upon the exercise of this Warrant) shall thereafter be applicable,
as nearly as may be, in relation to any stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company shall not effect any such
consolidation, merger, business combination, sale or conveyance unless prior to
or simultaneously with the consummation thereof the survivor or successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall (1) assume by written
instrument executed and sent to each registered Holder, the obligation to
deliver to such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
receive, and containing the express assumption by such successor corporation of
the due and punctual performance and observance of every provision of this
Warrant to be performed and observed by the Company and of all liabilities and
obligations of the Company hereunder, and (2) deliver to the registered Holder
an opinion of counsel, in form and substance satisfactory to such Holder, to the
effect that such written instrument has been duly authorized, executed and
delivered by such successor corporation and constitutes a legal, valid and
binding instrument enforceable against such successor corporation in accordance
with its terms (except as enforcement thereof may be subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally, and general principles or equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law)), and to such further effects as such Holder may reasonably request.
(e) For the purpose of any computation under this Warrant
certificate, the Current Market Price per Share at any date shall be (I) if the
Shares are listed on any national securities exchange, the average of the daily
closing prices for the 10 consecutive business days before the day in question
(the "Trading Period"); (ii) if the Shares are not listed on any national
securities exchange but are quoted on the National Association of Securities
Dealers, inc. Automated Quotation System ("NASDAQ"), the average of the high and
low bids as reported by NASDAQ for the Trading Period; and (iii) if the Shares
are neither listed on any national securities exchange nor quoted on NASDAQ, the
higher of (x) the exercise price then in effect, or (y) the tangible book value
per Share as of the end of the Company's immediately preceding fiscal year.
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(f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least $.01;
provided, however, that any adjustments which by reason of this subsection (f)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 6 shall be made
to the nearest cent or to the nearest one-hundredths of a Share, as the case may
be.
(g) Whenever the number of Shares purchasable hereunder is adjusted
as herein provided, the Company shall cause to be mailed to the Holder in
accordance with the provisions of this Section 6 a notice (i) stating that the
number of Shares purchasable upon exercise of this Warrant have been adjusted,
(ii) setting forth the adjusted number of Shares purchasable upon the exercise
of a Warrant, and (iii) showing in reasonable detail the computations and the
facts, including the amount of consideration received or deemed to have been
received by the Company, upon which such adjustments are based.
7. Fractional Shares. The Company shall not be required to issue any
fraction of a Share upon the exercise of Warrants. If more than one Warrant
shall be surrendered for exercise at one time by the same Holder, the number of
full Shares which shall be issuable upon exercise thereof shall be computed on
the basis of the aggregate number of Shares with respect to which this Warrant
is exercised. If any fractional interest in a Share shall be deliverable upon
the exercise of this Warrant, the Company shall make an adjustment therefor in
cash equal to such fraction multiplied by the Current Market Price.
8. REPURCHASE. The Company shall have no right to repurchase this Warrant
or the Shares which may be purchased under this Warrant.
9. REGISTRATION RIGHTS.
9.1 Company's Registration Option.
(a) (i) If the Company at any time elects or proposes to
register any of its Shares (the "Registration Shares") under the Act on any
Registration Statement forms in effect at such time with the SEC pursuant to
which Shares owned by any shareholder of the Company may be registered, the
Company shall give prompt written notice (the "Registration Notice" ) to the
Holder of its intention to register the Registration Shares.
(ii) Within fifteen (15) days after the Registration Notice
shall have been given to the Holder, the Holder shall give written notice to the
Company (the "Holder Notice"), stating the number of Shares to be registered
(the "Holder Shares") and the states in which the Holder wishes to register the
Shares. In the event the Registration Notice is given by the Company prior to
the time that this Warrant is otherwise exercisable pursuant to Section l (b)
hereof, the Holder Notice shall be accompanied by this Warrant together with a
duly executed Purchase Form and
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payment of the Exercise Price for the Holder Shares in accordance with Section 1
hereof.
(iii) The Company shall use its best efforts to register the
Holder Shares under the Act and the applicable state securities laws (the "State
Acts") designated by the Holder in the Holder Notice. Anything contained herein
to the contrary notwithstanding, the Company shall have the right to withdraw
and discontinue registration of the Holder Shares at any time prior to the
effective date of such Registration Statement if the registration of the
Registration Shares is withdrawn or discontinued.
(iv) The Company shall not be required to include any of the
Holder Shares in any Registration Statement unless the Holder agrees, if so
requested by the Company, to: (A) offer and sell the Holder Shares to or through
an underwriter selected by the Company and, to the extent possible, on
substantially the same terms and conditions under which the Registration Shares
are to be offered and sold; (B) comply with any arrangements, terms and
conditions with respect to the offer and sale of the Shares to which the Company
may be required to agree; and (C) enter into any underwriting agreement
containing customary terms and conditions, including provisions for the
indemnification of the underwriters.
(b) If the offering of the Registration Shares by the Company is, in
whole or in part, an underwritten public offering, and if the managing
underwriter determines and advises the Company in writing that the inclusion in
such Registration Statement of all of the Holder Shares, together with the
Shares of other persons who have exercised their right to include their Shares
in the Registration Statement (collectively referred to as the "Aggregate
Shares") would adversely affect the marketability of the offering of the
Registration Shares, then the Holder shall be entitled to register a proportion,
as determined in Subsection (b)(i) below, of such number of Aggregate Shares as
the managing underwriter determines may be included without such adverse effects
("Aggregate Underwriter Shares"), subject to the terms, exceptions and
conditions of this Section 9.
(i) The proportion of the Aggregate Underwriter Shares which
the Holder shall be entitled to register shall be equal to the ratio which the
Holder Shares bears to the Aggregate Shares.
(c) The Company shall bear all costs and expenses of registration of
the Registration Shares and the Holder Shares.
(d) It shall be a condition precedent to the Company's obligation to
utilize its best efforts to register any Holder Shares pursuant to this Section
9 that the Holder provide the Company with all information and documents, and
shall execute, acknowledge, seal and deliver all documents reasonably necessary,
to enable the Company to comply with the Act, the State Acts, and all applicable
laws, rules and regulations of the SEC or of any State Securities Commission.
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(e) The Holder shall indemnify and hold harmless the Company, each
of its directors and officers who have signed the Registration Statement, each
person, if any, who is a controlling person or the Company and any underwriter
from and against any and all losses, claims, damages, expenses or liabilities
(including amounts paid in settlement and reasonable attorneys' fees) (the
"Liabilities"), joint or several, to which they or any of them may become
subject under the Act, under any State Act or at common law or otherwise insofar
as the Liabilities arise from written information provided by the Holder for
specific inclusion in such Registration Statement; provided that the maximum
amount which may be recovered from the Holder pursuant to this paragraph or
otherwise shall be limited to the amount of net proceeds received by the Holder
from the sale of Shares pursuant to such Registration Statement.
(f) The Company shall indemnify and hold harmless the Holder from
and against any and all losses, claims, damages, expenses or liabilities
(including amounts paid in settlement and reasonable attorneys' fees) (the
"Liabilities"), joint or several, to which they or any of them may become
subject under the Act, under any State Act or at common law or otherwise insofar
as the Liabilities arise from written information provided by the Company for
specific inclusion in such Registration Statement; provided that the maximum
amount which may be recovered from the Company pursuant to this paragraph or
otherwise shall be limited to a sum equal to the number of Shares exercised by
Holder multiplied by the then Closing Price at the time of exercise.
9.2 Registration Procedures and Expenses. If and whenever the Company is
required by the provisions of Section 9.1 hereof to use its best efforts to
effect the registration of any of the Shares under the Act, the Company will, as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement
(which, in the case of an underwritten public offering, shall be on Form S-1 or
other form of general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities and use its best
efforts to cause such Registration Statement to become and remain effective for
the period of the distribution contemplated thereby (determined as hereinafter
provided);
(b) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
the period hereinafter provided and as shall comply with the provisions of the
Act with respect to the disposition of all Shares covered by such Registration
Statement in accordance with the sellers' intended method of disposition set
forth in such Registration Statement for such period;
(c) furnish to each seller and to each underwriter such number
of copies of the Registration Statement and the prospectus included therein
(including
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each preliminary prospectus) as such persons may reasonably request in order to
facilitate the public sale or other disposition of the Shares covered by such
Registration Statement;
(d) use its best efforts to register or qualify the Shares
covered by such Registration Statement under the securities or blue sky laws of
such jurisdictions as the sellers of Shares or, in the case of an underwritten
public offering, the managing underwriter, shall reasonably request;
(e) immediately notify each seller under such Registration
Statement and each underwriter, at any time when a prospectus relating thereto
is required to be delivered under the Act, of the happening of any event as a
result of which the prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to
furnish, at the request of any seller, on the date that Shares are delivered to
the underwriters for sale pursuant to such registration: (i) an opinion dated
such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters and to such seller, stating that
such Registration Statement has become effective under the Act and that (A) to
the best knowledge of such counsel, no stop order suspending the effectiveness
thereof has been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Act, (B) the Registration Statement,
the related prospectus, and each amendment or supplement thereof, comply as to
form in all material respects with the requirements of the Act and the
applicable rules and regulations of the SEC thereunder (except that such counsel
need express no opinion as to financial statements contained therein) and (C) to
such other effects as may reasonably be requested by counsel for the
underwriters or by such seller or its counsel, and (ii) a letter dated such date
from the independent public accountants retained by the Company, addressed to
the underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Act and that, in the opinion of such
accountants, the financial statements of the Company included in the
Registration Statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Act, and such letter shall additionally cover
such other financial matters (including information as to the period ending no
more than five business days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as such
underwriters or seller may reasonably request; and
(g) make available for inspection by each seller, any
underwriter participating in any distribution pursuant to such Registration
Statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and
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cause the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement.
For purposes of Section 9.2(a) and (b) hereof, the period of
distribution of Shares in an underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Shares in any other
registration shall be deemed to extend until the earlier of the sale of all
Shares covered thereby or nine (9) months after the effective date thereof.
In connection with each registration hereunder, the selling holders
of Shares will furnish to the Company in writing such information with respect
to themselves and the proposed distribution by them as shall be reasonably
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Section 9.1 hereof
covering an underwritten public offering, the Company agrees to enter into a
written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature, provided that such
agreement shall not contain any such provision applicable to the Company which
is inconsistent with the provisions hereof and, further, provided, that the time
and place of the closing under said agreement shall be as mutually agreed upon
between the Company and such managing underwriter.
10. Loss or Destruction. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement or bond satisfactory in form, substance and amount to the Company or,
in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor.
11. Survival. The various rights and obligations of the Holder hereof as
set forth herein shall survive the exercise of the Warrant represented hereby
and the surrender of this Warrant.
12. Notices. Whenever any notice, payment of any purchase price, or other
communication is required to be given or delivered under the terms of this
Warrant, it shall be in writing and delivered by hand delivery, by overnight
courier for next day delivery or by United States certified mail, return receipt
requested, postage prepaid, and will be deemed to have been given or delivered
on the date such notice, purchase price or other communication is so delivered
and, if to the Company, it will be addressed to the address specified in Section
1 hereof, and if to the Holder, it will be addressed to the registered Holder at
his address as it appears on the books of the Company.
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13. Successors. This Warrant shall be binding upon any successors or
assigns of the Company and upon any heirs, successors or assigns of the Holder.
14. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
15. Headings. The headings used in this Warrant are used for
convenience only and are not to be considered in construing or interpreting this
Warrant.
16. Saturdays, Sundays, Holidays. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday or a Sunday or shall be a legal holiday in the State of
California, then such action may be taken or such right may be exercised on the
next succeeding day not a legal holiday.
17. Attorney's Fees. In the event that any dispute among the parties to
this Warrant should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Warrant, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
IN WITNESS WHEREOF, The Majestic Companies, Ltd. has caused this Warrant
to be executed and attested under seal by its officers thereunto duly authorized
as of the 27th day of August, 1999.
ATTEST THE MAJESTIC COMPANIES, LTD.
/s/ Xxxx X. Xxxxx /s/ Xxxxxxxxx (SEAL)
------------------------ ---------------------------
Xxxx X. Xxxxx, Secretary Xxxxxxx X. Xxxxxxxxx, Chairman and
Chief Executive Officer
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EXHIBIT A
---------
PURCHASE FORM TO BE EXECUTED
UPON CASH EXERCISE OF WARRANT
-----------------------------
The Majestic Companies, Ltd.
0000 Xxx Xxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The undersigned hereby irrevocably elects to exercise, the attached
Warrant, according to the terms and conditions thereof, to the extent of
___________ shares of Common Stock, and hereby tenders $___________ in full
payment of the purchase price in accordance with Section 1(a) of the Warrant.
------------------------------
Date: ------------------------
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EXHIBIT B
---------
PURCHASE FORM TO BE EXECUTED
UPON CASHLESS EXERCISE OF WARRANT
---------------------------------
The Majestic Companies, Ltd.
0000 Xxx Xxx Xxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
The undersigned hereby irrevocably elects to exercise, on a cashless
basis, the attached Warrant Certificate, according to the terms and conditions
thereof, to the extent of ___________ shares of Common Stock, and hereby agrees
to accept the number of shares of Common Stock determined by utilizing the
agreed upon Current Market Price of $20.00 per share of Common Stock, as
provided for in Section 1(b) of the Warrant Certificate, as full consideration
for such exercise.
-----------------------------------
Date: ____________, 1999
The Common Stock certificates are to be issued as indicated below:
Name: ____________________________
Address: ____________________________
SSN/EIN: ____________________________
No. of Shares: ____________________________
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