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EXHIBIT 4.2
ALL AMERICAN FOOD GROUP, INC.
UNDERWRITER'S WARRANT AGREEMENT
UNDERWRITER'S WARRANT AGREEMENT dated as of ___________, 1996 by and
between ALL AMERICAN FOOD GROUP, INC., a New Jersey corporation (the
"Company"), and R.T.G. XXXXXXXX & COMPANY, INC. (the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue warrants to the Underwriter
("Warrants") to purchase up to 110,000 shares of common stock, no par value, of
the Company (the "Common Stock"); and
WHEREAS, the Underwriter has agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated _________, 1996 to which the
Underwriter and the Company are parties, to act as an underwriter in connection
with the Company's public offering of up to 1,100,000 shares of its Common
Stock at a public offering price of $_____ per share (the "Public Offering");
and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Underwriter in consideration for, and as part
of their compensation in connection with acting as underwriter pursuant to the
Underwriting Agreement;
NOW, THEREFORE, in consideration of the foregoing premises which are
incorporated into the terms hereof, of the payment by the Underwriter to the
Company of $110.00 for the Warrants purchased hereunder, the agreements herein
set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. GRANT. The holders of the Warrants issued hereunder are hereby granted the
right to purchase, at any time from ________, 1997 until 5:00 p.m., New York
time, on ________, 2001, up to 110,000 shares of the Common Stock of the
Company, at an initial exercise price (subject to adjustment as provided in
Section 8 hereof) of $____ per Share (140% of the public offering price per
share), subject to the terms and conditions of this Agreement. The shares
issuable upon exercise of the Warrants are referred to as the "Warrant Shares".
2. WARRANT CERTIFICATES. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall
be in the form set forth in Exhibit A, attached hereto and made a part hereof,
with such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement.
3. EXERCISE OF WARRANTS. The Warrants are exercisable during the term set
forth in Section 1 hereof at the Exercise Price (defined below) per Share set
forth in Section 6 hereof payable by certified or cashier's check or money
order payable in lawful money of the United States, subject to adjustment as
provided in Article 8 hereof. Upon surrender of a Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with payment of
the Exercise Price (as hereinafter defined) for the Warrant Shares (and such
other amounts, if any, arising pursuant to Section 4 hereof) at the Company's
principal office, the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Warrant Shares so purchased. The purchase rights represented by each Warrant
Certificate are exercisable at the option of the Holder thereof, in whole or in
part, (but not as to fractional Shares). The Warrants may be exercised to
purchase all or part of the Warrant Shares represented thereby. In the case of
the purchase of less than all the Warrant Shares purchasable on the exercise of
the Warrants represented by a Warrant Certificate, the Company shall cancel the
Warrant
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Certificate represented thereby upon the surrender thereof and shall execute
and deliver a new Warrant Certificate of like tenor for the balance of the
Warrant Shares purchasable thereunder.
4. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants and payment of
the Exercise Price therefor, the issuance of certificates for the Warrant
Shares underlying such Warrants shall be made forthwith (and in any event
within three (3) business days thereafter) without further charge to the Holder
thereof, and such certificates shall (subject to the provisions of Sections 5
and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holders thereof; provided, however, that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Holders, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Warrant Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the then present Chairman or Vice Chairman of the Board of Directors or
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the then present
Secretary or Assistant Secretary or Treasurer or Assistant Treasurer of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant Certificate
(and its Permitted Transferee, as defined below), by its acceptance thereof,
covenants and agrees that the Warrants are being acquired as an investment and
not with a view to the distribution thereof; that the Warrants may be sold,
transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part, to any person (a "Permitted Transferee"), provided such transfer,
assignment, hypothecation or other deposition is made in accordance with the
provisions of the Securities Act of 1933 (the "1933 Act"); and provided,
further, that until __________, 1997 (one year after the Effective Date,
defined below) only officers of the Underwriter, or any selling group member or
its officers or partners, shall be Permitted Transferees.
6. EXERCISE PRICE.
a. INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided
in Section 8 hereof, the initial exercise price of each Warrant to purchase
Warrant Shares shall be $____ per Share. The adjusted exercise price shall be
the price which shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of Section 8
hereof.
b. EXERCISE PRICE. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. REGISTRATION RIGHTS.
a. REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Warrant
certificates shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR
SALE OR SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO (I) AN EFFECTIVE
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR
(II) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH 1933 ACT
IS AVAILABLE.
b. DEMAND REGISTRATION. On two occasions commencing at any time one
(1) year after the effective date of the Company's Registration Statement
relating to the Public Offering (the "Effective Date") and expiring five (5)
years after the Effective Date, the Holders of the Warrants and the Warrant
Shares representing at least a Majority (as hereinafter defined) of such
securities shall have the right, exercisable by written notice to the Company,
to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement on Form X-0, XX-0 (or
other appropriate form, including, without limitation, a post-effective
amendment to the Company's Registration Statement) and such other documents,
including a prospectus, as may be necessary in the opinion of both counsel for
the Company and counsel for the Holders, in order to comply with the provisions
of the 1933 Act, so as to permit a public offering and sale, for a period of
nine (9) months, of the Warrant Shares by such Holders and any other Holders of
the Warrants and/or Warrant Shares who notify the Company within fifteen (15)
business days after receipt of the notice described in the succeeding sentence.
The Company covenants and agrees to give written notice of any registration
request under this Section 7(b) by any Holder(s) to all other registered
Holders of the Warrants and the Warrant Shares within ten (10) days from the
date of the receipt of any such registration request. For purposes of this
Agreement, the term "Majority" in reference to the Holders of the Warrants or
Warrant Shares, shall mean in excess of fifty percent (50%) of the then
outstanding Warrants or Warrant Shares that (i) are not held by the Company, an
affiliate, officer, director, employee or agent thereof or any of their
respective affiliates, members of their family, persons acting as nominees or
in conjunction therewith, or (ii) have not been resold to the public pursuant
to a registration statement filed with the Commission under the 1933 Act. The
Holders of the Warrants may demand registration without exercising the
Warrants, and shall never be required to exercise same. For the purposes of
subsection (i) above, the Underwriter and its officers, directors, employees
and agents shall not be deemed an affiliate, officer, director, employee or
agent of the Company.
c. PIGGYBACK REGISTRATION. If, at any time within seven (7) years
after the Effective Date, the Company should file a registration statement with
the Commission under the 1933 Act (other than in connection with a merger or
pursuant to Form S-8) it will give written notice by registered mail, at least
thirty (30) days prior to the filing of each such registration statement, to
the Underwriter and to all other Holders of the Warrants and/or the Warrant
Shares of its intention to do so. If the Underwriter or other Holders of the
Warrants and/or the Warrant Shares notify the Company within twenty (20) days
after receipt of any such notice of its or their desire to include any Warrant
Shares in such proposed registration statement, the Company shall afford the
Underwriter and such Holders of the Warrants and/or Warrant Shares the
opportunity to have any such Warrant Shares registered under such registration
statement. Notwithstanding the provisions of this Section 7(c), the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 7(c) (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not to file any
such proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
If the underwriter of an offering to which the above piggyback rights
apply objects to such rights, such objection shall preclude such inclusion.
However, in such event, the Company will, within six (6) months of completion
of such subsequent underwriting, file at its sole expense, a registration
statement
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relating to such excluded Warrant Shares, which shall be in addition to any
registration statement required to be filed pursuant to Section 7(b), unless
such Holders had refused an opportunity provided with the consent of the
underwriter, to be included in the registration statement on the condition that
they agree not to offer the securities for sale without the prior written
consent of the underwriter for a period not exceeding 60 days from the
effective date of such registration statement.
If the underwriter in such underwritten offering shall advise the
Company that it declines to include a portion or all of the Warrant Shares
requested by the Underwriter and the Holders to be included in the registration
statement, then (A) registration of all of the Warrant Shares shall be excluded
from such registration statement on the condition that all securities to be
registered by other selling security holders, if any, are also excluded and (B)
registration of a portion of such Warrant Shares allocated among the
Underwriter and the Holders and any other selling securityholders in proportion
to the respective numbers of securities to be registered by the Underwriter and
each such Holder and other selling securityholder. In such event the Company
shall give the Underwriter and the Holders prompt notice of the number of
Warrant Shares excluded.
d. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
connection with any registrations under Sections 7(b) and 7(c) hereof, the
Company covenants and agrees as follows:
(1) The Company shall use its best efforts to file a registration
statement within ninety (90) days of receipt of any demand
therefor; provided, however, that the Company shall not be
required to produce audited or unaudited financial statements
for any period prior to the date such financial statements are
required to be filed in a report on Form 10-K or Form 10-Q (or
Form 10-KSB or Form 10-QSB), as the case may be. The Company
shall use its best efforts to have any registration statements
declared effective at the earliest possible time, and shall
furnish each Holder desiring to sell Shares such number of
prospectuses as shall reasonably be requested.
(2) The Company shall pay all costs (excluding fees and expenses
of Holder(s)' counsel and any underwriting discounts or
selling fees, expenses or commissions), fees and expenses in
connection with any registration statement filed pursuant to
Sections 7(b) and 7(c) hereof including, without limitation,
the Company's legal and accounting fees, printing expenses,
blue sky fees and expenses. If the Company shall fail to
comply with the provisions of Section 7(d) (1), the Company
shall, in addition to any other equitable or other relief
available to the Holder(s), be liable for any or all
incidental, special and consequential damages and damages due
to loss of profit sustained by the Holder(s) requesting
registration of their Warrant Shares.
(3) The Company will take all necessary and reasonable action
which may be required to qualify or register the Warrant
Shares included in a registration statement for offering and
sale under the securities or blue sky laws of such states as
reasonably are requested by the Holder(s), provided that the
Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction.
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(4) The Company shall indemnify the Holder(s) of the Warrant
Shares to be sold pursuant to any registration statement and
each person, if any, who controls such Holders within the
meaning of Section 15 of the 1933 Act or Section 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"), against
all losses, claims, damages, expenses or liability (including
all expenses reasonably incurred in investigating, preparing
or defending against any claim whatsoever) to which any of
them may become subject under the 1933 Act, the Exchange Act
or otherwise, arising from such registration statement, but
only to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to
indemnify the Underwriter contained in Section 6 of the
Underwriting Agreement, and the Holder(s) shall indemnify the
Company to the same extent and with the same effect as the
provisions pursuant to which the Underwriter has agreed to
indemnify the Company contained in Section 6 of the
Underwriting Agreement.
(5) The Holder(s) of the Warrant Shares to be sold pursuant to a
registration statement, and their successors and assigns,
shall severally, and not jointly, indemnify the Company, its
officers and directors and each persons, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act
or Section 20(a) of the Exchange Act, against all losses,
claims, damages, expenses or liability (including all expenses
reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject
under the 1933 Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or
their successors or assigns, for specific inclusion in such
registration statement to the same extent and with the same
effect as the provisions contained in Section 6 of the
Underwriting Agreement pursuant to which the Underwriter has
agreed to indemnify the Company.
(6) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to
the initial filing of any registration statement or the
effectiveness thereof.
(7) If the manner of distribution proposed by the holders of the
Warrants and the Warrant Shares is an underwriting, the
Company shall furnish to each Holder participating in the
offering and to each underwriter, a signed counterpart,
addressed to such Holder or underwriter of (i) an opinion of
counsel to the Company, dated the effective date of such
registration statement (and if such registration includes an
underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a "cold
comfort" letter dated the effective date of such registration
statement (and, if such registration includes an underwritten
public offering, a letter dated the date of the closing under
the underwriting agreement) signed by the independent public
accountants who have issued a report on the Company's
financial statements included in such registration statement,
in each case covering substantially the same matters with
respect to such registration statement (and the prospectus
included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letter, with respect
to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and
in accountants' letters delivered to underwriters in
underwritten public offerings of securities.
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(8) The Company shall as soon as practicable after the effective
date of the registration statement, and in any event within
the first full four fiscal quarters following the effective
date, make "generally available to its security holders"
(within the meaning of Rule 158 under the 0000 Xxx) an
earnings statement (which need not be audited) complying with
Section 11(a) of the 0000 Xxx.
(9) The Company shall deliver promptly to one designated
representative for each Holder participating in the offering
requesting the correspondence described below and any managing
underwriter, copies of all correspondence between the
Commission and the Company, its counsel or auditors with
respect to the registration statement and permit each Holder
and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or
omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules
of the National Association of Securities Dealers Regulation,
Inc. ("NASDR"). Such investigation shall include access to
books, records and properties and opportunities to discuss the
business of the Company with its officers and independent
auditors, all to such reasonable extent and at such reasonable
times and as often as any such Holder shall reasonably
request.
(10) In connection with an offering for which the Holders have
demand rights, the Company shall enter into an underwriting
agreement with the managing underwriter selected for such
underwriting by Holders holding a Majority of the Shares
requested to be included in such underwriting. In connection
with an offering for which the Holders have piggyback rights,
the Company shall have the sole right to select the managing
underwriter. Such underwriting agreement shall be
satisfactory in form and substance to the Company, a Majority
of such Holders and such managing underwriter, and shall
contain such representations, warranties and covenants by the
Company and such other terms as are customarily contained in
agreements of that type used by the managing underwriter. The
Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Warrant Shares and
may, at their option, require that any or all the
representations, warranties and covenants of the Company to or
for the benefit of such underwriter shall also be made to and
for the benefit of such Holders. Such Holders shall not be
required to make any representations or warranties to or
agreements with the Company or the underwriter except as they
may relate to such Holders their ownership and their intended
methods of distribution.
8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES; REDEMPTION.
a. (i) Except as hereinafter provided, 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 issuance, subdivision or combination being
herein called a "Change of Shares"), then, and thereafter upon each further
Change of Shares, the Exercise Price for the Warrants (whether or not the same
shall be issued and outstanding) in effect immediately prior to such Change of
Shares shall be changed to a price (including any applicable fraction of a cent
to the nearest cent)
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determined by dividing (i) the sum of (a) the total number of shares of Common
Stock outstanding immediately prior to such Change of Shares, multiplied by the
Exercise Price in effect immediately prior to such Change of Shares, and (b)
the consideration, if any, received by the Company upon such issuance,
subdivision or combination by (ii) the total number of shares of Common Stock
outstanding immediately after such Change of Shares; provided, however, that in
no event shall the Exercise Price be adjusted pursuant to this computation to
an amount in excess of the Exercise Price in effect immediately prior to such
computation, except in the case of a combination of outstanding shares of
Common Stock.
For the purposes of any adjustment to be made in accordance with this
Section 8(a) the following provisions shall be applicable:
(1) Shares or equivalents of Common Stock issuable by way of
dividend or other distribution on any stock of the Company
shall be deemed to have been issued immediately after the
opening of business on the day following the record date for
the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have
been issued without consideration.
(2) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of
Common Stock shall be deemed to involve the issuance of such
shares of Common Stock for a consideration other than cash
immediately prior to the close of business on the date fixed
for the determination of security holders entitled to receive
such shares, and the value of the consideration allocable to
such shares of Common Stock shall be determined in good faith
by the Board of Directors of the Company on the basis of a
record of values of similar property or services.
(3) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum
number of shares issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of options, rights
or warrants and upon the conversion or exchange of convertible
or exchangeable securities.
b. Upon each adjustment of the Exercise Price pursuant to this
Section 8, the number of shares of Common Stock purchasable upon the exercise
of each Warrant shall be the number derived by multiplying the number of shares
of Common Stock purchasable immediately prior to such adjustment by the
Exercise Price in effect prior to such adjustment and dividing the product so
obtained by the applicable adjusted Exercise Price.
c. In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of a subdivision or combination), or in case of any consolidation
or merger of the Company with or into another corporation (other than a merger
with a subsidiary in which merger the Company is the continuing corporation and
which does not result in any reclassification or change of the then outstanding
shares of Common Stock or other capital stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par value,
or from no par value to par value or as a result of subdivision or combination)
or in case of any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety, then, as a
condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company, or
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such successor or purchasing corporation, as the case may be, shall make lawful
and adequate provision whereby the registered Holder of each Warrant then
outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 8a. The above provisions of this Section 8b. shall similarly
apply to successive reclassifications and changes of shares of Common Stock and
to successive consolidations, mergers, sales or conveyances.
d. Irrespective of any adjustments or changes in the Exercise 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 Exercise Price per share and the number of shares
purchasable thereunder as the Exercise Price per share and the number of shares
purchasable thereunder were expressed in the Warrant Certificates when the same
were originally issued.
e. After each adjustment of the Exercise Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant, after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. The Company will
promptly cause a brief summary thereof to be sent by first class mail to each
registered Holder at his last address as it shall appear on the registry books
of the Company. 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 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.
f. No adjustment of the Exercise Price shall be made as a result of
or in connection with the issuance or sale of shares of Common Stock pursuant
to options, warrants, stock purchase agreements and convertible or exchangeable
securities outstanding or in effect on the date hereof or granted upon the
consummation of and in connection with the first Business Combination (as
defined in the Registration Statement). In addition, registered Holders shall
not be entitled to cash dividends paid by the Company prior to the exercise of
any Warrant or Warrants held by them.
g. DEFINITION OF COMMON STOCK. For the purpose of this Agreement,
the term "Common Stock" shall mean (i) the class of stock designated as Common
Stock in the Certificate of Incorporation of the Company as it may be amended
as of the date hereof, or (ii) any other class of stock resulting from
successive changes or reclassification of such Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par
value to par value. In the event that the Company shall after the date hereof
issue securities with greater or superior voting rights than those of the
shares of Common Stock outstanding as of the date hereof, the Holder, at its
option, may receive upon exercise of any Warrant either shares of Common Stock
or a like number of such securities with greater or superior voting rights.
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h. RECLASSIFICATION, MERGER OR CONSOLIDATION. The Company will not
merge, reorganize or take any other action which would terminate the Warrants
without first making adequate provision for the Warrants. In case of any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value to no par value, or from nor par value to par value,
or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company with, or merger of
the Company into, another corporation (other than a consolidation or merger in
which the Company is the continuing corporation and which does not result in
any reclassification or change of the outstanding Common Stock except a change
as a result of a subdivision or combination of such shares or a change in par
value, as aforesaid), or in the case of a sale or conveyance to another
corporation or other entity of the property of the Company as an entirety, the
Holder of each Warrant then outstanding or to be outstanding shall have the
right thereafter (until the expiration of such Warrant) to purchase, upon
exercise of such Warrant, the kind and number of shares of stock and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance as if the Holder were the owner of
the shares of Common Stock underlying such Warrants immediately prior to any
such events at a price equal to the product of (x) the number of shares
issuable upon exercise of the Warrants and (y) the Exercise Prices in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance, as if such Holder has exercised the
Warrants. In the event of a consolidation, merger, sale or conveyance of
property, the corporation formed by such consolidation or merger, or acquiring
such property, shall execute and deliver to the Holders a supplemental warrant
agreement to such effect. Such supplemental warrant agreement shall provide
for adjustments which shall be identical to the adjustment to those provided in
Section 8. The provisions of this Section 8(h) shall similarly apply to
successive consolidations or mergers.
i. NO ADJUSTMENT OF EXERCISE PRICES IN CERTAIN CASES. No adjustment
of the Exercise Prices shall be made:
(1) Upon the issuance or sale of (i) the Warrants or the Warrant
Shares; (ii) the shares of Common Stock pursuant to the Public
Offering; or (iii) the shares of Common Stock issuable upon
the exercise of the options or warrants outstanding or in
effect on the date hereof as described in the prospectus
relating to the Public Offering.
(2) If the amount of said adjustments shall be less than five
($.05) cents per Share, provided, however, that in such case
any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount
to at least five ($.05) cents per Share.
j. DIVIDENDS AND OTHER DISTRIBUTIONS. In the event that the Company
shall at any time prior to the exercise of all the Warrants declare a dividend
(other than a dividend consisting solely of shares of Common Stock) or
otherwise distribute to its stockholders any assets, property, rights,
evidences of indebtedness, securities (other than shares of Common Stock),
whether issued by the Company or by another, or any other thing of value, the
Holders of the unexercised Warrants shall thereafter be entitled, in addition
to the shares of Common Stock or other securities and property receivable upon
the exercise thereof, to receive, upon the exercise of such Warrants, the same
property, assets, rights, evidences of indebtedness, securities or any other
thing of value that they would have been entitled to receive at the time of
such dividend or distribution as if the Warrants had been exercised immediately
prior to such
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dividend or distribution. At the time of any such dividend or distribution,
the Company shall make appropriate reserves to ensure the timely performance of
the provisions of this Section 8 (j).
k. SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OF OTHER
SECURITIES. In the event that the Company or an affiliate of the Company shall
at any time after the date hereof and prior to the exercise of all the Warrants
issue any rights to subscribe for shares of Common Stock or any other
securities of the Company or of such affiliate to all the stockholders of the
Company, the Holders of the unexercised Warrants shall be entitled to receive,
in addition to the Warrant Shares receivable upon the exercise of the Warrants,
such rights at the time such rights are distributed to the other stockholders
of the Company.
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant Certificate
is exchangeable without expense, upon the surrender thereof by the registered
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Shares in such denominations as shall be designated
by the Holder thereof at the time of such surrender. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it,
and reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of the Warrants, if mutilated, the Company
will make and deliver a new Warrant Certificate of like tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not be required to
issue certificates representing fractions of Shares upon the exercise of the
Warrants, nor shall it be required to issue scrip or pay cash in lieu of
fractional interests; provided, however, that if a Holder exercises all
Warrants held of record by such Holder the fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of Shares.
11. RESERVATION AND LISTING OF SECURITIES. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock as shall be issuable upon the exercise on conversion
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all the Warrant Shares issuable
upon such exercise shall be duly and validly issued, fully paid, nonassessable
and not subject to the preemptive rights of any stockholder. As long as the
Warrants shall be outstanding, the Company shall use its best efforts to cause
the Common Stock to be listed and quoted (subject to official notice of
issuance) on all securities exchanges on which the Common Stock issued to the
public in connection herewith may then be listed or quoted.
12. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement shall be
construed as conferring upon the Holders the right to vote or to consent or to
receive notice as a stockholder in respect of any meetings of stockholders for
the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:
a. the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
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b. the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
c. a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, or entitled to
vote on such proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer books, as
the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend, or the issuance of any convertible or
exchangeable securities, or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
13. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
(a) personally delivered, (b) three (3) business days after having been
properly addressed, enclosed in a properly sealed envelope or wrapper and sent
postage-paid by first class mail, (c) transmitted by facsimile transmission, if
acknowledged by such facsimile equipment as received, or (d) one (1) business
day after being sent, at the expense of the sender, by Federal Express(R),
Airborne(R), U.S. Express Mail(R) or similar overnight carrier:
a. If to the registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or
b. If to the Company to the address set forth in Section 3 hereof or
to such other address as the Company may designate by notice to the Holders.
14. SUPPLEMENTS AND AMENDMENTS. The Company and the Underwriter may from time
to time supplement or amend this Agreement without the approval of any Holders
of Warrant Certificates (other than the Underwriter) in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company and the Underwriter may deem necessary or desirable and which the
Company and the Underwriter deem shall not adversely affect the interests of
the Holders of Warrant Certificates.
15. SUCCESSORS. All the covenants and provisions of this Agreement shall be
binding upon and inure to the benefit of the Company, the Underwriter, the
Holders and their respective successors and assigns hereunder.
16. TERMINATION. This Agreement shall terminate at the close of business on
__________, 2006. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on the later of the expiration of any applicable statue of limitations
or ________, 2007.
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17. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws, except that matters concerning the
validity of the issuance of securities shall be determined and construed in
accordance with the laws of the State of Florida. The Company, the Underwriter
and the Holders hereby agree that any action, proceeding or claim against it
arising out of, or relating in any way to, this Agreement shall be brought and
enforced in the courts of the State of New York or of the United States of
America for the Southern District of New York, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The Company, the
Underwriter and the Holders hereby irrevocably waive any objection to such
exclusive jurisdiction or inconvenient forum. Any such process or summons to
be served upon any of the Company, the Underwriter and the Holders (at the
option of the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
13 hereof. Such mailing shall be deemed personal service and shall be legal
and binding upon the party so served in any action, proceeding or claim.
18. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to
the subject matter hereof. Subject to Section 14, this Agreement may not be
modified or amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.
19. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
21. CAPTIONS. The caption headings of the Sections of this Agreement are for
convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive
effect.
22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed
to give to any person or corporation, other than the Company and the
Underwriter and any other registered Holder(s) of the Warrant Certificates or
Warrant Shares, any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of
the Company and the Underwriter and any other Holder(s) of the Warrant
Certificates or Warrant Shares.
23. COUNTERPARTS. This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
24. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Company, the Underwriter and their successors and assigns and
the Holders from time to time of the Warrant Certificate(s) or any of them.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
ALL AMERICAN FOOD GROUP, INC.
By:
---------------------------------
Xxxxxx Xxxxxxxx, Chairman
and Chief Executive Officer
R.T.G. XXXXXXXX & COMPANY, INC.
By:
---------------------------------
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EXHIBIT A
ALL AMERICAN FOOD GROUP, INC.
WARRANT CERTIFICATE
THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANT REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR
RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE OR
SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT, OR (II) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION
UNDER SUCH 1933 ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING ________, 1997 THROUGH 5:00 P.M., NEW YORK TIME
________, 2001
NO. WC-1 _________ WARRANTS
This Warrant Certificate certifies that ______________ _______________
or registered assigns, is the registered holder of _________ warrants (the
"Warrants") to purchase initially, at any time from _______, 1997, until 5:00
p.m., New York time on _______, 2001 (the "Expiration Date"), up to ________
fully paid and non-assessable shares (the "Shares"), of Common Stock, no par
value (the "Common Stock"), of All American Food Group, Inc., a New Jersey
corporation (the "Company") at the exercise price of $____ per Share (the
"Exercise Price"), upon the surrender of this Warrant Certificate and payment
of the Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of _______,
1996 (the "Warrant Agreement") by and between the Company and R.T.G. Xxxxxxxx &
Company, Inc. Payment of the Exercise Price shall be made by certified or
cashier's check or money order payable to the order of the Company.
No Warrant may be exercised after 5:00 P.M, New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by
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reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the
rights of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange as provided
herein, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this
__th day of _______, 1996.
[SEAL]
ALL AMERICAN FOOD GROUP, INC.
By:
-------------------------------
Xxxxxx Xxxxxxxx, Chairman
and Chief Executive Officer
ATTEST:
By:
-----------------------------
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED
--------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________
Attorney, to transfer the within Warrant Certificate on the books of All
American Group, Inc., with full power of substitution.
Dated:
--------------------
Signature
---------------------
(Signature must conform in all
respects to the name of holder
as specified on the face of the
Warrant Certificate.)
--------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
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FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
_______ Shares
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of All American Food Group, Inc. in
the amount of $_______________, all in accordance with the terms hereof. The
undersigned requests that a certificate for such securities be registered in
the name of _____________________ whose address is ________________________ and
that such Certificate be delivered to _____________________________ whose
address is ______________________________________________________.
Dated:____________________
Signature
-----------------------
(Signature must conform in all
respects to the name of holder
as specified on the face of
the Warrant Certificate.)
--------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
17
