Exhibit 4.4
NEITHER THIS WARRANT NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT THER- ETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW,
OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. THE COMPANY'S SUBSCRIPTION
AGREEMENT WITH THE HOLDER OF THIS WARRANT CONTAINS ADDITIONAL PROVISIONS
RESTRICTING THE TRANSFER OF THIS WARRANT. A COPY OF SUCH AGREEMENT IS AVAILABLE
FOR INSPECTION AT THE COMPANY'S OFFICE.
For the Purchase of
________ shares of
Warrant No. __ Common Stock
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
PIVOT RULES, INC.
(A New York Corporation)
Pivot Rules, Inc., a New York corporation ("Company"), hereby certifies
that _______ ___________, or his, her or its registered assigns ("Registered
Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company, at any time or from time to time during the period commencing
January 1, 1998 and ending on December 31, 2002, ________ shares of Common
Stock, par value $.01 per share, of the Company ("Common Stock"), at an initial
exercise price equal to $2.50 per share (subject to adjustment as provided
below); provided, however, upon the effective date ("Effective Date") of the
registration statement with respect to an initial public offering ("Offering")
of the Company's securities as contemplated by the letter of intent dated
October 3, 1996 ("Letter of Intent") between the Company and GKN Securities
Corp. ("GKN"), this Warrant shall automatically convert (on a one-for-one
basis) into the warrants to be issued as part of the securities to be sold to
the public in the Offering. The number of shares of Common Stock purchasable
upon exercise of this Warrant, and the exercise price per share, each as
adjusted from time to time pursuant to the provisions of this Warrant, are
hereinafter referred to as the "Warrant Stock" and the "Exercise Price,"
respectively.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in whole or
in part, by surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by such Registered Holder, at the principal office
of the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, in lawful money of the United States, of the
Exercise Price payable in respect of the number of shares of Warrant Stock
purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the Warrant
shall have been surrendered to the Company as provided in subsection 1(a)
above. At such time, the person or persons in whose name or names any
certificates for Warrant Stock shall be issuable upon such exercise as provided
in subsection 1(c) below shall be deemed to have become the holder or holders
of record of the Warrant Stock represented by such certificates.
(c) As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within 10 days thereafter, the Company at its expense
will cause to be issued in the name of, and delivered to, the Registered
Holder, or, subject to the terms and conditions hereof, as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full shares of
Warrant Stock to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares of Warrant Stock equal (without
giving effect to any adjustment therein) to the number of such shares called
for on the face of this Warrant, minus the number of such shares purchased by
the Registered Holder upon such exercise as provided in subsection 1(a) above.
2. Adjustments.
(a) If the outstanding shares of the Company's Common Stock shall be
subdivided or split into a greater number of shares, or a dividend in Common
Stock shall be paid in respect of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or at the record date of such dividend
shall, simultaneously with the effectiveness of such subdivision or split or
immediately after the record date of such dividend, be proportionately reduced.
If the outstanding shares of Common Stock shall be combined or reverse-split
into a smaller number of shares, the Exercise Price in effect
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immediately prior to such combination or reverse-split shall, simultaneously
with the effectiveness of such combination or reverse-split, be proportionately
increased. When any adjustment is required to be made in the Exercise Price,
the number of shares of Warrant Stock purchasable upon the exercise of this
Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Exercise Price in
effect immediately prior to such adjustment, by (ii) the Exercise Price in
effect immediately after such adjustment.
(b) If there shall occur any capital reorganization or reclassification
of the Company's Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(a) above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, or the
payment of a liquidating distribution, then, as part of any such
reorganization, reclassification, consolidation, merger, transfer or
liquidating distribution, lawful provision shall be made so that the Registered
Holder of this Warrant shall have the right thereafter to receive upon the
exercise hereof (to the extent, if any, still exercisable) the kind and amount
of shares of stock or other securities or property which such Registered Holder
would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, transfer or
liquidating distribution, as the case may be, such Registered Holder had held
the number of shares of Common Stock which were then purchasable upon the
exercise of this Warrant. In any such case, appropriate adjustment (as
reasonably determined by the Board of Directors of the Company) shall be made
in the application of the provisions set forth herein with respect to the
rights and interests thereafter of the Registered Holder of this Warrant such
that the provisions set forth in this Section 2 (including provisions with
respect to adjustment of the Exercise Price) shall thereafter be applicable, as
nearly as practicable, in relation to any shares of stock or other securities
or property thereafter deliverable upon the exercise of this Warrant.
(c) No adjustment in the per share Exercise Price shall be required
unless such adjustment would require an increase or decrease in the Exercise
Price of at least $0.01; provided, however, that any adjustments which by
reason of this paragraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this Section 2 shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be. Anything in this Section 2 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
per share Exercise Price, in addition to those required by this Section 2 as in
its discretion it shall deem to be advisable in order that any stock dividend,
subdivision of shares or distribution rights to purchase stock or securities
convertible or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
(d) Upon the happening of any event requiring an adjustment of the
Exercise Price hereunder, the Company shall forthwith give written notice
thereto to the Registered Holder of this Warrant stating the adjusted
Exercise Price and the adjusted
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number of shares purchasable upon the exercise hereof resulting from such
event and setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
3. Fractional Shares. The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the mean between the low bid and high asked
prices for the Warrant Stock on the over-the-counter market as reported by
Nasdaq or the closing market price of the Warrant Stock on a national
securities exchange on the trading day immediately prior to the date of
exercise, whichever is applicable, or if neither is applicable, then on the
basis of the then fair market value of the Warrant Stock as shall be reasonably
determined by the Board of Directors of the Company.
4. Limitation on Sales, etc. Each holder of this Warrant acknowledges that
this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as now in force or hereafter amended, or any successor
legislation ("Act"), and agrees not to sell, pledge, distribute, offer for
sale, transfer or otherwise dispose of this Warrant or any Warrant Stock issued
upon its exercise in the absence of (a) an effective registration statement
under the Act as to this Warrant and the Warrant Stock issued upon its exercise
and registration or qualification of this Warrant or such Warrant Stock under
any applicable Blue Sky or state securities law then in effect, or (b) an
opinion of counsel, satisfactory to the Company, that such registration and
qualification are not required. Notwithstanding the foregoing, the holder
acknowledges that it may not sell the Warrant or any Warrant Shares until one
year after the Effective Date without the prior written consent of GKN;
provided, however, that, if necessary for the Common Stock to obtain Nasdaq
listing, and with GKN's consent, such restriction on sale of the Warrants and
Warrant Shares may be made unconditional and extended up to one additional
year.
Without limiting the generality of the foregoing, unless the offering and
sale of the Warrant Stock to be issued upon the exercise of the Warrant shall
have been effectively registered under the Act, the Company shall be under no
obligation to issue the shares covered by such exercise unless and until the
Registered Holder shall have executed an investment letter in form and
substance reasonably satisfactory to the Company, including a warranty at the
time of such exercise that it is acquiring such shares for its own account, for
investment and not with a view to, or for sale in connection with, the
distribution of any such shares, in which event a legend in substantially the
following form shall be endorsed upon the certificate(s) representing the
Warrant Stock issued pursuant to such exercise:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended ("Act"), or under any
applicable state securities laws and may not be offered or sold except
pursuant to (i) an effective registration statement under the Act and such
state securities laws, (ii) to the extent applicable, Rule 144 under the Act
(or any similar rule under such Act relating to the disposition of
securities), or (iii) an opinion of counsel,
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if such opinion shall be reasonably satisfactory to the Corporation, that an
exemption from registration under the Act and such state securities laws is
available.
5. Certain Dividends. If the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
"Property Dividend"), then the Company will pay or distribute to the Registered
Holder of this Warrant, upon the exercise hereof, in addition to the Warrant
Stock purchased upon such exercise, the Property Dividend which would have been
paid to such Registered Holder if the Registered Holder had been the owner of
record of such shares of Warrant Stock immediately prior to the date on which a
record is taken for such Property Dividend or, if no record is taken, the date
as of which the record holders of Common Stock entitled to such dividends or
distribution are to be determined.
6. Rights of Warrant Holder.
The Company has agreed to register this Warrant (and the underlying
Warrant Stock), or its successor, on Form XX-0, X-0 or other form of
registration statement used by the Company in connection with the Offering and
in connection with certain offerings by the Company, all as set forth in
Section 7 of the Subscription Agreement between the Company and the Registered
Holder pursuant to which this Warrant has been issued. Notwithstanding the
foregoing, the holder acknowledges that, if necessary for the Common Stock to
obtain Nasdaq listing, and with GKN's consent, this Warrant and the underlying
Warrant Stock may be excluded or withdrawn from any registration statement
filed in connection with the Offering.
On the Effective Date, the Registered Holder shall have the same rights
with respect to this Warrant as the holders of the warrants issued to the
public in the Offering and the Registered Holder shall exchange this Warrant
for the form of warrant issued to the public in the Offering. Such new warrant
and the rights of the Registered Holder shall be governed by the warrant
agreement executed in connection with the Offering. Some of the rights of the
Registered Holder reflected herein will not be reflected in such warrant
agreement, since the terms of the warrants to be issued to the public in the
Offering will be different, in certain respects, from the terms of this
Warrant.
7. Notices of Record Date, etc. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or other securities at the time issuable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution (other than a dividend or distribution payable solely in capital
stock of the Company or out of funds legally available therefor), or to receive
any right to subscribe for or purchase any shares of stock of any class or any
other securities, or to receive any other right; or
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(b) of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (i)
the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities as are
at the time issuable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least ten (10) days prior to the
record date or effective date, for the event specified in such notice, provided
that the failure to mail such notice shall not affect the legality or validity
of any such action.
8. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Warrant Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.
9. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and (in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
10. Transfers, etc. The Company will maintain a register containing the names
and addresses of the Registered Holders of this Warrant and of the holders of
other warrants of like tenor issued simultaneously hereunder. Any Registered
Holder may change its, his or her address as shown on the warrant register by
written notice to the Company requesting such change.
Until any transfer of this Warrant is made in the warrant register, the
Company may treat the Registered Holder of this Warrant as the absolute owner
hereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in this Warrant on the part of any other person;
provided, however, that if and when this Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat
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the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
11. Mailing of Notices, etc. All notices and other communications from the
Company to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, sent by reputable overnight
delivery or by facsimile to the address furnished to the Company in writing by
the last Registered Holder of this Warrant who shall have furnished an address
to the Company in writing. All notices and other communications from the
Registered Holder of this Warrant or in connection herewith to the Company
shall be mailed by first-class certified or registered mail, postage prepaid,
sent by reputable overnight delivery or by facsimile to the Company at its
offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address
as the Company shall so notify the Registered Holder.
12. No Rights as Stockholders. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
13. Change or Waiver. Any term of this Warrant may be changed or waived only
by an instrument in writing signed by the party against whom enforcement of the
change or waiver is sought.
14. Headings. The headings of this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
15. Governing Law. This Warrant will be governed by and construed in
accordance with the law of the State of New York without regard to the
principles of conflict of law.
16. Venue. The Company (a) agrees that any legal suit, action or proceeding
arising out of or relating to this Warrant shall be instituted exclusively in
New York State Supreme Court, County of New York or in the United States
District Court for the Southern District of New York, (b) waives any objection
to the venue of any such suit, action or proceeding and the right to assert
that such forum is not a convenient forum, and (c) irrevocably consents to the
jurisdiction of the New York State Supreme Court, County of New York, and the
United States District Court for the Southern District of New York in any such
suit, action or proceeding. The Company further agrees to accept and
acknowledge service of any and all process which may be served in any such
suit, action or proceeding in the New York State Supreme Court, County of New
York, or in the United States District Court for the Southern District of New
York and agrees that service of process upon it mailed by certified mail to its
address shall be deemed in every respect effective service of process upon it
in any such suit, action or proceeding.
Dated: January 2, 1997 PIVOT RULES, INC.
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By:
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E. Xxxxxxx Xxxxx
Chief Executive Officer
EXHIBIT I
PURCHASE FORM
To: Pivot Rules, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated:
In accordance with the provisions set forth in the attached Warrant (No.
_____), the undersigned hereby irrevocably elects to purchase ________ shares
of the Common Stock covered by such Warrant and herewith makes payment of
$_________, representing the full Exercise Price for such shares at the price
per share provided for in such Warrant.
The undersigned has had the opportunity to ask questions of and receive
answers from the officers of the Company regarding the affairs of the Company
and related matters, and has had the opportunity to obtain additional
information necessary to verify the accuracy of all information so obtained.
The undersigned understands that the shares have not been registered under
the Securities Act of 1933, as amended, or the securities laws of any other
jurisdiction, and hereby represents to the Company that the undersigned is
acquiring the shares for its own account, for investment, and not with a view
to, or for sale in connection with, the distribution of any such shares.
Signature
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Address
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