Exhibit 4.2
WARRANT AGREEMENT
Agreement made as of __________, 2002 between 99Cent Stuff, Inc. a
Florida corporation, with offices at 0000 Xxxxx Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx
00000 ("Company"), and American Stock Transfer & Trust Company, a New York
corporation, with offices at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (herein
called "Warrant Agent").
WHEREAS, the Company has issued or has determined to issue up to (i)
2,300,000 redeemable Warrants ("Public Warrants"), and (ii) 200,000 Warrants
("Representative's Warrants," together with the Public Warrants, "Warrants")
issued or issuable upon exercise of a Purchase Option ("Purchase Option") to
VFinance Investments, Inc., the representative of the underwriters for the
Company's initial public offering ("Representative"), or its designees,
evidencing the right of the holders thereof to purchase an aggregate of
2,500,000 shares of common stock of the Company, $.01 par value per share
("Common Stock"), which Warrants have been issued or will be issued as described
in the Company's Registration Statement on Form S-1, Registration No. 333-92048,
declared effective __________, 2002 ("Registration Statement"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange, redemption and exercise of the
Warrants; and
WHEREAS, the Company desires to provide for the form and provisions of
the Warrants, the terms upon which they shall be issued and exercised, and the
respective rights and limitation of rights of the Company, the Warrant Agent,
and the holders of the Warrants; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the Warrant
Agent to act as agent for the Company for the Warrants, and the Warrant Agent
hereby accepts such appointment and agrees to perform the same in accordance
with the terms and conditions set forth in this Agreement.
2. WARRANTS.
2.1 FORM OF WARRANT. Each Warrant shall be issued in registered form
only, shall be in substantially the form of Exhibit A hereto, shall be signed
by, or bear the facsimile signature of, the Chairman of the Board or President
and Secretary or Assistant Secretary of the Company and shall bear a facsimile
of the Company's seal. In the event the person whose facsimile signature has
been placed upon any Warrant shall have ceased to serve in the capacity in which
such person signed the Warrant before such Warrant is issued, it may be issued
with the same effect as if he had not ceased to be such at the date of issuance.
No Warrant may be exercised until it has been countersigned by the Warrant Agent
as provided in Section 2.3 hereof.
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2.2 EFFECT OF COUNTERSIGNATURE. Unless and until countersigned by the
Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no
effect.
2.3 EVENTS FOR COUNTERSIGNATURE. The Warrant Agent shall countersign a
Warrant only upon the occurrence of either of the following events:
(i) if the Warrant is to be issued in exchange or substitution
for one or more previously countersigned Warrants, as hereinafter provided; or
(ii) if the Company instructs the Warrant Agent to do so.
2.4 REGISTRATION.
2.4.1 WARRANT REGISTER. The Warrant Agent shall maintain books
("Warrant Register") for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the Company.
2.4.2 REGISTERED HOLDER. Prior to due presentment for
registration of transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the person in whose name such Warrant shall be registered upon
the Warrant Register ("registered holder") as the absolute owner of such Warrant
and of each Warrant represented thereby (notwithstanding any notation of
ownership or other writing on the Warrant Certificate made by anyone other than
the Company or the Warrant Agent), for the purpose of any exercise thereof, and
for all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
2.5 DETACHABILITY OF WARRANTS. The Warrants and Common Stock which
comprise the units ("Units") as described in the Registration Statement will not
trade separately until the 30th day after the effective date of the Registration
Statement.
3. TERMS AND EXERCISE OF PUBLIC WARRANTS.
3.1 WARRANT PRICE. Each Warrant shall, when countersigned by the
Warrant Agent, entitle the registered holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the Company, at
a price of $7.50, one share of Common Stock, subject to the adjustments provided
in Section 4 hereof. The term "Warrant Price" as used in this Warrant Agreement
refers to the price per share at which Common Stock may be purchased at the time
a Warrant is exercised.
3.2 DURATION OF WARRANTS. A Warrant may be exercised only during the
period ("Exercise Period") commencing on the later of the consummation by the
Company of a business combination as described in the Registration Statement or
__________, 2002, and terminating on the earlier to occur of (i) __________,
2007 or (ii) the date fixed for redemption of such Warrant as provided in
Section 6 of this Agreement (the "Expiration Date"). Each Warrant not exercised
on or before the Expiration Date shall become void, and all rights thereunder
and all rights in respect thereof under this Agreement shall cease at the close
of business on the Expiration Date.
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3.3 EXERCISE OF WARRANTS.
3.3.1 PAYMENT. A Warrant, when countersigned by the Warrant
Agent, may be exercised by the registered holder thereof by surrendering it, at
the office of the Warrant Agent, or at the office of its successor as Warrant
Agent, in the Borough of Manhattan, City and State of New York, with the
subscription form, as set forth in the Warrant and in substantially the form of
Exhibit A hereto, duly executed, and by paying in full, in lawful money of the
United States, in cash, good certified check or good bank draft payable to the
order of the Company, the Warrant Price for each full share of Common Stock as
to which the Warrant is exercised and any and all applicable taxes due in
connection with the exercise of the Warrant, the exchange of the Warrant for the
Common Stock, and the issuance of the Common Stock.
3.3.2 ISSUANCE OF CERTIFICATES. As soon as practicable after
the exercise of any Warrant, the Company shall issue to the registered holder of
such Warrant a certificate or certificates for the number of full shares of
Common Stock to which such registered holder is entitled, registered in such
name or names as may be directed by the registered holder, and if such Warrant
shall not have been exercised in full, a new countersigned Warrant for the
number of shares of Common Stock as to which such Warrant shall not have been
exercised. Notwithstanding the foregoing, the Company shall not be obligated to
deliver any securities pursuant to the exercise of a Warrant unless a
registration statement under the Securities Act of 1933, with respect to the
securities is then currently effective. Warrants may not be exercised by, or
securities issued to, any registered holder in any state in which such exercise
would be unlawful.
3.3.3 VALID ISSUANCE. All shares of Common Stock issued upon
the proper exercise of a Warrant in conformity with this Agreement shall be
validly issued.
3.3.4 DATE OF ISSUANCE. Each person in whose name any such
certificate for shares of Common Stock is issued and any such certificate for
Warrants is issued shall for all purposes be deemed to have become the holder of
record of such shares and Warrants on the date on which the Warrant was
surrendered and payment of the Warrant Price was made, irrespective of the date
of delivery of such certificates, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares and Warrants at
the close of business on the next succeeding date on which the stock transfer
books are open.
3.3.5 WARRANT SOLICITATION FEE.
(a) The Company has engaged the Representative, on a non-
exclusive basis, as its agent for the solicitation of the exercise of the
Warrants in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc. The Company has also agreed to (i)
assist the Representative with respect to such solicitation, if reasonably
requested by the Representative, and (ii) at the Representative's request,
provide the Representative and direct the Company's transfer and warrant agent
to deliver to the Representative, at the Company's cost, lists of the record
and, to the extent known, beneficial owners of the Company's Warrants.
Accordingly, the Company hereby instructs the Warrant Agent to cooperate with
the Representative in connection with the Representative's solicitation
activities, including but not limited to providing to the Representative, at the
Company's cost, such list of record and beneficial holders of the Warrants.
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(b) If, upon the exercise of any Warrant: (i) the market price
of the Company's Common Stock is greater and such satisfaction was confirmed in
writing by the holder of such Warrant than the then Warrant Price, (ii) the
exercise of the Warrant was solicited by the Representative, (iii) the Warrant
was not held in a discretionary account, then the Warrant Agent, simultaneously
with the distribution of proceeds to the Company received upon exercise of the
Warrant(s) so exercised, shall, on behalf of the Company, pay from the proceeds
received upon exercise of the Warrant(s), a fee of 5% of the Warrant Price to
the Representative for each Warrant exercised more than one year after the
effective date of the Registration Statement. The Representative and the Company
may at any time during business hours, examine the records of the Warrant Agent,
including its ledger of original Warrants certificates returned to the Warrant
Agent upon exercise of Warrants.
(c) The provisions of this Section 3.3.5 may not be modified,
amended or deleted without the prior written consent of the Representative.
3.3.6 REPRESENTATIVE'S WARRANTS. In connection with its
services as Representative, the Company has issued to the Representative or its
designees the Purchase Option. The Representative's Warrants, which will be
issued or will be issuable upon exercise of the Purchase Option, are identical
to the Public Warrants covered by this Agreement.
4. ADJUSTMENTS.
4.1 STOCK DIVIDENDS - SPLIT-UPS. If after the date hereof, and subject
to the provisions of Section 4.5 hereof, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common Stock
or by a split-up of shares of Common Stock or other similar event, then, on the
effective day thereof, the number of shares issuable on exercise of each Warrant
shall be increased in proportion to such increase in outstanding shares and the
then applicable Warrant Price shall be correspondingly decreased.
4.2 AGGREGATION OF SHARES. If after the date hereof, and subject to the
provisions of Section 4.5 hereof, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination or reclassification of shares
of Common Stock or other similar event, then, after the effective date of such
consolidation, combination or reclassification, the number of shares issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in
outstanding shares and the then applicable Warrant Price shall be
correspondingly increased.
4.3 REORGANIZATION, ETC. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the Warrant holders shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions specified
in the Warrants and in lieu of the securities of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
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represented thereby, such shares of stock, securities or assets as may be issued
or payable with respect to or in exchange for the number of outstanding shares
of such Common Stock equal to the number of shares of Common Stock and number of
Warrants immediately theretofore purchasable and receivable upon the exercise of
the rights represented by the Warrants, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the Warrant holders to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Warrant Price
and of the number of shares of Common Stock purchasable upon the exercise of the
Warrants) shall thereafter be applicable, as nearly as may be in relation to any
share of stock, securities or assets thereafter deliverable upon the exercise
hereof. The Company shall not effect any such consolidation, merger, or sale
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger, or the
corporation purchasing such assets, shall assume by written instrument executed
and delivered to the Warrant Agent the obligation to deliver to the Warrant
holders such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holders may be entitled to purchase.
4.4 NOTICES OF CHANGES IN WARRANT. Upon every adjustment of the Warrant
Price or the number of shares of Common Stock issuable on exercise of a Warrant,
the Company shall give written notice thereof to the Warrant Agent, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares of Common Stock purchasable at such
price upon the exercise of a Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. Upon
the occurrence of any event specified in Sections 4.1, 4.2 or 4.3, the Company
shall give written notice in the manner set forth above of the record date for
such dividend, distribution, or subscription rights, or the effective date of
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be entitled to exchange
their Common Stock for stock, securities or other assets deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or issuance. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.
4.5 NO FRACTIONAL SHARES. Notwithstanding any provision contained in
this Warrant Agreement to the contrary, the Company shall not issue fractional
shares upon exercise of Warrants. If, by reason of any adjustment made pursuant
to this Section 4, the holder of any Warrant would be entitled, upon the
exercise of such Warrant, to receive a fractional interest in a share, the
Company shall, upon such exercise, purchase such fractional interest, determined
as follows:
(i) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on The Nasdaq National Market or The Nasdaq SmallCap Market or the
OTC Bulletin Board, the current value shall be the last reported sale price of
the Common Stock on such exchange on the last business day prior to the date of
exercise of such Warrant or if no such sale is made on such day, the average of
the closing bid and asked prices for such day on such exchange; or
(ii) If the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported bid
and asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of such Warrant; or
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(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current value shall be an amount determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.
4.6 FORM OF WARRANT. The form of Warrant need not be changed because of
any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the same Warrant Price and the same number of shares as is
stated in the Warrants initially issued pursuant to this Agreement. However, the
Company may at any time in its sole discretion make any change in the form of
Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in
the form as so changed.
5. TRANSFER AND EXCHANGE OF WARRANTS.
5.1 REGISTRATION OF TRANSFER. The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with
signatures properly guaranteed and accompanied by appropriate instructions for
transfer. Upon any such transfer, a new Warrant representing an equal aggregate
number of Warrants shall be issued and the old Warrant shall be cancelled by the
Warrant Agent. The Warrant so cancelled shall be delivered by the Warrant Agent
to the Company from time to time upon request.
5.2 PROCEDURE FOR SURRENDER OF WARRANTS. Warrants may be surrendered to
the Warrant Agent, together with a written request for exchange or transfer, and
thereupon the Warrant Agent shall issue in exchange therefor one or more new
Warrants as requested by the registered holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that in
the event that a Warrant surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not cancel such Warrant and issue new Warrants in
exchange therefor until the Warrant Agent has received an opinion of counsel for
the Company stating that such transfer may be made and indicating whether the
new Warrants must also bear a restrictive legend.
5.3 FRACTIONAL WARRANTS. The Warrant Agent shall not be required
to effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant.
5.4 SERVICE CHARGES. No service charge shall be made for any
exchange or registration of transfer of Warrants.
5.5 WARRANT EXECUTION AND COUNTERSIGNATURE. The Warrant Agent is hereby
authorized to countersign and to deliver, in accordance with the terms of this
Agreement, the Warrants required to be issued pursuant to the provisions hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrants duly executed on behalf of the Company for such purpose.
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6. REDEMPTION.
6.1 REDEMPTION. Each of the outstanding Warrants may be redeemed, at
the option of the Company, as a whole and not in part, after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 6.2 hereof, at the price of $.05 per
Redeemable Warrant ("Redemption Price"), provided that the last sale price of
the Common Stock equals or exceeds 150% of the then Warrant Price on each of the
twenty (20) consecutive trading days ending on the third day prior to the date
on which notice of redemption is given.
6.2 DATE FIXED FOR, AND NOTICE OF, REDEMPTION. In the event the Company
shall elect to redeem the Warrants, the Company shall fix a date for the
redemption. Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than 30 days prior to the date fixed for
redemption to the registered holders of the Warrants to be redeemed at their
last address, as they shall appear on the registration books. Any notice mailed
in the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such notice.
6.3 EXERCISE AFTER NOTICE OF REDEMPTION. The Warrants may be exercised
in accordance with Section 3 of this Agreement at any time after notice of
redemption shall have been given by the Company pursuant to Section 6.2 hereof
and prior to the time and date fixed for redemption. On and after the redemption
date, the record holder of the Warrants shall have no further rights except to
receive, upon surrender of the Warrants, the redemption price.
7. OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS.
7.1 NO RIGHTS AS STOCKHOLDER. A Warrant does not entitle the registered
holder thereof to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends or other distributions, to
exercise any preemptive rights, or to vote, to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.
7.2 LOST, STOLEN, MUTILATED, OR DESTROYED WARRANTS. If any Warrant is
lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on
such terms as to indemnity or otherwise as they may in their discretion impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination, tenor, and date as the
Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time
enforceable by anyone.
7.3 RESERVATION OF COMMON STOCK. The Company shall at all times reserve
and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.
7.4 REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission the Registration Statement for the registration, under
the Securities Act of 1933, of, among others, the Warrants and the Common Stock
issuable upon exercise of the Warrants.
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7.5 REGISTRATION OF COMMON STOCK. The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, or
a new registration statement, for the registration, under the Securities Act of
1933, of the Common Stock issuable upon exercise of the Warrants. In either
case, the Company will use its best efforts to cause the same to become
effective and to maintain the effectiveness of such registration statement until
the expiration of the Warrants in accordance with the provisions of this
Agreement. In connection with the filing of such registration statement, the
Company shall disclose in such amendment or new registration statement the
warrant solicitation fee payable to the Representative.
8. CONCERNING THE WARRANT AGENT AND OTHER MATTERS.
8.1 PAYMENT OF TAXES. The Company will from time to time promptly pay
all taxes and charges that may be imposed upon the Company or the Warrant Agent
in respect of the issuance or delivery of shares of Common Stock and Warrants
upon the exercise of Warrants, but the Company shall not be obligated to pay any
transfer taxes in respect of the Warrants or such shares.
8.2 RESIGNATION, CONSOLIDATION, OR MERGER OF WARRANT AGENT.
8.2.1 APPOINTMENT OF SUCCESSOR WARRANT AGENT. The Warrant
Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities hereunder after giving sixty
(60) days' notice in writing to the Company. If the office of the Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a successor Warrant Agent in place of the Warrant
Agent. If the Company shall fail to make such appointment within a period of 30
days after it has been notified in writing of such resignation or incapacity by
the Warrant Agent or by the holder of the Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any
Warrant may apply to the Supreme Court of the State of New York for the County
of New York for the appointment of a successor Warrant Agent. Any successor
Warrant Agent, whether appointed by the Company or by such court, shall be a
corporation organized and existing or qualified to do business under the laws of
the State of New York, in good standing and having its principal office in the
Borough of Manhattan, City and State of New York, and authorized under such laws
to exercise corporate trust powers and subject to supervision or examination by
federal or state authority. After appointment, any successor Warrant Agent shall
be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed; but if for
any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2 NOTICE OF SUCCESSOR WARRANT AGENT. In the event a
successor Warrant Agent shall be appointed, the Company shall give notice
thereof to the predecessor Warrant Agent and the transfer agent for the Common
Stock not later than the effective date of any such appointment.
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8.2.3 MERGER OR CONSOLIDATION OF WARRANT AGENT. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
8.3 FEES AND EXPENSES OF WARRANT AGENT.
8.3.1 REMUNERATION. The Company agrees to pay the Warrant
Agent reasonable remuneration for its services as such Warrant Agent hereunder
and will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 FURTHER ASSURANCES. The Company and the Warrant Agent
agree to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by the Warrant Agent
or the Company for the carrying out or performing of the provisions of this
Agreement.
8.4 LIABILITY OF WARRANT AGENT.
8.4.1 RELIANCE ON COMPANY STATEMENT. Whenever in the
performance of its duties under this Warrant Agreement, the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
statement signed by the President of the Company and delivered to the Warrant
Agent. The Warrant Agent may rely upon such statement for any action taken or
suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 INDEMNITY. The Warrant Agent shall be liable hereunder
only for its own negligence or willful misconduct or any actions taken in bad
faith. The Company agrees to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and reasonable
counsel fees, for anything done or omitted by the Warrant Agent in the execution
of this Agreement except as a result of the Warrant Agent's negligence, willful
misconduct, or bad faith.
8.4.3 EXCLUSIONS. The Warrant Agent shall have no
responsibility with respect to the validity of this Agreement or with respect to
the validity or execution of any Warrant (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of Section 4
hereof or responsible for the manner, method, or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant or as to
whether any shares of Common Stock will when issued be valid and fully paid and
nonassessable.
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8.5 ACCEPTANCE OF AGENCY. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for, and
pay to the Company, all monies received by the Warrant Agent for the purchase of
shares of the Company's Common Stock through the exercise of Warrants.
9. MISCELLANEOUS PROVISIONS.
9.1 SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns.
9.2 NOTICES. Any notice, statement or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant to or by the Company shall be sufficiently given or made if sent by
certified mail, or private courier service, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows:
99Cent Stuff, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
with a copy to:
Sachs Sax Xxxxx
000 Xxxxxx Xxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
and
Xxxxxx & Xxxx, P.A.
000 X. Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
Any notice, statement or demand authorized by this Agreement to be given or made
by the holder of any Warrant or by the Company to or on the Warrant Agent shall
be sufficiently given or made if sent by certified mail or private courier
service, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company), as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Compliance Department
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9.3 APPLICABLE LAW. The validity, interpretation, and performance of
this Agreement and of the Warrants shall be governed in all respects by the laws
of the State of New York, without giving effect to conflict of laws. Each of the
Company and the Warrant Agent hereby agrees that any action, proceeding or claim
against it arising out of or relating in any way to this Agreement shall be
brought and enforced in the courts of the State of New York of the United States
of America for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Warrant Agent hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any such process or
summons to be served upon the Company or the Warrant Agent may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
9.2 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon each of the Company and the Warrant Agent in any action, proceeding
or claim. Each of the Company and the Warrant Agent agrees that the prevailing
party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys' fees and expenses relating to such
action or proceeding and/or incurred in connection with the preparation
therefor.
9.4 PERSONS HAVING RIGHTS UNDER THIS AGREEMENT. Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the registered holders
of the Warrants and, for the purposes of Section 3.3.5 hereof, the
Representative, any right, remedy, or claim under or by reason of this Warrant
Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. All covenants, conditions, stipulations, promises, and agreements
contained in this Warrant Agreement shall be for the sole and exclusive benefit
of the parties hereto and their successors and assigns and of the registered
holders of the Warrants. The parties hereto agree that the Representative is
intended to be a third-party beneficiary with respect to Section 3.3.5 with all
legal rights and remedies available to it as fully as if it were a party hereto.
9.5 EXAMINATION OF THE WARRANT AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the office of the Warrant Agent in
the Borough of Manhattan, City and State of New York, for inspection by the
registered holder of any Warrant. The Warrant Agent may require any such holder
to submit his Warrant for inspection by it.
9.6 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 all such counterparts shall together constitute but one and
the same instrument.
9.7 EFFECT OF HEADINGS. The Section headings herein are for
convenience only and are not part of this Warrant Agreement and shall not affect
the interpretation thereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto under their respective corporate seals as of the day and year
first above written.
Attest: 99CENT STUFF, INC.
_______________________________ By:___________________________________
Name:
Title:
Corporate Seal
Attest: AMERICAN STOCK TRANSFER & TRUST COMPANY
_______________________________ By:___________________________________
Name:
Title:
11
EXHIBIT A
FORM OF CLASS A WARRANT
NO.___ WARRANTS
CUSIP____
VOID AFTER __________, 2007
WARRANT CERTIFICATE
99 CENT STUFF, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED _____________________ or registered
assigns (the "Registered Holder") is the owner of the number of Warrants (the
"Warrants") specified above. Each Warrant initially entitles the Registered
Holder to purchase, subject to the terms and conditions set forth in this
Certificate and the Warrant Agreement (as hereinafter defined), one fully paid
and nonassessable share of Common Stock, $.01 par value, of 99 Cent Stuff, Inc.,
a Florida corporation (the "Company"), at any time from the Commencement Date
(as hereinafter defined) to the Expiration Date (as hereinafter defined) upon
the presentation and surrender of this Warrant Certificate with the Subscription
Form on the reverse hereof duly executed, at the corporate office of American
Stock Transfer & Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$7.50, subject to adjustment (the "Purchase Price"), in lawful money of the
United States of America in cash or by check made payable to the Warrant Agent
for the account of the Company.
This Warrant Certificate and each Warrant represented hereby are issued pursuant
to and are subject in all respects to the terms and conditions set forth in the
Warrant Agreement (the "Warrant Agreement"), dated as of ________, 2002, by and
between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant Agreement, the
Purchase Price and the number of shares of Common Stock subject to purchase upon
the exercise of each Warrant represented hereby are subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the option of the Registered
Holder, but no fractional interests will be issued. In the case of the exercise
of less than all the Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof and shall execute and deliver a
new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant
Agent shall countersign, for the balance of such Warrants.
The term "Commencement Date" shall mean ________, 2002. The term "Expiration
Date" shall mean 5:00 P.M. (New York City time) on ________, 2007, or earlier
upon redemption. If any of such dates shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then such date
shall mean 5:00 P.M. (New York City time) the next following day which in the
State of New York is not a holiday or a day on which banks are authorized to
close.
The Company shall not be obligated to deliver any securities pursuant to the
exercise of this Warrant unless a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to such securities is
effective or an exemption thereunder is available. The Company has covenanted
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and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, to
keep such registration statement current, if required under the Act, while any
of the Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder exercising this Warrant.
This Warrant shall not be exercisable by a Registered Holder in any state where
such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered Holder
shall not be entitled to any rights of a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be redeemed
in whole and not in part at the option of the Company at a redemption price of
$.01 per Warrant, at any time commencing after the Commencement Date, provided
that the last sales price of the Common Stock, for twenty (20) consecutive
trading days ending on the third business day prior to the day that the notice
of redemption is given, equals or exceeds 150% of the Purchase Price then in
effect (subject to adjustment in the event of any stock splits or other similar
events). Notice of redemption shall be given not less than the thirtieth day
before the date fixed for redemption, all as provided in the Warrant Agreement.
On and after the date fixed for redemption, the Registered Holder shall have no
rights with respect to this Warrant except to receive the $.01 per Warrant upon
surrender of this Certificate.
In accordance with the Warrant Agreement, VFinance Investments, Inc. shall be
entitled in certain events to receive a commission equal to 5% of the proceeds
received by the Company from the exercise of the Warrants.
Prior to due presentment for registration of transfer hereof, the Company and
the Warrant Agent may deem and treat the Registered Holder as the absolute owner
hereof and of each Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly authorized officer
of the Company or the Warrant Agent) for all purposes and shall not be affected
by any notice to the contrary, except as provided in the Warrant Agreement.
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This Warrant Certificate shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflicts of laws.
This Warrant Certificate is not valid unless countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: , 2002
99 CENT STUFF, INC. COUNTERSIGNED:
____________________________ AMERICAN STOCK TRANSFER
& TRUST COMPANY, as Warrant Agent
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
CORPORATE SEAL
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SUBSCRIPTION FORM
To Be Executed by the Registered Holder in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
_____________ Warrants represented by this Warrant Certificate, and to purchase
the securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
and be delivered to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated: X -------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Address
--------------------------------------
Social Security or Taxpayer
Identification Number
--------------------------------------
Signature Guaranteed
--------------------------------------
The undersigned represents that the exercise of the within Warrant was solicited
by VFinance Investments, Inc. If not solicited by VFinance Investments, Inc.,
please write "unsolicited" in the space below or write the name of the
broker/dealer which solicited your exercise. Unless otherwise indicated, it will
be assumed that the exercise was solicited by VFinance Investments, Inc.
--------------------------------------
(Write "unsolicited" on above line if
not solicited by VFinance
Investments, Inc.)
Dated: Signature:
--------------------------------- ----------------------------
15
ASSIGNMENT
FOR VALUE RECEIVED, ______________________________________________
_______________________________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
___________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints____________________
--------------------------------------------------------------------------------
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: X
--------------------------------- --------------------------------------
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
16
