EXHIBIT C
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF CAN BE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND
SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT, UNLESS, IN THE OPINION OF COUNSEL TO THE
COMPANY, SUCH REGISTRATION IS NOT THEN REQUIRED.
JWCHARLES FINANCIAL SERVICES, INC.
000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
COMMON STOCK PURCHASE WARRANT
Date of Issuance: Right to Purchase
January __, 1996 400,000 Shares
Expiration Date:
December 31, 2002
THIS CERTIFIES THAT, for value received, the person named
immediately below,
W T INVESTMENTS, INC.
or the registered assigns of such person (the "Registered Holder"), is
entitled to purchase from JWCHARLES FINANCIAL SERVICES, INC., a Florida
corporation (the "Company"), the number of shares of the Company's common
stock, $.001 par value per share, set forth above, subject to adjustment
pursuant to Section 5 hereof, at the Exercise Price (as defined in
subsection 3.1) per Share, subject to adjustment as set forth in Section 4
hereof (the "Exercise Price").
The amount and kind of securities purchasable pursuant to the
rights granted under this Warrant and the purchase price for such
securities are subject to adjustment pursuant to the provisions contained
in this Warrant. This Warrant is also subject to the following
provisions:
1.
CERTAIN DEFINITIONS
As used in this Warrant, the following terms have the meanings
set forth below:
"Affiliate" means any corporation directly under common control
with the Registered Holder.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, $.001 par value
per share, as constituted on the Date of Issuance. However, upon the
occurrence of certain events prescribed herein that affect the Common
Stock otherwise issuable upon exercise of this Warrant, Common Stock shall
mean Warrant Stock.
"Common Stock Deemed Outstanding" means, at any given time, the
Weighted Average Common Stock Outstanding plus the number of shares of
Common Stock deemed to be outstanding pursuant to Section 3 of this
Warrant
"Date of Issuance" is the date set forth on the front page of
this Warrant, and the terms "date hereof," "date of this Warrant," and
similar expressions shall be deemed to refer to the Date of Issuance of
this Warrant.
"EBT" means earnings before income taxes determined in accordance
with GAAP.
"Exercise Period" means the period of time commencing on the Date
of Issuance and ending at 12:00 Midnight, Eastern Time, on December 31,
2002.
"GAAP" means generally accepted accounting principles as applied
in the United States and on a basis with respect to the Company that is
consistent for or within each period affected.
"Market Price" means as to any security (i) the average of the
closing prices of such security's sales on the principal domestic
securities exchange on which such security may at the time be listed (but
only if such exchange, as opposed to The Nasdaq Stock Market, is the
principal trading market for such security), or (ii) if there have been no
sales on any such exchange on any day, the average of the highest bid and
lowest asked prices on such exchange at the end of such day, or (iii) if
on any day such security is not so listed and traded, the average of the
representative bid and asked prices quoted in The Nasdaq Stock Market as
of the close of trading in New York City on such day, or, if on any day
such security is not quoted in The Nasdaq Stock Market, the average of the
high and low bid and asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case
averaged over a period of 20 consecutive business days consisting of the
business day immediately preceding the day as of which "Market Price" is
being determined and the 19 consecutive business days prior to such day;
PROVIDED that if such security is listed on any domestic securities
exchange or quoted in The Nasdaq Stock Market, the term "business day" or
"business days" as used in this sentence means a day or days, as
applicable, on which such exchange or The Nasdaq Stock Market is open for
trading or quotation, as the case may be. If at any time such security is
not listed on any domestic securities exchange or quoted in The Nasdaq
- 2 -
Stock Market or the domestic over-the-counter market, the "Market Price"
will be the fair value thereof determined jointly by the Company and the
Registered Holder; PROVIDED that if such parties are unable to reach
agreement, such fair value will be determined by an appraiser jointly
selected by the Company and the Registered Holder.
"The Nasdaq Stock Market" means the Nasdaq Inter-Dealer Quotation
System or such other similar inter-dealer quotation system as may in the
future be used generally by members of the National Association of
Securities Dealers, Inc. for over-the-counter transactions in securities.
"Person" means an individual, a partnership, a corporation, a
trust, a joint venture, an unincorporated organization, and a government
or any department or agency thereof.
"Total Revenues" mean the amount thereof for the Company
determined in accordance with GAAP.
"Warrant Stock" means shares of the Company's authorized but
unissued Common Stock issued or issuable upon exercise of this Warrant or
any other of the Warrants; PROVIDED that if there is a change such that
the securities issuable upon exercise of a Warrant are issued by an entity
other than the Company, or there is a change in the class of securities so
issuable, then the term "Warrant Stock" will mean one share of the
security issuable upon exercise of the Warrant if such security is
issuable in shares, or will mean the smallest unit in which such security
is issuable if such security is not issuable in shares.
"Warrant" mean this Warrant providing for the purchase of up to
400,000 shares of Common Stock, subject to adjustment as provided herein,
and all common stock purchase warrants issued in exchange or substitution
for this Warrant or any such other common stock purchase warrant issued
pursuant to the terms hereof or thereof, as the case may be.
"Weighted Average Common Stock Outstanding" means, at any given
time, the number of shares of Common Stock deemed to be outstanding in
accordance with GAAP as of the end of the Company s most recent fiscal
quarter ended.
2.
EXERCISE OF WARRANT
2.1 EXERCISE PERIOD. The Registered Holder may exercise this
Warrant, in whole or in part (but not as to a fractional share), at any
time and from time to time, during the Exercise Period.
2.2 EXERCISE PROCEDURE.
(a) This Warrant will be deemed to have been
exercised at such time as the Company has received all of the following
items (the "Exercise Date"):
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(i) a completed Exercise Agreement, as described
below, executed by the Registered Holder
exercising all or part of the purchase rights
represented by this Warrant;
(ii) this Warrant (subject to delivery by the Company
of a new Warrant with respect to any unexercised
portion, as provided in Section 2.2(b)); and
(iii) a certified check or other certified funds
payable to the Company in an amount equal to the
product of the Exercise Price multiplied by the
number of shares of Warrant Stock being purchased
upon such exercise.
(b) Certificates for shares of Warrant Stock
purchased upon exercise of this Warrant will be delivered by the Company
to the Registered Holder within ten days after the Exercise Date. Unless
this Warrant has expired or all of the purchase rights represented hereby
have been exercised, the Company will prepare a new Warrant representing
the rights formerly represented by this Warrant that have not expired or
been exercised. The Company will, within such ten-day period, deliver
such new Warrant to the Registered Holder.
(c) The Warrant Stock issuable upon the exercise of
this Warrant will be deemed to have been issued to the Registered Holder
on the Exercise Date, and the Registered Holder will be deemed for all
purposes to have become the record holder of such Warrant Stock on the
Exercise Date.
(d) The issuance of certificates for shares of
Warrant Stock upon exercise of this Warrant will be made without charge to
the Registered Holder for any issuance tax in respect thereof or any other
cost incurred by the Company in connection with such exercise and the
related issuance of shares of Warrant Stock; PROVIDED, HOWEVER, that the
Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate or instrument in a name other than that of the Registered
Holder of this Warrant, and the Company shall not be required to issue or
deliver any such certificate or instrument unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
(e) The Company will not close its books for the
transfer of this Warrant or of any of the securities issuable upon the
exercise of this Warrant in any manner that interferes with the timely
exercise of this Warrant. The Company will from time to time take all
such action as may be necessary to assure that the par value per share of
the unissued Warrant Stock acquirable upon exercise of this Warrant is at
all times equal to or less than the Exercise Price then in effect.
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2.3 EXERCISE AGREEMENT. The Exercise Agreement will be
substantially in the form set forth as Exhibit I hereto.
2.4 FRACTIONAL SHARES. If a fractional share of Warrant
Stock would be issuable upon exercise of the rights represented by this
Warrant, the Company will, within 20 days after the Exercise Date, deliver
to the Registered Holder a check payable to the Registered Holder, in lieu
of such fractional share, in an amount equal to the Market Price of such
fractional share as of the close of business on the Exercise Date.
3.
EXERCISE PRICE
3.1 GENERAL.
(a) The exercise price per Share shall be the greater
of $5.50 or an amount, calculated on March 31 of each year during the
Exercise Period based on the Company s audited financial statements for
its immediately preceding fiscal year, equal to (i) the sum of (A) Total
Revenues multiplied by .175 PLUS (B) EBT multiplied by 2.5 DIVIDED BY (ii)
the number of shares of Weighted Average Common Stock Outstanding. In
order to prevent dilution of the rights granted under this Warrant, the
Exercise Price will also be subject to adjustment from time to time
pursuant to this Section 3.
(b) If and whenever the Company issues or sells, or
in accordance with subsection 3.2 is deemed to have issued or sold, any
shares of its Common Stock for a consideration per share less than the
lesser of ninety percent (90%) of the Market Price per share of Common
Stock, on the one hand, and the Exercise Price in effect immediately prior
to the time of such issuance or sale, on the other hand (such lesser price
being hereinafter referred to as the "Antidilution Strike Price"), then
immediately upon such issuance or sale the Exercise Price will be reduced
to a price determined by multiplying the Exercise Price in effect
immediately prior to the issuance or sale by a fraction, the numerator of
which shall be the sum of (i) the number of shares of Common Stock
outstanding prior to the issuance or sale PLUS (ii) the number of shares
of Common Stock (in terms of Warrant Stock issuable upon an exercise of
this Warrant) that the maximum aggregate amount receivable by the Company
upon such issuance or sale would purchase at the Antidilution Strike Price
effective immediately prior to the issuance or sale, and the denominator
of which shall be the number of shares of Common Stock Deemed Outstanding
immediately after such issuance or sale.
(c) The following securities or transactions shall be
excluded from the operation of paragraph (b) of this subsection 3.1 and
subsection 3.2:
(i) The existence and any exercise of any option,
warrant, or other right to purchase Common Stock,
or the conversion into or exchange for Common
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Stock of any security of the Company, that is
outstanding on the Issuance Date.
(ii) Any grant or exercise of options for Common Stock
under the Company's 1990 Stock Option Plan.
3.2 EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes
of determining the adjusted Exercise Price under subsection 3.1 above, the
following provisions will be applicable:
(a) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner grants any rights or options to subscribe for or to purchase Common
Stock or any stock or other securities convertible into or exchangeable
for Common Stock (such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities being herein called
"Convertible Securities") and the price per share for which Common Stock
is issuable upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities is less than the Antidilution
Strike Price effective immediately prior to the time of the granting of
such Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon
the exercise of such Options will be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. For
purposes of this paragraph, the "price per share for which Common Stock is
issuable upon exercise of such Options or upon conversion or exchange of
such Convertible Securities" will be determined by dividing (i) the total
amount, if any, received or receivable by the Company as consideration for
the granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Company upon exercise of all such
Options, plus, in the case of Options that relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all Convertible
Securities issuable upon the exercise of such Options. Except as
otherwise provided in paragraphs (c) and (d) below, no adjustment of the
Exercise Price will be made when Convertible Securities are actually
issued upon the exercise of such Options or when Common Stock is actually
issued upon the exercise of such Options or the conversion or exchange of
such Convertible Securities.
(b) ISSUANCE OF CONVERTIBLE SECURITIES. If the
Company in any manner issues or sells any Convertible Securities, and the
price per share for which Common Stock is issuable upon such conversion or
exchange is less than the Antidilution Strike Price effective immediately
prior to the time of such issuance or sale, then the maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities will be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For the purposes
of this paragraph, the "price per share for which Common Stock is issuable
- 6 -
upon such conversion or exchange" will be determined by dividing (i) the
total amount received or receivable by the Company as consideration for
the issuance or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (ii) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange
of all such Convertible Securities. Except as otherwise provided in
paragraphs (c) and (d) below, no adjustment of the Exercise Price will be
made when Common Stock is actually issued upon the conversion or exchange
of such Convertible Securities, and if any such issuance or sale of such
Convertible Securities is made upon exercise of any Options for which
adjustments of the Exercise Price had been or are to be made pursuant to
other provisions of this Section 3, no further adjustment of the Exercise
Price will be made by reason of such issuance or sale.
(c) CHANGE IN OPTION PRICE OR CONVERSION RATE. If
the purchase price provided for in any Options, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock changes at any time
(other than under or by reason of provisions that are designed to protect
against dilution of the type set forth in this Section 3 and that have no
more favorable effect on the holders of such Options or Convertible
Securities than this Section 3 would have if this Section 3 were included
in such Options or Convertible Securities), then the Exercise Price in
effect at the time of such change will be readjusted to the Exercise Price
that would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
purchase price, additional consideration, or changed conversion rate, as
the case may be, at the time initially granted, issued, or sold; such
adjustment of the Exercise Price will be made whether the result thereof
is to increase or reduce the Exercise Price then in effect under this
Warrant, provided that no such adjustment shall increase the Exercise
Price above the initial Exercise Price hereof.
(d) TREATMENT OF TERMINATED OR EXPIRED OPTIONS AND
CONVERTIBLE SECURITIES. Upon the expiration or the termination of any
Option or of any right to convert or exchange any Convertible Security,
without the exercise of such Option or right, the Exercise Price then in
effect hereunder will be adjusted to the Exercise Price that would have
been in effect at the time of such expiration or termination had such
Option or Convertible Security never been issued, but such subsequent
adjustment shall not affect the number of shares of Common Stock issued
upon any exercise of this Warrant prior to the date such adjustment is
made.
(e) CALCULATION OF CONSIDERATION RECEIVED. If any
Common Stock, Options, or Convertible Securities are issued or sold or
deemed to have been issued or sold for consideration that includes cash,
then the amount of cash consideration actually received by the Company
will be deemed to be the cash portion thereof. If any Common Stock,
Options, or Convertible Securities are issued or sold or deemed to have
- 7 -
been issued or sold for a consideration part or all of which is other than
cash, then the amount of the consideration other than cash received by the
Company will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the Market Price thereof as
of the date of receipt. If any Common Stock, Options, or Convertible
Securities are issued in connection with any merger or consolidation in
which the Company is the surviving corporation, then the amount of
consideration therefor will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options, or Convertible Securities, as
the case may be.
(f) INTEGRATED TRANSACTIONS. If any Option is issued
in connection with the issuance or sale of other securities of the
Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Option by the parties thereto,
the Option will be deemed to have been issued without consideration.
(g) TREASURY SHARES. The number of shares of Common
Stock Deemed Outstanding at any given time does not include shares owned
or held by or for the account of the Company, and the disposition of any
shares so owned or held will be considered an issuance or sale of Common
Stock.
3.3 SUBDIVISION OR COMBINATION OF COMMON STOCK; AND STOCK
DIVIDENDS, ETC. If the Company shall at any time after the date hereof
(a) issue any shares of Common Stock or Convertible Securities, or any
rights to purchase Common Stock or Convertible Securities, as a dividend
or other distribution upon Common Stock, (b) issue any shares of Common
Stock, in subdivision of outstanding shares of Common Stock by
reclassification or otherwise, or (c) combine outstanding shares of Common
Stock, by reclassification or otherwise, then the Exercise Price that
would apply if purchase rights hereunder were being exercised immediately
prior to such action by the Company shall be adjusted by multiplying it by
a fraction, the numerator of which shall be the number of shares of
Weighted Average Common Stock Outstanding immediately prior to such
dividend or other distribution, subdivision, or combination and the
denominator of which shall be the number of shares of Weighted Average
Common Stock Outstanding immediately after such dividend, subdivision, or
combination.
3.4 CERTAIN DIVIDENDS OR DISTRIBUTIONS. If the Company shall
declare a dividend or other distribution upon the Common Stock payable
otherwise than out of earnings or earned surplus AND otherwise than in
Common Stock or Convertible Securities, the Exercise Price that would
apply if purchase rights under the Warrants were being exercised
immediately prior to the declaration of such dividend or distribution
shall be reduced by an amount equal, in the case of a dividend or other
distribution in cash, to the amount thereof payable per share of the
Common Stock or, in the case of any other dividend or distribution, to the
fair value of such dividend or distribution per share of the Common Stock
- 8 -
as determined in good faith by the Board of Directors of the Company. For
purposes of the foregoing, a dividend or distribution other than in cash
shall be considered payable out of earnings or earned surplus only to the
extent that such earnings or earned surplus are charged with an amount
equal to the fair value of such dividend or distribution as determined in
good faith by the Board of Directors of the Company. Such reductions
shall take effect as of the date on which a record is taken for the
purpose of such dividend or distribution, or, if a record is not taken,
the date as of which the holders of Common Stock of record entitled to
such dividend or distribution are to be determined.
3.5 NO DE MINIMIS ADJUSTMENTS. No adjustment of the Exercise
Price shall be made if the amount of such adjustment would be less than
five cents per share, but in such case any adjustment that otherwise would
be required to be made shall be carried forward and shall be made at the
time and together with the next subsequent adjustment that, together with
any adjustment or adjustments so carried forward, shall amount to not less
than five cents per share.
4.
ADJUSTMENT OF NUMBER OF
SHARES ISSUABLE UPON EXERCISE
If the Company issues or sells, or, in accordance with Section 3
hereof, is deemed to have issued or sold, any shares of its Common Stock
for a consideration per share below the Antidilution Strike Price, then
upon each adjustment of the Exercise Price pursuant to Section 3 hereof,
the Registered Holder of this Warrant shall thereafter (until another such
adjustment) be entitled to purchase, at the adjusted Exercise Price in
effect on the date purchase rights under this Warrant are exercised, the
number of shares of Warrant Stock, calculated to the nearest 1/100th
share, determined by (a) multiplying the number of shares of Warrant Stock
purchasable hereunder immediately prior to the adjustment of the Exercise
Price by the Exercise Price in effect immediately prior to such
adjustment, and (b) dividing the product so obtained by the adjusted
Exercise Price in effect on the date of such exercise. The provisions of
subsection 2.4 shall apply, however, so that no fractional share of
Warrant Stock shall be issued upon exercise of this Warrant.
5.
EFFECT OF REORGANIZATION, RECLASSIFICATION
CONSOLIDATION, MERGER, OR SALE
If at any time while this Warrant is outstanding there shall be
any reorganization or reclassification of the capital stock of the Company
(other than a subdivision or combination of shares provided for in
subsection 3.3 hereof), any consolidation or merger of the Company with
another corporation (other than a consolidation or merger in which the
Company is the surviving entity and which does not result in any change in
the Common Stock), or any sale or other disposition by the Company of all
or substantially all of its assets to any other corporation, then the
- 9 -
Registered Holder of this Warrant shall thereafter upon exercise of this
Warrant be entitled to receive the number of shares of stock or other
securities or property of the Company, or of the successor corporation
resulting from such consolidation or merger, as the case may be, to which
the Common Stock (and any other securities and property) of the Company,
deliverable upon the exercise of this Warrant, would have been entitled
upon such reorganization, reclassification of capital stock,
consolidation, merger, sale, or other disposition if this Warrant had been
exercised immediately prior to such reorganization, reclassification of
capital stock, consolidation, merger, sale, or other disposition. In any
such case, appropriate adjustment (as determined in good faith by the
Board of Directors of the Company) shall be made in the application of the
provisions set forth in this Warrant with respect to the rights and
interests thereafter of the Registered Holder of this Warrant to the end
that the provisions set forth in this Warrant (including those relating to
adjustments of the Exercise Price and the number of shares issuable upon
the exercise of this Warrant) shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
deliverable upon the exercise hereof as if this Warrant had been exercised
immediately prior to such reorganization, reclassification of capital
stock, consolidation, merger, sale, or other disposition and the
Registered Holder hereof had carried out the terms of the exchange as
provided for by such reorganization, reclassification of capital stock,
consolidation, or merger. If in any such reorganization,
reclassification, consolidation, or merger, additional shares of Common
Stock shall be issued in exchange, conversion, substitution, or payment,
in whole or in part, for or of a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered
by the provisions of Section 3, with the amount of the consideration
received upon the issue thereof being determined in good faith by the
Board of Directors of the Company. The Company shall not effect any such
reorganization, consolidation, or merger unless, upon or prior to the
consummation thereof, the successor corporation shall assume by written
instrument the obligation to deliver to the Registered Holder hereof such
shares of stock or other securities, cash, or property as such Holder
shall be entitled to purchase in accordance with the foregoing provisions.
Notwithstanding any other provisions of this Warrant, in the event of sale
or other disposition of all or substantially all of the assets of the
Company as a part of a plan for liquidation of the Company, all rights to
exercise the Warrant shall terminate 60 days after the Company gives
written notice to the Registered Holder of this Warrant that such sale or
other disposition has been consummated.
6.
NOTICE OF ADJUSTMENT
Immediately upon any adjustment of the Exercise Price, or
increase or decrease in the number of shares of Common Stock purchasable
upon exercise of this Warrant, the Company will send written notice
thereof to the Registered Holder, stating the adjusted Exercise Price and
the increased or decreased number of shares purchasable upon exercise of
- 10 -
this Warrant and setting forth in reasonable detail the method of
calculation for such adjustment and increase or decrease. When
appropriate, such notice may be given in advance and included as part of
any notice required to be given pursuant to Section 7 below.
7.
PRIOR NOTICE OF CERTAIN EVENTS
If at any time:
(a) the Company shall pay any dividend payable in
stock upon its Common Stock or make any distribution (other than
cash dividends) to the holders of its Common Stock;
(b) the Company shall offer for subscription PRO RATA
to the holders of its Common Stock any additional shares of stock
of any class or any other rights;
(c) there shall be any reorganization or
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with another corporation
(other than a direct or indirect subsidiary of the Company), or a
sale or disposition of all or substantially all its assets; or
(d) there shall be a voluntary or involuntary
dissolution, liquidation, or winding up of the Company,
then, in each such case, the Company shall give prior written notice, by
hand delivery or by certified mail, postage prepaid, addressed to the
Registered Holder of this Warrant at the address of such holder as shown
on the books of the Company, of the date on which (i) the books of the
Company shall close or a record shall be taken for such stock dividend,
distribution, or subscription rights or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
or winding up shall take place, as the case may be. A copy of each such
notice shall be sent simultaneously to each transfer agent of the
Company's Common Stock. Such notice shall also specify the date as of
which the holders of Common Stock of record shall participate in said
dividend, distribution, or subscription rights or shall be entitled to
exchange their Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up, as the case may be. Such written
notice shall be given at least 30 days prior to the record date or the
effective date, whichever is earlier, of the subject action or other
event.
8.
RESERVATION OF COMMON STOCK
The Company will at all times reserve and keep available for
issuance upon the exercise of Warrants such number of its authorized but
- 11 -
unissued shares of Common Stock as will be sufficient to permit the
exercise in full of all outstanding Warrants, and upon such issuance such
shares of Common Stock will be validly issued, fully paid, and
nonassessable.
9.
NO STOCKHOLDER RIGHTS OR OBLIGATION
This Warrant will not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company. No provision of
this Warrant, in the absence of affirmative action under Section 2.2
hereof by the Registered Holder to purchase Warrant Stock, and no
enumeration in this Warrant of the rights or privileges of the Registered
Holder, will give rise to any obligation of such Holder for the Exercise
Price of Warrant Stock acquirable by exercise hereof or as a stockholder
of the Company.
10.
NON-TRANSFERABILITY
This Warrant and all rights hereunder are not transferable, in
whole or in part, except to an Affiliate. The Warrant Stock issued upon
exercise hereof may not be offered, sold, or transferred except in
compliance with the Securities Act of 1933, as amended (the "Act"), and
any applicable state securities laws, and then only against receipt of an
agreement of the Person to whom such offer or sale is made to comply with
the provisions of this Section 10 with respect to any resale or other
disposition of such securities; PROVIDED that no such agreement shall be
required from any Person purchasing any security underlying this Warrant
pursuant to a registration statement effective under the Act. The
Registered Holder of this Warrant agrees that, prior to the disposition of
any security purchased on the exercise hereof under circumstances that
might require registration of such security under the Act, or any similar
statute then in effect, the Registered Holder shall give written notice to
the Company, expressing its intention as to such disposition. Promptly
upon receiving such notice, the Company shall present a copy thereof to
its securities counsel. If, in the opinion of such counsel (or of other
securities counsel reasonably acceptable to the Company), the proposed
disposition does not require registration of such security under the Act,
or any similar statute then in effect, the Company shall, as promptly as
practicable, notify the Registered Holder of such opinion, whereupon the
Registered Holder shall be entitled to dispose of such security in
accordance with the terms of the notice delivered by the Registered Holder
to the Company. The above agreement by the Registered Holder of this
Warrant shall not be deemed to limit or restrict in any respect the
exercise of rights set forth in Section 11 hereof.
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11.
REGISTRATION RIGHTS
11.1 "PIGGYBACK RIGHTS". If at any time during the Exercise
Period, the Company shall prepare and file one or more registration
statements under the Act with respect to a public offering of equity or
debt securities of the Company, or of any such securities of the Company
held by its security holders, the Company will include in any such
registration statement such information as is required, and such number of
the Warrant Stock issuable, or previously issued and then outstanding,
pursuant to the exercise of this Warrant (collectively, the "Warrant
Securities") held by the Registered Holders thereof or their respective
designees or transferees as may be requested, to permit a public offering
of the Warrant Securities so requested; PROVIDED, HOWEVER, that if, in the
written opinion of the Company's managing underwriter, if any, for such
offering, the inclusion of the Warrant Securities requested to be
registered, when added to the securities being registered by the Company
or the selling security holder(s), would exceed the maximum amount of the
Company's securities that can be marketed without otherwise materially and
adversely affecting the entire offering, then the Company may exclude from
such offering all or any portion of the Warrant Securities requested to be
so registered, but only if no securities are included in such registration
statement other than securities being sold for the account of the Company
or by Persons pursuant to the exercise of "demand" registration rights or
of "piggyback" registration rights granted prior to the Issuance Date
which are expressly senior to those of the Registered Holder, and then
only on a pro rata basis with respect to all securities not being sold by
the Company or by Persons exercising such "demand" or senior "piggyback"
registration rights. The Company shall bear all fees and expenses
incurred by it in connection with the preparation and filing of such
registration statement. In the event of such a proposed registration, the
Company shall furnish the then Registered Holders of Warrant Securities
with not less than thirty (30) days' written notice prior to the proposed
or expected effectiveness date of such registration statement. Such
notice shall continue to be given by the Company to Registered Holders of
Warrant Securities, with respect to subsequent registration statements
filed by the Company, until such time as all of the Warrant Securities
have been registered or may be sold by the Registered Holders thereof
without registration under the Act or applicable state securities laws and
regulations, and without limitation as to volume, pursuant to Rule 144 of
the Act or any succeeding provision. The holders of Warrant Securities
shall exercise the rights provided for in this subsection 11.1 by giving
written notice to the Company, within twenty (20) days of receipt of the
Company's notice provided for herein.
11.2 CERTAIN PROCEDURES AND REQUIREMENTS OF REGISTERED HOLDER.
(a) INFORMATION TO BE FURNISHED BY REGISTERED HOLDER. In
connection with the registration of the Warrant Securities, and as a
condition to the Company s obligations under subsection 11.1, the
Registered Holder will furnish to the Company in writing such information
with respect to such Registered Holder and its proposed disposition as
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shall be reasonably necessary in order to assure compliance with the Act
and with other federal and applicable state securities laws. Without
limiting the generality of the foregoing, in connection with an
underwritten public offering, such Registered Holder electing such method
of disposition agrees to enter into, as required, a written agreement with
the managing underwriter in such form and containing such provisions as is
customary in the securities business for such an arrangement, and to
complete and execute all questionnaires, powers of attorney, indemnities,
and other documents or instruments reasonably required under such terms of
the underwriting arrangements.
(b) EXPENSES OF REGISTERED HOLDER. All underwriting
discounts and selling commissions applicable to the sale of any Warrant
Securities as well as fees and expenses of any counsel, accountant, or
other advisor to the Registered Holder shall be borne by the Registered
Holder.
(c) CERTAIN RESTRICTIONS. Notwithstanding anything to the
contrary contained in this Section 11, if there is a firm commitment
underwritten offering of securities for the Company pursuant to a
registration covering shares of the Warrant Securities, and if the
Registered Holder does not elect to sell its Warrant Securities to the
underwriters of the Company s securities in connection with such offering,
then the Registered Holder (if requested by the managing underwriter)
shall agree to refrain from selling any of its Warrant Securities that are
otherwise registered pursuant to this Section 11 during the period in
which the underwriting syndicate, as such, participates in the after-
market. Such Registered Holder shall, however, be entitled to sell such
securities, in any event, commencing on the 120th day after the effective
date of such registration statement, if then lawful to do so under
applicable securities laws and rules of the Commission.
(d) INDEMNIFICATION BY REGISTERED HOLDER. In connection with
a registration of the Warrant Securities under the Act pursuant to this
Section 11, the Company and the Registered Holder shall enter into
customary indemnification agreements with regard to losses, claims,
damages or liabilities arising therefrom. In addition, if such
registration relates to an underwritten offering, such indemnification
agreements shall include the underwriters thereof as a party thereto.
11.3 SURVIVAL. The rights and obligations set forth in this
Section 11 shall survive the exercise and surrender of this Warrant.
12.
MISCELLANEOUS
12.1 AMENDMENT AND WAIVER. Except as otherwise provided
herein, the provisions of the Warrant may be amended, and the Company may
take any action herein prohibited or omit to perform any act herein
required to be performed by it, only if the Company has obtained the prior
written consent of the Registered Holder.
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12.2 NOTICES. Any notices required to be sent to a Registered
Holder of this Warrant or of any Warrant Stock purchased upon the exercise
hereof will be delivered to the address of such Registered Holder shown on
the books of the Company. All notices referred to herein will be
delivered in person or sent by registered or certified mail, postage
prepaid, and will be deemed to have been given when so delivered in person
or on the third business day following the date so sent by mail.
12.3 DESCRIPTIVE HEADINGS; GOVERNING LAW. The descriptive
headings of the sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The
construction, validity, and interpretation of this Warrant will be
governed by the laws of the State of Florida.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed and attested by its duly authorized officers under its corporate
seal.
JWCHARLES FINANCIAL SERVICES, INC.
[SEAL] By: Xxxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxxx Xxxxx
Title: President
------------------------------
Attest:
Xxxx X. Xxxxx
---------------------------------
Secretary or Assistant Secretary
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EXHIBIT I
---------
EXERCISE AGREEMENT
------------------
To: Dated:
The undersigned Record Holder, pursuant to the provisions
set forth in the within Warrant, hereby subscribes for and purchases _____
shares covered by such Warrant and herewith makes full cash payment of
$__________________ for such Warrant Stock at the Exercise Price provided
by such Warrant.
--------------------------------------
(Signature)
--------------------------------------
(Print or type name)
--------------------------------------
Address
--------------------------------------
--------------------------------------
NOTICE: The signature on this Exercise Agreement must correspond
with the name as written upon the face of the within Warrant, in every
particular, without alteration, enlargement, or any change whatsoever, and
must be guaranteed by a bank, other than a saving bank, having an office
or correspondent in New York, New York, Boca Raton or Miami, Florida, or
Atlanta, Georgia, or by a firm having membership on a registered national
securities exchange and an office in New York, New York, Boca Raton or
Miami, Florida, or Atlanta, Georgia.
SIGNATURE GUARANTEE
Authorized Signature: -------------------------------------------------
Name of Bank or Firm: -------------------------------------------------
Date:------------------------------------------------------------------
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