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EXHIBIT 4.1
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of this ___th day of __________,
1999, by and between Nathan's Famous, Inc., a Delaware corporation (the
"Company") and American Stock Transfer & Trust Company, as warrant agent (the
"Warrant Agent").
W I T N E S S E T H
WHEREAS, in connection with the merger of Miami Subs
Corporation ("Miami Subs") with a wholly-owned subsidiary of the Company, the
Company proposes to make a public offering (the "Public Offering") of shares of
its Common Stock (as defined in Section I hereof) and common stock purchase
warrants (the "Warrants") of the Company, each Warrant exercisable to purchase
one share of Common Stock; and
WHEREAS, in relation to the Public Offering, the Company has
filed a Registration Statement on Form S-4 (Registration Statement No.
333-________) (as amended or supplemented, the "Registration Statement") with
the Securities and Exchange Commission ("SEC"); and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, registration, transfer, and exchange of the Warrants, the
issuance of certificates representing the Warrants (each a "Warrant
Certificate"), the exercise of the Warrants, and the rights of the registered
holders thereof;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth and for the purpose of defining the
terms and provisions of the Warrants and the certificates representing the
Warrants and the respective rights and obligations thereunder of the Company and
the Warrant Agent, the parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms
shall have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the Company's common stock, par
value $.01 per share.
(b) "Company" shall have the meaning set forth in the
introductory paragraph.
(c) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal business
shall be administered, which office is located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as of the date hereof.
(d) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(e) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof, or his attorney duly authorized in writing, with the
appropriate signature guarantees, as described in the Warrant Certificate, and
(ii) payment in cash, or by official bank or certified check made payable to the
Company, of an amount in lawful money of the United States of America equal to
the Exercise Price plus transfer taxes, if any.
(f) "Exercise Price" shall mean the purchase price to be paid
upon exercise of a Warrant in accordance with the terms hereof, which price
shall be $6.00 per share of Common Stock. Until the Warrant Expiration Date,
subject to (i) adjustment from time to time pursuant to the provisions of
Section 8 hereof, and (ii) the Company's right to reduce the Exercise Price,
upon written notice to all Registered Holders, for a period of not less than 30
days.
(g) "Nasdaq National Market" shall have the meaning set forth
in Section 8(f) hereof.
(h) "Notice Event" shall mean any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the
Company is required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any reclassification
or change 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 a tender offer or
exchange offer for shares of Common Stock.
(i) "Prospectus" shall mean the prospectus contained in the
Registration Statement, as such prospectus is amended or supplemented from time
to time.
(j) "Public Offering" shall have the meaning set forth in the
Recitals.
(k) "Registered Holder" shall mean the person in whose name
any certificate representing Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6 hereof.
(l) "SEC" shall have the meaning set forth in the Recitals.
(m) "SEC Reports" shall have the meaning set forth in Section
5(g) hereof.
(n) "Registration Statement" shall have the meaning set forth
in the Recitals.
(o) "Time of Determination" shall have the meaning set forth
in Section 9 hereof.
(p) "Transfer Agent" shall mean American Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized successor, as
such.
(q) "Warrant Agent" shall have the meaning set forth in the
introductory
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paragraph.
(r) "Warrant Certificate" shall have the meaning set forth in
the Recitals.
(s) "Warrant Expiration Date" shall mean 5:00 p.m. (New York
City time) on ________ ___, 2002 (or as may be extended pursuant to Section
5(d)), provided that, if in New York City, such date (or extended date) shall be
a holiday or a day on which banks are authorized to close, then 5:00 p.m. (New
York City time) on the next following day which in New York City is not a
holiday or a day on which banks are authorized to close.
(t) "Warrants" shall have the meaning set forth in the
Recitals.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant Exercisable for One Share. A Warrant shall
initially entitle the Registered Holder of the Warrant Certificate representing
such Warrant to purchase one share of Common Stock upon the exercise thereof, in
accordance with the terms hereof, subject to modification and adjustment as
provided in Section 8 hereof.
(b) 593,750 Shares. From time to time, up to the Warrant
Expiration Date, the Transfer Agent shall execute and deliver stock certificates
in required whole number denominations representing up to an aggregate of
593,750 shares of Common Stock, subject to adjustment as described herein, upon
the exercise of Warrants in accordance with this Agreement.
(c) Warrant Certificates. From time to time, up to the Warrant
Expiration Date, the Warrant Agent shall execute and deliver Warrant
Certificates in required whole number denominations to the persons entitled
thereto in connection with any transfer or exchange permitted under this
Agreement; provided that no Warrant Certificates shall be issued except (i)
those initially issued hereunder, (ii) those issued upon the exercise of fewer
than all Warrants represented by any Warrant Certificate, to evidence any
unexercised Warrants held by the exercising Registered Holder, (iii) those
issued upon any transfer or exchange pursuant to Section 6 hereof, (iv) those
issued in replacement of lost, stolen, destroyed or mutilated Warrant
Certificates pursuant to Section 7 hereof and, (v) at the option of the Company,
in such form as may be approved by its Board of Directors, to reflect (A) any
adjustment or change in the Exercise Price or the number of shares of Common
Stock purchasable upon exercise of the Warrants made pursuant to Section 8
hereof and (B) any other modifications approved by Registered Holders in
accordance with Section 15 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) Form. The Warrant Certificates shall be substantially in
the form annexed
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hereto as Exhibit A (the provisions of which are hereby incorporated herein) and
may have such letters, numbers or other marks of identification or designation
and such legends, summaries or endorsements printed, lithographed, engraved or
typed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, as may be required to comply with any
law, with any rule or regulation made pursuant thereto, or with any rule or
regulation of any stock exchange or securities association on which or through
which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen, or destroyed
Warrant Certificates) and issued in registered form. Warrants shall be numbered
serially with the letter "W."
(b) Execution. Warrant Certificates shall be executed on
behalf of the Company by the Company's Chairman of the Board, President or any
Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, by manual signatures or by facsimile signatures printed
thereon, shall have imprinted thereon a facsimile of the Company's seal and
shall be countersigned by an authorized signatory of the Warrant Agent. In case
any officer of the Company who shall have signed any of such Warrant
Certificates shall cease to be such officer of the Company before the date of
issuance of the Warrant Certificates and issue and delivery thereof, such
Warrant Certificates may nevertheless be issued and delivered with the same
force and effect as though the person who signed such Warrant Certificates had
not ceased to be such officer of the Company. After execution by the Company and
countersignature by the Warrant Agent, Warrant Certificates shall be delivered
by the Warrant Agent to the Registered Holders.
SECTION 4. Exercise.
(a) Time of Exercise. Each Warrant may be exercised by the
Registered Holder thereof at any time after the date hereof and on or before the
Warrant Expiration Date, upon the terms and subject to the conditions set forth
herein and in the applicable Warrant Certificate. A Warrant shall be deemed to
have been exercised immediately prior to the close of business on the Exercise
Date, and the person entitled to receive the shares of Common Stock and any
unexercised Warrants deliverable upon such exercise shall be treated for all
purposes as the holder of such shares of Common Stock and such unexercised
Warrants upon such exercise as of the close of business on the Exercise Date. As
soon as practicable on or after the Exercise Date, the Warrant Agent shall
deposit the proceeds received from the exercise of a Warrant into an account of
the Company as designated in writing by the Company or as the Company may
otherwise direct in writing.
(b) Receipt of Payment and Issuance. The Warrant Agent shall
promptly after clearance of checks received in payment of the Exercise Price,
direct the Transfer Agent to issue and deliver to the person or persons entitled
to receive the same, a stock certificate or certificates for the shares of
Common Stock deliverable upon such exercise and the Warrant Agent shall issue
and deliver a Warrant Certificate for any remaining unexercised Warrants. Upon
the exercise of any Warrant and clearance of the funds received therefor, the
Warrant Agent shall promptly remit the payment received for the Warrants to the
Company or as the Company may direct in writing.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes;
etc.
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(a) Issuance and Sale of Shares. The Company covenants that it
will at all times reserve and keep available, free from preemptive rights, out
of its authorized Common Stock, solely for the purpose of issuance upon exercise
of Warrants, such number of shares of Common Stock as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of Common Stock that shall be issuable upon exercise of the Warrants
shall, at the time of delivery, be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issue or sale thereof.
The Transfer Agent for the Common Stock will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will supply
such Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided in
Section 9. The Company will furnish the Transfer Agent a copy of all notices of
adjustments and certificates related thereto, transmitted to each Registered
Holder pursuant to Section 8(p) hereof.
Before taking any action which would cause an adjustment
pursuant to Section 8 hereof that would reduce the Exercise Price below the then
par value (if any) of the shares of Common Stock, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock at the Exercise Price as so adjusted.
(b) Registration Statement. Registered Holders will be able to
exercise their Warrants only if (i)(A) the Registration Statement or another
registration statement relating to the sale of shares of Common Stock underlying
such Warrants is then in effect, or (B) the sale of such shares upon exercise of
such Warrants is exempt from the registration requirements of the Securities Act
of 1933, as amended, and (ii) such shares are qualified for sale or exempt from
qualification under applicable laws of the states where the Registered Holders
reside. The Company covenants to maintain the Registration Statement or another
registration statement in effect at all times with respect to the sale of shares
of Common Stock underlying such Warrants until the Warrant Expiration Date. The
Company also covenants to maintain at all times all necessary or desirable state
"blue sky" filings with respect to the sale of shares of Common Stock underlying
such Warrants until the Warrant Expiration Date.
(c) Stamp Taxes. The Company shall pay all documentary, stamp
or similar taxes and other governmental charges that may be imposed with respect
to the issuance of Warrants, or the issuance or delivery of any shares of Common
Stock upon exercise of the Warrants; provided, however, that if shares of Common
Stock are to be delivered in a name other than the name of the
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Registered Holder of the Warrant Certificate, then no such delivery shall be
made unless the person requesting the same has paid to the Warrant Agent the
amount of transfer taxes or charges incident thereto, if any.
(d) Listings. The Company will from time to time take all
action which may be reasonably necessary so that the Warrants and the shares of
Common Stock issuable upon the exercise of the Warrants will be listed on the
principal securities exchanges and markets (including, without limitation, the
Nasdaq National Market) within the United States of America, if any, on which
any of the Company's shares of Common Stock are then listed.
(e) SEC Reports. So long as any of the Warrants remain
outstanding, the Company shall cause copies of all quarterly and annual
financial reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act ("SEC Reports") to be filed
with the Warrant Agent and mailed to the Registered Holders at their addresses
appearing in the register of the Registered Holders maintained by the Warrant
Agent, in each case, within 15 days after filing with the SEC. If the Company is
not subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall nevertheless continue to cause SEC Reports, comparable to those
which it would be required to file pursuant to Section 13 or 15(d) of the
Exchange Act if it were subject to the requirements of either such section, to
be so filed with the SEC (but only if the SEC permits such filings) and with the
Warrant Agent and mailed to the Registered Holders, in each case, within the
same time periods as would have applied (including under the preceding sentence)
had the Company been subject to the requirements of Section 13 or 15(d) of the
Exchange Act. The Company shall provide the Warrant Agent with a sufficient
number of copies of all SEC Reports to enable the Warrant Agent to deliver to
each Registered Holder at least one copy and to each nominee Registered Holder
at least one copy for each beneficial holder for whom such nominee Registered
Holder holds Warrants.
SECTION 6. Exchange and Registration of Transfer.
Subject to the restrictions on transfer contained herein or in
the Warrant Certificates:
(a) Exchange of Warrant Certificates. Warrant Certificates may
be exchanged for other Warrant Certificates representing an equal aggregate
number of Warrants or may be transferred in whole or in part. Warrant
Certificates to be exchanged shall be surrendered to the Warrant Agent at its
Corporate Office, and upon satisfaction of the terms and provisions herein, the
Company shall execute, and the Warrant Agent shall countersign, issue and
deliver in exchange therefor, the Warrant Certificate or Certificates that the
Registered Holder making the exchange shall be entitled to receive.
(b) Warrant Register. The Warrant Agent shall keep books at
its office, in which it shall register Warrant Certificates and transfers
thereof in accordance with its regular practice. Upon due presentment for
registration of transfer of any Warrant Certificate at its office, the
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Company shall execute and the Warrant Agent shall issue and deliver to the
transferee or transferees a new Warrant Certificate or Certificates representing
an equal aggregate number of Warrants.
(c) Exercise Form. With respect to all Warrant Certificates
presented for registration of transfer, or for exchange or exercise, the
exercise form attached thereto must be duly endorsed, or be accompanied by a
written instrument or instruments of transfer and exercise in form satisfactory
to the Warrant Agent, duly executed by the Registered Holder or his
attorney-in-fact duly authorized in writing.
(d) Service Charge. A service charge may be imposed by the
Warrant Agent upon the Registered Holder for any exchange or registration of
transfer of Warrant Certificates. The Warrant Agent may require payment by a
Registered Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
(e) Registered Holder Treated as Absolute Owner. Prior to due
presentment for registration of transfer thereof, the Company and the Warrant
Agent may deem and treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof and of each Warrant represented thereby for all purposes
and shall not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and
the Warrant Agent of evidence satisfactory to them of the ownership and loss,
theft, destruction or mutilation of any Warrant Certificate and, in case of
loss, theft or destruction, of indemnity satisfactory to them, and in the case
of mutilation, upon surrender and cancellation thereof, in the absence of notice
that the Warrant Certificate has been acquired by a bona fide purchaser the
Company shall execute and the Warrant Agent shall countersign and deliver to the
Registered Holder in lieu thereof a new Warrant Certificate of like tenor
representing an equal aggregate number of Warrants. Registered Holders
requesting a substitute Warrant Certificate will be required to comply with such
other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
SECTION 8. Adjustment of Exercise Price and Number of Shares
of Common Stock. The number of shares of Common Stock purchasable upon the
exercise of the Warrants and the Exercise Price shall be subject to adjustment
from time to time as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (i) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares, or (iv) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Company, the Exercise Price in effect and the
number of shares of Common Stock issuable upon exercise of each Warrant
immediately prior to such action shall be adjusted so that the Registered Holder
of any Warrant thereafter exercised shall be entitled to receive the number of
shares of capital stock of the Company at the same aggregate Exercise Price that
such Registered Holder would have
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owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this paragraph shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an adjustment
made pursuant to this paragraph, the Registered Holder of any Warrant thereafter
exercised shall become entitled to receive shares of two or more classes of
capital stock of the Company, the Board of Directors of the Company (whose
determination shall be conclusive) shall determine the allocation of the
adjusted Exercise Price between or among shares of such classes of capital
stock.
(b) Reclassification, Combinations, Mergers, etc. In case of
any reclassification or change of outstanding shares of Common Stock issuable
upon exercise of the Warrants (other than as set forth in paragraph (a) above
and 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 or entity (other than a merger in which 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), or in the case of any sale or
conveyance of all or substantially all of the assets of the Company followed by
a related distribution to holders of shares of Common Stock of cash, securities
or other property, then as a condition of such reclassification, change,
consolidation, merger, or sale of assets, the Company or such a successor
corporation or entity, as the case may be, shall forthwith 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 shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, or sale of
assets, by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, or sale of assets, and enter into a supplemental warrant
agreement so providing. Such provisions shall include provision for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 8. If the issuer of securities deliverable upon
exercise of the Warrants under the supplemental warrant agreement is an
affiliate of the formed or surviving corporation or other entity, that issuer
shall join in the supplemental warrant agreement. The above provisions of this
paragraph (b) shall similarly apply to successive reclassifications and changes
of shares of Common Stock and to successive consolidations or mergers.
(c) Change in Number of Warrants. The Company may elect, upon
any adjustment of the Exercise Price hereunder, to adjust the number of Warrants
outstanding, in lieu of the adjustment in the number of shares of Common Stock
purchasable upon the exercise of each Warrant as hereinabove provided, so that
each Warrant outstanding after such adjustment shall represent the right to
purchase one share of Common Stock. Each Warrant held of record prior to such
adjustment of the number of Warrants shall become that number of Warrants
(calculated to the nearest tenth) determined by multiplying the number one by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment. Upon each adjustment
of the number of Warrants pursuant to this Section 8, the Company shall, as
promptly as practicable, cause to be distributed to each Registered Holder of
Warrant Certificates, on the date of such adjustment,
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Warrant Certificates evidencing, subject to Section 9 hereof, the number of
additional Warrants to which such Registered Holder shall be entitled as a
result of such adjustment or, at the option of the Company, cause to be
distributed to such Registered Holder in substitution and replacement for the
Warrant Certificates held by such Registered Holder prior to the date of
adjustment (and upon surrender thereof, if required by the Company) new Warrant
Certificates evidencing the number of Warrants to which such Registered Holder
shall be entitled after such adjustment.
(d) Deferral of Certain Adjustments. No adjustment to the
Exercise Price (including the related adjustment to the number of shares of
Common Stock purchasable upon the exercise of each Warrant) shall be required
hereunder unless such adjustment, together with other adjustments carried
forward as provided below, would result in an increase or decrease of at least
one percent of the Exercise Price; provided that any adjustments which by reason
of this paragraph (i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. No adjustment need to be made
for a change in the par value of the Common Stock. All calculations under this
Section 8 shall be made to the nearest 1/1,000 of one cent or to the nearest
1/1000 of a share, as the case may be.
(e) Other Adjustments. In the event that at any time, as a
result of an adjustment made pursuant to this Section 8, the Registered Holders
shall become entitled to receive any securities of the Company other than shares
of Common Stock, thereafter the number of such other securities so receivable
upon exercise of the Warrants and the Exercise Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Section 8.
(f) Common Stock. As used in this Section 8, the term "Common
Stock" shall mean and include the Common Stock authorized on the date of the
original issue of the shares of Common Stock and Warrants in connection with the
Public Offering and shall also include any capital stock of any class of the
Company thereafter authorized that is not limited to a fixed sum or percentage
in respect of the rights of the holders thereof to participate in dividends and
in the distribution of assets upon the voluntary liquidation, dissolution or
winding up of the Company.
(g) Notice of Change in Exercise Price. Upon any adjustment of
the Exercise Price pursuant to Section 8, the Company shall promptly thereafter
(i) cause to be prepared a certificate of the President and Chief Financial
Officer of the Company setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of shares of
Common Stock (or portion thereof) issuable after such adjustment in the Exercise
Price upon exercise of a Warrant and payment of the adjusted Exercise Price,
which certificate shall be conclusive evidence of the correctness of the matters
set forth therein absent manifest error, provided that if the Warrant Agent
reasonably requests, the Company shall engage a firm of independent public
accountants of
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recognized standing selected by the Board of Directors of the Company (who may
be the regular auditors of the Company) to prepare and file such certificate in
lieu of the certificate of the President and Chief Financial Officer, in which
case such certificate shall be conclusive evidence of the matters set forth
therein absent manifest error, and (ii) deliver the Warrant Agent at its
Corporate Office and to each of the Registered Holders of the Warrant
Certificates at the address appearing on the registry books maintained by the
Warrant Agent written notice of such adjustments by first-class mail, postage
prepaid. The Warrant Agent shall be entitled to rely on the above-referenced
certificate and shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same from time to time to any Registered
Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Registered Holder to determine whether any facts exist that may require any
adjustment of the number of shares of Common Stock or other stock or property
issuable on exercise of the Warrants or the Exercise Price, or with respect to
the nature or extent of any such adjustment when made, or with respect to the
method employed in making such adjustment or the validity or value (or the kind
or amount) of any shares of Common Stock or other stock or property which may be
issuable on exercise of the Warrants.
(h) Notice of Certain Events. With respect to any Notice
Event, the Company shall cause to be filed with the Warrant Agent and shall
cause to be given to each of the Registered Holders of the Warrant Certificates
at such Registered Holder's address appearing on the registry books maintained
by the Warrant Agent, at least 20 days prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock entitled to
receive any such rights, options, warrants or distribution is to be determined,
(ii) the initial expiration date set forth in any tender offer or exchange offer
for shares of Common Stock, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 8(h) or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, or liquidation or winding up, or the vote upon any
action, provided that the Registered Holders shall retain any right to damages
from the Company with respect to such failure.
SECTION 9. Fractional Warrants and Fractional Shares.
Regardless of whether or not the number of shares of Common Stock purchasable
upon the exercise of each Warrant is adjusted pursuant to Section 8 hereof, the
Company shall nevertheless not be required to issue or sell fractions of shares
upon exercise of the Warrants or otherwise, or to distribute certificates that
evidence fractional shares. With respect to any fraction of a share called for
upon the exercise of any Warrants, the Company shall pay to the Registered
Holder an amount in cash equal to such fraction multiplied by the "current
market price" per share. To the extent possible, upon a Registered Holder's
exercise of more than one Warrant the shares issuable or transferable shall be
aggregated so that the Company shall only be required to pay for the value of
one fractional share.
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The "current market price" per share of Common Stock at any
date shall be the average of the daily closing prices for the shorter of (i) the
20 consecutive trading days ending on the last full trading day on the exchange
or market described below prior to the Time of Determination (as defined below)
and (ii) the period commencing on the date next succeeding the first public
announcement of the issuance, sale, distribution or granting in question through
such last full trading day prior to the Time of Determination. The term "Time of
Determination" as used herein shall be the time and date of the earlier to occur
of (A) the date as of which the current market price is to be computed and (B)
the last full trading day on such exchange or market before the commencement of
"ex-dividend" trading in the Common Stock relating to the event giving rise to
the adjustment. The closing price for any day shall be the last reported sale
price regular way or, in case no such reported sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each
case (1) on the principal national securities exchange on which the shares of
Common Stock are listed or to which such shares are admitted to trading or (2)
if the Common Stock is not listed or admitted to trading on a national
securities exchange, in the over-the-counter market as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq
National Market") or any comparable system or (3) if the Common Stock is not
listed on Nasdaq National Market or a comparable system, as furnished by two
members of the NASD selected from time to time in good faith by the Board of
Directors of the Company for that purpose. In the absence of all of the
foregoing, or if for any reason the current market price per share cannot be
determined pursuant to the foregoing provisions of this paragraph (9), the
current market price per share shall be the fair market value thereof as
determined in good faith by the Board of Directors of the Company.
SECTION 10. Warrant Holders Not Deemed Stockholders. No
Registered Holder shall, as such, be entitled to vote or to receive dividends or
be deemed the holder of Common Stock that may at any time be issuable or
transferable upon exercise of such Warrants for any purpose whatsoever, nor
shall anything contained herein be construed to confer upon the holder of
Warrants, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or reclassification
of stock, change of par value or change of stock to no par value, consolidation,
merger or conveyance or otherwise), or to receive notice of meetings, or to
receive dividends or subscription rights, until such Registered Holder shall
have exercised such Warrants and been issued shares of Common Stock in
accordance with the provisions hereof.
SECTION 11. Rights of Action. All rights of action with
respect to this Agreement are vested in the respective Registered Holders of the
Warrants, and any Registered Holder of a Warrant, without consent of the Warrant
Agent or of the holder of any other Warrant, may, on his or her own behalf and
for his or her own benefit, enforce against the Company his or her right to
exercise the Warrants for the purchase of shares of Common Stock in the manner
provided in the Warrant Certificate and this Agreement.
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SECTION 12. Agreement of Warrant Holders. Every holder of a
Warrant, by his or her acceptance thereof, consents and agrees with the Company,
the Warrant Agent and every other holder of a Warrant that:
(a) Transfer of Warrants. The Warrants are transferable only
on the registry books of the Warrant Agent by the Registered Holder thereof in
person or by his attorney-in-fact duly authorized in writing and only if the
Warrant Certificates representing such Warrants are surrendered at the office of
the Warrant Agent, duly endorsed or accompanied by a proper instrument of
transfer satisfactory to the Warrant Agent in its sole discretion, together with
payment of any applicable transfer taxes; and
(b) Registered Holder Treated as Absolute Owner. The Company
and the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the Registered Holder thereof and as the absolute,
true and lawful owner of the Warrants represented thereby for all purposes, and
the Company and the Warrant Agent shall not be affected by any notice or
knowledge to the contrary.
SECTION 13. Cancellation of Warrant Certificates. If the
Company shall acquire any Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be canceled by the Warrant
Agent, and the Company shall retire such Warrants. The Warrant Agent shall also
cancel Warrant Certificates surrendered to the Warrant Agent following exercise
of any or all of the Warrants represented thereby or delivered to it for
transfer, split-up, combination or exchange.
SECTION 14. Concerning the Warrant Agent. The Warrant Agent
acts hereunder as agent and in a ministerial capacity for the Company, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent
shall not, by issuing and delivering Warrant Certificates or by any other act
hereunder, be deemed to make any representations as to the validity, value or
authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently deposit all moneys received by
the Warrant Agent upon the exercise of Warrants into an account of the Company
as designated in writing by the Company or as the Company may otherwise direct
in writing. The Warrant Agent shall, upon request of the Company from time to
time, deliver to the Company such complete reports of registered ownership of
the Warrants and such complete records of transactions with respect to the
Warrants as the Company may request. The Warrant Agent shall also make available
to the Company for inspection by their agents or employees, from time to time as
they may request, such original books of accounts and record as may be
maintained by the Warrant Agent in connection with the issuance and exercise of
Warrants hereunder, such inspections to occur at the Warrant Agent's Corporate
Office during normal business hours.
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The Warrant Agent shall not at any time be under any duty or
responsibility to any Registered Holder to make or cause to be made any
adjustment of the Exercise Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. The Warrant Agent shall not be (i)
liable for any recital or statement of facts contained herein or for any action
taken, suffered or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) responsible for
any failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or (iii)
liable for any act or omission in connection with this Agreement except for its
own negligence or willful misconduct. The Warrant Agent may at any time consult
with counsel satisfactory to it (who may be counsel for the Company) and shall
incur no liability or responsibility for any action taken, suffered or omitted
by it in good faith in accordance with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument signed
by the Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary, or any Assistant Secretary (unless other
evidence in respect thereof is herein specifically prescribed). The Warrant
Agent shall not be liable for any action taken, suffered or omitted by it in
accordance with such notice, statement, instruction, request, direction, order
or demand believed by it to be genuine.
The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder, including reasonable legal fees. The Company further agrees
to indemnify the Warrant Agent and save it harmless against any and all losses,
expenses and liabilities, including judgments, costs and legal fees, for
anything done or omitted by the Warrant Agent in the execution of its duties and
powers hereunder except losses, expenses and liabilities arising as a result of
the Warrant Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), upon 30
days prior written notice to the Company and the Company may discharge the
Warrant Agent from its duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or willful misconduct)
upon 30 days prior written notice to the Warrant Agent. At least 15 days prior
to the date such resignation or discharge is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation or discharge to be mailed
to the Registered Holder of each Warrant Certificate at the Company's expense.
Upon such resignation or discharge, or any inability of the Warrant Agent to act
as such hereunder, the Company shall appoint a new warrant agent in writing. If
the Company shall fail to make such appointment within a period of 15 days after
it has been notified in writing of such resignation by
14
the resigning Warrant Agent, or within a period of 15 days after the Warrant
Agent has been notified by the Company of such discharge, then the Registered
Holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any new warrant agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company having a capital and surplus, as shown by its last published report to
its stockholders, of not less than $10,000,000 or a stock transfer company.
After acceptance in writing of such appointment by the new warrant agent is
received by the Company, the Warrant Agent's resignation or discharge shall be
deemed to be effective and such new warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; but if for any reason it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed and
delivered by the resigning Warrant Agent. Not later than the effective date of
any such appointment, the Company shall file notice thereof with the resigning
Warrant Agent and shall forthwith cause a copy of such notice to be mailed to
the Registered Holder of each Warrant Certificate.
Any corporation into which the Warrant Agent may be converted
or merged or any corporation resulting from any consolidation to which the
Warrant Agent shall be a party or any corporation succeeding to the trust
business of the Warrant Agent shall be a successor warrant agent under this
Agreement without any further act, provided that such corporation is eligible
for appointment as successor to the Warrant Agent under the provisions of the
preceding paragraph. Any such successor warrant agent shall promptly cause
notice of its succession as warrant agent to be mailed to the Company and the
Registered Holder of each Warrant Certificate.
The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 15. Modification of Agreement.
(a) Approval of Registered Holders. Subject to the provisions
of Section 15(b) hereof, the Company and the Warrant Agent may by supplemental
agreement make any changes or corrections in this Agreement that (i) they deem
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained or (ii) they deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Warrant Certificates; provided, however, that except as otherwise
indicated in this section and this Agreement, this Agreement shall not otherwise
be modified, supplemented or altered in any respect, including the modification
of the number of shares of Common Stock issuable upon exercise of the Warrants,
the Exercise Price and the Warrant Expiration Date, except with the consent in
writing of the Company, the Warrant Agent, and the Registered Holders of Warrant
Certificates representing not less than two-thirds of the Warrants then
outstanding.
15
(b) Decrease in Exercise Price. The Company shall have the
right at any time and from time to time to decrease the Exercise Price for a
period of not less than 30 days on not less than 30 days prior written notice to
the Registered Holders of the Warrants.
SECTION 16. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, at 0000 Xxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
Attention: President (with a copy to: Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.,
000 Xxxxxxx Xxxxxxxxxx, Xxxxxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxx,
Esq., Facsimile No.: (000) 000-0000); if to the Warrant Agent, at its Corporate
Office.
SECTION 17. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
SECTION 18. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the Company and the Warrant Agent (and their
respective successors and assigns) and the holders from time to time of Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any other person any right, remedy or claim, in equity or at law, or
to impose upon any other person any duty, liability or obligation.
SECTION 19. Termination. This Agreement shall terminate on the
earliest to occur of (a) the Expiration Date, (b) the date upon which all
Warrants have been exercised and (c) the date on which the Company certifies to
the Warrant Agent that no Warrants are outstanding; provided however, that
notwithstanding any such termination, the Warrant Agent shall be obligated to
deliver funds to the Company in accordance with this Agreement.
SECTION 20. Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute a single document.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
NATHAN'S FAMOUS, INC.
By:
Xxxxx Xxxxxxx
President
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
Authorized Officer
17
EXHIBIT A TO WARRANT AGREEMENT
No. W __________ __________ Warrants
WARRANT CERTIFICATE
NATHAN'S FAMOUS, INC.
This Warrant Certificate certifies that ____________, or its 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 $.10 per share
(the "Common Stock"), of Nathan's Famous, Inc., a Delaware corporation (the
"Company"), at any time until the Expiration Date hereinafter referred to, by
surrendering this Warrant Certificate, with the exercise form 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, 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, and any other offices of the Warrant Agent or its successor
designated for such purpose (any such warrant agent being herein called the
"Warrant Agent"), and by paying in full the sum of $6.00 per share on or before
the Expiration Date (as defined below) (the "Exercise Price"), plus transfer
taxes, if any. Payment of the Exercise 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 Exercise
Price and the number of shares of Common Stock issuable upon the exercise of
each Warrant are required to be adjusted.
No Warrant may be exercised after 5:00 p.m. (New York City time) on
______ __, 2002 or on such expiration date as may be extended to maintain an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act") for at least 90 consecutive days prior to such expiration
date (the "Expiration Date"). After the Expiration Date, all Warrants evidenced
hereby shall thereafter become void, and the holders thereof shall have no
rights hereunder. 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, 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 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, a savings bank
or a savings and loan association or a trust company located in the United
States, a member of the National
18
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 Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended).
Upon any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants will be issued in accordance
with the instructions in the form of assignment.
No Warrant is exercisable unless, at the time of such exercise, the
Company has a registration statement in effect under the Securities Act covering
the shares of Common Stock issuable or transferable upon exercise of such
Warrant, and such shares have been registered or qualified under the securities
laws of the state of residence of the exercising Registered Holder, or such
issuance or transfer is exempt from the registration requirements of the
Securities Act and such shares of Common Stock are exempt from such registration
or qualification.
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
Registered Holder shall be paid the cash value thereof determined as provided in
the Warrant Agreement.
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.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
DATED NATHAN'S FAMOUS, INC.
By:
President
[SEAL]
Treasurer
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST
COMPANY, WARRANT AGENT
By:
Authorized Officer
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[REVERSE SIDE]
Exercise Form
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _________________ shares of
Common Stock and herewith makes payment therefor. The undersigned requests that
a certificate for such shares be registered in the name of _________________,
whose address is _________________ and whose social security or other
identifying number is _________________, and that such shares be delivered to
_________________, whose address is _________________ . If said number of shares
is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the balance of
such shares be registered in the name of _________________, whose address is and
whose social security or other identifying number is _________________, and that
such Warrant Certificate be delivered to _________________, whose address is
_________________.
Date:
Signature
Signature Guaranteed:
The signature to the exercise form must correspond to the name as
written upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever. The signature should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved signature
guarantee medallion program), pursuant to Rule 17Ad-15.
21
Form of Assignment
For value received, the undersigned hereby sells, assigns and transfers
unto _______ ___________________, whose address is ________________________ and
whose social security or other identifying number is __________________, the
Warrants represented by this Warrant Certificate (or ____ Warrants, if less than
all of the Warrants represented by this certificate), and hereby irrevocably
constitutes and appoints the Warrant Agent as his or her attorney-in-fact to
transfer this Warrant Certificate in the books of the Warrant Agent maintained
for such purpose, with full power of substitution and re-substitution in the
premises. If said number of Warrants is less than all of the Warrants evidenced
by this certificate, the undersigned requests that a new Warrant Certificate
representing the balance of such Warrants be registered in the name of
_____________________, whose address is _______________________________ and
whose social security or other identifying number is ________________, and that
such Warrant Certificate be delivered to ___________________, whose address is
_____________________________.
Date:
Signature
Signature Guaranteed:
The signature to the assignment form must correspond to the name as
written upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever. The signature should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved signature
guarantee medallion program), pursuant to Rule 17Ad-15.
