WARRANT AGREEMENT
Exhibit 4.4
This Warrant Agreement (the “Agreement”) is made as of ______, 2010, by and between
Planet Beach Franchising Corporation, a Delaware corporation (the “Company”), and Registrar
and Transfer Company (the “Warrant Agent”).
RECITALS:
WHEREAS, the Company, at or about the time that it is entering into this Agreement, proposes
to issue and sell to public investors up to 4,312,500 units (the “Units”), with each Unit
consisting of one share of the Company’s common stock, $0.0001 par value (the “Common
Stock”), and one redeemable warrant to purchase one share of Common Stock of the Company (the
“Unit Warrants”);
WHEREAS, the Company has engaged X. X. Xxxxxx & Company, Inc. (“CKCC”), as the
underwriters’ representative and book-running manager, in connection with the public offering of
the Units;
WHEREAS, the Company wishes to retain the Warrant Agent to act on behalf of the Company, and
the Warrant Agent is willing to so act, in connection with, among other things, the issuance,
transfer, exchange and replacement, as the case may be, of the certificates evidencing the Unit
Warrants to be issued under this Agreement (the “Warrant Certificates”); and
WHEREAS, the Company and the Warrant Agent wish to enter into this Agreement to set forth the
terms and conditions of the Unit Warrants and the rights of the registered holders of record
thereof (the “Holders”), and to set forth the respective rights and obligations of the
Company and the Warrant Agent. Each Holder is an intended beneficiary of this Agreement with
respect to the rights of Holders herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereto agree as follows:
1. Definitions of Certain Terms. In addition to the terms defined in the Recitals
above and elsewhere in this Agreement, the following terms have the following meanings:
(a) “Business Day” means a day on which banks are open for business in the city of
New York.
(b) “Commission” means the U.S. Securities and Exchange Commission.
(c) “Effective Date” means the date that the Registration Statement was declared
effective by the Commission.
(d) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(e) “Fair Market Value” means, on any given day: (A) if the class of securities are
exchange-traded, the average of the closing sales prices per share of such class of securities for
the ten (10) consecutive trading days ending on the day that is two (2) trading days prior to the
applicable date of determination of Fair Market Value; or (B) if the class of securities is not
listed or admitted to trading on any securities exchange but is regularly traded in any
over-the-counter market, then the average of the bid and ask prices per share of such class of
securities for the ten (10) consecutive trading days ending on the day that is two (2) trading days
prior to the applicable date of determination of Fair Market Value; or (C) if the class of
securities is not traded as described in clauses (A) or (B) immediately above, then the per share
fair market value of the class of securities as determined in good faith by the Company’s Board of
Directors.
(f) “FINRA” means the Financial Industry Regulatory Authority, Inc.
(g) “Registration Statement” means the registration statement of the Company on Form
S-1 (File No. 333 — 165879), with respect to the registration under the Securities Act of the
Units, and any amendments thereto and any information deemed to be included therein pursuant to
Rules 424(b) and 430A under the Securities Act.
(h) “Securities Act” means the Securities Act of 1933, as amended.
2. Warrants. Subject to Section 9 below, each Unit Warrant may be exercised
by the Holder thereof, in whole or in part, at any time or from time to time, during the Exercise
Period (as defined in Section 3 below), for one fully paid and non-assessable share of
Common Stock (each, a “Share”), for an exercise price equal to
$______ per Share (the
“Exercise Price”). The Exercise Price is subject to adjustment as provided in Section
14 below. The exercise procedures are set forth in Section 7 below.
3. Exercise Period. Subject to Section 9 below, the Unit Warrants may be
exercised at any time during the period (the “Exercise Period”) commencing as of 9:30:01
a.m., New York time, on ______, 2010, and ending as of 5:00 p.m., New York time, on ______,
2013 (“Expiration Time”). After the Expiration Time, any unexercised Unit Warrants will be
void and all rights of Holders shall cease.
4. Execution of Warrant Certificates. Warrant Certificates shall be in registered
form only and shall be substantially in the form set forth as Exhibit A attached to this
Agreement and incorporated by reference herein. Warrant Certificates shall be signed by the
President and Secretary, respectively, of the Company, and shall bear the Company’s corporate seal.
If any officer, whose signature has been placed upon any Warrant Certificate, shall have ceased to
be such officer before such Warrant Certificate is countersigned, issued and delivered, such
Warrant Certificate may nonetheless be countersigned, issued and delivered with the same effect as
if such person had not ceased to be such officer. Any Warrant Certificate may be signed by any
person who at the actual date of the preparation of such Warrant Certificate shall be a proper
officer of
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the Company to sign such Warrant Certificate even though such person was not such an officer
upon the date of this Agreement.
5. Countersigning. Warrant Certificates shall be countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. The Warrant Agent hereby is
authorized to countersign and deliver to, or in accordance with the instructions of, any Holder any
Warrant Certificate which is properly issued.
6. Registration of Transfer and Exchanges. The Warrant Agent shall from time to time
register the transfer of any outstanding Warrant Certificate upon records maintained by the Warrant
Agent for such purpose upon surrender of such Warrant Certificate to the Warrant Agent for
transfer, accompanied by appropriate instruments of transfer in form satisfactory to the Company
and the Warrant Agent and duly executed by the Holder or a duly authorized attorney-in-fact. Upon
any such registration of transfer, a new Warrant Certificate shall be issued in the name of and to
the transferee, and the surrendered Warrant Certificate shall be cancelled.
7. Exercise of Warrants.
(a) Subject
to the terms of the Unit Warrant and this Agreement, including
Section 13 hereof, a Unit Warrant shall be exercised by the Holder by (i) surrendering to the Warrant Agent
the Warrant Certificate with the exercise form on the reverse of such Warrant Certificate duly
completed and executed, and (ii) remitting payment to the Warrant Agent of an amount in cash equal
to the product of the Exercise Price multiplied by the number of Shares being purchased upon such
exercise, with such payment being in the form of a personal or business check drawn on a U.S. bank
and payable to the Warrant Agent.
(b) Upon receipt of a Warrant Certificate with the exercise form thereon duly executed
together with payment in full of the Exercise Price for the Shares for which Unit Warrants are then
being exercised, the Warrant Agent shall requisition certificates for the Shares, and, upon
receipt, shall make delivery thereof evidencing the total number of whole Shares for which Unit
Warrants are then being exercised, in such names and denominations as are required for delivery to,
or in accordance with the instructions of, the Holder. Such certificates for the Shares shall be
deemed to be issued, and the person to whom such Shares are being issued of record shall be deemed
to have become a holder of record of such Shares, as of the date of the surrender of such Warrant
Certificate and payment of the Exercise Price, whichever shall last occur; provided that if the
transfer books of the Company with respect to the Shares shall be closed, the certificates for the
Shares issuable upon exercise of the Unit Warrants shall be issued as of the date on which such
books shall next be open, and the person to whom such Shares are issued of record shall be deemed
to have become a record holder of such Shares as of the date on which such books shall next be open
(whether before, on or after the Expiration Time) and until such date the Warrant Agent shall be
under no duty to deliver any certificate for such Shares.
(c) If less than all of a Holder’s Unit Warrants are exercised upon a single occasion, a new
Warrant Certificate for the balance of the Unit Warrants not so exercised shall be issued and
delivered to, or in accordance with, transfer instructions properly given by the Holder until the
Expiration Time.
(d) All Warrant Certificates surrendered upon exercise shall be cancelled.
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(e) Upon the exercise of any Unit Warrant, the Warrant Agent shall promptly deposit the
payment into an escrow account established by mutual agreement of the Company and the Warrant Agent
at a mutually agreed-upon, federally insured commercial bank. All funds deposited in the escrow
account will be disbursed on a weekly basis to the Company once they have been determined by the
Warrant Agent to be collected funds. Once the funds are determined to be collected, the Warrant
Agent shall cause the Share certificate(s) representing the exercised Unit Warrants to be issued.
(f) Expenses incurred by the Warrant Agent will be paid by the Company. A detailed accounting
statement relating to the number of Unit Warrants exercised, names and registered Holder(s), and
the amount of exercised funds remitted will be given to the Company with the payment of each
exercise amount.
8. Warrant Solicitation and Warrant Solicitation Fee.
(a) The Company has engaged CKCC, on a non-exclusive basis, as its agent for the solicitation
of the exercise of the Unit Warrants. The Company will, at its cost, (i) assist CKCC with respect
to such solicitation, if requested by CKCC, and (ii) provide CKCC, and instruct the Warrant Agent
to deliver to CKCC, lists of the record and, to the extent known, beneficial owners of the
Company’s Unit Warrants. The Company hereby instructs the Warrant Agent to cooperate with CKCC in
every respect in connection with CKCC’s solicitation activities, including, but not limited to,
providing to CKCC, at the Company’s cost, a list of record and beneficial holders of the Unit
Warrants and circulating a prospectus or offering circular disclosing the compensation arrangements
referenced in Section 8(b) below to holders of the Unit Warrants at the time of exercise of
the Unit Warrants. In addition to the conditions set forth in Section 8(b), CKCC shall
accept payment of the warrant solicitation fee provided in Section 8(b) only if permitted
under the rules and regulations of the FINRA and only to the extent that a holder who exercises
Unit Warrants specifically designates, in writing, that CKCC solicited the exercise.
(b) In each instance in which a Unit Warrant is exercised, the Warrant Agent shall promptly
give written notice of such exercise to the Company and CKCC (such notice, the “Warrant Agent’s
Exercise Notice”). For each Unit Warrant that is exercised more than one year following the
Effective Date, in connection with which (i) the Fair Market Value of the Common Stock is greater
than the Exercise Price, (ii) disclosure of compensation arrangements between the Company and CKCC
with respect to the solicitation of the exercise of the Unit Warrants was made both in the
Registration Statement and at the time of exercise, (iii) the Holder of the Unit Warrant confirms
in writing that the exercise of the Unit Warrant was solicited by CKCC, (iv) the Unit Warrant was
not held in a discretionary account, and (v) the solicitation of the exercise of the Unit Warrant
was not in violation of Regulation M (as such rule or any successor rule may be in effect as of
such time of exercise) promulgated under the Exchange Act, then, in each such instance, the Company
shall pay a fee in cash equal to 5.0% of the Exercise Price (the
“Solicitation Fee”) to CKCC, provided that CKCC delivers to
the Company within ten (10) Business Days from the date on which CKCC has received the Warrant
Agent’s Exercise Notice, a certificate that the conditions set forth in the preceding clauses
(iii), (iv) and (v) have been satisfied (the “Solicitation
Certificate”). The Company shall pay the Solicitation Fee to
CKCC by wire transfer in immediately available U.S. funds to an
account designated by CKCC within three (3) Business Days following
the date on which CKCC delivers the Solicitation Certificate to the
Company, provided, however, that the Company shall not be
obligated to pay the Solicitation Fee until the proceeds from the
exercise of the Warrants shall have been disbursed by the Warrant
Agent to the Company in accordance with section 7(e)
hereof. Notwithstanding the foregoing, no fee will be paid to
CKCC with respect to the exercise by CKCC or its affiliates of any warrants purchased by it or them
and still held by it or them for its or their own account.
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CKCC and the Company may at any time during business hours, examine the records of the Warrant
Agent, including its ledger of original Warrant Certificates returned to the Warrant Agent upon
exercise of Unit Warrants.
(c) The provisions of this Section 8 may not be modified, amended or deleted without
the prior written consent of CKCC, who is an intended beneficiary of this Agreement with respect to
the rights granted to it herein.
9. Redemption of Warrants.
(a) The outstanding Unit Warrants may be redeemed at the option of the Company, in whole or in
part on a pro-rata basis, by giving not less than fifteen (15) calendar days prior written notice
as provided in Section 9(c) below (the “Redemption Notice”), which notice may not
be given before, but may be given at any time after, the date on which the closing price of the
Common Stock on the principal exchange or trading facility on which it is then traded has equaled
or exceeded $______ for at least ten (10) consecutive trading days during the Exercise Period. The
Redemption Notice shall specify the date on which the Company shall redeem the Unit Warrants (such
date, the “Redemption Date”).
(b) The price at which Unit Warrants may be redeemed (the “Redemption Price”) is $0.10
per Unit Warrant. From and after the Redemption Date, all rights of the Holders with respect to
the redeemed Unit Warrant, except the right to receive the applicable Redemption Price, shall
terminate, but only if no later than two (2) Business Days prior to the Redemption Date, the
Company shall have irrevocably deposited with the Warrant Agent, as paying agent, a sufficient
amount to pay the Redemption Price on the Redemption Date for all Unit Warrants called for
redemption. The Holders of redeemed Unit Warrants shall be entitled to payment of the Redemption
Price upon surrender of the Warrant Certificates of such redeemed Unit Warrants to the Company at
the office of the Warrant Agent.
(c) The Redemption Notice shall be given at least fifteen (15) calendar days prior to the
Redemption Date by mailing, by registered or certified mail, return receipt requested, a copy of
such notice to the Warrant Agent and to all of the Holders of Unit Warrants at their respective
addresses appearing on the books or transfer records of the Warrant Agent. A Redemption Notice,
once mailed by the Company, shall be irrevocable; provided, however, that if the Company fails to
make a sufficient deposit with the Warrant Agent as provided herein, the Redemption Notice and
redemption indicated therein shall be revoked and deemed a nullity as to the pro-rata portion of
the Unit Warrants not covered by the deposited funds.
(d) On the Redemption Date, the Warrant Agent shall pay to the Holders of redeemed Unit
Warrants all monies received by the Warrant Agent from the Company for the redemption of Unit
Warrants to which the Holders of such redeemed Unit Warrants who shall have surrendered their
Warrant Certificates are entitled. The Warrant Agent shall have no obligation to pay for the
redemption of Unit Warrants except to the extent that funds for such payment have been provided to
it by the Company.
(e) All amounts deposited with the Warrant Agent that are not required for redemption of Unit
Warrants may be withdrawn by the Company. Any amounts deposited with
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the Warrant Agent that shall be unclaimed for six months after the Redemption Date shall be
delivered back to the Company, and thereafter the Holders of the Unit Warrants called for
redemption for which such funds were deposited shall look solely to the Company for payment, it
being understood that the Warrant Agent shall be under no obligation to report or remit unclaimed
property to appropriate states in compliance with applicable law. The Company acknowledges that
the bank accounts maintained by the Warrant Agent in connection with the services hereunder will be
in the Warrant Agent’s name and that the Warrant Agent may receive investment earnings in
connection with the funds held in those accounts from time to time.
(f) Notwithstanding anything to the contrary in this Section 9, the Company may not
provide any Redemption Notice at any time at which the Unit Warrants are not currently exercisable
as a result of the application of Section 13 below. If, during the period between the
Redemption Notice and the Redemption Date, the Unit Warrants become not currently exercisable as a
result of the application of Section 13, then the Redemption Date shall be extended to be
the tenth (10th) Business Day after such restriction on exercise lapses.
(g) Notwithstanding anything to the contrary in this Section 9, a Holder may elect, at
any time during the period between receipt of the Redemption Notice and two (2) Business Days prior
to the Redemption Date, to exercise such Holder’s Unit Warrant in accordance with the procedures
set forth in this Agreement, including Sections 2 and 7 hereof.
10. Taxes. The Company will pay all taxes attributable to the initial issuance of
Shares upon exercise of Unit Warrants. The Company shall not, however, be required to pay any tax
which may be payable in respect to any transfer involved in any issue of Warrant Certificates or in
the issue of any certificates of Shares in the name other than that of the Holder upon the exercise
of any Unit Warrant.
11. Mutilated or Missing Warrant Certificates. On receipt by the Company and the
Warrant Agent of evidence satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate, the Company shall execute and the Warrant Agent shall
countersign and deliver in lieu thereof, a new Warrant Certificate. In the case of loss, theft or
destruction of any Warrant Certificate, the Holder requesting issuance of a new Warrant Certificate
shall be required to secure an indemnity bond from an approved surety bonding company. In the
event a Warrant Certificate is mutilated, such Warrant Certificate shall be surrendered and
canceled by the Warrant Agent prior to delivery of a new Warrant Certificate. Applicants for a
substitute Warrant Certificate shall also comply with such other regulations and pay such other
reasonable charges as the Warrant Agent may prescribe.
12. Reservation of Shares. For the purpose of enabling the Company to satisfy all
obligations to issue Shares upon exercise of Unit Warrants, the Company will at all times reserve
and keep available free from preemptive rights, out of the aggregate of its authorized but unissued
shares, the full number of Shares which may be issued upon the exercise of the Unit Warrants and
such Shares will upon issue be fully paid and nonassessable by the Company and free from all taxes,
liens, charges and security interests with respect to the issue thereof.
13. Governmental or Regulatory Restrictions. If any Shares issuable upon the exercise
of Unit Warrants require registration or approval of any governmental or regulatory
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authority, the Company will use all commercially reasonable efforts to cause such Shares to be
duly registered, or approved, as the case may be, and, to the extent practicable, take all such
action in anticipation of and prior to the exercise of the Unit Warrants, including, without
limitation, filing any and all post-effective amendments and/or prospectus supplements to the
Company’s Registration Statement necessary to permit a public offering of the Shares underlying the
Unit Warrants at any and all times during the term of this Agreement; provided, however, that in no
event shall such Shares be issued, and the Company is authorized to refuse to honor the exercise of
any Unit Warrant, if such exercise would result in, in the opinion of the Company’s Board of
Directors, upon advice of counsel, the violation of any applicable law. If, at the Expiration
Time, the Unit Warrants are not currently exercisable as a result of the provisions of this
Section 13, the Expiration Time shall be extended automatically to a date that is thirty
(30) calendar days following notice to the Holders that the Unit Warrants are again exercisable and
references to the Expiration Time herein shall thereafter refer to such extended Expiration Time.
14. Adjustments.
(a) If prior to the exercise of any Unit Warrants, the Company shall have effected one or more
stock splits, stock dividends or other increases or reductions of the number of shares of Common
Stock outstanding without receiving compensation therefor in money, services or property, the
number of Shares subject to the Unit Warrants shall (i) if a net increase shall have been effected
in the number of outstanding shares of the Common Stock, be proportionately increased, and the
Exercise Price payable per share shall be proportionately reduced, and (ii) if a net reduction
shall have been effected in the number of outstanding shares of the Common Stock, be
proportionately reduced and the Exercise Price payable per share be proportionately increased.
(b) In the event of a capital reorganization or a reclassification of the Common Stock (except
as provided in Section 14(a) above), any Holder, upon exercise of the Unit Warrants, shall
be entitled to receive, in substitution for the Common Stock to which he would have become entitled
upon exercise immediately prior to such reorganization or reclassification, the shares (of any
class or classes) or other securities or property of the Company (or cash) that he would have been
entitled to receive at the same aggregate Exercise Price upon such reorganization or
reclassification if such Unit Warrants had been exercised immediately prior to the record date with
respect to such event; and in any such case, appropriate provision (as determined by the Board of
Directors of the Company, whose determination shall be conclusive and shall be evidenced by a
certified Board resolution filed with the Warrant Agent) shall be made for the application of this
Section 14 with respect to the rights and interests thereafter of the Holders (including
but not limited to the allocation of the Exercise Price between or among shares of classes of
capital stock), to the end that this Section 14 (including the adjustments of the number of
shares of Common Stock or other securities purchasable and the Exercise Price thereof) shall
thereafter be reflected, as nearly as reasonably practicable, in all subsequent exercises of the
Unit Warrants for any shares or securities or other property (or cash) thereafter deliverable upon
the exercise of the Unit Warrants.
(c) In case of any consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any reclassification or
change of the outstanding Common Stock), the corporation formed by
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such consolidation or merger shall execute and deliver to the Warrant Agent a supplemental
warrant agreement providing that the holder of each Unit Warrant then outstanding shall have the
right thereafter (until the Expiration Time) to receive, upon exercise of such Unit Warrant, the
kind and amount of shares of stock and other securities and property (or cash) receivable upon such
consolidation or merger by a holder of the number of shares of Common Stock for which such Unit
Warrant might have been exercised immediately prior to such consolidation, merger, sale or
transfer. Such supplemental warrant agreement shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided in this Section 14.
15. Notice to Holders. Upon any adjustment as described in Section 14, the
Company within twenty (20) calendar days thereafter shall (i) cause to be filed with the Warrant
Agent a certificate signed by an officer of the Company setting forth the details of such
adjustment, the method of calculation and the facts upon which such calculation is based, which
certificate shall be conclusive evidence of the correctness of the matters set forth therein
(absent manifest error), (ii) cause written notice of such adjustments to be given to each Holder
as of the record date applicable to such adjustment. Also, if the Company proposes to enter into
any reorganization, reclassification, sale of substantially all of its assets, consolidation,
merger, dissolution, liquidation or winding up, the Company shall give notice of such fact at least
20 days prior to such action to all Holders, which notice shall set forth such facts and indicate
the effect of such action (to the extent such effect may be known at the date of such notice) on
the Exercise Price and the kind and amount of the shares or other securities and property
deliverable upon exercise of the Unit Warrants. Without limiting the obligation of the Company
hereunder to provide notice to each Holder, failure of the Company to give notice shall not
invalidate any corporate action taken by the Company.
16. No Fractional Warrants or Shares. The Company shall not be required to issue
fractions of Shares issuable upon exercise of the Unit Warrants, upon the reissue of Unit Warrants,
or any adjustments as described in Section 14 or otherwise. Rather, the Company, in lieu
of issuing any such fractional interest, shall round up or down to the nearest full Share issuable
upon exercise of the Unit Warrant. If the total Unit Warrants surrendered by exercise would result
in the issuance of a fractional share, the Company shall not be required to issue a fractional
share but rather the aggregate number of shares issuable will be rounded up or down to the nearest
full Share.
17. Rights of Holders. No Holder, as such, shall have any rights of a stockholder of
the Company, either at law or in equity, and the rights of a Holder, as such, are limited to those
rights expressly provided in this Agreement and the Warrant Certificate. The Company and the
Warrant Agent may treat the registered Holder in respect of any Unit Warrant as the absolute owner
thereof for all purposes notwithstanding any notice to the contrary.
18. Warrant Agent. The Company hereby appoints the Warrant Agent to act as the agent
of the Company and the Warrant Agent hereby accepts such appointment upon the following terms and
conditions by all of which the Company and every Holder, by acceptance of his Warrant Certificates,
shall be bound:
(a) Statements contained in this Agreement and in the Warrant Certificate shall be taken as
statements of the Company. The Warrant Agent assumes no responsibility for
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the correctness of any of the same except such as describes the Warrant Agent or for action
taken or to be taken by the Warrant Agent.
(b) The Warrant Agent shall not be responsible for any failure of the Company to comply with
any of the Company’s covenants contained in this Agreement or in the Warrant Certificates.
(c) The Warrant Agent may consult at any time with counsel satisfactory to it (who may be
counsel for the Company), and the Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the opinion or the advice of such counsel, provided the Warrant
Agent shall have exercised reasonable care in the selection and continued employment of such
counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the Company or to any
Holder for any action taken in reliance upon any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent the compensation set forth on Exhibit B for
all services rendered by the Warrant Agent in the execution of this Agreement, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and all other charges of any kind or
nature incurred by the Warrant Agent in the execution of this Agreement, and to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and
counsel fees, for this Agreement except as a result of the Warrant Agent’s gross negligence or bad
faith or willful misconduct.
(f) The Warrant Agent shall be under no obligation to institute any action, suit or legal
proceeding or to take any other action likely to involve expense unless the Company or one or more
Holders shall furnish the Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred in connection with such action, suit or legal proceeding, but this
provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent
may consider proper, whether with or without any such security or indemnity. All rights of action
under this Agreement or under any of the Unit Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrant Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the Holders as their respective rights or interest may appear.
(g) The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Unit Warrants or other securities of the Company or become
interested in any pecuniary manner in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though it were
not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
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19. Successor Warrant Agent. Any corporation into which the Warrant Agent may be
merged or converted or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder with the same powers, rights, responsibilities and obligations of the
Warrant Agent without the execution or filing of any paper or any further act of a party or the
parties hereto. In any such event or if the name of the Warrant Agent is changed, the Warrant
Agent or such successor may adopt the countersignature of the original Warrant Agent and may
countersign such Warrants either in the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent.
20. Change of Warrant Agent. The Warrant Agent may resign or be discharged by the
Company from its duties under this Agreement by the Warrant Agent or the Company, as the case may
be, giving notice in writing to the other, and by giving a date when such resignation or discharge
shall take effect, which notice shall be sent at least 30 days prior to the date so specified. If
the Warrant Agent shall resign, be discharged or shall otherwise become incapable of acting, the
Company shall appoint a successor to 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 resigning or incapacitated Warrant Agent or after discharging the Warrant Agent,
then the Company agrees to perform the duties of the Warrant Agent hereunder until a successor
Warrant Agent is appointed. Any successor Warrant Agent shall be a bank or a trust company, in
good standing, organized under the laws of the United States of America, having at the time of its
appointment as Warrant Agent, a combined capital and surplus of at least five million dollars
(U.S.$5,000,000). After appointment, the successor Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent
without further act or deed and the former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by it thereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for effecting the delivery or transfer.
Failure to give any notice provided for in the section, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.
21. Notices. Any notice or demand authorized by this Agreement to be given or made by
the Warrant Agent or by any Holder to or on the Company shall be sent by facsimile, mail, first
class, certified or registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
To the Company:
Planet Beach Franchising Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Facsimile: 000-000-0000
To the Warrant Agent:
Planet Beach Franchising Corporation
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Facsimile: 000-000-0000
To the Warrant Agent:
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Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
To the Holders: At their last known addresses as they shall appear on the
registration books for the Warrant Certificates maintained by the Warrant Agent.
All notices required or permitted hereunder shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and
if not, then on the next Business Day; (iii) two (2) Business Days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) Business
Day after deposit with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt.
22. Supplements and Amendments. The Company and the Warrant Agent may from time to
time supplement or amend this Agreement without the approval of any Holders in order to cure any
ambiguity or to correct or supplement any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder that the Company and the Warrant Agent may deem
necessary or desirable.
23. Successors. All of the covenants and provisions of this Agreement by or for the
benefit of the Company, the Warrant Agent, the Holders and CKCC shall bind and inure to the benefit
of their respective successors and assigns hereunder.
24. Termination. This Agreement shall terminate at the close of business on the
Expiration Time or such earlier date upon which all Unit Warrants have been exercised or redeemed.
The provisions of Section 18 shall survive such termination.
25. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Louisiana, without regard to conflict of law principles, and
notwithstanding the fact that one or more counterparts hereof may be executed outside of the state,
or one or more of the obligations of the parties hereunder are to be performed outside of the
state.
26. Benefits of this Agreement. Nothing in this Agreement shall be construed to give
any person or corporation other than the Company, the Warrant Agent, the Holders and CKCC any legal
or equitable right, remedy or claim under this Agreement.
27. Headings. The headings used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
28. Severability. If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions of this
Agreement.
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29. Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute only one instrument. Any one of such counterparts shall be
sufficient for the purpose of proving the existence and terms of this Agreement, and no party shall
be required to produce an original or all of such counterparts in making such proof.
[The remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Warrant Agreement to be
executed by one of its officers thereunto duly authorized as of the date first set forth above.
| PLANET BEACH FRANCHISING CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| REGISTRAR AND TRANSFER COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
-13-
EXHIBIT A
FORM OF WARRANT CERTIFICATE
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON , 2013
UNIT WARRANTS TO PURCHASE COMMON STOCK
No. ______-
No. of Unit Warrants:
CUSIP
THIS CERTIFIES THAT , or its registered assigns, is the registered holder of the
number of Unit Warrants (“Warrants”) set forth above. Each Warrant entitles the holder
thereof to purchase from Planet Beach Franchising Corporation, a Delaware corporation (the
“Company”), subject to the terms and conditions set forth hereinafter and in the Warrant
Agreement, dated as of , 2010, by and between the Company and Registrar and Transfer
Company (the “Warrant Agreement”), during the period (the “Exercise Period”)
commencing as of 9:30:01 a.m., New York time, on , 2010, and ending as of 5:00 p.m., New
York time, on , 2013 (“Expiration Time”), one (1) fully paid and non-assessable
share of Common Stock, par value $0.0001 per share, of the Company (the “Common Stock”).
Any capitalized terms used herein without definition shall have the meanings ascribed to such terms
in the Warrant Agreement.
The Warrants may be exercised by delivery to Registrar and Transfer Company, 00 Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, (or to the address of any successor warrant agent or, if there
be no successor warrant agent, at the corporate offices of the Company), of:
(i)
this Warrant Certificate, with the exercise form attached hereto duly completed and
executed; and
(ii)
payment of the Exercise Price to the order of [ ].
Notwithstanding anything else in this Warrant Certificate, or the Warrant Agreement, no
Warrant may be exercised unless at the time of exercise (i) a registration statement covering the
Shares to be issued upon exercise is effective under the Securities Act and (ii) a prospectus
thereunder relating to the Shares is current. In no event shall the registered holder of this
Warrant be entitled to receive a net-cash settlement, shares of common stock or other consideration
in lieu of physical settlement in Shares of the Company. The Warrant Agreement provides that upon
the occurrence of certain events, the Exercise Price and the number of Shares
purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be
adjusted.
This Warrant will expire as of the Expiration Time if it is not exercised prior to such time
by the registered holder pursuant to the terms of the Warrant Agreement or if it is not redeemed by
the Company prior to such date in accordance with the terms of the Warrant Agreement.
This Warrant Certificate is subject to all of the terms, provisions and conditions of the
Warrant Agreement, to all of which terms, provisions and conditions the registered holder of this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is incorporated herein by
reference and made a part hereof and reference is made to the Warrant Agreement for a full
description of the rights, limitations of rights, obligations, duties and immunities of the Warrant
Agent, the Company and the holders of the Warrant Certificates. Copies of the Warrant Agreement
are available for inspection at the stock transfer office of the Warrant Agent or may be obtained
upon written request addressed to the Company at its corporate offices.
The Company shall not be required upon the exercise of the Warrants evidenced by this Warrant
Certificate to issue fractions of Warrants, Common Stock or other securities, but shall make
adjustment therefor as provided in the Warrant Agreement.
This Warrant does not entitle the registered holder to any of the rights of a stockholder of
the Company.
This Warrant Certificate, with or without other certificates, upon surrender to the Warrant
Agent, any successor warrant agent or, in the absence of any successor warrant agent, at the
corporate offices of the Company, may be exchanged for another Warrant Certificate or certificates
evidencing in the aggregate the same number of Warrants as the Warrant Certificate or certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be exercised in part,
the holder hereof shall be entitled to receive upon surrender hereof another Warrant Certificate or
certificates evidencing the number of Warrants not so exercised.
The Company and the Warrant Agent may deem and treat the registered holder as the absolute
owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the
registered holder, and for all other purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
The terms and provisions of this Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Louisiana, without regard to conflicts of law principles.
A-2
WITNESS the signatures of the duly authorized officers of Planet Beach Franchising Corporation
and its corporate seal.
By:
|
By: | ||||||||||
| Title: | Title: | ||||||||||
(CORPORATE SEAL)
Countersigned:
REGISTRAR AND TRANSFER COMPANY
By: ______________________________
Authorized Officer
Authorized Officer
A-3
The following abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to applicable laws or
regulations.
TEN COM:
|
as tenants in common | |
TEN ENT:
|
as tenants by the entireties | |
JT TEN:
|
as joint tenants with right | |
| of survivorship and not as | ||
| tenants in common |
UNIF GIFT MIN ACT ___________________________________ Custodian ___________________________________
(Cust)
(Minor)
under Uniform Gifts to Minors Act
(State)
(State)
UNIF TRF MIN ACT ___________________________________ Custodian ___________________________________
(Cust)
(Minor)
under Uniform Transfers to Minors Act
(State)
(State)
A-4
FORM OF EXERCISE
(To be executed upon exercise of Unit Warrant)
(To be executed upon exercise of Unit Warrant)
To: Planet Beach Franchising Corporation
The undersigned, pursuant to the provisions set forth in the Warrant Certificate and Warrant
Agreement, hereby irrevocably elects to exercise the right of purchase represented thereby, and
hereby agrees to subscribe for and to purchase shares of the Common Stock of Planet Beach
Franchising Corporation (“Common Shares”), as provided for therein, and tenders herewith
payment of the purchase price in full in cash by certified or bank cashier’s check in the amount of
$ .
Please issue a certificate or certificates for such Common Shares in the name of the
undersigned. If the number of Common Shares purchased hereby shall not be all the Common Shares
purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of the undersigned for the balance remaining of the Common Shares purchasable thereunder.
Name:
Address:
SS#/TIN#:
| |
||
| (This above signature(s) must correspond with the name on the face of this Warrant Certificate or with the name of the assignee appearing in the assignment form below.) |
Date:
A-5
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY UPON ASSIGNMENT)
(TO BE SIGNED ONLY UPON ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned Registered Holder, , hereby sells, assigns
and transfers unto
number of Registered Holder)
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.
Date:
| Signature(s): |
||
| (Signature(s) must conform in all respects to the name of Registered Holder as specified on the face of this Warrant Certificate in every particular, without alteration or any change whatsoever, and the signature(s) must be guaranteed in the usual manner.) | ||
(The signature(s) should be guaranteed by an
eligible institution pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as
amended.)
A-6
EXHIBIT B
TERMS OF WARRANT AGENT COMPENSATION
