Exhibit 4.3
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, ASSIGNED OR TRANSFERRED, IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.
No.
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Dated: September 30, 2004
XXXXXX, INC.
WARRANT TO PURCHASE _______ SHARES OF
COMMON STOCK, PAR VALUE $0.02 PER SHARE
For VALUE RECEIVED, ____________________ ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from Xxxxxx, Inc., a
Delaware corporation ("Company"), from and after the earlier of (i) six months
after the refinancing or prepayment of the Company's series of 7% Senior
Subordinated Notes due September 30, 2007 or (ii) September 30, 2005 until 5:00
P.M., Eastern time, on September 30, 2009 (the "Warrant Expiration Date"), at an
exercise price per share equal to $0.02 (the exercise price in effect being
herein called the "Warrant Price"), ______ shares ("Warrant Shares") of the
Company's Common Stock, par value $0.02 per share ("Common Stock").
Notwithstanding anything to the contrary contained herein, in no event shall
this Warrant be exercisable, and the Company shall have no obligation to issue
the Warrant Shares, until such time as the Company's stockholders shall have
approved issuance of Common Stock in an amount exceeding twenty percent (20%) of
the Common Stock outstanding on the date of this Warrant (which amount shall
include the Warrant Shares) in satisfaction of Nasdaq Marketplace Rule
4350(i)(1)(D); provided, however, that the Company shall be permitted to waive
such requirement if it determines that such stockholder approval is not required
by Nasdaq Marketplace Rule 4350(i)(1)(D). The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to adjustment from time to time as described herein. From and after the
Expiration Date, this Warrant shall be of no further force and effect.
Capitalized terms used herein without definition shall have the respective
meanings given such terms in the Note and Warrant Purchase Agreement, dated
September 30, 2004, between the Company and the Purchasers named therein (the
"Purchase Agreement").
Section 1. Registration. The Company shall maintain books for the
transfer and registration of the Warrant. Upon the initial issuance of this
Warrant, the Company shall issue and register the Warrant in the name of the
Holder. The Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to
the contrary.
Section 2. Transfers. As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the Securities
Act of 1933, as amended (the "Securities Act"), or an exemption from such
registration. Subject to such restrictions, the Company shall transfer this
Warrant from time to time upon the books to be maintained by the Company for
that purpose, upon surrender thereof for transfer properly endorsed or
accompanied by appropriate instructions for transfer and such other documents as
may be reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer is exempt
from the registration requirements of the Securities Act, to establish that such
transfer is being made in accordance with the terms hereof, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
Holder may exercise this Warrant in whole or in part at any time prior to its
expiration upon surrender of the Warrant, together with delivery of the duly
executed Warrant exercise form attached hereto as Appendix A (the "Exercise
Agreement") and payment by cash, certified check or wire transfer of funds for
the aggregate Warrant Price for that number of Warrant Shares then being
purchased, to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the Holder). The Warrant Shares so
purchased shall be deemed to be issued to the Holder or the Holder's designee,
as the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered (or evidence of loss, theft or
destruction thereof and security or indemnity satisfactory to the Company), the
Warrant Price shall have been paid and the completed Exercise Agreement shall
have been delivered. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the Holder within a reasonable time, not exceeding three
(3) business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the Holder and shall be registered in the name of the Holder or, subject to the
transfer restrictions contained herein, such other name as shall be designated
by the Holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the Holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. As used herein, "business day" means a day, other than
a Saturday or Sunday, on which banks in New York City are open for the general
transaction of business. Each exercise hereof shall constitute the
re-affirmation by the Holder that the representations and warranties contained
in Section 5 of the Purchase Agreement are true and correct in all material
respects with respect to the Holder as of the time of such exercise.
Section 4. Compliance with the Securities Act of 1933. Except as
provided in the Purchase Agreement, the Company may cause the legend set forth
on the first page of this Warrant to be set forth on each Warrant or similar
legend on any security issued or issuable upon exercise of this Warrant, unless
counsel for the Company is of the opinion as to any such security that such
legend is unnecessary.
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Section 5. Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the Holder in respect of which such shares are issued,
and in such case, the Company shall not be required to issue or deliver any
certificate for Warrant Shares or any Warrant until the person requesting the
same has paid to the Company the amount of such tax or has established to the
Company's reasonable satisfaction that such tax has been paid. The Holder shall
be responsible for income taxes due under federal, state or other law, if any
such tax is due.
Section 6. Mutilated or Missing Warrants. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if
requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents
and warrants that there have been reserved, and the Company shall at all
applicable times keep reserved until issued (if necessary) as contemplated by
this Section 7, out of the authorized and unissued shares of Common Stock,
sufficient shares to provide for the exercise of the rights of purchase
represented by this Warrant. The Company agrees that all Warrant Shares issued
upon due exercise of the Warrant shall be, at the time of delivery of the
certificates for such Warrant Shares, duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock of the Company.
Section 8. Adjustments. Subject and pursuant to the provisions of this
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall, at any time or from time to time while
this Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares of
Common Stock into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Holder thereafter exercising the
Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Holder would have received if the Warrant had been
exercised immediately prior to such event upon payment of a Warrant Price that
has been adjusted to reflect a fair allocation of the economics of such event to
the Holder. Such adjustments shall be made successively whenever any event
listed above shall occur.
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(b) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or other
disposition of all or substantially all of the Company's assets to another
corporation shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each Holder shall thereafter
only have the right to purchase and receive upon the basis and upon the terms
and conditions herein specified and in lieu of the Warrant Shares immediately
theretofore issuable upon exercise of the Warrant, such shares of stock,
securities or assets as would have been issuable or payable with respect to or
in exchange for a number of Warrant Shares equal to the number of Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of each Holder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Warrant Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the Holder, at
the last address of the Holder appearing on the books of the Company, such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase, and the other obligations
under this Warrant. The provisions of this paragraph (b) shall similarly apply
to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) In case the Company shall fix a payment date for the making of
a distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8(a)), or
subscription rights or warrants, the Warrant Price to be in effect after such
payment date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price (as defined below) per share of Common Stock immediately prior
to such payment date, less the fair market value (as determined by the Company's
Board of Directors in good faith) of said assets or evidences of indebtedness so
distributed, or of such subscription rights or warrants, and the denominator of
which shall be the total number of shares of Common Stock outstanding multiplied
by such Market Price per share of Common Stock immediately prior to such payment
date. "Market Price" as of a particular date (the "Valuation Date") shall mean
the following: (a) if the Common Stock is then listed on a national stock
exchange, the closing sale price of one share of Common Stock on such exchange
on the last trading day prior to the Valuation Date; (b) if the Common Stock is
then quoted on The Nasdaq Stock Market, Inc. ("Nasdaq"), the National
Association of Securities Dealers, Inc. OTC Bulletin Board (the "Bulletin
Board"), the National Quotation Board "Pink Sheets" (the
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"NQB") or such similar exchange or association, the closing sale price of one
share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or
association on the last trading day prior to the Valuation Date or, if no such
closing sale price is available, the average of the high bid and the low asked
price quoted thereon on the last trading day prior to the Valuation Date; or (c)
if the Common Stock is not then listed on a national stock exchange or quoted on
Nasdaq, the Bulletin Board or such other exchange or association, the fair
market value of one share of Common Stock as of the Valuation Date, shall be
determined in good faith by the Board of Directors of the Company and the
Holder. If the Common Stock is not then listed on a national securities
exchange, the Bulletin Board, the NQB or such other exchange or association, the
Board of Directors of the Company shall respond promptly, in writing, to an
inquiry by the Holder prior to the exercise hereunder as to the fair market
value of a share of Common Stock as determined by the Board of Directors of the
Company. In the event that the Board of Directors of the Company and the Holder
are unable to agree upon the fair market value in respect of subpart (c) hereof,
the Company and the Holder shall jointly select an appraiser, who is experienced
in such matters. The decision of such appraiser shall be final and conclusive,
and the cost of such appraiser shall be borne equally by the Company and the
Holder. Such adjustment shall be made successively whenever such a payment date
is fixed.
(d) An adjustment to the Warrant Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.
(e) In the event that, as a result of an adjustment made pursuant
to this Section 8, the Holder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of
such other shares so receivable upon exercise of this Warrant shall be subject
thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares
contained in this Warrant.
(f) Anything herein to the contrary notwithstanding, the Company
shall not be required to make any adjustment of the Warrant Price in the case of
the issuance of (A) capital stock, options or convertible securities issued to
directors, officers, employees or consultants of the Company in connection with
their service as directors of the Company, their employment by the Company or
their retention as consultants by the Company pursuant to an equity compensation
program approved by the Board of Directors of the Company or the compensation
committee of the Board of Directors of the Company, (B) shares of Common Stock
issued upon the conversion or exercise of options or convertible securities
granted or issued prior to the date hereof, (C) securities issued pursuant to
the Purchase Agreement and securities issued upon the exercise of those
securities, and (D) shares of Common Stock issued or issuable by reason of a
dividend, stock split or other distribution on shares of Common Stock (but only
to the extent that such a dividend, split or distribution results in an
adjustment in the Warrant Price pursuant to the other provisions of this
Warrant) (collectively, "Excluded Issuances").
(g) Notwithstanding any provision of this Section 8, no adjustment
of the Warrant Price shall be required if such adjustment is less than $0.01;
provided, however, that any
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adjustments which by reason of this Section 8(g) are not required to be made
shall be carried forward and taken into account for purposes of any subsequent
adjustment.
Section 9. Fractional Interest. The Company shall not be required to
issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this Section 9, be deliverable upon such exercise, the Company, in
lieu of delivering such fractional share, shall pay to the exercising Holder an
amount in cash equal to the Market Price of such fractional share of Common
Stock on the date of exercise.
Section 10. Benefits. Nothing in this Warrant shall be construed to
give any person, firm or corporation (other than the Company and the Holder) any
legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
Section 11. Notices to Holder. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give
written notice thereof to the Holder at the address appearing in the records of
the Company, stating the adjusted Warrant Price and the adjusted number of
Warrant Shares resulting from such event and setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
Failure to give such notice to the Holder or any defect therein shall not affect
the legality or validity of the subject adjustment.
Section 12. Identity of Transfer Agent. The Transfer Agent for the
Common Stock is Registrar and Transfer Company. Upon the appointment of any
subsequent transfer agent for the Common Stock or other shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrant, the Company will mail to the Holder a statement setting forth
the name and address of such transfer agent.
Section 13. Notices. Unless otherwise provided, any notice required or
permitted under this Warrant shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or facsimile or electronic mail, then such notice shall be deemed given
upon receipt of confirmation of complete transmittal, (iii) if given by mail,
then such notice shall be deemed given upon the earlier of (A) receipt of such
notice by the recipient or (B) three days after such notice is deposited in
first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one
business day after delivery to such carrier. All notices shall be addressed as
follows: if to the Holder, at its address as set forth in the Company's books
and records and, if to the Company, at the address as follows, or at such other
address as the Holder or the Company may designate by ten days' advance written
notice to the other:
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If to the Company:
Xxxxxx, Inc.
000 Xxxxxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Section 14. Registration Rights. The initial Holder is entitled to the
benefit of certain registration rights with respect to the shares of Common
Stock issuable upon the exercise of this Warrant as provided in the Registration
Rights Agreement, and any subsequent Holder may be entitled to such rights.
Section 15. Successors. All the covenants and provisions hereof by or
for the benefit of the Holder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 16. Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law
provisions thereof. The Company and, by accepting this Warrant, the Holder, each
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York located in New York County and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Warrant and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Warrant. The
Company and, by accepting this Warrant, the Holder, each irrevocably consents to
the jurisdiction of any such court in any such suit, action or proceeding and to
the laying of venue in such court. The Company and, by accepting this Warrant,
the Holder, each irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE HOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION
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WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.
Section 17. No Rights as Stockholder. Prior to the exercise of this
Warrant, the Holder shall not have or exercise any rights as a stockholder of
the Company by virtue of its ownership of this Warrant.
Section 18. Amendment; Waiver. This Warrant is one of a series of
Warrants of like tenor issued by the Company pursuant to the Purchase Agreement
and initially covering an aggregate of 110,000 shares of Common Stock
(collectively, the "Company Warrants"). Any term of this Warrant may be amended
or waived (including the adjustment provisions included in Section 8 of this
Warrant) upon the written consent of the Company and the holders of Company
Warrants representing at least 50% of the number of shares of Common Stock then
subject to all outstanding Company Warrants (the "Majority Holders"); provided,
that (x) any such amendment or waiver must apply to all Company Warrants; and
(y) the number of Warrant Shares subject to this Warrant, the Warrant Price and
the Warrant Expiration Date may not be amended, and the right to exercise this
Warrant may not be altered or waived, without the written consent of the Holder.
Section 19. Section Headings. The section headings in this Warrant are
for the convenience of the Company and the Holder and in no way alter, modify,
amend, limit or restrict the provisions hereof.
Section 20. Warrant Agent. The Company shall serve as warrant agent
under this Warrant. Upon not less than 30 days' notice to the Holder, the
Company may appoint a new warrant agent, which shall be reasonably satisfactory
to the Majority Holders. Any Person into which any new warrant agent may be
merged, any Person resulting from any consolidation to which any new warrant
agent shall be a party or any Person to which any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant register.
Section 21. Severability. Any provision of this Warrant that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the Company, and by its
acceptance hereof, the Holder, hereby waive any provision of law which renders
any provision hereof prohibited or unenforceable in any respect.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed, as of the 30th day of September, 2004.
XXXXXX, INC.
By:
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Name:
Title:
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APPENDIX A
XXXXXX, INC.
WARRANT EXERCISE FORM
To Xxxxxx, Inc.:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,
_______________ shares of Common Stock ("Warrant Shares") provided for therein,
and requests that certificates for the Warrant Shares be issued as follows:
--------------------------------
Name
--------------------------------
Address
--------------------------------
--------------------------------
Federal Tax ID or Social Security No.
and delivered by (certified mail to the above address, or
(electronically (provide DWAC Instructions:___________________), or (other
(specify): __________________________________________).
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of this Warrant be registered in
the name of the undersigned Holder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
Dated: ,
------------- ------
Note: The signature must correspond with
Signature:______________________________
the name of the Holder as written
on the first page of the Warrant in every ---------------------------
particular, without alteration or enlargement Name (please print)
or any change whatever, unless the Warrant
has been assigned. ---------------------------
---------------------------
Address
---------------------------
Federal Identification or
Social Security No.
Assignee:
---------------------------
---------------------------
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