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EXHIBIT 4.3
WARRANT AGREEMENT
AGREEMENT, dated as of July __, 1997, by and among AVIATION GROUP,
INC., a Texas corporation (the "Company"), CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent (the "Warrant Agent"), and DUKE & CO., INC., a
Florida corporation (the "Underwriter").
W I T N E S S E T H
WHEREAS, pursuant to an underwriting agreement (the "Underwriting
Agreement") dated July __, 1997 between the Company and the Underwriter, in
connection with (i) a public offering pursuant to a Registration Statement on
Form SB-2 (Registration No. 333-22727) (the "Registration Statement") filed
pursuant to the Securities Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange Commission on July __, 1997 of
1,000,000 shares of its Common Stock, par value $0.01 per share (the "Common
Stock") and 1,000,000 Redeemable Common Stock Purchase Warrants (the
"Warrants") (and up to 150,000 additional shares of Common Stock and up to
150,000 additional Warrants covered by an over-allotment option granted by the
Company to the Underwriter), and (ii) the issuance to the Underwriter or its
designees of warrants to purchase up to an aggregate of 100,000 shares of
Common Stock and/or 100,000 Warrants (the "Underwriter's Warrants"), the
Company will issue up to an aggregate of 1,250,000 Warrants; and
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, registration, 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;
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
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certificates representing the Warrants and the Warrant Agent, the parties
hereto agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the Common Stock of the Company,
$.01 par value; provided, however, that the shares issuable upon exercise of
the Warrants shall include (i) in the case of any consolidation, merger, sale
or conveyance of the character referred to in Section 9(d) hereof, the stock,
securities, or property provided for in such section or (ii) 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.
(b) "Corporate Office" shall mean the office of the Warrant Agent
(or its successor) at which at any particular time its principal business shall
be administered, which office is located on the date hereof at 0 Xxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(c) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing, and (ii)
payment in cash, or by official bank or certified check made payable to the
Warrant Agent, of an amount in lawful money of the United States of America
equal to the applicable Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean, as to each
Warrant, July __, 1999.
(e) "Market Price" shall mean, if the Common Stock is listed on a
national securities exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on The Nasdaq Stock Market, the last reported
sale price of the Common Stock on such exchange or The Nasdaq Stock Market, as
the case may be, on the applicable day or, if no such sale is made on such day,
the average of the closing bid and asked prices for such day on such exchange
or The Nasdaq Stock Market, as the case may be.
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(f) "Purchase Price" shall mean the price to be paid upon exercise
of each Warrant in accordance with the terms hereof, which price shall be $6.90
per share, subject to adjustment from time to time pursuant to the provisions
of Section 9 hereof, and subject to the Company's right to reduce the Purchase
Price upon notice to all Warrant Holders.
(g) "Redemption Price" shall mean the price at which the Company
may, at its option, redeem the Warrants in accordance with the terms hereof,
which price shall be $.10 per Warrant, subject to adjustment from time to time
pursuant to the provisions of Section 9 hereof.
(h) "Registered Holder" shall mean the person in whose name any
certificate representing Warrants shall be registered on the books maintained
by the Warrant Agent pursuant to Section 6.
(i) "Transfer Agent" shall mean Continental Stock Transfer & Trust
Company, as the Company's transfer agent, or its authorized successor, as such.
(j) "Warrant Expiration Date" shall mean, with respect to each
Warrant, 5:00 p.m. (Eastern time) on July __, 2002, or the Redemption Date as
defined in Section 8, whichever is earlier; provided that if such date shall in
the State of New York be a holiday or a day on which banks are authorized to
close, then 5:00 p.m. (Eastern time) on the next following day which in the
State of New York is not a holiday nor a day on which banks are authorized to
close. Upon notice to all Warrant Holders, the Company shall have the right to
extend the Warrant Expiration Date.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered 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 provided in Section 9.
(b) Upon execution of this Agreement, Warrant Certificates
representing the number of Warrants sold pursuant to the Underwriting Agreement
shall be executed by the Company and
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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.
(c) From time to time up to the Warrant Expiration Date, the
Transfer Agent shall countersign and deliver stock certificates in required
whole number denominations representing up to an aggregate of 1,250,000 shares
of Common Stock, subject to adjustment as described herein, upon the exercise
of Warrants in accordance with this Agreement.
(d) From time to time up to the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement; provided that no
Warrant Certificates shall be issued except (i) those initially issued
hereunder, (ii) those issued on or after the Initial Warrant Exercise Date upon
the exercise of fewer than all Warrants represented by any Warrant certificate
to evidence any unexercised Warrants held by the exercising Registered Holder,
(iii) those issued upon any transfer or exchange pursuant to Section 6; (iv)
those issued in replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7; (v) those issued pursuant to the
Underwriter's Warrants; and (vi) those issued at the option of the Company, in
such form as may be approved by its Board of Directors, to reflect any
adjustment or change in the Purchase Price, the number of shares of Common
Stock purchasable upon exercise of the Warrants or the Redemption Price
therefor made pursuant to Section 9.
(e) Pursuant to the terms of the Underwriter's Warrants, the
Underwriter and its designees may purchase up to an aggregate of 100,000
Warrants.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibit A, and may have such letters, numbers or other marks
of identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not
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inconsistent with the provisions of this Agreement or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The Warrant Certificates shall be dated the
date of issuance thereof (whether upon initial issuance, transfer, exchange or
in lieu of mutilated, lost, stolen or destroyed Warrant Certificates) and
issued in registered form. Warrants shall be numbered serially with the letter
W on the Warrants.
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President and by
its Secretary or an Assistant Secretary, by mutual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a facsimile of the
Company's seal. In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer of the Company
before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may nevertheless be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company. After countersignature by the Warrant Agent, Warrant Certificates
shall be delivered by the Warrant Agent to the Registered Holder without
further action by the Company, except as otherwise provided by Section 4(a).
SECTION 4. Exercise
(a) Each Warrant may be exercised by the Registered Holder thereof
at any time on or after the Initial Warrant Exercise Date, 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 Exercise
Date and the person entitled to receive the securities deliverable upon such
exercise shall be treated for all purposes as the holder upon 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
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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 Registered Holder),
provided that the Warrant Agent shall refrain from causing such issuance of
certificates pending clearance of checks received in payment of the Purchase
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. Notwithstanding anything in the foregoing to the contrary, no Warrant
will be exercisable unless at the time of exercise the Company has filed with
the Securities and Exchange Commission a registration statement under the Act
covering the shares of Common Stock issuable upon exercise of such Warrant and
such shares have been so registered or qualified or deemed to be exempt under
the securities laws of the state of residence of the Registered Holder of such
Warrant. The Company shall use its best efforts to have all shares so
registered or qualified on or before the date on which the Warrants become
exercisable.
(b) If, on the Exercise Date in respect of the exercise of any
Warrant at any time on or after the first anniversary of the date hereof, the
exercise of the Warrant was solicited by the Underwriter at such time as the
Underwriter is a member of the National Association of Securities Dealers, Inc.
("NASD") and the solicitation of the exercise of the Warrant was not in
violation of Securities Exchange Act of 1934, as amended, or any rule
promulgated thereunder which may be in effect as of such time of exercise, the
rules and regulations of the National Association of Securities Dealers, Inc.
or applicable state securities laws or regulations then the Underwriter shall
be entitled to receive, upon exercise of the Warrant(s), a fee of six percent
(6%) of the Purchase Price (the "Solicitation Fee"). Within five days after
the exercise, the Warrant Agent shall send to the Underwriter a copy of the
reverse side of the Warrant certificate relating to each Warrant exercised. In
the event the Underwriter is entitled to a Solicitation Fee with respect to any
such exercise, the Underwriter shall deliver to the Company (i) a copy of the
reverse side of the Warrant(s) and (ii) a certificate, executed by the
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President or Vice President of the Underwriter, certifying that the conditions
set forth above have been met with respect to such exercise. Within five days
after receipt thereof by the Company, the Company shall remit to the
Underwriter the Solicitation Fees to which the Underwriter is entitled. The
Underwriter shall reimburse the Warrant Agent, upon request, for its reasonable
expenses relating to compliance with this Section 4(b). In addition, the
Underwriter and the Company may, at any time during business hours, examine the
records of the Warrant Agent, including its ledger of original Warrant
certificates returned to the Warrant Agent upon exercise of Warrants. The
provisions of this paragraph may not be modified, amended or deleted without
the prior written consent of the Underwriter and the Company.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company has reserved, and covenants that it will at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issuance upon exercise of Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants. The Company covenants that all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall, at the time of delivery, be duly
and validly issued, fully paid, nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof (other than those which the
Company shall promptly pay or discharge) and that upon issuance such shares
shall be listed on each national securities exchange, if any, on which the
other shares of outstanding Common Stock of the Company are then listed or, if
applicable, The Nasdaq Stock Market.
(b) The Company hereby agrees that, so long as any unexpired
Warrants remain outstanding, the Company will file such post-effective
amendments to the Registration Statement as may be necessary to permit it to
deliver to each person exercising a Warrant a prospectus meeting the
requirements of Section 10(a)(3) of the Act and otherwise complying therewith,
and will deliver such a prospectus to each such person.
(c) The Company shall pay all documentary, stamp or similar taxes
and other governmental charges that may be imposed with respect to the issuance
of Warrants or the issuance or
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delivery of any shares upon exercise of the Warrants; provided, however, that
if the shares of Common Stock are to be delivered in a name other than the name
of the Registered Holder of the Warrant Certificate representing any Warrant
being exercised, then no such delivery shall be made unless the person
requesting the same had paid to the Warrant Agent the amount of transfer taxes
or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for certificates
representing shares of Common Stock issuable upon exercise of the Warrants, and
the Company will authorize the Transfer Agent to comply with all such proper
requisitions. The Company will file with the Warrant Agent a statement setting
forth the name and address of the Transfer Agent of the Company for shares of
Common Stock issuable upon exercise of the Warrants, unless the Warrant Agent
and the Transfer Agent are the same entity.
SECTION 6. Exchange and Registration of Transfer
(a) 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. Warrant Certificates to be
exchanged shall be surrendered to the Warrant Agent at its Corporate Office,
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.
(b) 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. 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.
(c) With respect to all Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the
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"Election to Purchase" or "Assignment" form, as appropriate, on the reverse
thereof shall be duly endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory to the Company
and the Warrant Agent, duly executed by the Registered Holder or his attorney-
in-fact authorized in writing.
(d) A service charge may be imposed by the Warrant Agent for any
exchange or registration of transfer of Warrant Certificates requested by a
Registered Holder. In addition, the Company may require payment by such
Registered Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be promptly canceled
by the Warrant Agent and thereafter retained by the Warrant Agent until
termination of this Agreement or resignation as Warrant Agent, or, with the
prior written consent of the Underwriter, disposed of or destroyed, at the
direction of the Company.
(f) Prior to due presentment for registration of transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than 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. The Warrants, which are being publicly offered with shares of
Common Stock pursuant to the Underwriting Agreement, may be purchased
separately from the shares and will be immediately transferable separately from
the Common Stock.
SECTION 7. 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
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Registered 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 6(d) or otherwise.
SECTION 8. Redemption
(a) Commencing July __, 1999, on prior written notice as required
pursuant to the provisions of paragraph (b) of this Section 8 below, the
Warrants may, with the prior consent of the Underwriter, be redeemed by the
Company at the Redemption Price, provided the Market Price of the Company's
Common Stock during the period in which the warrant is exercisable equals or
exceeds $9.4875 per share, subject to adjustment, for 20 consecutive trading
days ending not more than ten days immediately prior to the date on which the
Company gives notice of redemption. All Warrants must be redeemed if any of
the Warrants are redeemed.
(b) In case the Company shall desire to exercise its right to so
redeem the Warrants, it shall request the Warrant Agent, or the Underwriter, to
mail a notice of redemption to each of the Registered Holders of the Warrants
to be redeemed, first class, postage prepaid, not earlier than the forty-fifth
(45th) day before the date fixed for redemption and not later than the
thirtieth (30th) day before the date fixed for redemption, at such Registered
Holder's last address as it shall appear on the records of the Warrant Agent.
Any notice mailed in the manner provided herein shall be conclusively presumed
to have been duly given whether or not the Registered Holder receives such
notice.
(c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the Redemption Price paid, (iv) that the
Underwriter will assist each Registered Holder of a Warrant in connection with
the exercise thereof (if the Underwriter has conducted, or caused to be
conducted, the mailing) and (v) that the right to exercise the Warrant shall
terminate at 5:00 p.m. (Eastern time) on the business day immediately preceding
the date fixed for redemption (the "Redemption Date"). No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity of the
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proceedings for such redemption except as to a holder (a) to whom notice was
not mailed or (b) whose notice was defective. An affidavit of the Warrant
Agent or of the Secretary or an Assistant Secretary of the Underwriter or the
Company that notice of redemption has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant that has been called for
redemption shall terminate at 5:00 p.m. (Eastern time) on the Redemption Date.
After the Redemption Date, Holders of the redeemed Warrants shall have no
further rights except to receive, upon surrender of the redeemed Warrant, the
Redemption Price.
(e) From and after the date specified for redemption, the Company
shall, at the place specified in the notice of redemption, upon presentation
and surrender to the Company by or on behalf of the Registered Holder thereof
of one or more Warrants to be redeemed, deliver or cause to be delivered to or
upon the written order of such Holder a sum in cash equal to the Redemption
Price of each such Warrant. From and after the date fixed for redemption and
upon the deposit or setting aside by the Company of a sum sufficient to redeem
all the Warrants called for redemption, such Warrants shall expire and become
void and all rights hereunder and under the Warrant Certificates, except the
right to receive payment of the Redemption Price, shall cease.
SECTION 9. Adjustment of Exercise Price and Number of Shares of
Common Stock or Warrants.
(a) (i) In the event the Company shall, at any time or from time
to time after the date hereof, issue any shares of Common Stock as a stock
dividend to the holders of Common Stock, or subdivide or combine the
outstanding shares of Common Stock into a greater or lesser number of shares
(any such sale, issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter upon each further Change of Shares,
the applicable Purchase Price in effect immediately prior to such Change of
Shares shall be changed to a price (calculated to the nearest cent) determined
by multiplying the Purchase Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to such Change of Shares and the
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denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such Change of Shares.
(ii) Subject to the exceptions referred to in Section 9(h), in the
event that the Company shall at any time or from time to time issue or sell any
shares of its Common Stock for a consideration per share of Common Stock less
than the then applicable Purchase Price, the Purchase Price shall thereupon be
reduced to a price (calculated to the nearest cent) determined by dividing (x)
an amount equal to the sum of (i) the number of shares of Common Stock of the
Company outstanding immediately prior to such issue or sale multiplied by the
then applicable Purchase Price plus (ii) the consideration, if any, received by
the Company upon such issuance or sale by (y) the total number of shares of
Common Stock of the Company outstanding immediately after such issuance or
sale.
(iii) If the Company shall at any time after the date hereof issue or
sell any shares of any other securities convertible into Common Stock or any
options or warrants to purchase Common Stock (except as provided in Section
9(h)), including in connection with retirement of outstanding debt, for a
consideration per share less than the Purchase Price in effect immediately
prior to the time of such issue or sale, then, forthwith upon such issue or
sale, the Purchase Price shall be reduced to the price (calculated to the
nearest cent) determined by dividing (x)an amount equal to the sum of (i) the
number of shares of Common Stock outstanding immediately prior to such issue or
sale multiplied by the Purchase Price at the time plus (ii) the consideration,
if any, received by the Company upon such issue or sale, by (y) the total
number of shares of Common Stock outstanding immediately after such issue or
sale.
(iv) For purposes of this Section 9(a) the consideration in
connection with any such issue or sale shall be the amount of cash received by
the Company (or, in the case of securities sold to underwriters or dealers for
public offering or to the public through underwriters, the public offering
price) for the sale of such shares or other securities, options or warrants,
before deducting therefrom any commissions or other expenses paid or incurred
by the Company in connection with the issue or sale of such securities, options
or warrants plus any additional cash receivable by the Company on conversion or
exercise of such other securities, options or warrants except that, if any
portion of such
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consideration is a consideration other than cash, the amount of such
consideration other than cash shall be (i) the principal amount thereof, plus
any accrued but unpaid interest thereon and all other amounts payable in
connection with such debt including for expenses and yield maintenance
premiums, in the case of debt forgiven, exchanged or converted, and (ii) the
value of such consideration as determined in good faith by the Board of
Directors of the Company (whose determination shall be conclusive and shall be
evidenced by a resolution of the Company's Board of Directors filed with the
Warrant Agent), in the case of any other non-cash consideration.
(v) If the conversion or exercise price of any securities convertible
into Common Stock or options or warrants to purchase Common Stock is not
specified at the time of the issue or sale of such securities, option or
warrants, the amount thereof, for purposes only of this Section 9(a), shall be
as determined in accordance with Section 9(i).
(vi) In the event of the issuance or sale by the Company of any
securities convertible into Common Stock or any options or warrants to purchase
Common Stock (except as provided in Section 9(h)), the Company shall be deemed
to have issued the maximum number of shares of Common Stock into which such
convertible securities may be converted or the maximum number of shares of
Common Stock deliverable upon the exercise of such options or warrants, as the
case may be, for the minimum consideration payable in respect thereof. On the
expiration of such options or warrants or the termination of the right to
convert such convertible securities, the Purchase Price shall be readjusted
based upon the number of shares of Common Stock actually delivered upon the
exercise of such options or warrants or upon the conversion of such convertible
securities. Except as provided in the next preceding sentence no further
adjustment of the Purchase Price shall be made as a result of the actual
issuance of shares of Common Stock upon the exercise of such options or
warrants or the conversion of such convertible securities.
(b) Upon each adjustment of the applicable Purchase Price pursuant to
Section 9(a), the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in Section
9(c)) be such number of shares (calculated to the nearest tenth) purchasable at
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the applicable Purchase Price immediately prior to such adjustment multiplied
by a fraction, the numerator of which shall be the applicable Purchase Price in
effect immediately prior to such adjustment and denominator of which shall be
the applicable Purchase Price in effect immediately after such adjustment.
(c) The Company may elect, upon any adjustment of the applicable
Purchase Price, to adjust the number of Warrants outstanding, in lieu of
adjusting the number of shares of Common Stock purchasable upon the exercise of
each Warrant as hereinabove provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one share of Common
Stock. Each Warrant held of record prior to such adjustment of the number of
Warrants shall become that number of Warrants (calculated to the nearest tenth)
determined by multiplying the number one by a fraction, the numerator of which
shall be the applicable Purchase Price in effect immediately prior to such
adjustment and the denominator of which shall be the applicable Purchase Price
in effect immediately after such adjustment. Upon each such adjustment of the
number of Warrants, the Redemption Price in effect immediately prior to such
adjustment also shall be adjusted by multiplying such Redemption Price by a
fraction, the numerator of which shall be the Purchase Price in effect
immediately after such adjustment and the denominator of which shall be the
Purchase Price in effect immediately prior to such adjustment. Upon each
adjustment of the number of Warrants pursuant to this Section 9, the Company
shall, as promptly as practicable, cause to be distributed to each Registered
Holder of Warrant Certificates on the date of such adjustment Warrant
Certificates evidencing, subject to Section 10, the number of additional
Warrants, if any, to which such Holder shall be entitled as a result of such
adjustment or, at the option of the Company, cause to be distributed to such
Holder in substitution and replacement for the Warrant Certificates held by
such Holder prior to the date of adjustment (and upon surrender thereof, if
required by the Company) new Warrant Certificates evidencing the number of
Warrants to which such Holder shall be entitled after such adjustment.
(d) In the case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of
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Common Stock), or in case of any sale or conveyance to another corporation of
the property of the Company as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that each holder of a Warrant then
outstanding shall have the right thereafter, by exercising such Warrant, to
purchase the kind and number of shares of stock or other securities or property
(including cash) receivable upon such consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock that might have been
purchased upon exercise of such Warrant, immediately prior to such
consolidation, merger, sale or conveyance. Any such provision shall include
provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9. The foregoing
provisions shall similarly apply to successive consolidations, mergers, sales
or conveyances.
(e) Irrespective of any adjustments or changes in the Purchase
Price or the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant Certificates,
continue to express the applicable Purchase Price per share, the number of
shares purchasable thereunder and the Redemption Price therefor as were
expressed in the Warrant Certificates when the same were originally issued.
(f) After each adjustment of the Purchase Price pursuant to this
Section 9, the Company will promptly after the fiscal quarter in which such
adjustment was triggered prepare a certificate signed by the Chairman or
President, and by the Secretary or an Assistant Secretary, of the Company
setting forth: (i) the applicable Purchase Price as so adjusted, (ii) the
number of shares of Common Stock purchasable upon exercise of each Warrant
after such adjustment, and, if the Company shall have elected to adjust the
number of Warrants, the number of Warrants to which the Registered Holder of
each Warrant shall then be entitled, and the adjustment in Redemption Price
resulting therefrom, and (iii) a brief statement of the facts accounting for
such adjustment. The Company will promptly file such certificate with the
Warrant Agent and cause a brief summary thereof to be sent by ordinary first
class mail to the Underwriter and to each Registered Holder of Warrants at his
or her last address as it shall appear on the
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registry books of the Warrant Agent. No failure to mail such notice nor any
defect therein or in the mailing thereof shall affect the validity thereof
except as to the holder to whom the Company failed to mail such notice, or
except as to the holder whose notice was defective. The affidavit of an
officer of the Warrant Agent or the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(g) For purposes of Section 9(a), 9(b) and 9(c) hereof, the
following provisions (i) and (ii) shall also be applicable.
(i) The number of shares of Common Stock outstanding at
any given time shall include shares of Common Stock owned or held by or for the
account of the Company and the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be considered a Change of
Shares for purposes of said sections.
(ii) No adjustment of the Purchase Price shall be made
unless such adjustment would require an increase or decrease of at least $0.05
in such price; provided that any adjustments which by reason of this clause
(ii) are not required 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(s) so carried forward, shall require an increase or
decrease of at least $0.05 in the Purchase Price then in effect hereunder.
(h) No adjustment to the Purchase Price or to the number of shares
of Common Stock purchasable upon the exercise of each Warrant will be made,
however, with respect to the following:
(1) upon the issuance or exercise of any of the Warrants;
(2) upon (i) the issuance or sale of shares of Common
Stock pursuant to options, warrants or convertible or exchangeable securities
outstanding as of the date of this Agreement or (ii) issuance of shares of
Common Stock pursuant to the Company's 1997 Stock Option Plan as it exists on
the date hereof.
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(3) upon the issuance of any shares of Common Stock in
connection with a consolidation or merger in which the Company or a wholly
owned subsidiary of the Company is the continuing corporation and which does
not result in any reclassification, capital reorganization or other change of
the outstanding Common Stock, or (ii) pursuant to and in connection with the
acquisition by the Company or any wholly owned subsidiary of the Company of all
or substantially all of the assets or stock (or other equity interests, as the
case may be) of another entity.
(i) Any determination as to whether an adjustment in the Purchase
Price in effect hereunder is required pursuant to Section 9, or as to the
amount of any such adjustment, if required, shall be binding upon the holders
of the Warrants and the Company if made in good faith by the Board of Directors
of the Company.
(j) If and whenever the Company shall grant to the holders of
Common Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Common Stock or securities convertible into or
exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of
determination of stockholders entitled to the rights, warrants or options being
granted by the Company, such holder were the holder of record of the number of
whole shares of Common Stock then issuable upon exercise (assuming, for
purposes of this Section 9(j), that the exercise of Warrants is permissible
during periods prior to the Initial Warrant Exercise Date) of his Warrants.
Such grant by the Company to the holders of the Warrants shall be in lieu of
any adjustment which otherwise might be called for pursuant to this Section 9.
(k) In case the Company shall, at any time prior to the exercise
of a Warrant, make any distribution of its assets to holders of the Common
Stock, then the Registered Holder of such Warrant who exercises his Warrant
after the record date for determination of those Registered Holders of Common
Stock entitled to such distribution of assets shall be entitled to receive,
upon exercise of the Warrant, in addition to Common Stock, the amount of such
distribution which would have been payable to such Registered Holder had he
been the holder of record of the Common Stock
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receivable upon exercise of such Warrant on the record date for the
determination of those entitled to such distribution.
SECTION 10. Fractional Warrants and Fractional Shares.
(a) If the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 9 hereof, the Company
shall nevertheless not be required to issue fractions of shares, upon exercise
of the Warrants or otherwise, or to distribute certificates that evidence
fractional shares. With respect to any fraction of a share called for upon any
exercise hereof, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the current market value of such fractional share,
determined as follows:
(i) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on The Nasdaq Stock Market, the current value shall be
the last reported sale price of the Common Stock on The Nasdaq Stock Market or
such exchange on the last business day prior to the date of exercise of the
Warrant, or if no such sale is made on such day, the average of the closing bid
and asked prices for such day on such exchange; or
(ii) If the Common Stock is not listed or admitted to
unlisted trading privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Quotation Bureau, Inc.
on the last business day prior to the date of the exercise of the Warrant; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current value shall be an amount determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
SECTION 11. Warrant Holders Not Deemed Stockholders. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon
exercise of such Warrants for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the holder of Warrants, as such,
any of the rights of a stockholder of the Company or any right to vote for
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the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance or reclassification of stock,
change of par value or change of stock to no par value, consolidation, merger
or conveyance or otherwise), or to receive notice of meetings, or to receive
dividends or subscription rights, until such Holder shall have exercised such
Warrants and been issued shares of Common Stock in accordance with the
provisions hereof.
SECTION 12. Rights of Action. All rights of action with respect to
this Agreement are vested in the respective Registered Holders of the Warrants,
and any Registered Holder of a Warrant, without consent of the Warrant Agent or
of the holder of any other Warrant, may, in his own behalf and for his own
benefit, enforce against the Company his right to exercise his Warrants for the
purchase of shares of Common Stock in the manner provided in the Warrant
Certificates and this Agreement.
SECTION 13. Agreement of Warrant Holders. Every holder of a Warrant,
by his acceptance thereof, consents and agrees with the Company, the Warrant
Agent and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of
the Warrant Agent by the Registered Holder thereof in person or by his attorney
duly authorized in writing and only if the Warrant Certificates representing
such Warrants are surrendered at the office of the Warrant Agent, duly endorsed
or accompanied by a proper instrument of transfer satisfactory to the Warrant
Agent and the Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the holder and as
the absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice or knowledge to the contrary, except as otherwise expressly provided
in Section 7 hereof.
SECTION 14. Cancellation of Warrant Certificates. If the Company
shall purchase or acquire any Warrant or Warrants, the
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Warrant Certificate or Warrant Certificates evidencing the same shall thereupon
be delivered to the Warrant Agent and canceled by it and retired.
SECTION 15. 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 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 Purchase 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 or for the Underwriter) and shall incur
no liability or responsibility for any action taken, suffered or omitted by it
in good faith in accordance with the opinion or advice of such counsel.
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
20
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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.
In the event of a dispute under this Agreement between the Company and
the Underwriter regarding proceeds received by the Warrant Agent from the
exercise of the Warrants, the Warrant Agent shall have the right, but not the
obligation, to bring an interpleader action to resolve such dispute.
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 Registered 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 Registered Holder of
any Warrant Certificate may 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 ($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
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Company, such new warrant agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named herein as the
Warrant Agent, without any 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
Registered 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 Registered Holder of each Warrant
Certificate.
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.
SECTION 16. Modification of Agreement. Subject to the provisions of
Section 4(b), the Warrant Agent and the Company may by supplemental agreement
make any changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained or (ii) that they may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Warrant Certificates; provided, however, that this Agreement
shall not otherwise be modified,
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supplemented or altered in any respect except with the consent in writing of
the Registered Holders of Warrant Certificates representing not less than a
majority of the outstanding Warrants, and provided, further, that no change in
the number of or nature of the securities purchasable upon the exercise of any
Warrant, or the Purchase Price therefor, or the acceleration of the Warrant
Expiration Date, shall be made without the consent in writing of the Registered
Holder of the Warrant Certificate representing such Warrant, other than such
changes as are specifically prescribed by this Agreement as originally
executed.
SECTION 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made three days after such is mailed first class registered or certified mail,
postage prepaid as follows: if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000 Attention: President, or at such other address
as may have been furnished to the Warrant Agent in writing by the Company; if
to the Warrant Agent, at Continental Stock Transfer & Trust Company, 0 Xxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; if to Duke & Co., Inc., at 000 Xxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: President, with a copies sent
to (i) Xxxxxxx Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxx, Esq. and (ii) Zimet, Haines, Xxxxxxxx & Xxxxxx,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx Xxxxxx,
Esq.
SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
SECTION 19. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and the Underwriter, and
their respective successors and assigns, and the holders from time to time of
the Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or claim, in equity
or at law, or to impose upon any other person any duty, liability or
obligation.
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SECTION 20. Termination. This Agreement shall terminate at the close
of business on the Warrant Expiration Date of all the Warrants or such earlier
date upon which all Warrants have been exercised and/or redeemed, except that
the Warrant Agent shall account to the Company for cash held by it and the
provisions of Section 15 hereof shall survive such termination.
SECTION 21. Counterparts. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this warrant
Agreement to be duly executed as of the date first above written.
AVIATION GROUP, INC.
By:
--------------------------------
Authorized Officer
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:
--------------------------------
Authorized Officer
DUKE & CO., INC.
By:
--------------------------------
Authorized Officer
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EXHIBIT A
(FORM OF FACE OF WARRANT CERTIFICATE)
No. Warrants
------------ -------------
VOID AFTER JULY __, 2002
WARRANT CERTIFICATE FOR PURCHASE OF
COMMON STOCK
AVIATION GROUP, INC.
THIS CERTIFIES THAT FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number of
Redeemable Common Stock Purchase Warrants ("Warrants") specified above. Each
Warrant initially entitles the Registered Holder to purchase, subject to the
terms and conditions set forth in this Certificate and the Warrant Agreement
(as hereinafter defined), one (1) fully paid and nonassessable share of Common
Stock, $0.01 par value (the "Common Stock"), of AVIATION GROUP, INC., a Texas
corporation (the "Company"), at any time from July __, 1999 (or earlier in
certain circumstances as provided in the Warrant Agreement referred to below)
to the Expiration Date (as hereinafter defined), upon the presentation and
surrender of this Warrant Certificate with the Election to Purchase Form on the
reverse hereof duly executed, at the corporate office of CONTINENTAL STOCK
TRANSFER & TRUST COMPANY as Warrant Agent, or its successor (the "Warrant
Agent"), accompanied by payment of $6.90 (the "Purchase Price") in lawful money
of the United States of America in cash or by official bank or certified check
made payable to the Warrant Agent.
A-1
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This Warrant Certificate and each Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement (the "Warrant Agreement") dated as of July
__, 1997, by and among the Company, the Warrant Agent and Duke & Co., Inc. (the
"Underwriter").
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price or the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modifications or adjustments.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on
July __, 2002, or such earlier date as the Warrants shall be redeemed. If such
date shall in the State of New York be a holiday or a day on which the banks
are authorized to close, then the Expiration Date shall mean 5:00 p.m. (New
York time) on the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended, with respect to such securities is
effective. This Warrant shall not be exercisable by a Registered Holder in any
state in which it would be unlawful for the Company to deliver the shares of
Common Stock upon exercise of the Warrants represented hereby.
The Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to
represent
A-2
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such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment of this Warrant Certificate at
such office for registration of transfer, together with any transfer fee and
any tax or other governmental charge imposed in connection with such transfer,
a new Warrant Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
Commencing July __, 1999, this Warrant may, with the prior consent of
the Underwriter, be redeemed at the option of the Company, at a redemption
price of $.10 per Warrant, provided the Market Price (as defined in the Warrant
Agreement) for the securities issuable upon exercise of such Warrant shall
exceed $9.4875 per share (subject to adjustment as set forth in the Warrant
Agreement) for 20 consecutive trading days ending not more than three days
prior to the date on which the Company gives notice of redemption. Notice of
redemption shall be given not later than the thirtieth day, and not earlier
than the forty fifth day, before the date fixed for redemption, all as provided
in the Warrant Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to this Warrant except to
receive the $.10 per Warrant upon surrender of this Certificate.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon 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.
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The Company has agreed to pay a fee of 6% of the Purchase Price to the
Underwriter upon certain conditions as specified in the Warrant Agreement upon
the exercise of this Warrant.
This Warrant Certificate and each Warrant represented hereby shall be
governed by and construed in accordance with the laws of the State of New York.
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This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent. IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two of its
officers thereunto duly authorized, and a facsimile of its corporate seal to be
imprinted hereon.
AVIATION GROUP, INC.
By
-----------------------------------------
Its
By
-----------------------------------------
Its
Date:
----------------------
[Seal]
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By
-------------------------
Its
Authorized Officer
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30
(FORM OF REVERSE OF WARRANT CERTIFICATE)
ELECTION TO PURCHASE FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to
exercise ___________________ (____________________) Warrants represented by
this Warrant Certificate, and to purchase the securities issuable upon the
exercise of such Warrants, and requests that certificates for such securities
shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
-------------------------
-------------------------
-------------------------
-------------------------
[please print or type name and address]
and be delivered to
-------------------------
-------------------------
-------------------------
-------------------------
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
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The undersigned represents that the exercise of the within Warrant was
solicited by a member of the National Association of Securities Dealers, Inc.
("NASD"). If not solicited by an NASD member, please write "unsolicited" in
the space below.
Please indicate the name of the NASD member firm which solicited the exercise
of the Warrant.
-------------------------------
Name of soliciting NASD Member
Dated:
----------------------- -------------------------------
Signature
-------------------------------
Xxxxxx Xxxxxxx
-------------------------------
Xxxx, Xxxxx and Zip Code
-------------------------------
Taxpayer ID Number
Signature Guaranteed:
-------------------------------
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ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
-------------------------
-------------------------
-------------------------
-------------------------
[please print or type name and address]
____________________ (____________________) of the Warrants represented by this
Warrant Certificate, and hereby irrevocably constitutes and appoints
___________________ Attorney to transfer this Warrant Certificate on the books
of the Company, with full power of substitution in the premises.
Dated:
--------------------- ------------------------------
Signature Guaranteed:
------------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE ELECTION TO PURCHASE FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,
AND MUST BE GUARANTEED BY A MEDALLION BANK.
A-8
