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EXHIBIT 10.24
REPRESENTATIVE WARRANT AGREEMENT
REPRESENTATIVE WARRANT AGREEMENT dated as of , 1996, between
CONSEP, INC., an Oregon corporation (the "Company"), and VALUE INVESTING
PARTNERS, INC., a Delaware corporation ("VIP").
W I T N E S S E T H
WHEREAS, in connection with a public offering (the "Offering") of up to
2,300,000 shares of Common Stock, $.01 par value (the "Common Stock") of the
Company pursuant to a registration statement (the "Registration Statement") on
Form S-1 (File No. 333-11827), the Company desires to issue to VIP
Representative Warrants (the "Representative Warrants") to purchase an aggregate
of 175,556 shares (the "Shares") of Common Stock.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Company and VIP hereby agree as follows:
1. Issuance of Warrants: Form of Warrants; Execution of Warrants. The
Company shall issue, sell and deliver the Representative Warrants to VIP or, at
VIP's direction, to its bona fide officers or designees, for $100 concurrently
with the Firm Shares closing date (the "Closing") under the underwriting
agreement, dated , 1996, among the Company, Xxxxxxx X. Xxxxx, Xx.,
Xxxxxxx X. Xxxxx, VIP and certain other parties (the "Underwriting Agreement")
relating to the Offering. The Representative Warrants shall be executed on
behalf of the Company by the manual or facsimile signature of its present or any
future Chairman or President, under its corporate seal affixed or in facsimile,
and attested by the manual or facsimile signature of its Secretary or Assistant
Secretary.
2. Registration. The Representative Warrants shall be numbered and shall
be registered in a warrant register as they are issued. The Company shall be
entitled to treat the registered holder of any Representative Warrant (the
"Holder") as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Representative
Warrants on the part of any other Person (as hereinafter defined), and shall not
be liable for any registration or transfer of Representative Warrants that 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. The Representative Warrants shall be registered initially in the name of
"Value Investing Partners, Inc." in such denominations as VIP may request in
writing to the Company; provided, however, that prior to the Closing, VIP may
designate that the Representative Warrants be issued in varying amounts directly
to its bona fide officers or designees and not to VIP. Such designation will
only be made by VIP if it determines such issuances would not violate the
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. (the "NASD") relating to the review of corporate
financing arrangements.
3. Transfer of Warrants
3.1 The Representative Warrants may not be sold, assigned,
transferred, pledged or hypothecated (collectively, "transferred") for a
period of one year after the effective date of the Registration Statement,
except to bona fide officers of VIP. Subsequent to such one year period the
Representative Warrants may be transferred to any persons subject to
compliance with the provisions of Section 10 hereof. The Representative
Warrants shall be transferable only on the books of the Company maintained
at its principal executive office (the "Company Office") upon delivery
thereof duly indorsed by the Holder or by the Holder's duly authorized
attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer
by an attorney, the original power of attorney, duly approved, or a copy
thereof, duly certified, shall be deposited and remain with the Company. In
case of transfer by 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 Company
in its discretion.
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3.2 Upon any registration of transfer, the Company shall deliver a new
Representative Warrant or Representative Warrants to the Persons entitled
thereto. The Representative Warrants may be exchanged, at the option of the
Holder thereof, for other Representative Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Shares upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Representative Warrants to be transferred on its books
to any Person, unless the Holder or Holders thereof shall furnish to the
Company evidence of compliance with the Securities Act of 1933, as amended
(the "Act"), in accordance with the provisions of Section 10 of this
Agreement.
4. Exercise of Warrants; Terms of Warrants
4.1 Each Representative Warrant shall entitle the Holder thereof to
purchase from the Company one share of Common Stock at a purchase price of
$ per Share, payable in full at the time of exercise of the
Representative Warrant. Except as the context otherwise requires, the term
"Exercise Price" as used in this Agreement shall mean the purchase price of
one share. Each Representative Warrant may be exercised for a four-year
period commencing on the first anniversary of the effective date of the
Registration Statement. The term "Expiration Date" as used in this
Agreement shall mean the latest time and date at which the Representative
Warrants may be exercised. After the Expiration Date, any unexercised
Representative Warrants shall be void and all rights of Holders with
respect thereto shall cease.
4.2 During the period specified in and subject to the provisions of
this Section 4, Representative Warrants may be exercised by their surrender
at the Company Office with the election-to-purchase form set forth on (or
attached to) the Representative Warrant duly completed and executed,
accompanied by payment in full to the Company of the aggregate Exercise
Price for each Share with respect to which Representative Warrants are
being exercised, which amounts shall be paid in full, either in United
States currency, by a bank cashier's check or money order payable to the
order of the Company or by wire transfer to an account designated by the
Company or pursuant to Section 4.3 hereof. Within three (3) business days
after the exercise of any Representative Warrants, the Company shall issue
a certificate or certificates for the number of full Shares to which the
Holder is entitled, registered in accordance with the instructions set
forth in the election-to-purchase form. All Shares shall be duly
authorized, validly issued, fully paid, nonassessable and free from all
taxes, liens and charges. Certificates representing such Shares shall be
delivered by the Company in such names and denominations as are required
for delivery to, or in accordance with the instructions of, the Holder.
4.3 In lieu of a monetary payment of the Exercise Price, a Holder may
elect to receive, without the payment of any additional consideration,
Shares equal to the value of his Representative Warrants or portion thereof
by the surrender of such Representative Warrants to the Company with the
net issuance election marked in the election-to-purchase form. Thereupon,
the Company shall issue to the Holder, such number of fully paid and
nonassessable Shares as is computed using the following formula:
X = Y(A-B)
A
where X = the number of Shares to be issued to the Holder pursuant to this
Section 4.3.
Y = the number of Shares covered by his Representative Warrants in
respect of which the net issuance election is made pursuant to
this Section 4.3.
A = the fair market value of one share of Common Stock, as defined
below, as at the time the net issuance election is made pursuant
to this Section 4.3.
B = the Exercise Price in effect under this Representative Warrant
at the time the net issuance election is made pursuant to this
Section 4.3.
The fair market value of a share of Common Stock shall be the per share
last sale price for the Common Stock on the trading day immediately
preceding the day the Company receives the duly completed
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election-to-purchase form as quoted on the Nasdaq National Market or such
other quotation system or a national securities exchange on which the
Common Stock is then principally traded.
4.4 Each Person in whose name any such certificate for Shares is
issued shall for all purposes be deemed to have become the holder of record
of the Shares represented thereby on the date upon which such
Representative Warrants were surrendered for exercise, accompanied by
payment of the Exercise Price, irrespective of the date of issuance or
delivery of such certificate for Shares; provided, however, that if, at the
date of the surrender of such Representative Warrants and payment of the
Exercise Price, the transfer books for the Shares purchasable upon the
exercise of such Representative Warrants shall be closed, the certificates
for the Shares shall be issuable as of the date on which such books shall
next be opened (whether before or after the Expiration Date) and, until
such date, the Company shall be under no duty to deliver any certificate
for such Shares; provided further, that the transfer books of record,
unless otherwise required by law, shall not be closed at any one time for a
period longer than twenty (20) days.
4.5 The Representative Warrants shall be exercisable, at the election
of the Holders thereof, in full or from time to time in part and, in the
event that less than all of the surrendered Representative Warrants are
exercised, the Company shall execute and mail, by first-class mail, within
ten (10) days of the date upon which the Representative Warrants were
exercised, to the Holder of such Representative Warrants or such other
Person (as defined herein) as shall be designated in the election to
purchase, a new Representative Warrant representing the number of full
Representative Warrants not exercised. No fractional Shares shall be
issued; all issuances upon exercise would be rounded to the nearest whole
Share.
5. Payment of Taxes. The Company shall promptly pay all documentary stamp
taxes attributable to the issuance of Shares upon the exercise of any
Representative Warrants, but any transfer taxes that may be payable in
connection with the issuance of Representative Warrants or certificates for
Shares in any name other than that of the Holder of the Representative Warrants
surrendered shall be paid by such Holder.
6. Mutilated or Missing Representative Warrants. In case any of the
Representative Warrants shall be mutilated, lost, stolen or destroyed, the
Company shall issue and deliver in exchange and substitution for and upon
cancellation of the mutilated Representative Warrant, or in lieu of and
substitution for the lost, stolen or destroyed Representative Warrant, a new
Representative Warrant of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Representative Warrant.
Applicants for such substitute Representative Warrants shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
7. Reservation of Shares. The Company shall at times reserve and keep
available for issuance upon the exercise of Representative Warrants a number of
Shares that will be sufficient to permit the exercise in full of all outstanding
Representative Warrants. Xxxxx Xxxxxx Shareholder Services (the "Transfer
Agent") and every subsequent transfer agent for the Company's Common Stock, or
other securities issuable upon exercise of Representative Warrants, shall be
irrevocably authorized and directed at all times to reserve such number of
Shares as shall be required for such purpose. The Company will keep a copy of
this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any of the Company's Shares or other securities issuable upon
the exercise of Representative Warrants. The Company shall supply the Transfer
Agent (and any such subsequent transfer agent) with duly executed certificates
for such purpose. All Representative Warrants surrendered upon the exercise
thereof shall be canceled and such canceled Representative Warrants shall
constitute sufficient evidence of the number of Shares that have been issued
upon the exercise of the Representative Warrants. After the Expiration Date, no
Shares shall be subject to reservation in respect of any unexercised
Representative Warrant.
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8. Adjustments.
The Exercise Price and the number and kind of Shares shall be subject to
adjustment from time to time upon the happening of certain events as provided in
this Section 8.
8.1 If at any time prior to the full exercise of Representative
Warrants the Company shall (a) pay a dividend or make a distribution on its
shares of Common Stock in shares of Common Stock (other than cash dividends
or distributions out of surplus or earnings), (b) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares
or (c) combine, reclassify or recapitalize its outstanding Common Stock
into a smaller number of shares, the Exercise Price in effect at the time
of the record date of such subdivision, combination, reclassification or
recapitalization shall be proportionately adjusted so that the Holder shall
be entitled to receive the aggregate number and kind of shares which, if
this Warrant had been exercised in full immediately prior to such time, he
would have owned upon such exercise and been entitled to receive upon such
dividend, subdivision, combination, reclassification or recapitalization.
Such adjustment shall be made successively whenever any event listed in
this Section 8.1 shall occur.
8.2 If the Company shall hereafter issue rights, options or warrants
to all holders of its outstanding Common Stock, without charge to such
holders, entitling them to subscribe for or purchase shares of Common Stock
(or Common Stock equivalents) at a price (or having a conversion price per
share) less than the lower of the Exercise Price or the current market
price of the Common Stock (as determined pursuant to Section 8.5 hereof) on
the record date described below, the Exercise Price then in effect shall be
adjusted so that the Exercise Price shall equal the price determined by
multiplying the Exercise Price in effect immediately prior to the date of
such sale or issuance (which date in the event of distribution to
shareholders shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such distribution) by a
fraction, the numerator of which shall be (i) the number of shares of
Common Stock outstanding on the date of such sale or issuance, plus (ii)
the number of additional shares of Common Stock which the aggregate
consideration received by the Company upon such issuance or sale (plus the
aggregate of any additional amount to be received by the Company upon the
exercise of such rights or warrants) would purchase at such current market
price per share of the Common Stock; and the denominator of which shall be
(i) the number of shares of Common Stock outstanding on the date of such
issuance or sale, plus (ii) the number of additional shares of Common Stock
offered for subscription or purchase (or into which the Common Stock
equivalents so offered are convertible). Such adjustments shall be made
successively whenever such warrants or rights are issued. To the extent
that shares of Common Stock are not delivered (or Common Stock equivalents
are not delivered) after the expiration of such rights or warrants, the
Exercise Price shall be readjusted to the Exercise Price which would then
be in effect had the adjustments been made upon the issuance of such rights
or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or Common Stock equivalents) actually delivered.
8.3 In case the Company shall hereafter fix a record date for making a
distribution to the holders of Common Stock of assets or evidences of its
indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in Section 8.1 hereof) or Common
Stock subscription rights, options or warrants for Common Stock or Common
Stock equivalents (excluding those referred to in Section 8.2 hereof), then
in each such case the Exercise Price in effect after such record date shall
be adjusted to the price determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock (as defined in
Section 8.5 hereof), less the fair market value (as determined by the
Company's Board of Directors) of said assets or evidences of indebtedness
so distributed or of such Common Stock subscription rights, options and
warrants or of such Common Stock equivalents applicable to one share of
Common Stock, and the denominator of which shall be the total number of
shares of Common Stock outstanding multiplied by such current market price
per share of Common Stock. Such adjustment shall be made successively
whenever the record date for such distribution is fixed and shall become
effective immediately after such record date.
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8.4 Whenever the Exercise Price payable upon exercise of each
Representative Warrant is adjusted pursuant to Section 8.1, 8.2 or 8.3
hereof, the Shares shall simultaneously be adjusted by multiplying the
number of Shares initially issuable upon exercise of each Warrant by the
Exercise Price in effect on the date thereof and dividing the product so
obtained by the Exercise Price, as adjusted.
8.5 For the purpose of any computation under this Section 8, the
current market price per share of Common Stock at any date shall be deemed
to be the average of the daily closing price for five (5) consecutive
trading days immediately preceding such date. The closing sale or price for
each day shall be the last sale price regular way or, in case no such
reported sales take place on such day, the average of the last reported bid
and asked prices regular way, in either case on the principal national
securities exchange on which the Common Stock is admitted to trading or
listed, or if not listed or admitted to trading on such exchange, the
representative closing sale or bid price as reported by Nasdaq, or other
similar organization if Nasdaq is no longer reporting such information, or
if not so available, the fair market price as determined by the Board of
Directors.
8.6 No adjustments in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents
($.05) in such price; provided, however, that any adjustments which by
reason of this Section 8.6 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 8 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
8.7 In the event that at any time, as a result of any adjustment made
pursuant to Section 8.1 hereof, the Holder thereafter shall become entitled
to receive any shares of the Company, other than Common Stock, thereafter
the number of such other shares so receivable upon exercise of any
Representative Warrant 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 Common Stock contained in this Section 8.
9. Consolidation, Merger, Sale of Assets, Reorganization, etc. General
Provisions
9.1 In case the Company, after the Effective Date, (a) shall
consolidate with or merge into any other Person (as defined below) and
shall not be the continuing or surviving Person of such consolidation or
merger, (b) shall permit any other Person to consolidate with or merge into
the Company and the Company shall be the continuing or surviving person
but, in connection with such consolidation or merger, Common Stock or other
securities shall be changed into or exchanged for cash, stock, or other
securities of any other Person or any other property, (c) shall transfer,
directly or indirectly through transactions involving any of or all of its
subsidiaries all or substantially all its properties and assets to any
other Person or (d) shall effect a capital reorganization or
reclassification of Common Stock or other securities, then, and in the case
or each such transaction, the Company shall make proper provision such that
the Holder of a Representative Warrant, upon the exercise thereof at any
time after the consummation of each such transaction, shall be entitled to
receive, at the Exercise Price in effect immediately prior to such
consummation, the highest amount of cash, securities or other property to
which such Holder would actually have been entitled as a shareholder of
Common Stock upon such consummation if such Holder had exercised this
Representative Warrant immediately prior thereto, subject to adjustments
subsequent to such consummation as nearly equivalent as possible to the
adjustments provided for in this Section 9; provided, however, that if
prior to the consummation of such transaction, a purchase tender or
exchange offer shall have been made to and accepted by the holders of more
than 50% of the outstanding shares of Common Stock, and if the Holder of
the Representative Warrants, by written notice to the Company signed on or
before the date immediately preceding the date of expiration of such
purchase, tender or exchange offer, declares an intention to exercise his
Warrants in whole or in part, such Holder shall be entitled, upon
consummation of such offer, to receive upon exercise the highest amount of
cash, securities or other property to which such Holder would actually have
been entitled as a holder of the Shares under the Representative Warrants
if such Holder had exercised his Warrants prior to the expiration of such
purchase, tender, or exchange offer, and if all Shares which such Holder
would have owned as a result of such exercise had been purchased pursuant
to such purchase,
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tender or exchange offer. "Person" shall mean an individual, a corporation,
a partnership, a trust, an unincorporated organization or a government or
any agency or political subdivision thereof.
9.2 Assumption of Obligations. Notwithstanding anything contained in
this Agreement to the contrary, the Company shall not effect any of the
transactions described in subdivisions (a) through (d) of Section 9.1
unless prior to the consummation thereof, each Person (other than the
Company) that may be required to deliver any cash, stock or other
securities or other property upon the exercise of Representative Warrants
as provided herein shall assume, by written instrument delivered to the
Holders of the Representative Warrants, and reasonably satisfactory to VIP
or Holders of a majority in interest of the Representative Warrants (i) the
obligations of the Company under this Agreement and the Representative
Warrants (and if the Company shall survive the consummation of any such
transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this
Agreement and the Representative Warrants) and (ii) the obligation to
deliver to such Holder such cash, stock or other securities or other
property as such Holder may be entitled to receive in accordance with the
provisions of this Section 9.
9.3 Other Dilutive Events. The Board of Directors of the Company
shall have an ongoing obligation to determine in good faith whether any
event has occurred as to which the provisions of Section 8 or this Section
9 shall not be strictly applicable, but with respect to which the failure
to make any adjustment to the Exercise Price or the Shares would not fairly
protect the purchase rights represented by the Representative Warrant in
accordance with the intent and principles of this Agreement. In each case
in which such determination shall be made, the Company shall appoint a firm
of independent public accountants, reasonably acceptable to VIP or the
Holders of a majority-in-interest of the Representative Warrants, which
shall give its opinion upon the adjustments, if any, consistent with the
intent and principles established in this Agreement necessary to preserve
without dilution the purchase rights represented by this Agreement and the
Representative Warrants. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the Holders and shall make the adjustments
described therein.
9.4 No Dilution or Impairment. The Company shall not, by amendment of
its Articles of Incorporation or By-Laws or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue, sale, grant
or assumption of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Agreement
or the Representative Warrants, but will at all times, whether or not
requested to do so, in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holders against dilution
or other impairment. Without limiting the generality of the foregoing, the
Company shall take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Shares upon the exercise of all Representative Warrants from
time to time outstanding.
9.5 Notice Evidence of Adjustments. Whenever any adjustment is made
pursuant to this Agreement, the Company shall promptly cause a notice
setting forth the details of the adjustment to be mailed to the Holders, at
their last addresses appearing in the Warrant register, and shall cause a
certified copy thereof to be mailed to the Transfer Agent. The Company
shall retain a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by
such adjustment and a certificate signed by such firm shall accompany said
notice and shall be conclusive evidence of the correctness of such
adjustment.
10. Restrictions of Dispositions. The Shares have been registered under
the Act pursuant to the Registration Statement. VIP represents and warrants to
the Company that it understands that (a) the Shares may not be transferred
except pursuant to (i) a post-effective amendment to the effective Registration
Statement, (ii) another effective registration statement under the Act relating
thereto, or (iii) any available exemption from registration under the Act
permitting such disposition of securities and an opinion of counsel, reasonably
satisfactory to counsel for the Company, that an exemption from such
registration is available and
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(b) the Representative Warrants may not be transferred except in accordance with
the provisions of Section 3 hereof, pursuant to an effective registration
statement under the Act relating thereto or pursuant to any available exemption
from registration under the Act permitting such disposition of securities and an
opinion of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
11. Certificates to Bear Legends. The Representative Warrants shall be
subject to a stop-transfer order and the certificate or certificates therefor
shall bear the following legend:
NEITHER THE REPRESENTATIVE WARRANTS NOR THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF MAY BE SOLD OR TRANSFERRED PRIOR TO 1997 (SUBJECT
TO CERTAIN LIMITED EXCEPTIONS), SUCH SECURITIES MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION
STATEMENT, (ii) ANOTHER EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") RELATING THERETO OR (iii) AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES AND AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL
FOR THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS
AVAILABLE, AND THE REPRESENTATIVE WARRANTS MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3 OF THE REPRESENTATIVE WARRANT
AGREEMENT BETWEEN CONSEP, INC. AND VALUE INVESTING PARTNERS, INC. PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATING THERETO OR
PURSUANT TO ANY AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
PERMITTING SUCH DISPOSITION OF SECURITIES AND AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
The Shares upon exercise of the Representative Warrants shall be subject to
a stop-transfer order and the certificate or certificates evidencing any such
Shares shall bear a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") PURSUANT TO A REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. HOWEVER, SUCH SHARES MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO
THE REGISTRATION STATEMENT, (ii) ANOTHER EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT RELATING THERETO OR (iii) AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES AND
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.
12. Registration Rights.
12.1 Demand Registration Rights. Upon written request of the then
Holder(s) of at least a majority of the Representative Warrants or Shares,
if issued, made at any time within the period commencing one (1) year and
ending five (5) years after the effective date of the Registration
Statement, the Company shall file within a reasonable period of time and,
in any event, within sixty (60) days after receipt of such written request,
at its sole expense, on no more than one occasion, a post-effective
amendment to the present Registration Statement or a new registration
statement under the Act registering the Shares for sale to the public and
either must be declared effective. Within fifteen (15) days after receiving
any such notice, the Company shall give notice to the other Holders of the
Representative Warrants and/or Shares acquired upon exercise of the
Representative Warrants advising that the Company is proceeding with such
post-effective amendment or registration statement, and offering to include
therein the Shares of such other Holders. The Company shall not be
obligated to so include the Shares of any such other Holder unless such
other Holder shall accept such offer by notice in
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writing to the Company within ten (10) days after receipt of such notice
from the Company. The Company shall use its best efforts, through its
officers, directors, auditors and counsel in all matters necessary or
advisable, to file and cause to become effective such post-effective
amendment or registration statement as promptly as practicable and for a
period of ninety (90) days thereafter to reflect in the post-effective
amendment or registration statement financial statements that are prepared
in accordance with Section 10(a)(3) of the Act and any facts or events
arising that, individually or in the aggregate, represent a fundamental
and/or material change in the information set forth in the post-effective
amendment or registration statement to enable any Holders of Representative
Warrants to exercise Representative Warrants and/or sell Shares during said
ninety-day period. If the initiating Holders intend to distribute the
Shares covered by their request by means of an underwriting they shall so
advise the Company as part of their request made pursuant to this Section
12.1 and the Company shall include such information in the written notice
referred to in this Section 12.1. In such event, the right of any Holder to
include its Shares in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Shares in such registration (unless otherwise mutually agreed upon
by a majority in interest of the initiating Holders and such Holder) to the
extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall, together with the Company,
enter into an underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting by a majority in interest of
the initiating Holders, which underwriter shall be reasonably acceptable to
the Company. Notwithstanding any other provision of this Section 12.1, if
the underwriter advises the initiating Holders and the Company in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the Company shall so advise all Holders of Shares which
would otherwise be underwritten pursuant hereto, and the number of Shares
that may be included in the underwriting shall be allocated among all
Holders thereof, including the initiating Holders, on a pro rata basis
according to the number of Shares held by such Holders. Notwithstanding the
foregoing, (i) the Company shall not be obligated to effect a registration
pursuant to this Section 12.1 during the period starting with the date 60
days prior to the Company's good faith estimated date of filing of, and
ending on a date 180 days following the effective date of, a registration
statement pertaining to an underwritten public offering of securities for
the account of the Company, provided that the Company is at all times
during such period diligently pursuing such registration and, (ii) if the
Company shall furnish to the initiating Holders requesting a registration
pursuant to this Section 12.1, a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for such registration statement to be filed and it is therefor
essential to defer the filing of such registration statement, the Company
shall have the right to defer such filing for a period of not more than 120
days after receipt of the request of the initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twenty-four month period.
12.2 Other Registration Rights. The Holders of the Representative
Warrants shall be entitled to the registration rights set forth in that
Registration Rights Agreement dated as of May 5, 1992, as amended, among
the Company, VIP and certain other parties with respect to the Shares.
12.3 Action to be Taken by the Company. In connection with the
registration of Shares in accordance with Section 12.1 hereof, the Company
shall:
(a) bear the expenses of any registration under Section 12.1
hereof, including but not limited to legal, accounting and printing
fees; provided, however, that in no event shall the Company be obligated
to pay (i) any fees and disbursements of legal counsel retained by
Holders of Representative Warrants and/or Shares, or (ii) any
underwriters' discount or commission payable in respect of such Shares,
payment of which shall, in each case, be the sole responsibility of the
Holders of the Shares;
(b) use its best efforts to register or qualify the Shares for
offer or sale under state securities or blue sky laws of such
jurisdictions in which the participating Holders propose to offer
Shares, and to do any and all other acts and things that may be
necessary or advisable to enable the Holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction; and
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(c) enter into a cross-indemnity agreement, in customary form, with
each underwriter, if any, and each Holder of Shares included in such
Registration Statement provided that, if so requested by the
underwriter, such Holders shall provide the underwriters with several
indemnity agreements as to information regarding such Holders.
12.4 Information by Holders. Each Holder shall provide, upon
reasonable request by the Company, information for inclusion in such
Registration Statement as may be required by the applicable rules and
regulations of the Act.
13. Notices to Holders.
13.1 Nothing contained in this Agreement or in any of the
Representative Warrants shall be construed as to confer upon the Holders
thereof the right to vote or to receive dividends or to consent to receive
notice as shareholders in respect of the meetings of shareholders or the
election of directors of the Company or any other matter, or any rights
whatsoever as shareholders of the Company; provided, however, that in the
event that a meeting of shareholders shall be called to consider and take
action on a proposal for the voluntary dissolution of the Company, other
than in connection with a consolidation, merger, or sale of all, or
substantially all, of its property, assets, business and good will as an
entirety, then and in that event the Company shall cause a notice thereof
to be sent by first-class mail, postage prepaid, at least twenty (20) days
prior to the date fixed as a record date or the date of closing the
transfer books in relation to such meeting, to each registered Holder of
Registration Warrants at such Holder's address appearing on the Warrant
register; but failure to mail or receive such notice or any defect therein
or in the mailing thereof shall not affect the validity of any action taken
in connection with such voluntary dissolution. If such notice shall have
been so given and if such a voluntary dissolution shall be authorized at
such meeting or any adjournment thereof, then from and after the date on
which such voluntary dissolution shall have been duly authorized by the
shareholders, the purchase rights represented by the Representative
Warrants and all other rights with respect thereto shall cease and
terminate.
13.2 In the event the Company intends to make any distribution on or
to shareholders of its Common Stock, including, without limitation, any
dividend or distribution from earned surplus, any dividend or distribution
of stock, assets or evidences of indebtedness, any distribution to be made
in connection with a consolidation or merger in which the Company is the
surviving corporation or any distribution of shares of stock of any
corporation at least a majority of whose outstanding stock is owed by the
Company, then the Company shall cause a notice of its intention to make
such distribution to be sent by first-class mail, postage prepaid, at least
twenty (20) days prior to the date fixed as a record date or the date of
closing the transfer books in relation to such distribution, to each
registered Holder of Representative Warrants at such Holder's address
appearing on the Warrant register, but failure to mail or to receive such
notice or any defect therein or in the mailing thereof shall not affect the
validity of any action taken in connection with such distribution or
issuance.
14. Notices. Any notice or demand required by this Agreement to be given
or made by the Holder to or on the Company shall be sufficiently given or made
if in writing and sent by first-class or registered mail, postage prepaid,
addressed as follows:
CONSEP, INC.
000 X.X. Xxxxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Attn: President
with a copy to:
Ater Xxxxx Xxxxxx Xxxxxx & Skerrit
000 X.X. Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxx, Esq.
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Any notice or demand required by this Agreement to be given or made by the
Company to or on the Holder of any Representative Warrant shall be sufficiently
given or made, whether or not such Holder receives the notice, if sent by
first-class or registered mail, postage prepaid, addressed to such Holder at his
last address as shown on the books of the Company.
15. Governing Law. The validity, interpretation and performance of this
Agreement of each Representative Warrant issued hereunder and of the respective
terms and provisions thereof shall be governed by the law of the State of
Oregon.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
CONSEP, INC.
By:
--------------------------------------
Name:
Title:
VALUE INVESTING PARTNERS, INC.
By:
--------------------------------------
Name:
Title:
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EXHIBIT A
(FORM OF REPRESENTATIVE WARRANT CERTIFICATE)
NEITHER THE REPRESENTATIVE WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD OR TRANSFERRED PRIOR TO 1997 (SUBJECT TO CERTAIN
LIMITED EXCEPTIONS), SUCH SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO (i) A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT, (ii) ANOTHER
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ("THE ACT")
RELATING THERETO OR (iii) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES AND AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION
UNDER THE ACT IS AVAILABLE AND THE REPRESENTATIVE WARRANT MAY NOT BE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3 OF THE WARRANT AGREEMENT
BETWEEN CONSEP INC. AND VALUE INVESTING PARTNERS, INC., PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT RELATING THERETO OR PURSUANT TO ANY
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT PERMITTING SUCH DISPOSITION
OF SECURITIES AND AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR
THE COMPANY, THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
NO. REPRESENTATIVE WARRANTS
VOID AFTER 5:00 P.M. NEW YORK CITY TIME
ON , 2001
CONSEP, INC.
REPRESENTATION WARRANT CERTIFICATE
THIS CERTIFIES THAT for the value received, VALUE INVESTING PARTNERS, INC.,
or registered assigns, is the registered holder of the number of Representative
Warrants set forth above, each of which entitles the owner thereof to purchase
at any time from , 1997 until 5:00 p.m., New York City time on
, 2001 (the "Expiration Date"), one share (the "Share") of Common
Stock, $.01 par value, of CONSEP, INC., an Oregon corporation (the "Company"),
at a purchase price per Share (the "Exercise Price") equal to $ upon
presentation and surrender of this Representative Warrant Certificate with the
Form of Election to Purchase duly executed. The number of Representative
Warrants evidenced by this Representative Warrant Certificate (and the number of
Shares that may be purchased upon exercise thereof) set forth above, and the
Exercise Price set forth above, are the number and Exercise Price as of the date
of original issuance of the Representative Warrant, based on the shares of
Common Stock of the Company as constituted at such date.
This Representative Warrant Certificate is subject to, and entitled to the
benefits of, all of the terms, provisions and conditions of an agreement dated
as of , 1996 (the "Representative Warrant Agreement") between the
Company and Value Investing Partners, Inc., which Representative Warrant
Agreement is hereby incorporated herein by reference and made a part hereof and
to which Representative Warrant Agreement reference is hereby made for full
description of the rights, limitations of rights, duties and immunities
hereunder of the Company and the holders of the Representative Warrant
Certificates. Copies of the Representative Warrant Agreement are on file at the
principal office of the Company.
This Representative Warrant Certificate, with or without other
Representative Warrant Certificates, upon surrender at the principal office of
the Company, may be exchanged for another Representative Warrant
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Certificate or Certificates of like tenor and date evidencing Representative
Warrants entitling the holder to purchase a like aggregate number of Shares as
the Representative Warrant evidenced by the Representative Warrant Certificate.
If the Representative Warrant evidenced by this Representative Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Representative Warrant Certificate or
Certificates for the number of whole Representative Warrants not exercised.
No holder of this Representative Warrant Certificate shall be entitled to
vote or to receive dividends or to consent or to receive notice as a shareholder
at the meetings of shareholders for the election of directors of the Company or
any other matter, or to any rights whatsoever as shareholder of the Company.
If this Representative Warrant Certificate shall be surrendered for
exercise within any period during which the transfer books for the Company's
Common Stock are closed for any purpose, the Company shall not be required to
make delivery of certificates for the Shares purchasable upon such exercise
until the date of the reopening of said transfer books.
IN WITNESS WHEREOF, Consep, Inc. has caused the signature (or facsimile
signature) of its Chairman and Secretary to be printed hereon and its corporate
seal (or facsimile) to be printed hereon.
Dated: , 1996
CONSEP, INC.
By:
--------------------------------------
Name:
Title:
[Corporate Seal]
Attest:
---------------------------------------------------------
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Representation Warrant Certificates).
TO CONSEP, INC.
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto this Representative Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint , to transfer the within Representative
Warrant Certificate on the books of the within-named Company, with full power of
substitution.
DATED: , 19
Signature
--------------------------------------
Signature Guaranteed:
NOTICE
The signature of the foregoing assignment must correspond to the name as
written upon the face of this Representative Warrant Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Representative Warrant
Certificates).
TO CONSEP, INC.
The undersigned hereby irrevocably elects to exercise Representative
Warrants represented by this Representative Warrant Certificate to purchase
Shares issuable upon the exercise of such Representative Warrants and
requests that certificates for such Shares be issued in the name of:
Please insert social security or other identifying number
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
(Please print name and address)
The undersigned elects to pay the Exercise Price for the Shares being
purchased by [check one]:
/ / Delivery of a check, money order or wire transfer pursuant to
Section 4.2 of the Representative Warrant Agreement
/ / Net cashless exercise pursuant to Section 4.3 of the Representative
Warrant Agreement.
If such number of Representative Warrants shall not be all the Representative
Warrants evidenced by this Representative Warrant Certificate, a new
Representative Warrant Certificate for the balance remaining of such
Representative Warrants shall be registered in the name of and delivered to:
Please insert social security or other identifying number
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
(Please print name and address)
Dated: , 19
---------------------------------------------------------
Signature
(Signature must conform in all aspects to name of holder as specified on the
face of this Representative Warrant Certificate)
Signature Guaranteed:
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