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EXHIBIT 4.2
AGREEMENT
THIS AGREEMENT made as of this _______ day of _______ 1997, between MIKE'S
ORIGINAL, INC., a Delaware corporation with offices at 000 Xxxxxxx Xxxxxxxx,
Xxxxxxx, Xxx Xxxx 00000 (the "Company") and AMERICAN STOCK TRANSFER & TRUST
COMPANY, with offices at 0000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx, 00000 (the
"Warrant Agent").
Introduction
The Company (i) has determined to issue and deliver up to 850,000 common
stock purchase warrants (the "IPO Warrants") evidencing the right of the holders
thereof to purchase an aggregate of 850,000 shares of common stock, $0.001 par
value of the Company (the "Common Stock"), which IPO Warrants are to be issued
and delivered as part of units (the "Units") to be offered for sale to the
public pursuant to a registration statement No. 333-______ (the "Registration
Statement") filed with the Securities and Exchange Commission; and (ii) has
determined to issue and deliver to Millenium Securities Corp. ("Millenium")
options evidencing, inter alia, the right of Millenium and its permitted
transferees as holders thereof to purchase up to 85,000 Units, each Unit
comprised of one share of common stock and one nonredeemable common stock
purchase warrant (the "Millenium Warrants") evidencing the right of the holder
thereof to purchase an aggregate of 85,000 shares of Common Stock. The IPO
Warrants and the Millenium Warrants are hereinafter referred to as the
"Warrants". 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, redemption and exercise of the
Warrants. The Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the Company, the
Warrant Agent, and the holders of the Warrants.
All acts and things have been done and performed which are necessary to make
the Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligation of the Company, and to authorize the execution and delivery of this
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
Appointment of Warrant Agent
The Company hereby appoints the Warrant Agent to act as agent for the Company
for the Warrants, and the Warrant Agent hereby accepts such appointment and
agrees to perform the same in accordance with the terms and conditions set forth
in this Agreement.
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ARTICLE II
Warrants, Form of Warrants, Execution,
Countersignature and Registration of Warrants
2.01. Form of Warrant. Each Warrant shall be issued in registered form only,
shall be in substantially the form of Exhibit A hereto (the "Warrant
Certificate"), shall be signed by, or bear the facsimile signature of, the
President or any Vice President and by the Secretary of the Company and shall
bear a facsimile of the Company's seal. The Warrant Certificate may also bear
such letters, marks of identification, legends, designations, summaries and
endorsements as the Company may deem appropriate and as are not inconsistent
with this Agreement, or in any particular case as may be required in the opinion
of counsel to the Company. In the event the person whose facsimile signature has
been placed upon any Warrant Certificate shall have ceased to be President or
Secretary of the Company before such Warrant Certificate is issued, it may be
issued with the same effect as if she had not ceased to be such at the date of
issuance. No Warrant Certificate may be exercised until it has been
countersigned by the Warrant Agent as provided in Section 2.03 hereof.
2.02. Warrant Valid Only If Countersigned. Unless and until manually
countersigned by the Warrant Agent and dated the date of countersignature
pursuant to this Agreement, a Warrant Certificate shall be invalid and of no
effect.
2.03. Countersignature. The Warrant Agent shall countersign a Warrant
Certificate only (i) if the Warrant Certificate is to be issued in exchange or
substitution for one or more previously countersigned Warrant Certificates, as
hereinafter provided, or (ii) if the Company instructs the Warrant Agent to do
so.
2.04. Registration.
2.04.1 The Warrant Agent shall maintain books (the "Warrant Register") for the
registration of original issuance and the registration of transfer of the
Warrant Certificates. Upon the initial issuance of the Warrant Certificates, the
Warrant Agent shall issue and register the Warrant Certificates in the names of
the respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company.
2.04.2 Prior to due presentment for registration of transfer of any Warrant
Certificate, the Company and the Warrant Agent may deem and treat the person in
whose name such Warrant Certificate shall be registered upon the Warrant
Register (the "Holder" or the "registered holder") as the absolute owner of such
Warrant Certificate and of each Warrant represented thereby (notwithstanding any
notation of ownership or other writing on the Warrant Certificate made by anyone
other than the Company or the Warrant Agent) for the purpose of any exercise
thereof, and for all other purposes, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary and shall not be required
to recognize any equitable or other claim to or interest in such Warrant
Certificate on the part of any other person, and shall not be liable for any
registration or transfer of Warrant Certificates which are registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary unless made
with the actual knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration or transfer, or with such knowledge of
such facts that its participation therein amounts to bad faith.
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2.05. Detachability of Warrants. The Warrant Agent understands that the
Warrants are being issued as part of Units together with shares of the Company's
Common Stock and that the shares of Common Stock and the Warrants are
immediately detachable and may be traded separately.
ARTICLE III
Term and Exercise of Warrants
3.01. Warrant Price. Each Warrant Certificate shall, when signed by the proper
officers of the Company and countersigned and dated by the Warrant Agent,
entitle the registered holder thereof, subject to the provisions of such Warrant
Certificate and of this Warrant Agreement, to purchase from the Company up to
the number of shares (the "Warrant Shares") of Common Stock stated therein, at
the price of $____ per share in the case of the IPO Warrants and at the price of
$_____ per share in the case of the Millenium Warrants, subject to the
adjustments provided in Article IV hereof. The term "Warrant Price" as used in
this Agreement refers to the price per share at which Common Stock may be
purchased at the time a Warrant is exercised, reflecting all appropriate
adjustments made in accordance with Article IV hereof.
3.02. Duration of Warrants. An IPO Warrant may be exercised only during the
period (the "IPO Exercise Period") commencing on the effective date (the
"Effective Date") of the Registration Statement, and ending at 5:00 p.m. New
York City time on the date which is the earlier of (i) the third anniversary of
the Effective Date, or (ii) the date fixed for redemption of such Warrant as
provided in Article VI of this Agreement (in each such case, the "IPO Expiration
Date"). The Millenium Warrants may be exercised only during the period (the
"Millenium Exercise Period") commencing on the first anniversary of the
Effective Date and ending on the fifth anniversary of the Effective Date (the
"Underwriter Warrant Expiration Date"). Each Warrant not exercised on or before
the applicable Expiration Date shall become void, and all rights thereunder and
all rights in respect thereof under this Agreement shall cease at the close of
business on the Expiration Date. The Company in its sole discretion may extend
the duration of the Warrants by extending the applicable Expiration Date upon
written notice to holders of the Warrants.
3.03. Exercise of Warrants.
3.03.1 A Warrant Certificate, when countersigned by the Warrant Agent, may be
exercised by the registered holder thereof by surrendering it, at the office of
the Warrant Agent, or at the office of its successor as Warrant Agent, in the
Borough of Manhattan, City and State of New York, with the subscription form, as
set forth in the Warrant Certificate and in substantially the form of Exhibit A
hereto, duly executed with signature guaranteed by an eligible guarantor
institution. These institutions (commercial banks, member firms of a national
securities exchange, savings and loans and thrifts) qualify as long as the
guarantor is a member of The Securities Transfer Agent Medallion Program or any
other industry recognized program and by paying in full, in lawful money of the
United States, in cash, certified check or bank draft payable to the Company,
the Warrant Price for each full share of Common Stock as to which the Warrant is
exercised and any and all applicable taxes due in connection with the exercise
of the Warrant, the exchange of the Warrant for the Common Stock, and the
issuance of the Common Stock.
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3.03.2 As soon as practicable after the exercise of any Warrant, the Company
shall issue to the registered holder of such Warrant a certificate or
certificates for the number of full shares of Common Stock to which he is
entitled, registered in such name or names as may be directed by him, and if
such Warrant shall not have been exercised in full, a new countersigned Warrant
for the number of shares as to which such Warrant shall not have been exercised.
3.03.3 All shares of Common Stock issued upon the proper exercise of a Warrant
in conformity with this Warrant Agreement shall be validly issued.
3.03.4 Each person in whose name any such certificate for shares of Common
Stock is issued shall for all purposes be deemed to have become the holder of
record of such shares on the date on which the Warrant was surrendered and
payment of the Warrant Price was made, irrespective of the date of delivery of
such certificate, except that, if the date of such surrender and payment is a
date when the stock transfer books of the Company are closed, such person shall
be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.
3.03.5 If, upon the exercise of any Warrant (other than an Millenium Warrant,
as to which this subsection shall not apply), after the first anniversary of the
Effective Date, (i) disclosure of compensation arrangements was made both at the
time of the original offering and at the time of exercise (by delivery of the
Prospectus or as otherwise required by applicable law, rule or regulation), and
(ii) the solicitation of the exercise of the Warrant was not in violation of
rule 10b-6 (as such rule, or any successor rule as may be in effect as of such
time of exercise) promulgated under the Securities Exchange Act of 1934 and is
otherwise in compliance with any applicable rules and regulations of NASD, then
the Company shall forthwith pay from the proceeds received upon exercise of the
Warrant(s), a fee of 5% of the Warrant Price to Millenium. Within five days
after exercise, the Warrant Agent shall send Millenium a copy of the reverse
side of each Warrant exercised. Millenium 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 Section may not be modified, amended or deleted
without the prior written consent of Millenium.
3.04. Disposition of Proceeds. Upon the exercise of any Warrant, the
Warrant Agent shall promptly forward all funds received by it for the purchase
of Warrant Shares to the Company.
ARTICLE IV
Adjustments
4.01. Stock Dividends--Split-Ups. If after the date hereof the number of
outstanding shares of Common Stock is increased by a stock dividend payable in
shares of Common Stock or by a split-up of shares of Common Stock or other
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similar event, or the number of outstanding shares of Common Stock is decreased
by a consolidation, combination or reclassification of shares of Common Stock,
reverse stock split or other similar event, then, on the date following the date
fixed for the determination of holders of Common Stock entitled to receive such
stock dividend, or whom are affected by such split-up, consolidation,
combination, reclassification or other similar event, the Warrant Price in
effect immediately after the record date of such dividend or distribution or the
effective date of any such subdivision, combination or reclassification shall be
proportionately adjusted so that the Holder of any Warrant exercised after such
time shall be entitled to receive the aggregate number of shares which, if such
Warrant had been exercised prior to any such event, the registered holder would
have owned upon such exercise and would have been entitled to receive by virtue
of such event. Such adjustment shall be made successively whenever any such
event specified above shall occur.
4.02. Adjustment to Number of Shares. Upon each adjustment of the Warrant
Price pursuant to Section 4.01, each Warrant shall thereupon evidence the right
to purchase that number of shares of Common Stock (calculated to the nearest
hundredth of a share) obtained by multiplying the number of shares of Common
Stock purchasable immediately prior to such adjustment upon exercise of the
Warrant by the Warrant Price in effect immediately prior to such adjustment and
dividing the product so obtained by the Warrant Price in effect immediately
after such adjustment.
4.03. Reorganization, etc. If after the date hereof any capital reorganization
or reclassification (other than pursuant to Section 4.01 hereof) of the Common
Stock of the Company, or consolidation or merger of the Company with another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock or the conversion or exchange of such
outstanding shares into shares of other stock or other securities or property),
or the sale of all or substantially all of its assets to another corporation or
other similar event shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful and
fair provision shall be made whereby the Warrant holders shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, such shares of stock, securities, or
assets as may be issuable or payable with respect to or in exchange for the
number of shares of Common Stock purchasable and receivable upon the exercise of
the Warrants had such exercise occurred in full prior to such reorganization,
reclassification, consolidation, merger, or sale. In such event appropriate
provision shall be made with respect to the rights and interests of the Warrant
Holders to the end that the provisions hereof (including, without limitation,
provisions for adjustments of the Warrant Price and of the number of shares
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purchasable upon the exercise of the Warrants) shall thereafter be applicable,
as nearly as may be in relation to any share of stock, securities, or assets
thereafter deliverable upon the exercise hereof. The Company shall not effect
any such consolidation, merger, or sale unless prior to the consummation thereof
the successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing such assets, shall assume
by written instrument executed and delivered to the Warrant Agent the obligation
to deliver to the Warrant Holders such shares of stock, securities, or assets
as, in accordance with the foregoing provision, such Holders may be entitled to
purchase. In the event of sale or conveyance or other transfer of all or
substantially all of the assets of the Company as a part of a plan for total
liquidation of the Company, all rights to exercise any Warrant shall terminate
30 days after the Company gives notice to each Holder that such sale or
conveyance or other transfer has been consummated.
4.04. Notices of Changes in Warrant. Upon every adjustment of the Warrant
Price or the number of shares issuable on exercise of a Warrant, the Company
shall give notice thereof to the Warrant Agent, which notice shall state the
Warrant Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. The Warrant Agent shall promptly
cause a similar notice to be mailed to each Holder of Warrants. Upon the
occurrence of any event above specified in this Article IV, the Company shall
give notice to the Warrant Agent and each Holder of the record date for such
dividend, distribution, or subscription rights, or the effective date of such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be entitled to exchange
their Common Stock for stock, securities, or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Failure to give such notice, or any defect
therein shall not affect the legality or validity of such event.
4.05. No Fractional Shares. Notwithstanding any provision contained in this
Agreement to the contrary, the Company shall not issue fractional shares upon
exercise of Warrants. If, by reason of any adjustment made pursuant to this
Article IV, the holder of any Warrant would be entitled, upon the exercise of
such Warrant, to receive a fractional interest in a share, the Company shall,
upon such exercise, purchase such fractional interest for an amount in cash
equal to the current market value of such fractional interest, determined as
follows:
4.05.1. If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange, the current value
shall be the last reported sale price regular way of the Common Stock on such
exchange. If the Common Stock is not listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange but is listed for
trading on the NASDAQ Automated Quotation System, the current value shall be the
closing bid quotation on NASDAQ on the last business day prior to the date of
exercise of the Warrant.
4.05.2. If the Common Stock is not listed or admitted as above described, the
current value shall be the mean of the last reported bid and asked prices
reported by first, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted for trading on the OTC Bulletin Board, second, the National
Quotation Bureau, Inc. on the last business day prior to the date of the
exercise of the Warrant.
4.05.3. If the Common Stock is not so listed or admitted as above described
and bid and asked prices are not so last 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.
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4.06. Form of Warrant. The form of Warrant need not be changed because of any
adjustment pursuant to this Article IV or Article IX hereof, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of
shares as is stated in the Warrants initially issued pursuant to this Agreement.
However, the Company may at any time in its sole discretion make any change in
the form of Warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any Warrant thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant or
otherwise, may be in the form as so changed.
4.07. Limitations. No adjustment of the Warrant Price shall be made as a
result of or in connection with (i) the issuance of Common Stock pursuant to
options, warrants, and stock purchase agreements outstanding or in effect on the
date hereof and as set forth on Schedule 1 hereto, or issuable pursuant to
agreements for the issuance thereof described in the Registration Statement;
(ii) the granting of additional options or warrants by separate agreements or
pursuant to the 1995 Long-Term Incentive Plan and/or the 1996 Non-Qualified
Stock Option Plan of the Company as currently in effect or as hereafter
modified, renewed, or extended, or the issuance of Common Stock of the Company
upon exercise of any such options or warrants described in the Registration
Statement; (iii) the issuance of Common Stock of the Company in connection with
(a) the IPO Warrants, the Unit Purchase Option and/or the Millenium Warrants or
(b) compensation arrangements with officers, employees, or agents of the Company
or any subsidiary described in the Registration Statement, (iv) the issuance of
Common Stock in connection with the conversion of any other securities of the
Company currently issued and outstanding or hereafter issued or issuable
pursuant to agreements for the issuance thereof described in the Registration
Statement into shares of Common Stock or other securities of the Company
pursuant to any conversion or exercise privileges attached thereto or contained
therein, or (v) any other circumstances other than those set forth in Section
4.01 hereof.
ARTICLE V
Transfer and Exchange of Warrants
5.01. Registration Procedure. The Warrant Certificates shall be transferable
only on the books of the Company maintained at the principal office of the
Warrant Agent in New York, New York upon delivery thereof duly endorsed by the
registered holder or to his order, or duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer, which endorsement shall be guaranteed by a member firm of
a national securities exchange, a commercial bank (not a savings bank or a
savings and loan association) or trust company located in the United States or a
member of the NASD. In all cases of transfer by an attorney-in-fact, the
original power of attorney, duly approved, or a copy thereof, duly certified, by
such attorney-in-fact, shall be deposited and remain with the Warrant Agent. In
case of transfer of executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Warrant Agent
in its discretion. Upon any such transfer, a new Warrant Certificate
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representing an equal aggregate number of Warrants so transferred shall be
issued, a new Warrant Certificate representing the balance of the Warrants not
so transferred shall be issued, and the original Warrant Certificate which is
the subject of such transfers shall be canceled by the Warrant Agent. The
Warrant Certificate so canceled shall be delivered by the Warrant Agent to the
Company upon request.
5.02. Cancellation and Surrender. Warrant Certificates may be surrendered to
the Warrant Agent together with a request for exchange, and thereupon the
Warrant Agent shall issue in exchange therefor one or more new Warrant
Certificates as requested by the registered holder of the Warrants so
surrendered, representing an equal aggregate number of Warrants. In the event
that a Warrant Certificate surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not cancel such Warrant Certificate and issue a new
Warrant Certificate in exchange therefor until the Warrant Agent has received an
opinion of counsel for the Company stating that such transfer may be made and
indicating whether the new Warrants must also bear a restrictive legend. The
Warrant Agent shall not be required to effect any registration of transfer or
exchange which will result in the issuance of a Warrant Certificate for a
fraction of a Warrant.
5.02.1. No service charge shall be made for any exchange or registration of
transfer of Warrants.
5.02.2. The Warrant Agent is hereby authorized to countersign and to deliver,
in accordance with the terms of this Agreement, the Warrant Certificate required
to be issued pursuant to the provisions hereof, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrants duly
executed on behalf of the Company for such purpose.
ARTICLE VI
Redemption
6.01. Redemption. The IPO Warrants, but not the Millenium Warrants, may be
redeemed prior to the Expiration Date, at the option of the Company, with the
consent of Millenium with respect to any notice of redemption given during the
twelve (12) month period following the Effective Date, upon written notice as
provided in Section 6.02 below and notice to Millenium, which notice to
Millenium shall be given concurrently with the Company's decision to deliver
notices to Noteholders provided for in Section 6.02 below, as a whole at any
time or in part from time to time, by lot, in any proportion as the Company in
its sole discretion shall determine, at the office of the Warrant Agent, upon
notice as below provided, at the price of $.01 per Warrant (the "IPO Redemption
Price"), provided, (i) the closing bid quotation of the Common Stock as quoted
by the National Association of Securities Dealers Automated Quotation System;
(ii) the last reported sale price, regular way, or if no such reported sale has
occurred on any such day, the average of the closing bid and asked prices,
regular way, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or (iii) if not so quoted or reported,
the average of the bid and asked prices as furnished by two members of the NASD
selected for that purpose, in any such case has been at least one hundred thirty
percent (130%) of the then exercise Warrant Price of the IPO Warrants on each of
the twenty (20) consecutive trading days ending on the third (3rd) day prior to
the day on which notice is given (the "Closing Price").
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6.02. Date Fixed for, and Notice of, Redemption. In the event the Company
shall elect to redeem all or any part of the IPO Warrants, the Company shall fix
a date for the redemption (the "Redemption Date") not more than sixty (60) days
and not less than thirty (30) days following the date upon which notice is given
to the registered holders of the IPO Warrants to be redeemed, at their
respective addresses then appearing on the registration books. Nothing herein
shall limit the rights of registered holders to exercise the IPO Warrants in
accordance with Article III of this Agreement at any time prior to the date
fixed for redemption. Written notice by first class mail shall be given by the
Company to all Holders of IPO Warrant Certificates, as the case may be, to be
redeemed by the Warrant Agent not more than sixty (60) days and not less than
thirty (30) days prior to the Redemption Date. Each such notice of redemption
will specify the Redemption Date and the Redemption Price. The notice will state
that payment of the Redemption Price will be made by the Warrant Agent upon
presentation and surrender of the IPO Warrant Certificates representing such IPO
Warrants to the Warrant Agent at its principal office, and will also state that
the right to exercise the IPO Warrants will terminate at 5:00 p.m., New York
City time, on the Redemption Date. Failure to mail the notice of redemption to
any Holder or any defect therein, however, shall not affect the validity of the
redemption of the remaining IPO Warrants. The Company will also make prompt
public announcement of such redemption by news release.
6.03. Payment of Redemption Price. On or prior to the opening of business on
the Redemption Date (as defined in Section 6.01 hereof), the Company shall
deposit with the Warrant Agent funds in form satisfactory to the Warrant Agent
sufficient to purchase all the IPO Warrants which are to be redeemed. Payment of
the Redemption Price shall be made by the Warrant Agent upon presentation and
surrender of the Warrant Certificates representing such IPO Warrants to the
Warrant Agent at its principal office.
6.04. Limited Redemption Rights. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Article VI shall apply to or include
the Millenium Warrants, which Millenium Warrants shall not be redeemable
hereunder.
ARTICLE VII
Other Provisions Relating to
Rights of Holders of Warrants
7.01. No Rights as Stockholder Conferred by Warrants. A Warrant does not
entitle the registered holder thereof to any of the rights of a stockholder of
the Company, including, without limitation, the right to receive dividends or
other distributions, exercise any preemptive rights to vote or to consent or to
receive notice as shareholders in respect of the meetings of shareholders or the
election of directors of the Company or any other matter.
7.02. Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost,
stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such
terms as to indemnity or otherwise as the Company may in its discretion impose
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(which shall, in the case of a mutilated Warrant Certificate, include the
surrender thereof), issue a new Warrant Certificate of like denomination, tenor,
and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new
Warrant Certificate shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated, or destroyed
Warrant shall be at any time enforceable by anyone.
7.03. Reservation of Common Stock. The Company shall at all times reserve and
keep available a number of its authorized but unissued shares of Common Stock
that will be sufficient to permit the exercise in full of all outstanding
Warrants covered by this Agreement.
7.04 Registration of Common Stock. Prior to the commencement of the Exercise
Period, the Company shall have the Registration Statement on file with the
Securities and Exchange Commission for the registration of the Common Stock
issuable upon exercise of the Warrants, and shall use good faith efforts with
due diligence to maintain such Registration Statement current, until the
expiration of the Warrants in accordance with the provisions of this Agreement,
whether by filing an appropriate post-effective amendment thereto or otherwise.
ARTICLE VIII
Concerning the Warrant Agent and Other Matters
8.01. Payment of Taxes. The Company will from time to time pay on or before
the due date therefor, all taxes and charges that may be imposed upon the
Company or the Warrant Agent in respect of the issuance or delivery of shares of
Common Stock upon the exercise of Warrants, but the Company shall not be
obligated to pay any transfer taxes in respect of the Warrants or such shares.
8.02. Resignation, Consolidation, or
Merger of Warrant Agent.
8.02.1. The Warrant Agent, or any successor to it hereafter appointed, may
resign its duties and be discharged from all further duties and liabilities
hereunder after giving sixty (60) days' notice to the Company. If the office of
the Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a successor Warrant Agent in
place of the Warrant Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after receiving notification of such
resignation or incapacity by the Warrant Agent or by the holder of a Warrant
(who shall, with such notice, submit his Warrant for inspection by the Company),
then the holder of any Warrant may apply to the Supreme Court of the State of
New York for the County of New York for the appointment of a successor Warrant
Agent.
8.02.2. Any successor Warrant Agent, whether appointed by the Company or by
such court, shall be a corporation organized and existing under the laws of the
State of New York, in good standing and having its principal office in the
Borough of Manhattan, City and State of New York, and authorized under such laws
to exercise corporate trust powers and subject to supervision or examination by
Federal or state authority. After appointment, any successor Warrant Agent shall
be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally
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named as Warrant Agent hereunder, without any further act or deed. The
predecessor Warrant Agent shall execute and deliver, at the expense of the
Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, and rights of such predecessor Warrant Agent hereunder and
the successor Warrant Agent shall execute and deliver an instrument accepting
the same. Upon request of any successor Warrant Agent, the Company and the
predecessor Warrant Agent shall make, execute, acknowledge, and deliver any and
all instruments in writing in order to more fully and effectually vest in and
confirm to such successor Warrant Agent all such authority, powers, rights,
immunities, duties, and obligations.
8.02.3. In the event a successor Warrant Agent shall be appointed, the Company
shall give notice thereof to the predecessor Warrant Agent and the Transfer
Agent for the Common Stock not later than the effective date of any such
appointment.
8.02.4. Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party may be the successor
Warrant Agent under this Agreement upon delivery to the Company of an agreement
whereby such successor shall assume all obligations of the Warrant Agent
hereunder.
8.03. Fees and Expenses of Warrant Agent.
8.03.1 The Company shall pay the Warrant Agent reasonable remuneration for its
services as such Warrant Agent hereunder and will promptly reimburse the Warrant
Agent for all expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder.
8.03.2 The Company agrees to perform, execute, acknowledge, and deliver or
cause to be performed, executed, acknowledged, and delivered all such further
and other acts, instruments, and assurances as may reasonably be required by the
Warrant Agent for the carrying out or performing of the provisions of this
Agreement.
8.04. Liability of Warrant Agent.
8.04.1 Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President of the Company and delivered
to the Warrant Agent. The Warrant Agent may rely upon such statement for any
action taken or suffered in good faith by it pursuant to the provisions of this
Agreement.
8.04.2 The Warrant Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. The Company agrees to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including
judgments, costs and reasonable counsel fees, for anything done or omitted by
the Warrant Agent in the execution of this Agreement except as a result of the
Warrant Agent's negligence, willful misconduct, or bad faith.
8.04.3 The Warrant Agent shall have no responsibility with respect to the
validity of this Agreement or with respect to the validity or execution of any
Warrant (except its countersignature thereof), nor shall it be responsible for
any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant. The Warrant Agent shall not be responsible to make
any adjustments required under the provisions of Article IV or responsible for
the manner, method, or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment, nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Warrant or as to whether any shares of Common Stock
will when issued be validly issued and fully paid and nonassessable.
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8.05. Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
remit to the Company, all moneys received by the Warrant Agent for the purchase
of shares of the Company's Common Stock through the exercise of Warrants.
8.06. Purchase of Warrants by the Company. The Company shall have the right,
except as limited by law, other agreement or herein, to purchase or otherwise
acquire Warrants at such times, in such manner and for such consideration as it
may deem appropriate.
ARTICLE IX
Miscellaneous Provisions
9.01. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and permitted assigns.
9.02. Notices. Any notice, statement or demand or other communication
authorized or permitted by this Agreement shall be in writing and signed and
shall be deemed given or made as and when sent by registered or certified mail,
postage prepaid addressed to the parties at their above addresses or such other
address as a party may hereafter specify in the manner for the giving of notice
herein.
9.03. Applicable Law: Amendment. The validity, interpretation, and performance
of this Agreement and of the Warrants shall be governed in all respects by the
laws of the State of New York, without regard to its conflicts of laws
principles. This Agreement and the Warrants may be amended only in writing. The
Warrant Agent may, without the consent or concurrence of any Holder, by
supplemental agreement or otherwise, join with the Company in making any changes
or corrections in this Agreement that they shall reasonably believe (i) are
required to cure any ambiguity or to correct any defective or inconsistent
provision or clerical omission or mistake or manifest error herein contained;
13
(ii) add to the covenants and agreements of the Company or the Warrant Agent in
this Agreement such further covenants and agreements thereafter to be observed,
or (iii) result in the surrender of any right or power reserved to or conferred
upon the Company or the Warrant Agent in this Agreement, but which changes or
corrections do not or will not adversely affect, alter or change the rights,
privileges or immunities of the Holders of Warrant Certificates.
9.04. Persons having rights under this Agreement. Nothing in this Agreement
expressed and nothing that may be implied from any of the provisions hereof is
intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the parties hereto and the registered holders of the
Warrants and, as the context implies, Millenium Securities Corp., any right,
remedy, or claim under or by reasons of this Agreement or of any covenant,
condition, stipulation, promise, or agreement hereof. All covenants, conditions,
stipulations, promises, and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the parties hereto and their successors and
assigns and of the registered holder of the Warrants.
9.05. Examination of Warrant Agreement. A copy of this Agreement shall be
available at all reasonable times at the office of the Warrant Agent in the
Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his Warrant for inspection by it.
9.06. 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 all such counterparts shall together constitute but one and
the same instrument.
9.07. Effect of Headings. The Article and Section headings herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year first above
written.
MIKE'S ORIGINAL, INC.
By: ______________________
Xxxxxxx Xxxxx
President
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: ______________________
Name:
Title:
14
Exhibit A
[FORM OF WARRANT CERTIFICATE]
No.
Certificate for _____ Warrants
NOT EXERCISABLE BEFORE 9:30 A.M., NEW
YORK CITY TIME, ON _________, 1997 OR
AFTER 5:00 P.M., NEW YORK CITY TIME, ON
_____________, 2000
MIKE'S ORIGINAL, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that
or registered assigns is the registered holder (the "Registered Holder") of the
number of Warrants set forth above, each of which represents the right to
purchase one fully paid and nonassessable share of Common Stock, par value $.01
per share (the "Common Stock"), of Mike's Original, Inc., a Delaware corporation
(the "Company"), at the initial exercise price (the "Warrant Price") of [$5.00]
at any time after the shares of Common Stock issuable upon exercise of the
Warrants evidenced hereby have been registered under the Securities Act of 1933,
as amended, or such other action as may be required by Federal or state law
relating to the issuance or distribution of securities shall have been taken,
but not after the Expiration Date hereinafter referred to, by surrendering this
Warrant Certificate, with the form of election to purchase set forth hereon duly
executed with signatures guaranteed as provided below, at the office maintained
pursuant to the Warrant Agreement hereinafter referred to for that purpose by
American Stock Transfer & Trust Company, or its successor as warrant agent (any
such warrant agent being herein called the "Warrant Agent"), and by paying in
full the Warrant Price, plus transfer taxes, if any. Payment of the Warrant
Price shall be made in United States currency, by certified check or money order
payable to the order of the Company.
Upon certain events provided for in the Warrant Agreement, the Warrant
Price and the number of shares of Common Stock issuable upon the exercise of
each Warrant are required to be adjusted.
The Warrants, or any portion thereof, are subject to call for
redemption by the Company at a call price of $0.01 per Warrant, upon written
notice to Millenium Securities Corp. (which notice shall be given to Millenium
Securities, Corp. not less than ten (10) days prior to the date notice of such
15
redemption is first given by the Company to the Registered Holders) and upon no
more than sixty (60) days and no less than thirty (30) days notice to the
Registered Holders, provided that the "Closing Price" (as defined in the Warrant
Agreement) per share of the Common Stock shall have been greater than or equal
to ____% of the then-current Warrant Price for a period of 20 consecutive
trading days ending on the third day prior to the date that the notice of such
call (the "Call Notice") is given by the Company to the Warrant Agent and
subject to certain other conditions. Notwithstanding anything contained in this
paragraph to the contrary, nothing in this paragraph shall apply to or include
the Warrants issued to Millenium Securities Corp., which Warrants shall not be
redeemable hereunder.
No Warrant may be exercised after 5:00 P.M., New York City time, on
the expiration date (the "Expiration Date") which will be the earlier of (i)
_______________, 2000 or (ii) the close of business on the Redemption Date.
After the Expiration Date, all Warrants evidenced hereby shall thereafter become
void.
Prior to the Expiration Date, subject to any applicable laws, rules,
or regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement hereinafter referred to, the Registered
Holder shall be entitled to transfer this Warrant Certificate in whole or in
part upon surrender of this Warrant Certificate at the office of the Warrant
Agent maintained for that purpose with the form of assignment set forth hereon
duly executed, with signatures guaranteed by a member firm of a national
securities exchange, a commercial bank (not a savings bank or a savings and loan
association) or a trust company located in the United States, a member of the
National Association of Securities Dealers, Inc., or other eligible guarantor
institution which is a participant in a signature guarantee program (as such
terms are defined in Reg. 240.17Ad-15 under the Securities Exchange Act of 1934,
as amended) acceptable to the Warrant Agent. Upon any such transfer, a new
Warrant Certificate or Warrant Certificates representing the same aggregate
number of Warrants will be issued in accordance with instructions in the form of
assignment.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised.
Prior to the Expiration Date, the Registered Holder shall be entitled
to exchange this Warrant Certificate, with or without other Warrant
Certificates, for another Warrant Certificate or Warrant Certificates for the
same aggregate number of Warrants, upon surrender of this Warrant Certificate at
the office maintained for such purpose by the Warrant Agent.
No fractional shares will be issued upon the exercise of Warrants. As
to any final fraction of a share which the registered holder of one or more
Warrant Certificates, the rights under which are exercised in the same
transaction, would otherwise be entitled to purchase upon such exercise, the
Company shall pay the cash value thereof determined as provided in the Warrant
Agreement.
16
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement between the Company and the Warrant Agent (the "Warrant
Agreement") and is subject to the terms and provisions contained in said Warrant
Agreement, to all of which terms and provisions the Registered Holder consents
by acceptance hereof.
This Warrant Certificate shall not entitle the Registered Holder to
any of the rights of a stockholder of the Company, including, without
limitation, the right to vote, to receive dividends and other distributions, or
to attend or receive any notice of meetings of stockholders or any other
proceedings of the Company.
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its facsimile corporate seal.
MIKE'S ORIGINAL, INC.
By: Xxxxxxx Xxxxx
President
Seal Attest:
_____________________________
Secretary
Countersigned: AMERICAN STOCK TRANSFER & TRUST
COMPANY
as Warrant Agent
Dated By: __________________________
17
[FORM OF]
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise __________ of
the Warrants represented by this Warrant Certificate and to purchase the shares
of Common Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER)
DELIVER TO:
(NAME)
at
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the
Warrants represented by this Warrant Certificate, the undersigned requests that
a new Warrant Certificate representing the number of full Warrants not exercised
be issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_________ by certified check or money order payable in United States currency
to the order of the Company.
Dated ____________________, 19__
Name of Warrant Holder:
---------------------------------------------------------
Address: _________________________________________________________
---------------------------------------------------------
---------------------------------------------------------
Signature: _________________________________________________________
18
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
Warrants set forth below:
Name of Assignee Address No. of Warrants
---------------- ------- ---------------
and does hereby irrevocably constitute and appoint ___________ Attorney to make
such transfer on the books of EcoTyre Technologies, Inc. maintained for that
purpose, with full power of substitution in the premises.
Dated: , 199_.
Signature
SIGNATURE(S) GUARANTEED
By
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (Banks,
Stock Brokers, Savings and Loan
Associations, and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM
PURSUANT TO S.E.C. RULE 17Ad-15.
Signature
NOTICE: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of
the Certificate, in every particular,
without alteration or enlargement
or any change whatever.
