Exhibit 4.3.1
COMMON STOCK PURCHASE WARRANT AGREEMENT
THIS AGREEMENT, dated as of this ____ day of ________, 1996,
is between THE TRANSLATION GROUP, LTD., a Delaware corporation (the "Company"),
XXXXXX- XXXX SECURITIES, INC. (the "Underwriter") and AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
RECITALS
A. The Company is issuing, in connection with a public
offering, up to 1,200,000 shares of the Company's common stock, $.001 par value
(the "Common Stock"), and up to 1,600,000 Common Stock Purchase Warrants (the
"Public Warrants" or "Warrants"), not including, in both cases, over-allotments.
B. The Company has as of the date hereof 300,000 issued and
outstanding Common Stock Purchase Warrants, which shall be treated herein as
Public Warrants.
C. One Warrant entitles the registered holder to purchase one
share of Common Stock.
D. The Company desires to provide for the issuance of
certificates representing the Warrants.
E. The Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
AGREEMENTS
In consideration of the recitals and the mutual agreements set
forth below, and for the purpose of defining the terms and provisions of the
Warrants and the certificates representing the Warrants and the respective
rights and obligations thereunder of the Company, the holders of certificates
representing the Warrants and the Warrant Agent, the parties agree as follows:
1. Definitions. As used herein, the following terms shall have
the following meanings, unless the context shall otherwise require.
(a) "Common Stock" shall mean common stock of the
Company of any class, whether now or hereafter authorized, which has the right
to participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage, which at the date hereof consists of 15
million shares of authorized Common Stock, $.001 par value per share, and as
further defined in section 8(e) below.
(b) "Warrant Expiration Date" shall mean 5:00 p.m.
(New York City time) on ____________, 1999, or if such a date shall in the State
of New York be a holiday or a day on which banks are authorized to close, then
5:00 p.m. (New York City time) on the next following day which in the State of
New York is not a holiday on which banks are authorized to close. Unless
exercised during the Warrant Exercise Period, the Warrants will automatically
expire. The Warrants may be called for redemption and the expiration date
therefor accelerated, on the terms and conditions set forth in sections 4(b) and
4(c) of this Agreement. If so called for redemption, Warrant Certificate holders
shall have a period of at least thirty (30) days after the date of the call
notice within which to exercise the Warrants. However, Warrant Certificate
holders will receive the redemption price only if such certificates are
surrendered to the Corporate Office (defined below) within the redemption
period.
(c) "Warrant Exercise Period" shall mean from
___________, 1996 until the Warrant Expiration Date.
(d) "Corporate Office" shall mean the office of
the Warrant Agent (or its successor) at which at any particular time its
principal business is conducted, currently located at 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
(e) "Exercise Date" shall mean the date a
certificate representing a Warrant is surrendered for exercise. "Surrender" for
purposes hereof shall mean in the event of (i) personal delivery by a Registered
Holder, the date it is received by the Warrant Agent, (ii) mailing, the postmark
date, and (iii) delivery by a messenger or similar service the date of dispatch,
as reflected on the delivery receipt.
(f) "Purchase Price" shall mean $4.00 per share
for the Public Warrants, unless such purchase price has been adjusted as
hereinafter provided. Each Warrant is exercisable for one share of Common Stock
upon payment of the Purchase Price at any time during the Warrant Exercise
Period. The Warrants, which are being publicly offered pursuant to a
registration statement and prospectus filed by the Company with the Securities
and Exchange Commission, will trade on NASDAQ (as defined below) as a small cap
issue under the symbol [THEOW] immediately after the effective date of such
registration statement.
(g) "Registered Holder" shall mean the person or
persons in whose name or names any certificates representing the Warrants shall
be registered from time to time on the books maintained by the Warrant Agent
pursuant to section 6.
(h) "Subsidiary" or "Subsidiaries" shall mean any
corporation or corporations, as the case may be, of which stock having ordinary
power to elect a majority of the Board of Directors of such corporation
(regardless of whether or not at the time stock of any other class or classes of
such corporation shall have or may have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by
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the Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
(i) "Transfer Agent" shall mean American Stock
Transfer & Trust Company or its authorized successor.
(j) "Warrant Certificate" shall mean a certificate
representing Warrants.
2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall entitle the Registered
Holder thereof to purchase one share of Common Stock upon its exercise. The
Warrants will be separately transferable once the Underwriter determines to
separate the Units.
(b) Upon closing of the offering, Warrant
Certificates representing an aggregate of not more than 1,900,000 Warrants (or
up to 2,140,000 in the event the Underwriters over-alotment option is exercised)
to purchase an aggregate of not more than a like number of shares of Common
Stock, shall be executed by the Company and delivered to the Warrant Agent and
shall be countersigned, issued and delivered by the Warrant Agent upon written
order of the Company signed by its President or a Vice President and its
Treasurer or an Assistant Treasurer or its Secretary or Assistant Secretary.
(c) From time to time, up to the Warrant
Expiration Date, plus such additional time as may reasonably be required to
perform, accomplish and complete necessary administrative functions connected
with the exercise of the Warrants, the Warrant Agent, in its capacity as the
Company's Transfer Agent, shall countersign and deliver stock certificates
representing an aggregate of not more than 1,900,000 shares of Common Stock, or
up to 2,140,000 in the event the Underwriters over-alotment option is exercised
(subject to adjustment pursuant to section 8 of this Agreement), upon the
exercise of the Warrants pursuant to the terms of this Agreement.
(d) From time to time, up to the Warrant
Expiration Date, the Warrant Agent shall countersign and deliver Warrant
Certificates in required whole number denominations to the persons entitled
thereto in connection with any transfer or exchange permitted under this
Agreement. Except as provided in section 7 hereof, no Warrant Certificates shall
be issued except (i) Warrant Certificates initially issued hereunder, (ii) upon
the exercise of any Warrants, to evidence the unexercised Warrants held by the
exercising Registered Holder and (iii) upon any transfer or exchange of
Warrants.
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3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be
substantially in the form annexed hereto as Exhibit A (the provisions of which
are hereby incorporated herein) and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
automated quotation system on which the Warrants may be listed, or to conform to
usage. The Warrant Certificates shall be dated the date of issuance thereof
(whether upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates). Warrant Certificates shall be
numbered serially with the letters, "__" on Warrant Certificates of all
denominations.
(b) Warrant Certificates shall be executed on
behalf of the Company by its President or any Vice President and its Treasurer
or an Assistant Treasurer or its Secretary or an Assistant Secretary, by manual
signatures or by facsimile signatures printed thereon. Warrant Certificates
shall be manually countersigned by the Warrant Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Warrant Certificates shall cease to hold such
position with the Company before the date of issuance of the Warrant
Certificates or before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates, nevertheless, may be countersigned
by the Warrant Agent, issued and delivered with the same force and effect as
though the person who signed such Warrant Certificates had not ceased to be such
officer of the Company.
4. Exercise; Redemption.
(a) Each Warrant represented by a Warrant
Certificate may be exercised during the Warrant Exercise Period, upon the terms
and subject to the conditions set forth herein and in the Warrant Certificate. A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date, provided that the Warrant Certificate
representing such Warrant, with the appropriate exercise form thereon duly
executed by the Registered Holder thereof or his or her attorney duly authorized
in writing, together with payment in cash, or by official bank or certified
check made payable to the Company, of an amount equal to the Purchase Price has
been timely received by the Warrant Agent. Payment must be made in United Sates
funds. The person entitled to receive the securities deliverable upon such
exercise shall be treated for all purposes as the holder of such securities as
of the close of business on the Exercise Date. The Company shall not be
obligated to issue any fractional share interests or fractional warrant
interests upon the exercise of any Warrants. Computations resulting in the
issuance of fractional shares be rounded to the nearest whole share. As soon as
practicable on or after the Exercise Date and in any event within 10 days after
having received authorization from the
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Company, the Warrant Agent, on behalf of the Company, shall cause to be issued
to the person or persons entitled to receive the same a certificate or
certificates for the shares of Common Stock, and the Warrant Agent shall deliver
the same to the person or persons entitled thereto. No adjustment shall be made
in respect of cash dividends on any shares delivered upon exercise of any
Warrant. Upon the exercise of any Warrants, the Warrant Agent shall promptly
notify the Company in writing of such fact and of the number of securities
delivered upon such exercise and shall cause all payments of an amount in cash
or check made payable to the order of the Company, equal to the Purchase Price,
less any Warrant solicitation fee, as hereinafter described.
(b) If at the time of exercise of any Warrant
after ____________, 1996 (i) the market price of the Company's Common Stock is
equal to or greater than the then Purchase Price of the Warrant, (ii) the
exercise of the Warrant is solicited by the underwriter at such time while the
Underwriter is a member of the National Association of Securities Dealers, Inc.
("NASD"), (iii) the Warrant is not held in a discretionary account, (iv)
disclosure of the compensation arrangement is made in documents provided to the
holders of the Warrants; and (v) the solicitation of the exercise of the Warrant
is not in violation of Rule 10b-6 (as such rule or any successor rule may be in
effect as of such time of exercise) promulgated under the Securities Exchange
Act of 1934, then the Underwriter shall be entitled to receive from the Company
upon exercise of each of the Warrant(s) so exercised a fee of four percent (4%)
of the aggregate price of the Warrants so exercised (the "Exercise Fee"). The
procedures for payment of the warrant solicitation fee are set forth in
subparagraph (c) below.
(c) (1) Within five (5) days of the last day of
the each month commencing with ____________ 1997, the Warrant Agent will notify
the Underwriter of each Warrant Certificate which has been properly completed
for exercise by holders of Warrants during the last month. The Company and
Warrant Agent shall determine, in their sole and absolute discretion, whether a
Warrant Certificate has been properly completed. The Warrant Agent will provide
the Underwriter with such information, in connection with the exercise of each
Warrant, as the Underwriter shall reasonably request.
(2) The Company hereby authorizes and
instructs the Warrant Agent to deliver to the Underwriter the Exercise Fee
promptly after receipt by the Warrant Agent from the Company of a check payable
to the order of the Underwriter in the amount of the Exercise Fee. The Warrant
Agent shall not issue the shares of Common Stock issuable upon exercise of the
Warrants until receipt and forwarding of such check to the Underwriter. In the
event that an Exercise Fee is paid to the Underwriter with respect to a Warrant
which the Company or the Warrant Agent determines is not properly completed for
exercise or in respect of which the Underwriter is not entitled to an Exercise
Fee, the Underwriter will promptly return such Exercise Fee to the Warrant Agent
which shall forthwith return such fee to the Company.
The Underwriter and the Company may at any time, after
_________________, 1997, and during business hours, examine the records of the
Warrant Agent, including its
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ledger of original Warrant certificates returned to the Warrant Agent upon
exercise of Warrants. Notwithstanding any provision to the contrary, the
provisions of this paragraph and of subparagraph (b) above may not be modified,
amended or deleted without the prior written consent of the Underwriter.
(d) The Warrants may be redeemed at any time
during the exercise period by the Company beginning on ____________, 1997,
unless earlier permitted by the Underwriter, on 30 days' prior written notice to
all Registered Holders of the Warrants, at a redemption price of $.25 per
Warrant, if the closing bid price of the Common Stock as reported by the
National Association of Securities Dealers Automated Quotation System (NASDAQ)
(or a national securities exchange or the National Quotation Bureau or the NASD
Bulletin Board, as the case may be) is at least $6.00 on 20 consecutive trading
days ending three (3) days prior to the date of the written notice of
redemption. All Warrants must be redeemed if any are redeemed.
(e) If the Company calls the Warrants for
redemption, the price at which such Warrants are to be redeemed shall not be
paid to any Warrant holder unless the certificates representing such Warrants
are surrendered to the Corporate Office within the redemption period specified
in the Company's notice to Registered Holders. At the end of any such redemption
period respecting Warrants called for redemption, any Warrants not exercised or
tendered for redemption shall expire and the certificate(s) therefor shall
become void.
5. Reservation of Shares; Listing; Payment of Taxes, Etc.
(a) The Company covenants that it will at all
times reserve and keep available out of its authorized Common Stock, solely for
the purpose of issue upon exercise of Warrants, such number of shares of Common
Stock as shall then be issuable upon the exercise of all outstanding Warrants.
The Company covenants that all shares of Common Stock which shall be issuable
upon exercise of Warrants shall be duly and validly issued any fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and that upon issuance such shares shall be listed on each
national securities exchange or automated quotation system, if any, on which the
other shares of outstanding Common Stock of the Company are then listed.
(b) If any Common Stock reserved for issuance upon
exercise of Warrants hereunder requires registration with or approval of any
governmental authority under any federal or state law, before such securities
may be validly issued or delivered upon such exercise, then the Company
covenants that it will in good faith and as expeditiously as possible endeavor
to secure such registration or approval, as the case may be; provided, however,
that the Company need not endeavor to seek such registration or approval in a
state in which the Warrants were not sold by the Company pursuant to the
registration statement unless an exemption from registration under such state's
laws is available; provided, further, that Warrants may not be exercised by, or
shares of Common
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Stock issued to, any Registered Holder in any state in which such exercise would
be unlawful.
(c) The Company shall pay all documentary, stamp
or similar taxes and other governmental charges that may be imposed with respect
to the issuance of Warrants, or the issuance or delivery of any shares upon
exercise of Warrants; provided, however, that if shares of Common Stock are to
be delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent, unless it is acting as
such, is hereby irrevocably authorized to requisition the Company's Transfer
Agent from time to time for certificates representing shares of Common Stock
required upon exercise of the Warrants, and the Company will authorize its
Transfer Agent to comply with all such requisitions. The Company will file with
the Warrant Agent a statement setting forth the name and address of its Transfer
Agent for shares of Common Stock or other capital stock issuable upon exercise
of the Warrants and of each successor Transfer Agent.
6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for
other Warrant Certificates representing an equal aggregate number of Warrants or
may be transferred in whole or in part. Warrant Certificates to be so exchanged
shall be surrendered to the Warrant Agent at its Corporate Office, accompanied
by an Assignment, when necessary, and the Company shall execute and the Warrant
Agent shall countersign, issue and deliver in exchange therefor the Warrant
Certificate(s) which the Registered Holder shall be entitled to receive.
(b) The Warrant Agent shall keep at such office,
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof. Upon due
presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates
presented for registration or transfer, or for exchange or exercise, the
subscription form on the reverse thereof shall be duly endorsed, or be
accompanied by a written instrument or instruments of transfer and subscription,
in form satisfactory to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof or his or her attorney duly authorized in writing.
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(d) The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
upon any exchange, registration or transfer of any Warrant Certificates.
(e) All Warrant Certificates surrendered for
exercise or for exchange in case of mutilated Warrant Certificates shall be
promptly canceled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of the agency.
(f) Prior to due presentment for registration of
transfer thereof the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute owner thereof and
of each Warrant represented thereby (notwithstanding any notations of ownership
or writing thereon made by anyone other than the Company or the Warrant Agent)
for all purposes and shall not be affected by any notice to the contrary.
7. Loss or Mutilation. Upon receipt by the Company and
the Warrant Agent of evidence satisfactory to them of the ownership of and the
loss, theft, destruction or mutilation of any Warrant Certificate and (in the
case of loss, theft or destruction) of indemnity satisfactory to them, and (in
the case of mutilation) upon surrender and cancellation thereof, the Company
shall execute and the Warrant Agent shall countersign and deliver a new Warrant
Certificate representing an equal aggregate number of Warrants. Applicants for a
substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.
8. Adjustments to Exercise Price and Number of Securities.
(a) Computation of Adjusted Exercise Price. Except
as hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in subparagraph (g) of this section 8), including shares held
in the Company's treasury and shares of Common Stock issued upon the exercise of
any options, rights or warrants to subscribe for shares of Common Stock and
shares of Common Stock issued upon the direct or indirect conversion or exchange
of securities for shares of Common Stock, for a consideration per share less
than the Purchase Price in effect immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Purchase Price shall (until another such issuance or sale) be reduced
to the price (calculated to the nearest full cent) equal to the quotient derived
by dividing (i) an amount equal to the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to the issuance or sale of such
shares, multiplied by the Purchase Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance or sale, by (ii) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Purchase Price be adjusted
pursuant to this computation to an amount in excess
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of the Purchase Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock, as provided by
subparagraph (c) of this section 8.
For the purposes of any computation to be made in accordance
with this subparagraph (a), the following provisions shall be applicable:
(i) In case of the issuance or sale of
shares of Common Stock for a consideration part or all of which shall be cash,
the amount of the cash consideration therefor shall be deemed to be the amount
of cash received by the Company for such shares (or, if shares of Common Stock
are offered by the Company for subscription, the subscription price, or, if
either of such securities shall be sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price)
before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale
(otherwise than as a dividend or other distribution on any stock of the Company)
of shares of Common Stock for a consideration part or all of which shall be
other than cash, the amount of the consideration therefor other than cash shall
be deemed to be the value of such consideration as determined in good faith by
the Board of Directors of the Company and shall include any amounts payable to
security holders or any affiliates thereof, including without limitation,
pursuant to any employment agreement, royalty, consulting agreement, covenant
not to compete, earnout or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written; all such amounts being
valued for the purposes hereof at the aggregate amount payable thereunder,
whether such payments are absolute or contingent, and irrespective of the period
or uncertainty of payment, the rate of interest, if any, or the contingent
nature thereof.
(iii) Shares of Common Stock issuable by
way of dividend or other distribution on any stock of the Company shall be
deemed to have been issued immediately after the opening of business on the day
following the record date for the determination of shareholders entitled to
receive such dividend or other distribution and shall be deemed to have been
issued without consideration.
(iv) The reclassification of securities
of the Company other than shares of Common Stock into securities including
shares of Common Stock shall be deemed to involve the issuance of such shares of
Common Stock for a consideration other than cash immediately prior to the close
of business on the date fixed for the determination of security holders entitled
to receive such shares, and the value of the consideration allocable to such
shares of Common Stock shall be determined as provided in subparagraph (a) of
this section 8.
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(v) The number of shares of Common Stock
at any one time outstanding shall include the aggregate number of shares issued
or issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights, warrants and upon the conversion or exchange of
convertible or exchangeable securities exclusive of any option under the Company
1996 Stock Option Plan and any additional options which are not vested or then
exercisable.
(b) Options, Rights, Warrants and Convertible and
Exchangeable Securities. In case the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock, for a consideration per share less than the Purchase Price in
effect immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration, the
Purchase Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of subparagraph (a) of this section 8., provided
that:
(i) The aggregate maximum number of
shares of Common Stock, as the case may be, issuable under such options, rights
or warrants shall be deemed to be issued and outstanding at the time such
options, rights or warrants were issued, and for a consideration equal to the
minimum purchase price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration (determined in the same
manner as consideration received on the issue or sale of shares in accordance
with the terms of the Warrants), if any, received by the Company for such
options, rights or warrants.
(ii) The aggregate maximum number of
shares of Common Stock issuable upon conversion or exchange of any convertible
or exchangeable securities shall be deemed to be issued and outstanding at the
time of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Common Stock in accordance with the terms of the
Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof.
(iii) If any change shall occur in the
price per share provided for in any of the options, rights or warrants referred
to in subparagraph (i) of section 8(b), or in the price per share at which the
securities referred to in subparagraph (ii) of this section 8(b) are convertible
or exchangeable, such options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or terminated on the
date when such price change became effective in respect of shares not
theretofore issued pursuant to the exercise or conversion or exchange thereof,
and the Company shall be deemed to have issued upon such date new options,
rights or warrants or convertible or exchangeable securities at the new price in
respect of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such convertible or
exchangeable securities, provided, however, in no event shall the adjustment
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provide the Holder with any greater rights arising from consecutive adjustments
than if the last adjustment occurred initially.
(c) Subdivision and Combination. In case the
Company shall at any time subdivide or combine the outstanding shares of Common
Stock, the Purchase Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination.
(d) Adjustment in Number of Securities. Upon each
adjustment of the Purchase Price pursuant to the provisions of this section 8,
the number of securities issuable upon the exercise at the adjusted Purchase
Price of each Warrant shall be adjusted to the nearest full amount by
multiplying a number equal to the Purchase Price in effect immediately prior to
such adjustment by the number of securities issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Purchase Price.
(e) Definition of Common Stock. For the purpose of
this Agreement, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Certificate of Incorporation of the Company as
may be amended as of the date hereof, or (ii) any other class of stock resulting
from successive changes or reclassifications of such Common Stock consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. In the event that the Company shall after the date
hereof issue securities with greater or superior voting rights than the shares
of Common Stock outstanding as of the date hereof, the Registered Holder, at its
option, may receive upon exercise of any Warrant either shares of Common Stock
or a like number of such securities with greater or superior voting rights.
(f) Merger or Consolidation. In case of any
consolidation of the Company with, or merger 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 such consolidation or merger shall
execute and deliver to the Registered Holder a supplemental warrant agreement
providing that the holder of each Warrant then outstanding or to be outstanding
shall have the right thereafter (until the expiration of such Warrant) to
receive, upon exercise of such Warrant, the kind and amount of shares of stock
and other securities and property receivable upon such consolidation or merger,
by a holder of the number of shares of Common Stock of the Company for which
such 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 identical to the adjustments provided in this section
8. The above provision of this subsection shall similarly apply to successive
consolidations or mergers.
(g) No Adjustment of Purchase Price in Certain
Cases. No adjustment of the Purchase Price shall be made:
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(i) Upon the issuance or sale of the
Warrants, the shares issuable upon the exercise of the Warrants; the securities
issuable upon the exercise of the Representative's warrants, and the shares of
Common Stock issuable upon the exercise of any of them;
(ii) If the amount of said adjustment
shall be less than two cents (2(cent)) per security, provided, however, that in
such case any adjustment that would otherwise be required then to be made shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment so carried forward,
shall amount to at least two cents (2(cent)) per security;
(iii) Upon the issuance of up to 300,000
Shares of Common Stock under the Company's Stock Option Plan; or
(iv) Upon the issuance of shares Common
Stock upon exercise of the 340,000 warrants currently outstanding.
(h) Dividends and Other Distributions. In the
event that the Company shall at any time prior to the exercise of all Warrants
fix a record date for the determination of stockholders entitled to receive
(including any such distribution made to the stockholders of the Company in
connection with consolidation or merger in which the Company is the continuing
corporation in a distribution to all holders of Common Stock) evidence of its
indebtedness, cash, or assets (other than distributions and dividends payable in
shares of Common Stock), or rights, options,or warrants to subscribe for or or
purchase shares of Common Stock, or securities convertible into, or exchangeable
for, shares of Common Stock in a distribution to all holders of Common Stock,
then, in each case, the Purchase Price in effect at the time of such record date
shall be adjusted by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the market
price per share of Common Stock on such record date, less the fair market value
(as determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the
evidence of indebtedness or assets so to be distributed, or such rights,
options, or warrants, or convertible or exchangeable securities, or the amount
of cash, applicable to one share of Common Stock, and the denominator of which
shall be the market price per share of Common Stock on such record date. Such
adjustment shall be made successively whenever any event listed above shall
occur and become effective at the close of business on such record date.
9. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and
in a ministerial capacity for the Company, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not, by issuing and
delivering Warrant Certificates or by any other act hereunder, be deemed to make
any representations as to the validity or value or
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authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
(b) The Warrant Agent shall not at any time (i) be
liable for any recital or statement of fact contained herein or for any action
taken, suffered or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be responsible for
any failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or (iii)
be liable for any act or omission in connection with this Agreement except for
its own negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with
counsel for the Company and shall incur no liability or responsibility for any
action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
(d) Any notice, statement, instruction, request,
direction, order or demand of the Company shall be sufficiently evidenced by an
instrument signed by its President, a Vice President, its Treasurer, an
Assistant Treasurer, its Secretary, or an Assistant Secretary (unless other
evidence in respect thereof is herein specifically prescribed). The Warrant
Agent shall not be liable for any action taken, suffered or omitted by it in
accordance with such notice, statement, instruction, request, direction, order
or demand.
(e) The Company agrees to pay the Warrant Agent
the usual and customary compensation it normally receives for its services of
this nature and to reimburse it for its reasonable expenses hereunder; it
further agrees to indemnify the Warrant Agent and save it harmless against any
and all losses, expenses and liabilities, including judgments, costs and counsel
fees, for anything done or omitted by the Warrant Agent in the execution of its
duties and powers hereunder except those arising as a result of the Warrant
Agent's negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or willful
misconduct), after giving 30 days' prior written notice to the Company. At least
15 days prior to the date such resignation is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to each
Registered Holder at the Company's expense. Upon such resignation the Company
shall appoint in writing a new 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 by the resigning Warrant Agent, then any Registered
Holder may apply in any court of competent jurisdiction for the appointment of a
new warrant agent. After acceptance in writing of such appointment by the new
warrant agent is received by the Company, such new warrant agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any
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further assurance, conveyance, act or deed; provided, however, that if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the resigning
Warrant Agent. Not later than the effective date of any such appointment the
Company shall file notice thereof with the resigning Warrant Agent and shall
forthwith cause a copy of such notice to be mailed to each Registered Holder.
(g) Any corporation into which the Warrant Agent
or any new warrant agent may be converted or merged or any corporation resulting
from any consolidation to which the Warrant Agent or any new warrant agent shall
be a party or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor warrant agent under this Agreement without
any further act, provided that such corporation is eligible for appointment as
successor to the Warrant Agent under the provisions of the preceding paragraph.
Any such successor warrant agent shall promptly cause notice of its succession
as warrant agent to be mailed, at its expense, to the Company and to each
Registered Holder.
(h) The Warrant Agent, its subsidiaries and
affiliates, and any of its or their officers or directors, may buy and hold or
sell Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effect as though
it were not the Warrant Agent. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any other legal entity.
10. Modification of Agreement. The Warrant Agent and the
Company may by supplemental agreement make any changes or corrections in this
Agreement (a) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; or (b) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
Registered Holders representing not less than 50% of the Warrants then
outstanding; provided, further, that no change shall be made in the terms or
provisions of any Warrant which would adversely affect such registered Holders,
other than such changes as are expressly permitted by this Agreement as
originally executed, without the consent in writing of the Registered Holders of
the Warrants affected.
11. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when mailed, first-class postage prepaid, when delivered to a telegraph
office for transmission, or when delivered to any commercial overnight air
courier service or other commercial messenger or delivery service which
regularly retains its receipts; if to a Registered Holder, at the
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address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company at 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
Attention: President, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company, with a copy to the Company's counsel,
Xxxxxx, Xxxxxxxx & Xxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxxxxxx, Esq.; and, if to the Warrant Agent, at the
Corporate Office.
12. Governing Law; Section Headings. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
Section headings in this Agreement appear for convenience of reference only and
shall not be used in any interpretation of this Agreement.
13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, the Warrant Agent and their respective
successors and assigns, and the Registered Holders from time to time of Warrant
Certificates or any of them. Nothing in this Agreement shall be construed to
confer any right, remedy or claim upon any other person.
14. Counterparts. This Agreement may be executed in
counterparts, which taken together shall constitute a single document.
THE TRANSLATION GROUP, LTD.
BY: _________________________
AMERICAN STOCK TRANSFER & TRUST
COMPANY
BY: _________________________
Authorized Officer
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