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EXHIBIT 1.2
WARRANT AGREEMENT
This WARRANT AGREEMENT (this "AGREEMENT") is entered into as of
_________, 1998 by and between Primera Foods Corporation, a Delaware
corporation (the "COMPANY") and Cruttenden Xxxx Incorporated (the
"REPRESENTATIVE").
A. The Representative has agreed to act as the Representative of
the several underwriters in connection with the proposed public offering by the
Company pursuant to that certain Underwriting Agreement with the Company dated
_______________, 1998 (the "UNDERWRITING AGREEMENT") of up to 1,500,000 shares
in the aggregate of its Common Stock, par value $0.001 per share (the "COMMON
STOCK"), including 225,000 of such shares covered by an over-allotment option
(the "PUBLIC OFFERING"); and
B. Pursuant to Section 4(p) of the Underwriting Agreement and as
part of the Representatives' compensation in connection with the Public
Offering, the Company has agreed to sell to the Representatives, at a price of
$0.001 per warrant, warrants (the "WARRANTS") to purchase, at an exercise price
of $________ per share, up to an aggregate of 150,000 shares of Common Stock
(hereinafter, and as the number thereof may be adjusted as set forth herein,
the "WARRANT SHARES").
In consideration of the foregoing premises and the mutual agreements
herein and in the Underwriting Agreement and for other good and valuable
consideration, the parties hereto agree as follows:
1. Issuance of Warrants: Form of Warrant Certificate. The Company
shall issue to the Representative, on the Closing Date referred to in the
Underwriting Agreement, the Warrants. Certificates representing the Warrants
in substantially the form of Exhibit A (the "WARRANT CERTIFICATES") shall be
executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman of the Board, Chief Executive Officer or Vice
President of the Company, attested by the manual or facsimile signature of the
Secretary or an Assistant Secretary of the Company, and delivered to the
Representative on the Closing Date referred to in the Underwriting Agreement,
and thereafter to successive registered Holders (as defined below). Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement. Warrant Certificates shall be
dated as of the date of execution thereof by the Company either upon initial
issuance or upon division, exchange, substitution or transfer.
2. Terms and Exercise of Warrants.
2.1. Each Warrant entitles the registered owner thereof to
purchase one share of Common Stock (subject to adjustment as set forth herein)
at any time from 10:00 a.m., California time, on __________, 1999 (the
"INITIATION DATE") until 6:00 p.m., California time, on __________, 2004 (the
"EXPIRATION DATE") at an exercise price of $ ________ (subject to adjustment
as set forth herein) (the "WARRANT PRICE"). Subject to the provision of this
Agreement, each registered Holder
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(as defined below) of Warrants shall have the right to exercise the Warrants
and purchase the Warrant Shares, either in their entirety or from time to time,
effective as of any date specified by the Holder from and after the Initiation
Date and on or before the Expiration Date in the manner set forth in the
Warrant Certificate. Payment of the aggregate Warrant Price for all Warrant
Shares for which Warrants are exercised shall be made, in the discretion of the
Holder, in cash or by certified or official bank check or by net issuance, or a
combination thereof. Exercise by net issuance shall be effected without
payment by the Holder of any cash or other consideration by the Company's
withholding from the Warrant Shares that would otherwise by issued upon
exercise if the exercise price were paid in cash, that number of Warrant Shares
which, when multiplied by the Closing Price for the day immediately preceding
the date of exercise, equals the aggregate Warrant Price for the Warrants so
exercised.
2.2. Notwithstanding the foregoing, if at 6:00 p.m.,
California time on the Expiration Date, any Holder of Warrants has not
exercised its Warrants and has not notified the Company that it waives
automatic issuance pursuant to this Section 2.1, then all such unexercised
Warrants shall be automatically converted into a number of shares of Common
Stock of the Company equal to: (A) the number of shares of Common Stock then
issuable upon exercise of all such unexercised Warrants minus (B) a number of
shares of Common Stock equal to the quotient obtained by dividing the aggregate
Warrant Price for all such unexercised Warrants by the Closing Price (as
defined in Section 11.1(c) below) for the Common Stock on the Expiration Date.
2.3. Upon exercise of Warrants and payment of the applicable
Warrant Price, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the registered Holder of
such Warrants and in such name or names as such registered Holder may
designate, a certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrants (net of any Warrant Shares
withheld in payment of the Warrant Price, if paid by net issuance), together
with cash, as provided in Section 12, in respect of any fraction of a share
otherwise issuable upon such exercise and, if the number of Warrants
represented by a Warrant Certificate shall not be exercised in full, a new
Warrant Certificate for the number of Warrants represented by the Warrant
Certificate surrendered but not exercised. Any person(s) designated by the
exercising Holder as the holder of the Warrant Shares issuable upon exercise
shall be deemed to have become a holder of record of such shares as of the date
of the surrender of such Warrants and payment of the Warrant Price, or such
later date as the exercising Holder may specify, notwithstanding that the stock
transfer books of the Company may then be closed or that certificates
representing the Warrant Shares have not been delivered.
3. Registration. The Warrant Certificates shall be numbered and
shall be registered on the books of the Company (the "WARRANT REGISTER")
as they are issued. The Company shall be entitled to treat the registered
holder of any Warrant Certificate (notwithstanding any notation of ownership or
other writing made on the Warrant Certificate made by anyone) on the Warrant
Register (the "HOLDER") as the owner in fact thereof and of the Warrants
represented thereby for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant Certificate or the
Warrants represented thereby on the part of any other person, and shall not be
liable for any registration or transfer of Warrants registered in the name of a
fiduciary or the nominee of a fiduciary. The Warrant Certificates shall be
registered initially in the names of the Representative, or
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in such other denominations as the Representative may request in writing to the
Company with respect to the Warrants to be issued to the Representative.
4. Transfers.
4.1. Until __________, 1999, the Warrants will not be sold,
transferred, assigned or hypothecated except to (a) bona fide officers of
the Representative; (b) a successor to the Holder in a merger or consolidation;
(c) a purchaser of all or substantially all of the Holder's assets; (d) any
person receiving the Warrants from a permitted transferee at death pursuant to
will, trust or the laws of intestate succession; (e) any other underwriter or
selling group member that participated in the Public Offering and is a member
of the NASD, or bona fide officers or partners thereof; or (f) any person by
operation of law, provided that any such transfer shall be contingent upon the
transferee's agreement in writing to be bound by the terms hereof.
4.2. The Warrants shall be transferable only on the Warrant
Register upon delivery thereof duly endorsed by the Holder or by the Holder's
duly authorized attorney or representatives, or accompanied by proper evidence
of succession, assignment or authority to transfer. In all cases of transfer
by an attorney, the original power of attorney, duly approved, or an official
copy thereof, duly certified, shall be deposited with the Company. In case of
transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced and may be required to be deposited with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a new
Warrant Certificate or Warrant Certificates to the person entitled thereto.
4.3. The Company shall not be required to recognize any
transfer of the Warrants or the Warrant Shares unless (a) such transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "ACT"), including a post-effective amendment to the
Registration Statement, or (b) counsel reasonably satisfactory to the Company
provides an opinion that the transfer may be made without registration pursuant
to Rule 144 under the Act or otherwise.
4.4. The Company may stop transfer of the Warrants and the
Warrant Shares to enforce the transfer restrictions set forth herein. The
Warrant Certificates shall bear the following legend:
TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS RESTRICTED
AS DESCRIBED IN THE WARRANT AGREEMENT DESCRIBED HEREIN.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF SUCH WARRANTS MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO THE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, PURSUANT TO WHICH SUCH SECURITIES WERE ORIGINALLY
REGISTERED IN CONNECTION WITH ORIGINAL ISSUANCE OF THE WARRANTS
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REPRESENTED HEREBY, OR (ii) A SEPARATE REGISTRATION STATEMENT
UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT.
The Warrant Shares or other securities issued upon exercise of the
Warrants shall bear the following legend, if applicable:
THE SHARES OR OTHER SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW. SAID SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT.
5. Compliance with Government Regulations. If any shares of
Common Stock required to be reserved for purposes of exercise or conversion
of Warrants require, under any federal or state law or applicable governing
rule or regulation of any national securities exchange or market system,
registration with or approval of any governmental authority, or listing on any
such national securities exchange or market system before such shares may be
issued upon exercise, the Company will in good faith and as expeditiously as
possible endeavor to cause such shares to be duly registered, approved or
listed. The Company shall keep current in filing all reports, statements and
other materials required to be filed with the Securities and Exchange
Commission to permit Holders to sell the Warrants and the Warrant Shares under
Rule 144.
6. Payment of Taxes. The Company shall pay any taxes due in
connection with the issuance or exercise of the Warrants other than transfer
taxes payably in connection with secondary transfers of any Warrants or
issuance of Warrant Shares to any person other than the registered Holder of
such Warrants.
7. Exchange of Warrant Certificates. Holders of Warrant
Certificates may exchange them for another certificate or certificates
representing the right of the Holder thereof to purchase a like aggregate
number of Warrant Shares as the Warrant Certificate or Certificates surrendered
by delivering the Warrant Certificates to be exchanged to the Company, properly
endorsed or accompanied by a properly executed instrument of transfer, together
with a written request for transfer, whereupon the Company shall execute and
deliver to the person entitled thereto a new Warrant Certificate or
Certificates, as the case may be as so requested.
8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
shall issue and deliver in exchange and substitution for and upon cancellation
of the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of
like tenor and representing equivalent right or interest, subject to the
provision to the Company by the Holder thereof of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
Certificate and, if requested, indemnity or bond also reasonably satisfactory
to the
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Company, provided that no such bond shall be required from any of the initial
Holders of the Warrants.
9. Reservation of Warrant Share; Authorization and Valid Issuance.
The Company shall at all times reserve and keep available out of its authorized
and unissued shares of Common Stock a number of shares sufficient to provide for
the exercise of the rights of purchase represented by the Warrants, and the
transfer agent for the Common Stock or any other securities issuable upon the
exercise of any of the rights of purchase aforesaid ("TRANSFER AGENT") is
hereby irrevocably authorized and directed at all times until the Expiration
Date to reserve such number of authorized and unissued shares or other
securities as shall be required for such purpose. The Company will keep a copy
of this Agreement on file with the Transfer Agent and will supply such Transfer
Agent with duly executed stock certificates for such purposes and will itself
provide or otherwise make available any cash which may be issuable as provided
in Section 12. The Company will furnish to such Transfer Agent a copy of all
notices of adjustments, and certificates related thereto, transmitted to each
Holder pursuant to Section 11.2. All Warrant Certificates surrendered in the
exercise of the rights thereby evidenced shall be canceled. The Company
represents that the Warrant Shares are duly authorized and covenants that, upon
receipt by the Company of the full payment therefor, the Warrant Shares will be
validly issued, fully paid, nonassessable, and not issued in violation of any
preemptive rights.
10. Obtaining Stock Exchange Listings. The Company will from time
to time take all action which may be necessary to that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed
and/or included for trading on the principal securities exchanges and markets
within the United States of America, if any, on which other shares of Common
Stock are then listed or included for trading.
11. Adjustment of Warrant Price and Number of Warrant Shares. For
purposes of this Section 11, "Common Stock" means shares now or hereafter
authorized of any class of Common Stock of the Company and any other stock of
the Company, however designated, that has the right (subject to any prior
rights of any class or series of preferred stock) to participate in any
distribution of the assets or earnings of the Company without limit as to per
share amount.
11.1. Mechanical Adjustments. The number and kind of
securities purchasable upon the exercise of each Warrant and the Warrant Price
shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (i) pay a dividend in shares
of Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock or (iv) issue by reclassification of its shares of
Common Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which the
Company is the surviving corporation), the number of Warrant Shares purchasable
upon exercise of each Warrant without giving effect thereto shall be adjusted
so that the Holder of each Warrant shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which such Holder
would have owned or would have been entitled to receive after the happening of
any of the events described above, had
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such Warrants been exercised immediately prior to the happening of such event
or any record date with respect thereto. An adjustment made pursuant to this
paragraph (a) shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) In case the Company shall distribute to all holders of
its shares of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the surviving
corporation) evidence of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned surplus and in
compliance with applicable law and dividends or distributions referred to in
paragraph (a) above or in the paragraph immediately following this paragraph),
or rights, options or warrants, or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock, then
in each case the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
Warrant Shares purchasable upon the exercise of each Warrant without giving
effect thereto by a fraction, the numerator of which shall be the current
market price per share of Common Stock (as defined in paragraph (c) below) as
of the record date for such distribution or, if there is no record date with
respect thereto then as of the date of such distribution, and the denominator
of which shall be the current market price per share of Common Stock as of such
date, less the fair value (as reasonably determined by the Board of Directors
of the Company) of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective on the date of distribution retroactive to the record date for
the determination of stockholders entitled to receive such distribution.
Notwithstanding the foregoing, however, no adjustment in the number of Warrant
Shares purchasable upon the exercise of each Warrant need be made under this
paragraph if the Company issues or distributes to each Holder of Warrants the
rights, options, warrants or convertible or exchangeable securities, or
evidences of indebtedness or assets referred to in those paragraphs which each
Holder of Warrants would have been entitled to receive had the Warrants been
exercised prior to the happening of such event or the record date with respect
thereto. No adjustment need be made for a change in the par value of the
Warrant Shares.
In the event of a distribution by the Company to all holders of
its shares of Common Stock or of the stock of a subsidiary of securities
convertible into or exercisable for such stock (other than as described in
subparagraph (a)(iv) above), then in lieu of an adjustment in the number of
Warrant Shares purchasable upon the exercise of each Warrant, the Holder of
each Warrant, upon the exercise thereof at any time after such distribution,
shall be entitled to receive from the Company, such subsidiary or both, as the
Company shall determine, the stock or other securities to which such Holder
would have been entitled if such Holder had exercised such Warrant immediately
prior thereto, all subject to further adjustment as provided in this Section
11.1; provided, however, that no adjustment in respect of dividends or interest
on such stock or other securities shall be made during the term of a Warrant or
upon the exercise of a Warrant.
(c) For the purpose of any computation under paragraph (b)
of this Section, the current market price per share of Common Stock as of any
date shall be the average of the daily
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Closing Prices for 20 consecutive trading days on which such Common Stock
actually was traded commencing 30 trading days before the date of such
computation. The "CLOSING PRICE" for any day shall be the last such reported
sales price regular way for a share of Common Stock on that day on the
principal national securities exchange or national market system on which the
shares of Common Stock are listed or admitted to trading or, if not so listed
or admitted to trading, the average of the closing bid and asked prices of the
Common Stock in the over-the-counter market or if not approved for such
trading, the average of the closing bid and asked prices as furnished by two
members of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose.
(d) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the number of Warrant
Shares purchasable upon the exercise of each Warrant; provided, however, that
any adjustments which by reason of this paragraph (d) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-thousandth of a
share.
(e) Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as herein provided, the Warrant Price
per share payable upon exercise of each Warrant shall be appropriately and
proportionately adjusted.
(f) If at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the Holders shall become entitled to purchase
any securities of the Company other than shares of Common Stock, thereafter the
number of such other shares so purchasable upon exercise of each Warrant and
the Warrant Price of such shares shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in this Section 11, and
the other provisions of this Agreement, with respect to the Warrant and Warrant
Shares, shall apply as nearly equivalent as practicable on like terms to such
other securities.
(g) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges for which an adjustment was made hereunder,
if any thereof shall not have been exercised, the Warrant Price per share and
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall, upon such expiration, be readjusted and shall thereafter be such
as they would have been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (i) the only shares of
Common Stock so issued were the shares of Common Stock, if any, actually issued
or sold upon the exercise of such rights, options, warrants or conversion or
exchange rights and (ii) such shares of Common Stock, if any, were issued or
sold for the consideration actually received by the Company upon such exercise
plus the aggregate consideration, if any, actually received by the Company for
the issuance, sale or grant of all such rights, options, warrants or conversion
or exchange rights whether or not exercised; provided, however, that no such
readjustment shall have the effect of increasing the Warrant Price per share or
decreasing the number of shares of Common Stock purchasable upon the exercise
of each Warrant by an amount in excess of the amount of the adjustment
initially made in respect to the issuance, sale or grant of such rights,
options, warrants or conversion or exchange rights.
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11.2. Notice of Adjustment. Whenever the Company proposes
any action that would result in an adjustment of the number of Warrant Shares
purchasable upon the exercise of Warrants or the Warrant Price per share as
herein provided, the Company shall, at least 10 days prior to the date of such
action or, if earlier, the record date therefor, mail by first class, postage
prepaid, to each Holder notice of such adjustment or adjustments, the proposed
date and, if applicable, record date therefor, and a certificate of a firm of
independent public accountants selected by the board of directors of the
Company (who may be the regular accountants employed by the Company) setting
forth the number of Warrant Shares to be purchasable upon the exercise of each
Warrant and the Warrant Price per share after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
11.3. No Adjustment for Dividends. Except as provided in
Section 11.1, no adjustments in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.4. Preservation of Purchase Rights Upon Merger,
Consolidation etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale, transfer or
lease to another corporation of all or substantially all the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with each Holder an agreement (and shall not effect any
such transaction in the absence of such an agreement) that each Holder shall
have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities, cash and property which such
Holder would have owned or would have been entitled to receive in connection
with the happening of such consolidation, merger, sale, transfer or lease and
as a result of subsequent transactions had such Warrant been exercised
immediately prior to such action and such consideration been held until such
exercise; provided, however, that no adjustment in respect of dividends,
interest or other income on or from such shares or other securities, cash and
property shall be made during the term of a Warrant or upon the exercise of a
Warrant. Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 11. The provisions of this Section 11.4 shall similarly apply to
successive consolidations, mergers, sales transfer or leases.
11.5. Statement on Warrants. Irrespective of any adjustments
in the Warrant Price per share or the number or kind of shares purchasable upon
the exercise of the Warrants, Warrant Certificates theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in the Warrants initially issuable pursuant to this Agreement.
12. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be exercised at the same time by the same holder, the number of
full Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so exercised. If any fraction of a Warrant Share
would, except for the provision of this Section 12, be issuable on the exercise
of any Warrant (or specified portion thereof), the Company shall pay the
exercising Holder in lieu thereof an amount in cash equal to the Closing Price
for one
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share of the Common Stock, on the day immediately preceding the exercise date
of the Warrant, multiplied by such fraction.
13. Registration Rights.
13.1. Demand Registration Rights. Within 60 days after
receipt of a written request from the Representative or from Holders of at
least 40% in interest of the aggregate of Warrants and/or Warrant Shares that
the Representative or such Holders of the Warrants and/or Warrant Shares desire
and intend to transfer more than 25% in interest of the aggregate number of the
Warrants and/or Warrant Shares under such circumstances that a public offering,
within the meaning of the Act, will be involved, the Company shall (subject to
the last sentence of this paragraph) notify all Holders of such request and
file a registration statement (and use its reasonable best efforts to cause
such registration statement to become effective under the Act) with respect to
the offering and sale or other disposition of the Warrants and/or Warrant
Shares requested to be included by the requesting Holders and any other Holders
who request inclusion of Warrants or Warrant Shares within 20 days after the
Company has given them notice of the registration (the "OFFERED SECURITIES");
provided, however, that the Company shall not be obligated to comply with the
foregoing provisions of this Section 13.1 if in the opinion of counsel to the
Company reasonably acceptable to the Holder or Holders from whom such written
requests have been received, registration under the Act is not required for the
transfer of the Offered Securities in the manner proposed by such person or
persons, or a post-effective amendment to an existing registration statement
would be legally sufficient for such transfer (in which latter event the
Company shall promptly file such post-effective amendment (and use its best
efforts to cause such amendment to become effective under the Act)).
Notwithstanding the foregoing, however, the Company shall not be obligated to
provide more than one effective registration statement meeting the requirements
hereof pursuant to this Section 13.1.
The Company may defer the preparation and filing of a registration
statement for up to 90 days after the request for registration is made in the
Company's board of directors determines in good faith that (i) such
registration or post-effective amendment would materially adversely affect or
otherwise materially interfere with a proposed or pending material transaction
by the Company, including without limitation a financing or a corporate
reorganization, or (ii) the Company is in possession of material inside
information concerning the company or its securities, disclosure of which would
be illegal or have material adverse effect upon the Company.
The Company shall not be obligated to honor any request to register
Warrant Shares pursuant to this Section 13.1 received later than six (6) years
from the effective date of the Company's Registration Statement on Form S-1
(File No. 333-_______) (the "EFFECTIVE DATE"). The Company shall not be
required (i) to maintain the effectiveness of the registration statement beyond
the date on which all of the Offered Securities have been sold (the
"TERMINATION DATE"); provided, however, that if at the Termination Date the
Offered Securities are covered by a registration statement which also covers
other securities and which is required to remain in effect beyond the
Termination Date, the Company shall maintain in effect such registration
statement as it relates to Offered Securities for so long as such registration
statement (or any substitute registration statement) remains or is required to
remain in effect for any such other securities, or (ii) to cause any
registration statement with respect to the Warrant Shares to become effective
prior to the Initiation Date. All expenses of
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registration pursuant to this Section 13.1 shall be borne by the Company
(excluding underwriting discounts and commissions on securities not sold by the
Company).
The Company shall be obligated pursuant to this Section 13.1 to include
in the registration statement Warrant Shares that have not yet been purchased
by a Holder of Warrants so long as such Holder of Warrants submits an
undertaking to the Company that such Holder intends to exercise Warrants
representing the number of Warrant Shares to be included in such registration
statement prior to the consummation of the public offering with respect to such
Warrant Shares. In addition, such Holder of Warrants is permitted to pay the
Company the Warrant Price for such Warrant Shares upon the consummation of the
public offering with respect to such Warrant Shares.
13.2. Piggy-back Registration Rights. In the event the
Company proposes to file (for its own offer and sale or offer and sale
by selling security holders) a registration statement under the Act at any time
on or before __________, 2003 (the fifth anniversary of the Effective Date)
with respect to any class of security (other than in connection with an
exchange offer, a non-cash offer or a registration statement of Form S-4 or
Form S-8 or any successor registration statement form) which becomes or which
should be expected to become effective at any time after the Initiation Date
then the Company shall in each case give written notice or such proposed filing
to the Holders of Warrants and Warrant Shares at least 30 days before the
proposed filing date and such notice shall offer to such Holders the
opportunity to include in such registration statement such number of Warrant
Shares as they may request, unless, in the opinion of counsel to the Company
reasonably acceptable to any such holder of Warrants or Warrant Shares who
wishes to have Warrant Shares included in such registration statement,
registration under the Act is not required for the transfer of such Warrants
and/or Warrant Shares in the manner proposed by such Holders. The Company
shall not be obligated to honor any request to register any such Warrant Shares
if the Company is not notified in writing of any such request pursuant to this
Section 13.2 within 20 days after the Company has given notice to the Holders
of the filing. The Company shall permit, or shall cause the managing
underwriter of a proposed offering to permit, the Holders of Warrant Shares
requested to be included in the registration (the "PIGGY-BACK SHARES") to
include such Piggy-back Shares in the proposed offering on the same terms and
conditions as applicable to securities of the Company included therein or as
applicable to securities of any person other than the Company and the Holders
of Piggy-back Shares if the securities of any such person are included
therein. Notwithstanding the foregoing, if any such managing underwriter shall
advise the Company in writing that it believes that the distribution of all or
a portion of the Piggy-back Shares requested to be included in the registration
statement concurrently with the securities being registered by the Company
would materially adversely affect the distribution of such securities by the
Company for its own account, then the Holders of such Piggy-back Shares shall
delay their offering and sale of Piggy-back Shares (or the portion thereof so
designated by such managing underwriter) for such period, not to exceed 120
days, as the managing underwriter shall request provided that no such delay
shall be required as to Piggy-back Shares if any securities of the company are
included in such registration statement for the account of any person other
than the Company and the Holders of Piggy-back Shares. In the event of such
delay, the Company shall file such supplements, post-effective amendments or
separate registration statement, and take any such other steps as may be
necessary to permit such Holders to make their proposed offering and sale for a
period of 90 days immediately following the end of such period of delay
("PIGGY-BACK TERMINATION DATE"); provided, however, that if at the Piggy-back
Termination Date
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the Piggy-back Shares are covered by a registration statement which is, or is
required to remain, in effect beyond the Piggy-back Termination Date, the
Company shall maintain in effect the registration statement as it relates to
the Piggy-back Shares for so long as such registration statement remains or is
required to remain in effect for any of such other securities.
The Company shall be obligated pursuant to this Section 13.2 to include
in the registration Warrant Shares that have not yet been purchased by a holder
of Warrants so long as such Holder of Warrants submits an undertaking to the
Company that such Holder intends to exercise Warrants representing the number
of Warrant Shares to be included in such registration prior to the consummation
of the offering made pursuant thereto. In addition, such Holder of Warrants is
permitted to pay the Company the Warrant Price for such Warrant Shares upon the
consummation of the public offering with respect to such Warrant Shares.
If the Company decides not to proceed with a registration and offering
in which Piggy-back Shares are included, the Company has no obligation to
proceed with the offering of the Piggy-back Shares, unless the Holders of the
Warrants and/or Warrant Shares otherwise comply with the provisions of Section
13.1 hereof (without regard to the 60 days' written request required thereby).
13.3. In connection with the registration of securities in
accordance with Sections 13.1 and 13.2 above, the Company shall:
(a) Use its reasonable best efforts to register or qualify
the securities for offer or sale under the state securities or Blue Sky laws
of such states which the Holders of such Warrant Shares shall designate;
provided, however, that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not then so qualified or take
any action which would subject it to general service of process in any
jurisdiction where it is not then so subject or to register or get a license as
a broker or dealer in securities in any jurisdiction where it is not so
registered or licensed.
(b) Pay all costs, other than fees and disbursements of
counsel for the Holders and underwriting discounts and commissions, if any, in
respect of securities held by the Holders.
(c) Furnish to each Holder such number of copies of the
registration statement and of each amendment and supplement thereto (in each
case, including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations
thereunder, and such other documents, as any Holder may reasonably request to
facilitate the disposition of the securities included in such registration.
(d) If an opinion of counsel for the Company is delivered
to any underwriter in connection with the registration, such opinion to each
Holder participating in the registration.
(e) Enter into a cross-indemnity agreement and a
contribution agreement, each in customary form, with each underwriter, if any,
and if requested, enter into an underwriting
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agreement containing conventional representations, warranties, allocation of
expenses and customary closing conditions, including, without limitation,
opinions of counsel and accountants' cold comfort letters, with any underwriter
who acquires any securities included by a Holder in the registration.
13.4. (a) The Company shall indemnify and hold harmless each
Holder participating in any registration hereunder against any losses, claims,
damages or liabilities, joint or several, to which such Holder may become
subject under the Act, the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") or otherwise, specifically including, but not limited to,
losses, claims, damages, judgments, liabilities and expenses (including the
fees and expenses of counsel and other expenses in connection with
investigating, defending or settling any such action or claim) (or actions in
respect thereof), as they are incurred and regardless of whether the indemnitee
is a party to the litigation, if any, arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of the Company
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement filed by the Company or
any amendment or supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any preliminary
prospectus or final prospectus included in any registration statement filed by
the Company or any amendment or supplement thereto, 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 the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
Holder for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any such
registration statement, preliminary prospectus or final prospectus, or any such
amendment or supplement thereto, in reliance upon, and in conformity with,
written information relating to any Holder furnished to the Company by such
Holder specifically for use in the preparation thereof, and provided further,
that the indemnity agreement provided in this Section 13.4(a) with respect to
any preliminary prospectus shall not inure to the benefit of any Holder from
whom the person asserting any losses, claims, damages, liabilities or actions
based upon any untrue statement or alleged untrue statement of material fact or
omission or alleged omission to state therein a material fact purchased
securities, if adequate copies of the applicable final prospectus in which such
untrue statement or alleged untrue statement or omission or alleged omission
was corrected were provided by the Company to the Holder or its representatives
and the Holder or its representatives did not deliver such final prospectus to
such person.
The indemnity agreement in this Section 13.4(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each person,
if any, who controls any Holder within the meaning of the Act or the Exchange
Act and each of the agents, employees, officers and directors of each Holder
and person who so controls any Holder. This indemnity agreement shall be in
addition to any liabilities which the Company may otherwise have.
(b) Each Holder, severally and not jointly, agrees to
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the
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Company may become subject under the Act or otherwise, specifically including,
but not limited to, losses, claims, damages, judgments, liabilities and
expenses (including the fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action or claim)
(or actions in respect thereof), as they are incurred and regardless of whether
the indemnitee is a party to the litigation, if any, arising out of or based
upon (i) any breach of representation, warranty, agreement or covenant of such
Holder herein contained, (ii) any untrue statement or alleged untrue statement
of any material fact contained in any registration statement filed by the
Company or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
preliminary prospectus or final prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in the case of subparagraphs (ii)
and (iii) of this Section 13.4(b) to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Holder specifically for use in the preparation
thereof, and agrees to reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses
are incurred.
The indemnity agreement in this Section 13.4(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer
of the Company who signed such registration statement and each director of the
Company, and each person, if any, who controls the Company within the meaning
of the Act or the Exchange Act. This indemnity agreement shall be in addition
to any liabilities which each Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 13.4 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 13.4, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 13.4 except to the
extent that it has been prejudiced by such omission. In case any such action
is brought against any indemnified party, and it notified the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise 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 the indemnifying party's
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party hereunder for any legal or other expenses
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subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel
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 (together with appropriate local
counsel) approved by the indemnifying party representing all the indemnified
parties under Section 13.4(a) or 13.4(b) hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
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. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of
any action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party effect, any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and
indemnification could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on all claims that are the subject matter of such
proceeding.
(d) To provide for just and equitable contribution, if (i)
an indemnified party makes a claim for indemnification pursuant to Section
13.4(a) or 13.4(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not enforced in such case, even though this Agreement
expressly provides for indemnification in such case, or (ii) any indemnified or
indemnifying party seeks contribution under the Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made
by or on behalf of any director of the Company, any officer of the Company who
signed any such registration statement, any controlling person of the Company,
and its or their respective counsel), as one entity, and the affected Holders
of the securities included in such registration in the aggregate (including for
this purpose any contribution by or on behalf of an indemnified party), as a
second entity, shall contribute to the losses, liabilities, claims, damages and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Holders in connection with the facts which resulted in such losses,
liabilities, claims, damages and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omission or alleged omission,
shall be determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information supplied by the
Company or by such Holders, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement, alleged
statement, omission or alleged omission. The Company and the Holders agree
that it would be unjust and inequitable if the respective obligations of the
Company and the Holders for contribution were determined by pro rata or per
capita allocation of the aggregate losses, liabilities, claims, damages, and
expenses (even if the Holder and the other indemnified parties were treated as
one entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 13.4(c). In
no case shall any Holder be responsible for a portion of the contribution
obligation imposed on all Holders in excess of its pro rata share based on the
number of shares of Common Stock (or other successor securities) owned (or
which would be owned upon exercise of all Warrants) by it and included in such
registration as compared to the number of shares of Common Stock (or other
successor securities) owned (or which would be owned
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upon exercise of all Warrants) by all Holders and included in such
registration. No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. For purposes
of this Section 13.4(c), each person, if any, who controls any Holder within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
each officer, director, partner, employee, agent and counsel of each such
Holder or control person shall have the same rights to contribution as such
Holder or control person and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed any such registration
statement, each director of the Company and its or their respective counsel
shall have the same rights to contribution as the Company, subject in each case
to the provisions of this Section 13.4(c). Anything in this Section 13.4(c) to
the contrary notwithstanding, no party shall be liable for contribution with
respect to the settlement of any claim or action effected without its written
consent. This Section 13.4(c) is intended to supersede any right to
contribution under the Act, the Exchange Act or otherwise.
14. No Rights as Stockholder; Notices to Holders. Nothing
contained in this Agreement or in any of the Warrant Certificates shall be
construed as conferring upon the Holders or their transferee(s) the right to
vote or to receive dividends or to consent to or receive notice as stockholders
in respect of any meeting of stockholders for the election of directors of the
Company or any other matter or any rights whatsoever as stockholders of the
Company. If, however, at any time prior to the expiration of the Warrants and
prior to their exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution (other than
a cash dividend) to the holders of its shares of Common Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities convertible
into or exchangeable for shares of Common Stock or any right to subscribe to or
purchase any thereof; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, sale, transfer or lease
of all or substantially all of its property assets and business as an entirety)
shall be proposed,
then in any one or more of said event the Company shall (i) give notice in
writing of such event to the Holders, as provided in Section 16 hereof and (ii)
if there are more than 100 Holders, cause notice of such event to be published
once in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 10 days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution or subscription
rights, or for the determination of stockholders entitled to vote on such
proposed dissolution, liquidation or winding up. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to publish, mail or receive such notice or any defect therein or in
the publication or mailing thereof shall not affect the validity of any action
taking in connection with such dividend, distribution or subscription rights,
or such proposed dissolution, liquidation or winding up.
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15. Attorney's Fees. In the event of any action, suit,
counterclaim, appeal, arbitration, mediation, or other proceeding (an
"ACTION") between any Holder and the Company arising out of or in connection
with this Agreement or the Warrants, in addition to any damages and costs to
which the prevailing party would otherwise be entitled, the losing party in any
such Action shall pay to the prevailing party the attorneys' fees and costs
incurred by the prevailing party in connection with such Action and/or
enforcing any judgment, order, ruling, or award (collectively, a "DECISION")
granted therein, all of which shall be paid whether or not such Action is
prosecuted to a Decision. Any Decision entered in an Action shall contain a
specific provision providing for the recovery of attorneys' fees and costs
incurred in enforcing such Decision. Attorneys' fees shall include, but not be
limited to, fees incurred in the following: (1) post judgment motions and
collection actions; (2) contempt proceedings; (3) garnishment, levy, and debtor
and third party examinations; (4) discovery, and (5) bankruptcy. "Prevailing
party" within the meaning of this section includes, without limitation, a party
who agrees to dismiss an Action on the other party's payment of the sum
allegedly due or performance of the covenants allegedly breached, or who
obtains substantially the relief sought. If there are multiple claims, the
prevailing party shall be determined with respect to each claim separately.
The prevailing party shall be the party who has obtained the greater relief in
connection with any particular claim, although with respect to any claim, it
may be determined by the court or arbitrator before which the Action is brought
that there is no prevailing party.
16. Notices. Any notice pursuant to this Agreement to be given or
made by the registered Holder of any Warrant to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows:
Primera Foods Corporation
X.X. Xxx 000, 000 X. 0xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: President
Notices or demands authorized by this Agreement to be given or made by the
Company to the registered Holder of any Warrant shall be sufficiently given or
made (except as otherwise provided in this Agreement) if sent by first-class
mail, postage prepaid, addressed to such Holder at the address of such Holder
as shown on the Warrant Register.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without giving
effect to principals of conflicts of laws.
18. Supplements and Amendments. The Company and the Representative
owning at least a majority of the outstanding Warrants may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Representative may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrant Certificates and which shall
not adversely affect the interests of the Holders. This Agreement may also be
supplemented or amended from time to time by writing executed by or on behalf
of the
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Company all of the Holders.
19. Successor. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Holders shall bind and inure to the
benefit of their respective successors and assigns hereunder. Assignments by
the Holders of their rights hereunder shall be made in accordance with Section
4.
20. Merger or Consolidation of the Company. So long as Warrants
remain outstanding, the Company will not merge or consolidate with or into, or
sell, transfer or lease all or substantially all of its property to, any other
corporation unless the successor or purchasing corporation, as the case may be
(if not the Company), shall expressly assume, by supplemental agreement
executed and delivered to the Holders, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Holders, any legal or equitable right, remedy or claim under this Agreement,
but this Agreement shall be for the sole and exclusive benefit of the Company
and the Holders of the Warrants and Warrant Shares.
22. Captions; References. The captions of the sections and
subsections of this Agreement have been inserted for convenience only and
shall have no substantive effect. References herein to Sections, Schedules and
Exhibits are, unless otherwise specified, references to the referenced section,
schedule or exhibit hereof or hereto.
23. Counterparts. This Agreement may be executed in any number of
counterparts each of which when so executed shall be deemed to be an original;
but such counterparts together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day, month and year first above written.
PRIMERA FOODS CORPORATION CRUTTENDEN XXXX INCORPORATED
By: By:
---------------------------- -----------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
------------------------- --------------------------
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Exhibit A to
Warrant Agreement
[Form of Warrant Certificate]
TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS RESTRICTED AS
DESCRIBED IN THE WARRANT AGREEMENT DESCRIBED HEREIN.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF SUCH WARRANTS MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO WHICH SUCH SECURITIES WERE
ORIGINALLY REGISTERED IN CONNECTION WITH ORIGINAL ISSUANCE OF THE WARRANTS
REPRESENTED HEREBY, OR (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT,
OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
EXERCISABLE ON OR BEFORE ___________, 2004
No. __________ Warrants
Warrant Certificate
PRIMERA FOODS CORPORATION
This Warrant Certificate certifies that [Cruttenden Xxxx Incorporated],
or registered assigns (the "HOLDER"), is the registered holder of __________
Warrants (the "WARRANTS") to purchase Common Stock, $0.001 par value per share
(the "COMMON STOCK"), of Primera Foods Corporation, a Delaware corporation (the
"COMPANY"). Each Warrant entitles the registered Holder thereof to purchase
one share of Common Stock (subject to adjustment as set forth in the Warrant
Agreement (as defined below), at any time from 10:00 a.m., California time, on
_________, 1999 (the "INITIATION DATE") until 6:00 p.m., California time, on
___________, 2004 (the "EXPIRATION DATE") at an exercise price of $ _________
(the "WARRANT PRICE").
Subject to the provisions of the Warrant Agreement, the Holder shall
have the right to exercise the Warrants and purchase the underlying Warrant
Shares, either in their entirety or from time to time, effective as of any date
specified by the Holder from and after the Initiation Date and on or before the
Expiration Date. Exercise shall be effected by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon properly
completed and executed, together with payment of the Warrant Price or
designation of net issuance at the office of the Company designated for such
purpose. If upon any exercise of Warrants evidenced hereby the number of
Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the Holder or such Holder's assignee a new
Warrant Certificate evidencing the number of Warrants not exercised. No
adjustment shall be made for any dividends on any Common Stock issuable upon
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exercise of this Warrant.
Payment of the aggregate Warrant Price for all Warrant Shares for which
Warrants are exercised shall be made, in the discretion of the Holder, by
certified or official bank check or by net issuance, or a combination thereof.
Exercise by net issuance shall be effected without payment by the Holder of any
cash or other consideration by the Company's withholding from the Warrant
Shares that would otherwise be issued upon exercise if the exercise price were
paid in cash, that number of Warrant Shares which, when multiplied by the
Closing Price for the day immediately preceding the date of exercise, equals
the aggregate Warrant Price for the Warrants so exercised.
Notwithstanding the foregoing, if at 6:00 p.m., California time on the
Expiration Date, the Holder has not exercised its Warrants and has not notified
the Company that it waives automatic issuance, then all such unexercised
Warrants shall be automatically converted into a number of shares of Common
Stock of the Company equal to: (A) the number of shares of Common Stock then
issuable upon exercise of all such unexercised Warrants minus (B) a number of
shares of Common Stock equal to the quotient obtained by dividing the aggregate
Warrant Price for all such unexercised Warrants by the Closing Price (as
defined in Section 11.1(c) of the Warrant Agreement) for the Common Stock on
the Expiration Date.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to a Warrant Agreement, dated as
of ____________, 1998 (the "WARRANT AGREEMENT"), duly executed and delivered by
the Company, which Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities thereunder
of the Company and the holders of the Warrants. A copy of the Warrant
Agreement may be obtained by the Holder hereof upon written request to the
Company.
The Warrant Price and number of Warrant Shares issuable upon exercise
of the Warrants are subject to adjustment upon the occurrence of certain events
set forth in the Warrant Agreement. No fractions of a share of Common Stock
will be issued upon the exercise of any Warrants but the Company will pay the
cash value thereof determined as provided in the Warrant Agreement.
The Holder is entitled to certain registration rights with respect to
the Common Stock purchasable upon exercise thereof as set forth in the Warrant
Agreement.
Warrant Certificates may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
The Company may deem and treat the registered Holder of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone) as the owner in fact hereof and of the Warrants represented
hereby for all purposes, and the Company shall not be affected by any notice to
the contrary.
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Neither the Warrants nor this Warrant Certificate entitles the Holder
to any rights of a stockholder of the Company.
This Warrant Certificate shall not be valid unless countersigned by the
Company.
IN WITNESS WHEREOF, Primera Foods Corporation has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary.
Dated: __________, 1998 PRIMERA FOODS CORPORATION
By:
------------------------------------
Chief Executive Officer
Attest:
-----------------------------
Secretary
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[Form of Election to Purchase]
(To be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects, effective as of
________________, to exercise the right, represented by this Warrant
Certificate, to receive __________ shares of Common Stock, par value $0.001 per
share, of Primera Foods Corporation and elects to pay the Exercise Price as
indicated below:
[ ] Payment in cash in the amount of $___________ per share, for a
total aggregate Exercise Price payment of $___________; check
payable to Primera Foods Corporation in the amount of such
aggregate Exercise Price.
[ ] Payment on a cashless, net issuance basis by foregoing receipt
of that number of shares of Common Stock otherwise
issuable upon this exercise as has an aggregate value, at the
Closing Price, equal to the aggregate Exercise Price.
The undersigned requests that a certificate for such shares be
registered in the name of _________________________________, whose address is
____________________________________________________________ and that such
shares be delivered to ____________________________ whose address is
_______________________ _____________________________________. If said number
of shares is less than all of the shares of Common Stock purchasable hereunder,
the undersigned requests that a new Warrant certificate representing the
remaining balance of such shares be registered in the name of ________________
whose address is ____________________________________, and that such Warrant
certificate be delivered to ________________________ whose address is
____________________________________.
Signature:
Date:
Signature Guaranteed:
