EXHIBIT 4.2
WARRANT AGREEMENT dated as of ________ __, 1998 between 21st Century
Holding Company, a Florida corporation (the "Company"), and Gilford Securities
Incorporated (hereinafter referred to as "Gilford").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Gilford warrants ("Warrants")
to purchase up to 125,000 shares (the "Shares") of common stock of the Company,
par value $.01 per share (the "Common Stock"); and
WHEREAS, Gilford (the "Underwriter") has entered into an underwriting
agreement (the "Underwriting Agreement") dated _____________ __, 1998 between
the Underwriter as representative of the several underwriters named in Schedule
1 to the Underwriting Agreement, and the Company in connection with the
Company's proposed public offering (the "Public Offering") of 1,250,000 shares
of Common Stock, at a price of $____ per share; and
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to Gilford or officers and partners of Gilford and members
of the selling group and/or their officers or partners, in consideration for,
and as part of Gilford's compensation in connection with, the Underwriter acting
as representative of several underwriters named in Schedule 1 to the
Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriter or its designees to the Company of TWELVE DOLLARS AND FIFTY CENTS
($12.50), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. GRANT.
Gilford, and/or its designees are hereby granted the right to purchase,
at any time from _________________, 1999 until 5:00 P.M., New York time, on
_______________, 2003 (the "Warrant Exercise Term"), up to 125,000 fully-paid
and non assessable Shares at an initial exercise price (subject to adjustment as
provided in Article 8 hereof) of $_____ per share, representing 120% of the
initial offering price of the Common Stock in the Public Offering.
2. WARRANT CERTIFICATES.
The warrant certificates (the "Warrant Certificates") delivered and to
be delivered pursuant to this Agreement shall be in the form set forth in
Exhibit A attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
3. EXERCISE OF WARRANT.
The Warrants initially are exercisable at a price of $______ per share
of Common Stock purchased, payable in cash or by check to the order of the
Company, or any combination of cash or check, subject to adjustment as provided
in Article 8 hereof. Upon surrender of the Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the
Exercise Price (as hereinafter defined) for the Shares purchased, at the
Company's principal offices in Florida (currently located at 0000 X.X. 0xx
Xxxxxx, Xxxxxxxxxx, Xxxxxxx 33317) the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Shares so purchased. The purchase rights represented by
each Warrant Certificate are exercisable at the option of the Holder hereof, in
whole or in part (but not as to fractional Shares). In the case of the purchase
of less than all the Shares purchasable under
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any Warrant Certificate, the Company shall cancel said Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Shares purchasable thereunder.
4. ISSUANCE OF CERTIFICATES.
Upon the exercise of the Warrants, the issuance of certificates for the
Shares shall be made forthwith (and in any event within three business days
thereafter) without charge to the Holder thereof including, without limitation,
any transfer tax which may be payable in respect of the issuance thereof, and
such certificates shall (subject to the provisions of Article 5 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance 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. The Warrant
Certificates and the certificates representing the Shares shall be executed on
behalf of the Company by the manual or facsimile signature of the present or any
future Chairman or Vice Chairman of the Board of Directors or President or Vice
President of the Company under its corporate seal reproduced thereon, attested
to by the manual or facsimile signature of the present or any future Secretary
or Assistant Secretary of the Company. Warrant Certificates shall be dated the
date of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
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Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares (the "Warrant Securities"), shall bear a legend
substantially similar to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), nor any state securities laws and may not be offered
or sold except (i) pursuant to an effective registration
statement under the Act and applicable state securities laws,
(ii) to the extent applicable, pursuant to Rule 144 under the
Act (or any similar rule under such Act relating to the
disposition of securities), or (iii) upon the delivery by the
holder to the Company of an opinion of counsel, reasonably
satisfactory to counsel to the issuer, stating that an
exemption from registration under such Act or applicable state
securities laws is available."
5. RESTRICTION ON TRANSFER OF WARRANTS.
The Holder of a Warrant Certificate, by its acceptance thereof,
covenants and agrees that the Warrants are being acquired as an investment and
not with a view to the distribution thereof, and that the Warrants may not be
sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or
in part, for a period of one (1) year from the effective date of the
registration statement filed in connection with the Public Offering, except to
officers and partners of Gilford or to any member of the selling group
participating in the distribution to the public of the shares of Common Stock
and/or their respective officers or partners.
6. PRICE.
6.1 INITIAL AND ADJUSTED EXERCISE PRICES. The initial exercise
price of each Warrant shall be $______ per share. The adjusted exercise price
shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Article 8 hereof.
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6.2 EXERCISE PRICE. The term "Exercise Price" herein shall
mean the initial exercise price or the adjusted exercise price, depending upon
the context.
7. REGISTRATION RIGHTS.
7.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. Neither the
Warrants nor the Shares have been registered for purposes of public distribution
under the Securities Act of 1933, as amended (the "Securities Act").
7.2 REGISTRABLE SECURITIES. As used herein the term
"Registrable Security" means the Shares and any shares of Common Stock issued
upon any stock split or stock dividend in respect of such Shares; PROVIDED,
HOWEVER, that with respect to any particular Registrable Security, such security
shall cease to be a Registrable Security when, as of the date of determination,
(i) it has been effectively registered under the Securities Act and disposed of
pursuant thereto, (ii) registration under the Securities Act is no longer
required for subsequent public distribution of such security pursuant to Rule
144 under the Securities Act (or any successor provision), or (iii) it has
ceased to be outstanding. The term "Registrable Securities" means any and/or all
of the securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Article 7.
7.3 PIGGYBACK REGISTRATION. If, at any time during the seven
years following the closing of the Public Offering, the Company proposes to
prepare and file any new registration statement or post-effective amendments
thereto covering equity or debt securities of the
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Company, or any such securities of the Company held by its shareholders (in any
such case, other than pursuant to Form S-4 or Form S-8 or successor form) (for
purposes of this Article 7, collectively, the "Registration Statement"), it will
give written notice of its intention to do so by registered mail ("Notice"), at
least twenty (20) business days prior to the filing of each such Registration
Statement, to all Holders of the Warrants and the Registrable Securities. Upon
the written request of such a Holder (a "Requesting Holder"), made within ten
(10) business days after receipt of the Notice, that the Company include any of
the Requesting Holder's Registrable Securities in the proposed Registration
Statement, the Company shall, as to each such Requesting Holder, effect the
registration under the Securities Act of the Registrable Securities which it has
been so requested to register ("Piggyback Registration"), at the Company's sole
cost and expense and at no cost or expense to the Requesting Holders other than
underwriting discounts and commissions, and fees and expenses of the Holder's
counsel; provided, however, that if, in the written opinion of the Company's
managing underwriter, if any, for such offering, the inclusion of all or a
portion of the Registrable Securities requested to be registered, when added to
the securities being registered by the Company or the selling shareholder(s),
will exceed the maximum amount of the Company's securities which can be marketed
(i) at a price reasonably related to their then current market value, or (ii)
without otherwise materially adversely affecting the entire offering, then the
Company may exclude from such offering all or a portion of the Registrable
Securities which it has been requested to register.
If securities are proposed to be offered for sale pursuant to such
Registration Statement by other security holders of the Company and the total
number of securities to be offered by the Requesting Holders and such other
selling security holders is required to be reduced pursuant to a
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request from the managing underwriter (which request shall be made only for the
reasons and in the manner set forth above) the aggregate number of Registrable
Securities to be offered by Requesting Holders pursuant to such Registration
Statement shall equal the number which bears the same ratio to the maximum
number of securities that the underwriter believes may be included for all the
selling security holders (including the Requesting Holders) as the original
number of Registrable Securities proposed to be sold by the Requesting Holders
bears to the total original number of securities proposed to be offered by the
Requesting Holders and the other selling security holders.
7.4 DEMAND REGISTRATION. (a) For a period of five (5) years
from the closing of the Public Offering, any "Majority Holder" (as such term is
defined in Section 7.4(d) below) of the Registrable Securities shall have the
right (which right is in addition to the piggyback registration rights provided
for under Section 7.3 hereof), exercisable by written notice to the Company (the
"Demand Registration Request"), to have the Company prepare and file with the
Securities and Exchange Commission (the "Commission") on one occasion, at the
sole expense of the Company (excluding fees and expenses of the Majority
Holder's counsel and any underwriting or selling commissions), a Registration
Statement and such other documents, including a prospectus, as may be necessary
(in the opinion of both counsel for the Company and counsel for such Majority
Holder) in order to comply with the provisions of the Securities Act, so as to
permit a public offering and sale of the Registrable Securities by the Holders
thereof for nine (9) consecutive months.
(b) The Company covenants and agrees to give written
notice of any Demand Registration Request to all Holders of the Registrable
Securities within ten (10) days
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from the date of the Company's receipt of any such Demand Registration Request.
After receiving notice from the Company as provided in this Section 7.4(b),
Holders of Registrable Securities may request the Company to include their
Registrable Securities in the Registration Statement to be filed pursuant to
Section 7.4(a) hereof by notifying the Company of their decision to have such
securities included within ten (10) days of their receipt of the Company's
notice.
(c) In addition to the registration rights provided
for under Section 7.3 hereof and subsection (a) of this Section 7.4, for a
period of five (5) years from the closing of the Public Offering, any Holder of
Registrable Securities shall have the right, exercisable by written request to
the Company, to have the Company prepare and file with the Commission, on one
occasion in respect of such Holders of Registrable Securities, a Registration
Statement so as to permit a public offering and sale of such Registrable
Securities for nine (9) consecutive months, provided, however, that all costs
incident thereto shall be at the expense of the Holders of the Registrable
Securities included in such Registration Statement. If a Holder of Registrable
Securities shall give notice to the Company at any time of its or their desire
to exercise the registration right granted pursuant to this Section 7.4(c), then
within ten (10) days after the Company's receipt of such notice, the Company
shall give notice to the other Holders of Registrable Securities advising them
that the Company is proceeding with such registration and offering to include
therein the Registrable Securities of such Holders, provided they furnish the
Company with such appropriate information in connection therewith as the Company
shall reasonably request in writing. The Registration Statement filed pursuant
to this Section 7.4(c) may include other securities of the Company which are
held by officers or directors of the
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Company, or which are held by persons who, by virtue of agreements with the
Company, are entitled to include their securities in such Registration
Statement.
(d) The term "Majority Holder" as used in Section 7.4
hereof shall mean any Holder or any combination of Holders of Registrable
Securities, if included in such Holders' Registrable Securities are that
aggregate number of shares of Common Stock (including Shares already issued and
Shares issuable pursuant to the exercise of outstanding Warrants) as would
constitute a majority of the aggregate number of shares of Common Stock
(including Shares already issued and Shares issuable pursuant to the exercise of
outstanding Warrants) included in all the Registrable Securities.
(e) Notwithstanding the foregoing, if the Company
shall inform the Holders requesting the filing of a registration statement
pursuant to this Section 7.4 that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such Registration Statement to be filed and it is therefore
essential to defer the filing of such Registration Statement, then 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 twelve (12) month
period.
7.5 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section
7.4 hereof, the Company shall file the Registration Statement as expeditiously
as possible, but in any event no later than twenty (20) business days following
receipt of any demand therefor, shall use its best
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efforts to have any such Registration Statement declared effective at the
earliest possible time, and shall furnish each Holder of Registrable Securities
such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, fees and
expenses in connection with all Registration Statements filed pursuant to
Sections 7.3 and 7.4(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses;
provided, however, that the Holders of Registerable Securities shall pay any
underwriting discounts or expenses applicable to the sale of the Registerable
Securities sold by such Holders pursuant to the Registration Statement and the
fees and expenses of any counsel retained by them. The Holders of Registrable
Securities included in any Registration Statement filed pursuant to Section
7.4(c) hereof will pay all costs, fees and expenses in connection with such
Registration Statement.
(c) The Company will take all necessary action which
may be required in qualifying or registering the Registrable Securities included
in a Registration Statement, for offering and sale under the securities or blue
sky laws of such states as are requested by the Holders of such securities,
provided that the Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(d) The Company shall indemnify any Holder of the
Registrable Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Securities Act and
each person, if any, who controls such Holder or underwriter or person deemed to
be an underwriter within the meaning of Section 15 of
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the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), against all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject
under the Securities Act, the Exchange Act or otherwise, arising from such
registration statement to the same extent and with the same effect as the
provisions pursuant to which the Company has agreed to indemnify the Underwriter
and to provide for just and equitable contribution as set forth in Section 7 of
the Underwriting Agreement.
(e) INFORMATION BY THE HOLDERS. Each of the Holders
holding securities included in any registration, shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 7.4.
(f) Any Holder of Registrable Securities to be sold
pursuant to a registration statement, and its successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Securities Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holder, or
its successors or assigns, for specific inclusion in such
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Registration Statement to the same extent and with the same effect as the
provisions pursuant to which the Underwriter has agreed to indemnify the Company
and to provide for just and equitable contribution as set forth in Section 7 of
the Underwriting Agreement.
(g) Nothing contained in this Agreement shall be
construed as requiring any Holder to exercise his Warrants prior to the initial
filing of any registration statement or the effectiveness thereof.
8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SECURITIES.
The following adjustments apply to the Exercise Price of the Warrants
with respect to the Shares and the number of Shares purchasable upon exercise of
the Warrants.
8.1 COMPUTATION OF ADJUSTED PRICE. Except as hereinafter
provided, in case the Company shall at any time after the date hereof issue or
sell any shares of Common Stock (other than the issuances or sales referred to
in Section 8.6 hereof), including shares held in the Company's treasury and
shares of Common Stock issued upon the exercise of any options, rights or
warrants to subscribe for shares of Common Stock (other than the issuance or
sales of Common Stock pursuant to rights to subscribe for such Common Stock
distributed to all the shareholders of the Company and Holders of Warrants
pursuant to section 8.8 hereof) and shares of Common Stock issued upon the
direct or indirect conversion or exchange shares of Common Stock, for a
consideration per share less than the Current Market Price (as defined below),
the Exercise Price shall (until another such issuance or sale) be adjusted to
equal the product of the Exercise Price and the quotient obtained by dividing:
(A) an amount equal to the sum of (X) the product of
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(a) the total number of shares of Common Stock
outstanding immediately prior to such issuance or
sale, multiplied by
(b) the Current Market Price,
plus, (Y) the aggregate amount of all consideration, if any, received
by the Company upon such issuance or sale, by
(B) the product of (i) total number of shares of Common Stock
outstanding immediately after such issuance or sale and (ii)
the Current Market Price.
For purposes of this Section 8.1, the "Current Market Price" at the
time of any issuance or sale of Common Stock shall mean the Exercise Price, as
adjusted pursuant to this Section 8.
For the purposes of any computation to be made in accordance with this
Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale of
shares of Common Stock for a consideration part or all of which shall
be cash, the amount of the cash consideration therefor shall be deemed
to be the amount of cash received by the Company for such shares (or,
if shares of Common Stock are offered by the Company for subscription,
the subscription price, or, if such securities shall be sold to
underwriters or dealers for public offering without a subscription
offering, the initial public offering price) before deducting therefrom
any compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing
similar services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale
(otherwise than as a dividend or other distribution on any stock of the Company)
of shares of Common Stock for a consideration, part or all of which shall be
other than cash, the amount of the consideration
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therefor other than cash shall be deemed to be the value of such consideration
as determined in good faith by the Board of Directors of the Company.
(iii) Shares of Common Stock issuable by way
of dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the day following
the record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
(iv) The reclassification of securities of
the Company other than shares of Common Stock into securities including shares
of Common Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such shares
of Common Stock shall be determined as provided in subsection (ii) of this
Section 8.1.
(v) The number of shares of Common Stock at
any one time outstanding shall include the aggregate number of shares issued or
issuable upon the exercise of options, rights, warrants and upon the conversion
or exchange of convertible or exchangeable securities.
8.2 OPTIONS, RIGHTS, WARRANTS AND CONVERTIBLE AND EXCHANGEABLE
SECURITIES. Except in the case of the Company issuing rights to subscribe for
shares of Common Stock distributed to all the shareholders of the Company and
Holders of Warrants pursuant to Section 8.8 hereof and in the case of the
Company issuing employee stock options pursuant to a stock option plan at an
option price no less than 80% of the fair market value of the underlying
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Common Stock on the date of grant, if the Company shall at any time after the
date hereof issue options, rights or warrants to subscribe for shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock, (i) for a consideration per share less than the Exercise Price in
effect immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities or (ii) without consideration, the
Exercise Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 8.1 hereof, provided that:
(a) The aggregate maximum number of shares
of Common Stock, as the case may be, issuable under all the outstanding options,
rights or warrants shall be deemed to be issued and outstanding at the time all
the outstanding options, rights or warrants were issued, and for a consideration
equal to the minimum purchase price per share provided for in the options,
rights or warrants at the time of issuance, plus the consideration (determined
in the same manner as consideration received on the issuance or sale of shares
in accordance with the terms of the Warrants), if any, received by the Company
for the options, rights or warrants, and if no minimum price is provided in the
options, rights or warrants, then the consideration shall be equal to zero;
provided, however, that upon the expiration or other termination of the options,
rights or warrants, if any thereof shall not have been exercised, the number of
shares of Common Stock deemed to be issued and outstanding pursuant to this
subsection (a) (and for the purposes of subsection (v) of Section 8.1 hereof)
shall be reduced by such number of shares as to which options, warrants and/or
rights shall have expired or terminated unexercised, and such number of shares
shall no longer be deemed to be issued and outstanding, and the Exercise Price
then in
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effect shall forthwith be readjusted and thereafter be the price which it would
have been had adjustment been made on the basis of the issuance only of shares
actually issued or issuable upon the exercise of those options, rights or
warrants as to which the exercise rights shall not have expired or terminated
unexercised.
(b) The aggregate maximum number of shares
of Common Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding at the time
of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Common Stock in accordance with the terms of the
Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof; provided, however, that upon the termination of the right to convert or
exchange such convertible or exchangeable securities (whether by reason of
redemption or otherwise), the number of shares deemed to be issued and
outstanding pursuant to this subsection (b) (and for the purpose of subsection
(v) of Section 8.1 hereof) shall be reduced by such number of shares as to which
the conversion or exchange rights shall have expired or terminated unexercised,
and such number of shares shall no longer be deemed to be issued and outstanding
and the Exercise Price then in effect shall forthwith be readjusted and
thereafter be the price which it would have been had adjustment been made on the
basis of the issuance only of the shares actually issued or issuable upon the
conversion or exchange of those convertible or exchangeable securities as to
which the conversion or exchange rights shall not have expired or terminated
unexercised.
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(c) If any change shall occur in the price
per share provided for in any of the options, rights or warrants referred to in
subsection (a) of this Section 8.2, or in the price per share at which the
securities referred to in subsection (b) of this Section 8.2 are convertible or
exchangeable, the options, rights or warrants or conversion or exchange rights,
as the case may be, shall be deemed to have expired or terminated on the date
when such price change became effective in respect of shares not theretofore
issued pursuant to the exercise or conversion or exchange thereof, and the
Company shall be deemed to have issued upon such date new options, rights or
warrants or convertible or exchangeable securities at the new price in respect
of the number of shares issuable upon the exercise of such options, rights or
warrants or the conversion or exchange of such convertible or exchangeable
securities.
8.3 SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increased in the case of combination.
8.4 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment
of the Exercise Price pursuant to the provisions of this Article 8, the number
of securities issuable upon the exercise of each Warrant shall be adjusted to
the nearest full number by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of securities issuable upon exercise of
the Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
8.5 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of
any reclassification or change of the outstanding shares of Common Stock (other
than a change in 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 the
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case of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the Company
is the surviving corporation and which does not result in any reclassification
or change of the outstanding shares of Common Stock, except a change as a result
of a subdivision or combination of such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holders shall thereafter have the
right to purchase the kind and number of shares of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale or conveyance as if the Holders were the owners of the Shares
underlying the Warrants immediately prior to any such events, at a price equal
to the product of (x) the number of shares of Common Stock issuable upon
exercise of the Warrants and (y) the Exercise Price in effect immediately prior
to the record date for such reclassification, change, consolidation, merger,
sale or conveyance as if such Holders had exercised the Warrants.
8.6 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES.
Notwithstanding anything herein to the contrary, no adjustment of the Exercise
Price shall be made:
(a) Upon the issuance or sale of the
Warrants or the shares of Common Stock issuable upon the
exercise of the Warrants; or
(b) Upon the issuance or sale of the shares
of Common Stock issued pursuant to the Public Offering;
(c) Upon the issuance of options pursuant to
the Company's employee stock option plan in effect on the date
hereof or the issuance or sale by
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the Company of any shares of Common Stock pursuant to the
exercise of any such options; or
(d) If the amount of said adjustment shall
be less than one cents (1(cent)) per security, provided,
however, that in such case any adjustment that would otherwise
be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried
forward, shall amount to at least one cents (1(cent)) per
security.
8.7 DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO
OUTSTANDING SECURITIES. In the event that the Company shall at any time prior to
the exercise of all Warrants declare a dividend (other than a dividend
consisting solely of shares of Common Stock or a cash dividend or distribution
payable out of current or retained earnings) or otherwise distribute to its
shareholders any monies, assets, property, rights, evidences of indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity, or any other thing of value, the Holders of the
unexercised Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities receivable upon the exercise thereof, to
receive, upon the exercise of such Warrants, the same monies, property, assets,
rights, evidences of indebtedness, securities or any other thing of value that
they would have been entitled to receive at the time of such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make appropriate reserves to ensure the timely performance of the
provisions of this Subsection 8.7.
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8.8 SUBSCRIPTION RIGHTS FOR SHARES OF COMMON STOCK OR OTHER
SECURITIES. In the case that the Company or an affiliate of the Company shall at
any time after the date hereof and prior to the exercise of all the Warrants
issue any rights to subscribe for shares of Common Stock or any other securities
of the Company or of such affiliate to all the shareholders of the Company, the
Holders of the unexercised Warrants shall be entitled, in addition to the shares
of Common Stock or other securities receivable upon the exercise of the
Warrants, to receive such rights at the time such rights are distributed to the
other shareholders of the Company.
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant certificate of like tenor and date representing
in the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
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Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS.
The Company shall not be required to issue certificates representing
fractions of Shares upon the exercise of the Warrants, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of Shares.
11. RESERVATION AND LISTING OF SECURITIES.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price therefor, all Shares
issuable upon such exercise shall be duly and validly issued, fully paid,
nonassessable and not subject to the preemptive rights of any shareholder. As
long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon the exercise of the
Warrants to be listed on the Nasdaq National Market.
12. NOTICES TO WARRANT HOLDERS.
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Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them
to receive a dividend or distribution payable otherwise than
in cash, or a cash dividend or distribution payable otherwise
than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the
Company or securities convertible into or exchangeable for
shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or
merger) or a sale of all or substantially all of its property,
assets and business as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or
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entitled to vote on such proposed dissolution, liquidation, winding up or sale.
Such notice shall specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend or distribution, or the issuance of
any convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
13. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(a) If to a registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company;
or
(b) If to the Company, to the address set forth in
Section 3 of this Agreement or to such other address as the
Company may designate by notice to the Holders.
14. SUPPLEMENTS AND AMENDMENTS.
The Company and Gilford may from time to time supplement or amend this
Agreement without the approval of any Holders of the Warrants and/or Warrant
Securities in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and Gilford may deem necessary or
desirable and
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which the Company and Xxxxxxx xxxx not to adversely affect the interests of the
Holders of Warrant Certificates.
15. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
16. GOVERNING LAW.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the laws of said State.
17. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and Gilford and any other registered Holder
or Holders of the Warrant Certificates or Warrant Securities any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and Gilford and any other
Holder or Holders of the Warrant Certificates or Warrant Securities.
18. COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the date first above written.
21st CENTURY HOLDING COMPANY
By:________________________________________
Name:
Title:
Attest:
________________________________ GILFORD SECURITIES INCORPORATED
By:________________________________________
Name:
Title:
25
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") NOR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR
SOLD EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, (II) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (III) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
ISSUER, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR APPLICALBE
STATE SECURITIES LAWS IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING ________________ ___, 1999, THROUGH
5:00 P.M., NEW YORK TIME, ____________ ___, 2003
NO. W-1 125,000 WARRANTS
WARRANT CERTIFICATE
This Warrant Certificate certifies that Gilford Securities Incorporated
or its registered assigns, is the registered holder of Warrants to purchase, at
any time from ___________ __, 1999 until 5:00 P.M. New York City time on
__________ __, 2003 ("Expiration Date"), up to 125,000 fully-paid and
non-assessable shares of common stock, $.01 par value ("Common Stock"), of 21st
Century Holding Company, a Florida corporation (the "Company"), at the initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $_____ per share of Common Stock upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the Warrant Agreement dated as
of ___________ ___, 1998 between the Company and Gilford Securities Incorporated
(the "Warrant Agreement"). Payment of the Exercise Price may be made in cash, or
by certified or official bank check in New York Clearing House funds payable to
the order of the Company, or any combination of cash or check.
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No Warrant may be exercised after 5:00 P.M, New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated: __________ __, 1998 21st CENTURY HOLIDNG COMPANY
By:_______________________________________
Name:
Title:
Attest:
____________________________________
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FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______ shares of Common
Stock and herewith tenders in payment for such securities cash or a certified or
official bank check payable in New York Clearing House Funds to the order of
21st Century Holding Company in the amount of $____________, all in accordance
with the terms hereof. The undersigned requests that a certificate for such
securities be registered in the name of ___________________________, whose
address is ____________________________________________, and that such
Certificate be delivered to _______________________________________, whose
address is _________________________________________________.
Dated: Signature:__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
_______________________________________
_______________________________________
(Insert Social Security or Other
Identifying Number of Holder)
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FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER
DESIRES TO TRANSFER THE WARRANT CERTIFICATE.)
FOR VALUE RECEIVED hereby sells, assigns and transfers
unto__________________________ (Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint , Attorney, to transfer the
within Warrant Certificate on the books of the within-named Company, with full
power of substitution.
Signature:__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
_________________________________
_________________________________
(Insert Social Security or Other
Identifying Number of Assignee)
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