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EXHIBIT 4.2
THIS WARRANT HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.
THIS WARRANT MAY NOT BE SOLD OR TRANSFERRED, EXCEPT UPON SUCH REGISTRATION OR
UPON DELIVERY TO MAKER OF AN OPINION OF COUNSEL SATISFACTORY TO MAKER THAT
REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER. IN ADDITION, EXCEPT AS
PROVIDED HEREIN, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED BY ANY PERSON FOR A PERIOD OF ONE YEAR UNTIL _________, 1998.
XXXXXX INCORPORATED
Warrant for the Purchase of Shares of Common Stock
No. [ ] 227,500 Shares
FOR VALUE RECEIVED, Xxxxxx Incorporated, a Nevada corporation (the
"Company"), hereby certifies that Ladenburg Xxxxxxxx & Co. Inc. or its
permitted assigns, is entitled to purchase from the Company, at any time or from
time to time commencing on , 1997 and prior to 5:00 P.M., New York City
time, on , 2002, [Two Hundred Twenty Seven Thousand Five Hundred
(227,500)] fully paid and non- assessable shares of the common stock, $.001 par
value per share, of the Company for an aggregate purchase price of $ (computed
on the basis of $________ per share). Hereinafter, (i) said common stock,
together with any other equity securities which may be issued by the Company
with respect thereto or in substitution therefor, is referred to as the "Common
Stock," (ii) the shares of the Common Stock purchasable hereunder or under any
other Warrant (as hereinafter defined) are referred to individually as a
"Warrant Share" and collectively as the "Warrant Shares," (iii) the aggregate
purchase price payable for the Warrant Shares hereunder is referred to as the
"Aggregate Warrant Price," (iv) the price payable for each of the Warrant Shares
hereunder is referred to as the "Per Share Warrant Price," (v) this Warrant, all
similar Warrants issued on the date hereof and all Warrants hereafter issued in
exchange or substitution for this Warrant or such similar Warrants are referred
to as the "Warrants", and (vi) the holder of this Warrant is referred to as the
"Holder" and the holder of this Warrant and all other Warrants or Warrant Shares
issued upon the exercise of any Warrant are referred to as the "Holders." The
Aggregate Warrant Price is not subject to adjustment. The Per Share Warrant
Price is subject to adjustment as hereinafter provided, and in the event of any
such adjustment, the number of Warrant Shares shall be adjusted to equal the
number determined by dividing the Aggregate Warrant Price by the Per Share
Warrant Price in effect immediately after such adjustment.
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1. Exercise of Warrant. (a) This Warrant may be exercised in whole
at any time or in part from time to time, during the period commencing on
____________, 1997 and ending prior to 5:00 P.M., New York City time, on
___________, 2002 (such period, the "Exercise Period"), by the Holder by the
surrender of this Warrant (with the subscription form at the end of this Warrant
duly executed) at the address set forth in Section 10(a) hereof, together with
proper payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for Warrant Shares shall be made
by certified or official bank check payable to the order of the Company. If
this Warrant is exercised in part, this Warrant must be exercised for a number
of whole shares of the Common Stock, and the Holder is entitled to receive a new
Warrant covering the Warrant Shares in respect of which this Warrant has not
been exercised and setting forth the proportionate part of the Aggregate Warrant
Price applicable to such Warrant Shares. Upon such exercise and surrender of
this Warrant, the Company will (i) issue a certificate or certificates in the
name of the Holder for the largest number of whole shares of the Common Stock to
which the Holder shall be entitled and, if this Warrant is exercised in whole,
in lieu of any fractional share of the Common Stock to which the Holder shall be
entitled, pay to the Holder cash in an amount equal to the fair value of such
fractional share (determined in such reasonable manner as the Board of Directors
of the Company shall determine) and (ii) deliver the other securities and
properties receivable upon the exercise of this Warrant, or the proportionate
part thereof if this Warrant is exercised in part, pursuant to the provisions of
this Warrant.
(b) In lieu of exercising this Warrant in the manner set
forth in Section 1(a) above, this Warrant may be exercised in whole at any time
or in part from time to time during the Exercise Period, by the Holder by
surrendering the Warrant at the address set forth in Section 10(a) hereof,
without payment of any other consideration, commission or remuneration, together
with the subscription form at the end of this Warrant, duly executed. The number
of shares of the Common Stock to be issued by the Company shall be calculated
using the following formula:
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X = Y(A-B)
A
Where X = the number of shares of the Common Stock
to be issued to the Holder
Y = the number of shares of the Common Stock
purchasable under this Warrant or, if
this Warrant is being exercised in part,
under the portion of the Warrant being
exercised (at the date of the surrender
of this Warrant and the subscription
form)
A = the Market Price (at the date of the
surrender of this Warrant and the
subscription form)
B = the Per Share Warrant Price (as adjusted
to the date of the surrender of this
Warrant and the subscription form)
If this Warrant is exercised in part pursuant to this Section 1(b), this
Warrant must be exercised for a number of whole shares of the Common Stock, and
the Holder is entitled to receive a new Warrant covering the Warrant Shares in
respect of which this Warrant has not been exercised and setting forth the
proportionate part of the Aggregate Warrant Price applicable to such Warrant
Shares. Upon such exercise and surrender of this Warrant, the Company will (i)
issue a certificate or certificates in the name of the Holder for the largest
number of whole shares of the Common Stock to which the Holder shall be
entitled and, if this Warrant is exercised in whole, in lieu of any fractional
share of the Common Stock to which the Holder shall be entitled, pay cash equal
to the fair value of such fractional share (determined in such reasonable
manner as the Board of Directors of the Company shall determine) and (ii)
deliver the other securities and properties receivable upon the exercise of
this Warrant, or the proportionate part thereof if this Warrant is exercised in
part, pursuant to the provisions of this Warrant.
(c) The market price of a share of the Common Stock (the
"Market Price") on any date of determination shall be (i) the last reported sale
price per share of the Common Stock on
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the business day immediately preceding the date of determination as reported on
the Nasdaq National Market (the "National Market"), or (ii) if there is no such
reported sale on the date in question, the average of the closing bid and asked
quotations as so reported on the National Market, or (iii) if the Common Stock
is not then listed on the National Market, the last reported sale price per
share of the Common Stock on such national securities exchange upon which the
Common Stock is then listed, or (iv) if the Common Stock is not then listed on
any national securities exchange, the average of the closing bid and asked
quotations in the over-the-counter market as reported by Nasdaq, or if not so
reported, as reported by the National Quotations Bureau or a similar
organization. In the absence of such quotations, the Board of Directors of the
Company shall determine in good faith the fair market value per share of the
Common Stock, which shall for these purposes be deemed to be the Market Price,
which determination shall be set forth in a certificate executed by an officer
of the Company showing the facts upon which the Market Price is based.
2. Reservation of Warrant Shares; Listing. The Company agrees
that, prior to the expiration of this Warrant, the Company will at all times (a)
have authorized and in reserve, and will keep available, solely for issuance or
delivery upon the exercise of this Warrant, the shares of the Common Stock and
other securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale or
transfer and free and clear of all preemptive rights and rights of first refusal
and (b) if the Company hereafter lists the Common Stock on any national
securities exchange, keep the shares of the Common Stock receivable upon the
exercise of this Warrant authorized for listing on such exchange upon notice of
issuance.
3. Protection Against Dilution. (a) If, at any time or from time
to time after the date of this Warrant, the Company shall issue or distribute to
the holders of shares of the Common Stock (i) securities, other than shares of
the Common Stock, or (ii) property, other than cash, without payment therefor,
with respect to the Common Stock, then, and in each such case, the Holder, upon
the exercise of this Warrant, shall be entitled to receive the securities and
property which the Holder would hold on the date of such exercise if, on the
date of this Warrant, the Holder had been the holder of record of the number of
shares of the Common Stock subscribed for upon such exercise and, during the
period from the date of this Warrant to and including the date of such exercise,
had retained such shares and the securities and properties receivable by the
Holder during such period. Notice of each such distribution shall be forthwith
mailed to the Holder.
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(b) If, at any time or from time to time after the date of
this Warrant, the Company shall (i) pay a dividend or make a distribution on its
capital stock in shares of the Common Stock, (ii) subdivide its outstanding
shares of the Common Stock into a greater number of shares, (iii) combine its
outstanding shares of the Common Stock into a smaller number of shares or (iv)
issue by reclassification of the Common Stock any shares of capital stock of the
Company, the Per Share Warrant Price shall be adjusted so that the Holder upon
the exercise hereof shall be entitled to receive the number of shares of the
Common Stock or other capital stock of the Company which the Holder would have
owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this Section 3(b)
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
(c) Except as provided in Section 3(e), in case the Company
shall hereafter issue or sell any shares of the Common Stock for a consideration
per share less than the Per Share Warrant Price in effect immediately prior to
the date of such issuance or sale, the Per Share Warrant Price shall be adjusted
as of the date of such issuance or sale so that the same shall equal the price
determined by dividing (i) the sum of (A) the number of shares of the Common
Stock outstanding immediately prior to such issuance or sale multiplied by the
Per Share Warrant Price plus (B) the consideration received by the Company upon
such issuance or sale by (ii) the total number of shares of the Common Stock
outstanding after such issuance or sale. Except as provided in Section 3(e), in
case the Company shall hereafter issue or sell any rights, options, warrants or
securities convertible into the Common Stock entitling the holders thereof to
purchase the Common Stock or to convert such securities into the Common Stock at
a price per share (determined by dividing (i) the total amount, if any, received
or receivable by the Company in consideration of the issuance or sale of such
rights, options, warrants or convertible securities plus the total
consideration, if any, payable to the Company upon exercise or conversion
thereof (the "Total Consideration") by (ii) the number of additional shares of
the Common Stock issuable upon
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exercise or conversion of such securities) less than the then Per Share Warrant
Price in effect on the date of such issuance or sale, the Per Share Warrant
Price shall be adjusted as of the date of such issuance or sale so that the
same shall equal the price determined by dividing (i) the sum of (A) the number
of shares of the Common Stock outstanding on the date of such issuance or sale
multiplied by the Per Share Warrant Price plus (B) the Total Consideration by
(ii) the number of shares of the Common Stock outstanding on the date of such
issuance or sale plus the maximum number of additional shares of the Common
Stock issuable upon exercise or conversion of such securities. No adjustment
in the Per Share Warrant Price shall be required in the case of (i) the
issuance of up to [ ] shares of the Common Stock upon the exercise of
options outstanding on the date hereof, (ii) the issuance by the Company of the
Common Stock pursuant to the exercise of any Warrant or (iii) the issuance by
the Company of any shares of the Common Stock pursuant to the exercise of the
over-allotment option granted in the Underwriting Agreement, dated ________,
1997, by and between the Company and Ladenburg Xxxxxxxx & Co. Inc. and Xxxxxx,
Xxxxxxxx & Company Incorporated, as representatives of the several underwriters
named therein.
(d) In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
entity (including any exchange effected in connection with a merger of another
corporation with the Company), the Holder of this Warrant shall have the right
thereafter to receive on the exercise of this Warrant the kind and amount of
securities, cash or other property which the Holder would have owned or have
been entitled to receive immediately after such consolidation, merger, statutory
exchange, sale or conveyance had this Warrant been exercised immediately prior
to the effective date of such consolidation, merger, statutory exchange, sale or
conveyance and, in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder of this Warrant to
the end that the provisions set forth in this Section 3 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable on
the exercise of this Warrant. The above provisions of this Section 3(d) shall
similarly apply to successive consolidations, mergers, statutory exchanges,
sales or conveyances. The issuer of any shares of stock or other securities or
property thereafter deliverable on the exercise of this Warrant shall be
responsible for all of the agreements and obligations of the Company hereunder.
Notice of any such consolidation, merger, statutory exchange, sale or conveyance
and of said provisions so proposed to be made, shall be mailed to the Holders of
the Warrants not less than 30 days prior to such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
(e) In case any event shall occur as to which the other
provisions of this Section 3 are not strictly applicable
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but as to which the failure to make any adjustment would not fairly protect the
purchase rights represented by this Warrant in accordance with the essential
intent and principles hereof, then, in each such case, the Holders of Warrants
representing the right to purchase a majority of the Warrant Shares subject to
all outstanding Warrants may appoint a firm of independent public accountants
of recognized national standing reasonably acceptable to the Company, which
shall give their opinion as to the adjustment, if any, on a basis consistent
with the essential intent and principles established herein, necessary to
preserve the purchase rights represented by the Warrants. Upon receipt of such
opinion, the Company will promptly mail a copy thereof to the Holder of this
Warrant and shall make the adjustments described therein. The fees and
expenses of such independent public accountants shall be borne by the Company.
(f) No adjustment in the Per Share Warrant Price shall be
required unless such adjustment would require an increase or decrease of at
least $0.05 per share of the Common Stock; provided, however, that any
adjustments which by reason of this Section 3(f) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
provided further, however, that adjustments shall be required and made in
accordance with the provisions of this Section 3 (other than this Section 3(f))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution to the Holder of this Warrant or the Common Stock
issuable upon exercise hereof. All calculations under this Section 3 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 3 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Per Share Warrant Price, in
addition to those required by this Section 3, as it in its discretion shall deem
to be advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.
(g) Whenever the Per Share Warrant Price is adjusted as
provided in this Section 3 and upon any modification of the rights of a Holder
of Warrants in accordance with this Section 3, the Company shall promptly
obtain, at its expense, a certificate of a firm of independent public
accountants of recognized national standing selected by the Board of Directors
of the Company (who may be the regular auditors of the Company) setting forth
the Per Share Warrant Price and the number of Warrant Shares after such
adjustment or the effect of such modification, a brief statement of the facts
requiring such adjustment or modification and the manner of computing the same,
and cause copies of such certificate to be mailed to the Holders
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of the Warrants. In addition, within thirty (30) days after the end of the
Company's fiscal year next following any such adjustment or modification, the
Company shall, at its own expense, deliver to the Holder of this Warrant a
certificate of a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Company (who may be the
regular auditors of the Company) setting forth the same information as required
by such certificate.
(h) If the Board of Directors of the Company shall (i)
declare any dividend or other distribution with respect to the Common Stock,
other than a cash dividend payable otherwise than out of earnings or earned
surplus, (ii) offer to the holders of shares of the Common Stock any additional
shares of the Common Stock, any securities convertible into or exercisable for
shares of the Common Stock or any rights to subscribe thereto or (iii) propose a
dissolution, liquidation or winding up of the Company, the Company shall mail
notice thereof to the Holders of the Warrants not less than 15 days prior to the
record date fixed for determining stockholders entitled to participate in such
dividend, distribution, offer or subscription right or to vote on such
dissolution, liquidation or winding up.
(i) If, as a result of an adjustment made pursuant to this
Section 3, the Holder of any Warrant thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock or
shares of the Common Stock and other capital stock of the Company, the Board of
Directors of the Company (whose determination shall be conclusive and shall be
described in a written notice to the Holder of any Warrant promptly after such
adjustment) shall determine the allocation of the adjusted Per Share Warrant
Price between or among shares or such classes of capital stock or shares of the
Common Stock and other capital stock and any subsequent adjustments made
pursuant to this Section 3 shall apply equally to each such resulting class of
capital stock.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of
the Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and nonassessable, and not subject
to preemptive rights, rights of first refusal or other contractual rights to
purchase securities of the Company, and the Company will take all such actions
as may be necessary to assure that the par value or stated value, if any, per
share of the Common Stock is at all times equal to or less than the then Per
Share Warrant Price. The Company further covenants and agrees that it will pay,
when due and payable, any and all federal and state stamp, original issue or
similar taxes which may be payable in respect of the issuance of any Warrant
Share or certificate therefor.
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5. Registration Under Securities Act of 1933.
(a) The Company agrees that if, at any time during the
period commencing on _________,1997 and ending on _________,2002, (i) the Holder
and/or the Holders of any other Warrants and/or Warrant Shares who or which
shall hold, collectively, not less than 50% of the Warrants and/or Warrant
Shares outstanding at such time and not previously sold pursuant to this Section
5 shall request that the Company file a registration statement under the
Securities Act of 1933, as amended (the "Act"), covering not less than 50% of
the Warrant Shares issued or issuable upon the exercise of the Warrants, and not
so previously sold, the Company will (i) promptly notify each Holder of the
Warrants and each holder of Warrant Shares not so previously sold that such
registration statement will be filed and that the Warrant Shares which are then
held, and/or may be acquired upon exercise of the Warrants by the Holder and
such Holders, will be included in such registration statement at the Holder's
and such Holders' request, (ii) cause such registration statement to cover all
Warrant Shares which it has been so requested to include, (iii) use its best
efforts to cause such registration statement to become effective as soon as
practicable and (iv) take all other action necessary under any federal or state
law or regulation of any governmental authority to permit all Warrant Shares
which it has been so requested to include in such registration statement to be
sold or otherwise disposed of, and will maintain such compliance with each such
federal and state law and regulation of any governmental authority for the
period necessary for such Holders to effect the proposed sale or other
disposition. The Company shall be required to effect a registration or
qualification pursuant to this Section 5(a) on one occasion only.
(b) The Company agrees that if, at any time and from time to
time during the period commencing __________,1997 and ending on
___________,2004, the Board of Directors of the Company shall authorize the
filing of a registration statement (any such registration statement being
hereinafter called a "Subsequent Registration Statement") under the Act
(otherwise than pursuant to Section 5(a) hereof, and other than a registration
statement on Form S-8 or other form which does not permit secondary sales or
include substantially the same information as would be required in a form for
the general registration of securities) in connection with the proposed offer of
any of its securities by it or any of its stockholders, the Company will (i)
promptly notify the Holder and each of the Holders, if any, of other Warrants
and/or Warrant Shares not previously sold pursuant to this Section 5 that such
Subsequent Registration Statement will be filed and that the Warrant Shares
which are then held, and/or which may be acquired upon the exercise of the
Warrants, by the Holder and such Holders, will,
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at the Holder's and such Holders' request, be included in such Subsequent
Registration Statement, (ii) upon the written request of a Holder made within
20 days after the giving of such notice by the Company, include in the
securities covered by such Subsequent Registration Statement all Warrant Shares
which it has been so requested to include, (iii) use its best efforts to cause
such Subsequent Registration Statement to become effective as soon as
practicable and (iv) take all other action necessary under any federal or state
law or regulation of any governmental authority to permit all Warrant Shares
which it has been so requested to include in such Subsequent Registration
Statement to be sold or otherwise disposed of, and will maintain such
compliance with each such federal and state law and regulation of any
governmental authority for the period necessary for the Holder and such Holders
to effect the proposed sale or other disposition.
(c) Whenever the Company is required pursuant to the
provisions of this Section 5 to include Warrant Shares in a registration
statement or a post-effective amendment to a registration statement, the Company
shall (i) furnish each Holder of any such Warrant Shares and each underwriter of
such Warrant Shares with such copies of the prospectus, including the
preliminary prospectus, conforming to the Act (and such other documents as each
such Holder or each such underwriter may reasonably request) in order to
facilitate the sale or distribution of the Warrant Shares, (ii) use its best
effort to register or qualify such Warrant Shares under the blue sky laws (to
the extent applicable) of such jurisdiction or laws (to the extent applicable)
of such jurisdiction or jurisdictions as the Holders of any such Warrant Shares
and each underwriter of Warrant Shares being sold by such Holders shall
reasonably request and (iii) take such other actions as may be reasonably
necessary or advisable to enable such Holders and such underwriters to
consummate the sale or distribution in such jurisdiction or jurisdictions in
which such Holders shall have reasonably requested that the Warrant Shares be
sold, including entering into an underwriting agreement in customary form for
transactions of this nature.
(d) The Company shall pay all expenses incurred in
connection with any registration or other action pursuant to the provisions of
this Section 5, including attorneys' fees and expenses of the Holder(s) of the
Warrant Shares covered by such registration incurred in connection with such
registration or other action, other than underwriting discounts and applicable
transfer taxes relating to the Warrant Shares.
6. Indemnification.
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(a) The Company agrees to indemnify and hold harmless each
selling holder (including, for purposes of this Section 6, any Holder) of
Warrant Shares and each person who controls any such selling holder within the
meaning of Section 15 of the Act, and each and all of them, from and against any
and all losses, claims, damages, liabilities or actions, joint or several, to
which any selling holder of Warrant Shares or they or any of them may become
subject under the Act or otherwise and to reimburse the persons indemnified
above for any legal or other expenses (including the cost of any investigation
and preparation) incurred by them in connection with any litigation or
threatened litigation, whether or not resulting in any liability, but only
insofar as such losses, claims, damages, liabilities or actions arise out of, or
are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement pursuant to which Warrant
Shares were registered under the Act (hereinafter called a "Registration
Statement"), any preliminary prospectus, the final prospectus or any amendment
or supplement thereto (or in any application or document filed in connection
therewith) or document executed by the Company based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
register or qualify the Warrant Shares under the securities laws thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) the employment
by the Company of any device, scheme or artifice to defraud, or the engaging by
the Company in any act, practice or course of business which operates or would
operate as a fraud or deceit, or any conspiracy with respect thereto, in which
the Company shall participate, in connection with the issuance and sale of any
of the Warrant Shares; provided, however, that (i) the indemnity agreement
contained in this Section 6(a) shall not extend to any selling holder of Warrant
Shares in respect of any such losses, claims, damages, liabilities or actions
arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was based upon and made in conformity with information furnished in
writing to the Company by a selling holder of Warrant Shares specifically for
use in connection with the preparation of such Registration Statement, any final
prospectus, any preliminary prospectus or any such amendment or supplement
thereto. The Company agrees to pay any legal and other expenses for which it is
liable under this Section 6(a) from time to time (but not more frequently than
monthly) within 30 days after its receipt of a xxxx therefor.
(b) Each selling holder of Warrant Shares, severally and
not jointly, will indemnify and hold harmless the
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Company, its directors, its officers who shall have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act to the same extent as the foregoing indemnity from the
Company, but in each case to the extent, and only to the extent, that any
statement in or omission from or alleged omission from such Registration
Statement, any final prospects, any preliminary prospectus or any amendment or
supplement thereto was made in reliance upon information furnished in writing
to the Company by such selling holder specifically for use in connection with
the preparation of the Registration Statement, any final prospectus or the
preliminary prospectus or any such amendment or supplement thereto; provided,
however, that the obligation of any holder of Warrant Shares to indemnify the
Company under the provisions of this Section 6(b) shall be limited to (X) the
product of the Market Price and the number of the Warrant Shares being sold by
the selling holder minus (Y) the product of the Per Share Warrant Price and the
number of such Warrant Shares. Each selling holder of Warrant Shares agrees to
pay any legal and other expenses for which it is liable under this Section 6(b)
from time to time (but not more frequently than monthly) within 30 days after
receipt of a xxxx therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing Section 6(a) or Section 6(b) (an
"Indemnified Party") in respect of which indemnity may by sought against a
person granting indemnification (an "Indemnifying Party") pursuant to such
section, such Indemnified Party shall promptly notify such Indemnifying Party in
writing of the commencement thereof; but the omission so to notify the
Indemnifying Party of any such action shall not release the Indemnifying Party
from any liability it may have to such Indemnified Party otherwise than on
account of the indemnity agreement contained in Section 6(a) or Section 6(b)
hereof. In case any such action is brought against an Indemnified Party and it
notifies an Indemnifying Party of the commencement thereof, the Indemnifying
Party against which a claim is to be made will be entitled to participate
therein at its own expense and, to the extent that it may wish, to assume at its
own expense the defense thereof, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that if the Indemnified Party shall have
reasonably concluded based upon advice of counsel that there may be legal
defenses available to it and/or other Indemnified Parties which are different
from or additional to those available to the Indemnifying Party, the Indemnified
Party shall have the right to select separate counsel to assume such legal
defenses and otherwise to participate in the defense of such action on behalf of
such Indemnified Party or Parties. Upon receipt of notice from the Indemnifying
Party to such Indemnified Party of its election so to assume the defense of such
action and approval by the Indemnified Party of counsel, the Indemnifying Party
will
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not be liable to such Indemnified Party under this Section 6 for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof unless (i) the Indemnified Party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the Indemnifying Party shall not be liable for the expenses of more than
one separate counsel), (ii) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of commencement of the
action or (iii) the Indemnifying Party has authorized the employment of counsel
for the Indemnified Party at the expense of the Indemnifying Party. An
Indemnifying Party shall not be liable for any settlement of any action or
proceeding effected without its written consent (which consent shall not be
unreasonably withheld).
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 6(a)
or (b) hereof is unavailable in accordance with its terms, the Company and the
selling holder of Warrant Shares shall contribute to the aggregate losses,
claims, damages and liabilities, of the nature contemplated by said indemnity
agreement, incurred by the Company and the selling holder of Warrant Shares, in
such proportions as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the selling holder of Warrant Shares, on the
other hand, from any offering of the Warrant Shares; provided, however, that if
such allocation is not permitted by applicable law or if the Indemnified Party
failed to give the notice required under Section 6(c), then the relative fault
of the Company and the selling holder of Warrant Shares in connection with the
statements or omissions which result in such losses, claims, damages and
liabilities and other relevant equitable considerations will be considered
together with such relative benefits.
(e) The respective indemnity and contribution agreements by
the Company and the selling holder of Warrant Shares in Sections 6(a), (b), (c)
and (d) hereof shall remain operative and in full force and effect regardless of
(i) any investigation made by any selling holder of Warrant Shares or by or on
behalf of any person who controls such selling holder or by the Company or any
controlling person of the Company or any director or any officer of the Company,
(ii) the exercise of this Warrant or (iii) payment for any of the Warrant
Shares, and shall survive the delivery of the Warrant Shares, and any successor
of the Company, or of any selling holder of Warrant Shares, or of any person who
controls the Company, or of any selling holder of Warrant Shares, as the case
may be, shall be entitled to the
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benefit of such respective indemnity and contribution agreements. The
respective indemnity and contribution agreements by the Company and the selling
holders of Warrant Shares contained in Sections 6(a), (b), (c) and (d) hereof
shall be in addition to any liability which the Company and the selling holders
of Warrant Shares may otherwise have.
7. Limited Transferability. This Warrant may not be sold,
transferred, assigned or hypothecated by the Holder (a) except in compliance
with the provisions of the Act and any applicable state securities laws and (b)
until the first anniversary of the date hereof except (i) to Ladenburg Xxxxxxxx
& Co. Inc. or any successor firm or corporation of Ladenburg Xxxxxxxx & Co.
Inc., (ii) to any of the officers of Ladenburg Xxxxxxxx & Co. Inc., or of any
such successor firm or corporation, or (iii) in the case of an individual,
pursuant to such individual's last will and testament or the laws of descent
and distribution, and is so transferable only upon the books of the Company
which it shall cause to be maintained for the purpose. The Company may treat
the registered Holder of this Warrant as he or it appears on the Company's
books at any time as the Holder for all purposes. The Company shall permit any
Holder of a Warrant or his or its duly authorized attorney, upon written
request during ordinary business hours, to inspect and copy or make extracts
from its books showing the registered holders of Warrants. All Warrants issued
upon the transfer or assignment of this Warrant will be dated the same date as
this Warrant, and all rights of the Holder thereof shall be identical to those
of the Holder of this Warrant.
8. Loss, etc., of Warrant. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of like date,
tenor and denomination.
9. Warrant Holder Not Stockholder. Except as otherwise provided
herein, this Warrant does not confer upon the Holder any right to vote or to
consent to or receive notice as a stockholder of the Company, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
stockholder, prior to the exercise hereof.
10. Communication. No notice or other communication under this
Warrant shall be effective unless, but any notice or other communication shall
be effective and shall be deemed to have been given if, the same is in writing
and is mailed by first-class mail, postage prepaid, addressed to:
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(a) the Company at 0000 Xxxx Xxxxxx Xxxxxx, Xxx Xxxxx, XX
00000, or such other address as the Company has designated in writing
to the Holder, or
(b) the Holder at Ladenburg Xxxxxxxx & Co. Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other address as the
Holder has designated in writing to the Company.
11. Headings. The headings of this Warrant have been inserted as
a matter of convenience and shall not affect the construction hereof.
12. Applicable Law. This Warrant shall be governed by and
construed in accordance with the law of the State of New York without giving
effect to the principles of conflicts of law thereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, Xxxxxx Incorporated has caused this Warrant to be
signed by its [ ] and its corporate seal to be hereunto affixed and
attested by its Secretary this _____ day of ______________, 1997.
XXXXXX INCORPORATED
By: _______________________________
Name:
Title:
ATTEST:
_____________________________
Name:
Title:
[Corporate Seal]
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17
0184283.04
ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _______________________________ the foregoing Warrant and all
rights evidenced thereby, and does irrevocably constitute and appoint
_____________________________, attorney, to transfer said Warrant on the books
of Xxxxxx Incorporated
Dated: ________________ Signature: _____________________________
Address: _______________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto __________________________ the right to purchase _____________
shares of the Common Stock of Xxxxxx Incorporated covered by the foregoing
Warrant, and a proportionate part of said Warrant and the rights evidenced
thereby, and does irrevocably constitute and appoint __________________________,
attorney, to transfer that part of said Warrant on the books of Xxxxxx
Incorporated
Dated: ________________ Signature: _____________________________
Address: _______________________________
18
SUBSCRIPTION FORM
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to purchase thereunder,
_____________ shares of the Common Stock of Xxxxxx Incorporated, as provided for
in Section 1 thereof.
The undersigned herewith makes payment for such shares in full at the
price per share provided by such Warrant in the following manner (please check
the type or types of payment and indicate the portion of the aggregate payment
to be paid by each type of payment):
____ Exercise for cash as provided in Section 1(a) of such Warrant.
____ Exercise by surrender of such Warrant (or a portion thereof) in
accordance with Section 1(b) of such Warrant.
Please issue a certificate or certificates for such shares in the name
of, and pay any cash for any fractional share to:
Name ___________________________________
(Please Print Name, Address and Social
Security No. or Taxpayer Identification
No.)
Address ________________________________
________________________________
Social Security No. or
Taxpayer Identification No._____________
Signature ______________________________
NOTE: The above signature should
correspond exactly with the name
on the first page of such
Warrant or with the name of the
assignee appearing in the
assignment form attached to the
Warrant.
19
And if such number of shares shall not be all the shares purchasable
under the attached Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder and
delivered to the address set forth above.
