Investment Banking Warrant Agreement (the "Investment Banking Warrant
Agreement" or "Agreement"), dated as of January 20, 1998, between Coventry
Industries Corp. (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ Securities, Inc., (the
"Investment Banker").
W I T N E S S E T H:
WHEREAS, the Company and the Investment Banker have agreed, pursuant to
an Financial Advisory Agreement dated as of the date hereof between the Company
and the Investment Banker, that the Investment Banker shall furnish certain
investment banking, business and financial related advice and services to the
Company on the terms and conditions provided therein; and
WHEREAS, the Company proposes to issue to the Investment Banker and/or
persons designated by the Investment Banker (the "Holder"), Investment Banker
Purchase Warrants (the "Warrants") for the purchase of up to 300,000 shares of
the Company's Common Stock (the "Shares" or "Warrant Securities") at $4.50 per
share pursuant to the Financial Advisory Agreement.
NOW, THEREFORE, in consideration of the premises, the payment by the
Investment Banker to the Company of TEN DOLLARS AND NO CENTS ($10.00), the
agreements herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Grant and Period.
The aforesaid recitals are true and accurate. Pursuant to the Warrants,
the Holders are hereby granted the right to purchase from the Company, at any
time during the period commencing on the date of this Agreement and expiring
three (3) years thereafter (the "Expiration Time"), up to 300,000 shares of the
Company's Common Stock at an initial exercise price (subject to adjustment as
provided in Article 8 hereof) of $4.50 per share (the "Exercise Price" or
"Purchase Price").
Except as specifically otherwise provided herein, the Shares
constituting the Warrant Securities shall bear the same terms and conditions as
such securities designated in the Company's Articles of Incorporation and any
amendments thereto, and the Holders shall have registration rights under the
Securities Act of 1933, as amended (the "Act"), for the Shares, as more fully
described in paragraph seven (7) of this Investment Banking Warrant Agreement.
2. Warrant Certificates.
The warrant certificates (the "Warrant Certificate") delivered and to be
delivered pursuant to this Agreement shall be in the form set forth in the form
of Warrant Certificate, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Full Exercise. The Holder hereof may effect a cash exercise of the
Warrants by surrendering the Warrant Certificate, together with a Subscription
in the form of Exhibit "A" attached thereto, duly executed by such Holder to the
Company, at any time prior to the Expiration Time, at the Company's principal
office, accompanied by payment in cash or by certified or official bank check
payable to the order of the Company in the amount of the aggregate purchase
price (the "Aggregate Price"), subject to any adjustments provided for in this
Agreement. The aggregate price hereunder for each Holder shall be equal to the
exercise price as set forth in Section six (6) hereof multiplied by the number
of Shares that are the subject of each Holder's Warrant (as adjusted as
hereinafter provided).
3.2 Partial Exercise. The securities referred to in paragraph 3.1 above
also may be exercised from time to time in part by surrendering the Warrant
Certificate in the manner specified in Section 3.1 hereof, except that the
Purchase Price payable shall be equal to the number of securities being
purchased hereunder multiplied by the per security Purchase Price, subject to
any adjustments provided for in this Agreement. Upon any such partial exercise,
the Company, at its expense, will forthwith issue to the Holder hereof a new
Warrant Certificate or Warrants of like tenor calling in the aggregate for the
number of securities (as constituted as of the date hereof) for which the
Warrant Certificate shall not have been exercised, issued in the name of the
Holder hereof or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct.
4. Issuance of Certificates.
Upon the exercise of the Warrants, the issuance of certificates for the
shares of Common Stock and/or other securities shall be made forthwith (and in
any event within three (3) business days thereafter) without charge to the
Holder thereof including, without limitation, any tax which may be payable in
respect of the issuance thereof, and such certificates shall (subject to the
provisions of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificates and the certificates representing the shares of
Common Stock and/or other securities shall be executed on behalf of the Company
by the manual or facsimile signature of the then present Chairman or Vice
Chairman of the Board of Directors or President or Vice President of the Company
under its corporate seal reproduced thereon, attested to by the manual or
facsimile signature of the then present Secretary or Assistant Secretary of the
Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants.
The Holder of a Warrant Certificate, by its acceptance thereof,
covenants and agrees that the Warrants may not be sold, transferred, assigned,
hypothecated or otherwise disposed of, in whole or in part, except in accordance
with applicable law.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Prices.
The initial exercise price of each Warrant shall be $4.50 per Share.
The adjusted exercise price shall be the price which shall result from time to
time from any and all adjustments of the initial exercise price in accordance
with the provisions of Section 8 hereof.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933.
The Warrants and the shares of Common Stock issuable upon exercise of
the Warrants (collectively the "Registrable Securities") have not been
registered under the Securities Act of 1933, as amended (the "Act"). Upon
exercise, in part or in whole, of the Warrants, certificates representing the
Shares shall bear the following legend in the event there is no current
registration statement effective with the Securities and Exchange Commission at
such time as to such securities:
The securities represented by this certificate may not be offered or sold except
pursuant to (i) an effective registration statement under the Act, (ii) to the
extent applicable, Rule 144 under the Act (or any similar rule under such Act
relating to the disposition of securities), or (iii) an opinion of counsel, if
such opinion shall be reasonably satisfactory to counsel to the issuer, that an
exemption from registration under such Act and applicable state securities laws
is available.
7.2 Piggyback Registration.
If, at any time commencing after the date of this Agreement, subject to
the existing rights granted to Pro Futures Special Equities Fund, L.P. and the
parties related thereto, the Company prepares and files a Registration Statement
under the Act, or a Notification on Form 1-A or otherwise registers securities
under the Act, or files a similar disclosure document with the Securities and
Exchange Commission (the "Commission" or "SEC") (collectively the "Registration
Documents") as to any of its securities under the Act (other than under a
Registration Statement pursuant to Form S-8 or Form S-4) it will give written
notice by registered mail, at least twenty (20) days prior to the filing of each
such Registration Document, to the Investment Banker and to all other Holders of
the Registrable Securities of its intention to do so. If the Investment Banker
and/or other Holders of the Registrable Securities notify the Company within
twenty (20) days after receipt of any such notice of its or their desire to
include any such Registrable Securities in such proposed Registration Documents,
the Company shall afford the Investment Banker and such Holders of such
Registrable Securities the opportunity to have any Registrable Securities
registered under such Registration Documents. Registration Document(s) are also
referred to as "registration statement(s)".
Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
Registration Document, or to withdraw the same after the filing but prior to the
effective date thereof.
In connection with any registration pursuant to this paragraph involving
an underwritten offering, if the managing underwriter or underwriters advise the
Company in writing that, in its or their opinion, the number of Registrable
Securities requested to be included in such registration would make it
impracticable to successfully market the offering (including, without
limitation, a material decrease in the price at which such securities can be
sold), then the amount of Registrable Securities included in the offering shall
be reduced and the Registrable Securities and the other securities to be offered
shall participate in such offering as follows: (i) securities to sold by the
Company shall have priority over all securities to offered by stockholders of
the Company, including the Holders and (ii) if securities in the excess of the
Company's securities can, in the good faith judgment of such managing
underwriter or underwriters, successfully be marketed in such offering, the
Registrable Securities and the other securities to be offered by stockholders of
the Company, including the Holders, shall be included in such offering, subject
to reduction pro rata in proportion to the number of securities proposed to be
included in such offering by the Holders and other stockholders (based on
underlying numbers of shares of Common Stock). To the extent any Registrable
Securities are excluded from registration pursuant to this paragraph, the
Company will, within nine (9) months of completion of the underwritten offering
from which such Registrable Securities were excluded, file at the expense of the
Company, a registration statement so as to permit a public offering and sale,
for a period of nine (9) months (or such longer period as permitted under the
Act), of such excluded Registrable Securities, which shall be in addition to any
registration statement required to be filed pursuant to this Agreement.
7.3 Demand Registration.
(a) At any time commencing after the date of this Agreement, and after
the effectiveness of the Registration Statement relating to Pro Futures Special
Equities Fund, L.P. and the parties related thereto, the Holders of Registrable
Securities representing more than 50% of such securities at that time
outstanding shall have the right (which right is in addition to the registration
rights under Section 7.2 hereof), exercisable by written notice to the Company,
to have the Company prepare and file with the Commission, on two occasions, a
registration statement and/or such other documents, including a prospectus,
and/or any other appropriate disclosure document as may be reasonably necessary
in the opinion of both counsel for the Company and counsel for the Investment
Banker and Holders, in order to comply with the provisions of the Act, so as to
permit a public offering and sale of their respective Registrable Securities for
nine (9) consecutive months (or such longer period of time as permitted by the
Act) by such Holders and any other Holders of any of the Registrable Securities
who notify the Company within ten (10) days after being given notice from the
Company of such request. A Demand Registration shall not be counted as a Demand
Registration hereunder until such Demand Registration has been declared
effective by the SEC and maintained continuously effective for a period of at
least nine months or such shorter period when all Registrable Securities
included therein have been sold in accordance with such Demand Registration,
provided that a Demand Registration shall be counted as a Demand Registration
hereunder if the Company ceases its efforts in respect of such Demand
Registration at the request of the majority Holders making the demand for a
reason other than a material and adverse change in the business, assets,
prospects or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by the majority of the Holders to
all other registered Holders of any of the Registrable Securities within ten
(10) days from the date of the receipt of any such registration request.
(c) Any written request by the Holders made pursuant to this Section
7.3 shall:
(i) specify the n umber of Registrable Securities which the Holders
intend to offer and sell and the minimum price at which the Holders intend to
offer and sell such securities;
(ii) state the intention of the Holders to offer such securities for
sale;
(iii) describe the intended method of distribution of such securities;
and
(iv) contain an undertaking on the part of the Holders to provide all
such information and materials concerning the Holders and take all such action
as may be reasonably required to permit the Company to comply with all
applicable requirements of the Commission and to obtain acceleration of the
effective date of the registration statement.
(d) In the event the Company receives from the Holders of any
Registrable Securities representing more than 50% of such securities at that
time outstanding, a request that the Company effect a registration on Form S-3
with respect to the Registrable Securities and if Form S-3 is available for such
offering, the Company shall, as soon as practicable, effect such registration as
would permit or facilitate the sale and distribution of the Registrable
Securities as are specified in the request. All expenses incurred in connection
with a registration requested pursuant to this Section shall be borne by the
Company, except the Holders shall bear the costs of their counsel and any
brokerage commissions. Registrations effected pursuant to this Section 7.3(e)
shall not be counted as registrations pursuant to Section 7.3(a) and 7.3(c)
hereof.
7.4 Covenants of the Company With Respect to Registration.
In connection with any registration under Section 7.2 or 7.3 hereof, the
Company covenants and agrees as follows:
(a) The Company shall use its reasonable best efforts to file a
registration statement within forty-five (45) days of receipt of any demand
pursuant to Section 7.3, and shall use its best efforts to have any such
registration statement declared effective at the earliest practicable time. The
Company will promptly notify each seller of such Registrable Securities and
confirm such advice in writing, (i) when such registration statement becomes
effective, (ii) when any post-effective amendment to such registration statement
becomes effective and (iii) of any request by the SEC for any amendment or
supplement to such registration statement or any prospectus relating thereto or
for additional information.
The Company shall furnish to each seller of such Registrable Securities
such number of copies of such registration statement and of each such amendment
and supplement thereto (in each case including each preliminary prospectus and
summary prospectus) in conformity with the requirements of the Act, and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities by such seller.
(b) The Company shall pay all costs (excluding transfer taxes, if any,
and fees and expenses of Holder(s)' counsel and the Holder's pro-rata portion of
the selling discount or commissions), fees and expenses in connection with all
registration statements filed pursuant to Sections 7.2 and 7.3 hereof including,
without limitation, the Company's legal and accounting fees, printing expenses,
blue sky fees and expenses.
(c) The Company shall prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be reasonably necessary to keep such registration statement
effective for at least nine months (or such longer period as permitted by the
Act), and to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the seller or
sellers of Registrable Securities set forth in such registration statement. If
at any time the SEC should institute or threaten to institute any proceedings
for the purpose of issuing a stop order suspending the effectiveness of any such
registration statement, the Company will promptly notify each seller of such
Registrable Securities and will use all reasonable efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible. The Company will use its good faith reasonable efforts and take all
reasonably necessary action which may be required in qualifying or registering
the Registrable Securities included in a registration statement for offering and
sale under the securities or blue sky laws of such states as reasonably are
required by the Holder(s), provided that the Company shall not be obligated to
execute or file any general consent to service of process or to qualify as a
foreign corporation to do business under the laws of any such jurisdiction. The
Company shall use its good faith reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities of the United States
or any State thereof as may be reasonably necessary to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities.
(d) The Company shall indemnify the Holder(s) of the Registrable
Securities to be sold pursuant to any registration statement and each person, if
any, who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from statements contained in such
registration statement not provided in writing by the Holders.
(e) Each of the Holder(s) of the Registrable Securities to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
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, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from written information furnished by such Holder, or their successors or
assigns, for specific inclusion in such registration statement and to the extent
that the maximum amount which may be recovered from each Holder pursuant to this
paragraph or otherwise shall be limited to the amount of net proceeds received
by the Holder from the sale of the Registrable Securities.
(f) Nothing contained in this Agreement shall be construed as requiring
the Holder(s) to exercise their Warrants prior to the filing of any registration
statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other
than the Registrable Securities to be included in any registration statement
filed pursuant to Section 7.3 hereof without the prior written consent of the
Holders of the Registrable Securities representing a majority of such
securities.
(h) The Company shall furnish to each Holder participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(i) The Company shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda described below and the
managing underwriter copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the registration statement and
permit each Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.
(j) With respect to a registration statement filed pursuant to Section
7.3, the Company, if requested, shall enter into an underwriting agreement with
the managing underwriter, reasonably satisfactory to the Company, selected for
such underwriting by Holders holding a majority of the Registrable Securities
requested to be included in such underwriting. Such agreement shall be
satisfactory in form and substance to the Company, each Holder and such managing
underwriters, and shall contain such representations, warranties and covenants
by the Company and such other terms as are customarily contained in agreements
of that type used by the managing underwriter. The Holders, if required by the
Underwriter to be parties to any underwriting agreement relating to an
underwritten sale of their Registrable Securities, may, at their option, require
that any or all the representations, warranties and covenants of the Company to
or for the benefit of such underwriters shall also be made to and for the
benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
(k) Notwithstanding the provisions of paragraph 7.2 or paragraph 7.3 of
this Agreement, the Company shall not be required to effect or cause the
registration of Registrable Securities pursuant to paragraph 7.2 or paragraph
7.3 hereof if, within thirty (30) days after its receipt of a request to
register such Registrable Securities (i) counsel for the Company delivers an
opinion to the Holders requesting registration of such Registrable Securities,
in form and substance satisfactory to counsel to such Holder(s), to the effect
that the entire number of Registrable Securities proposed to be sold by such
Holder(s) may otherwise be sold, in the manner proposed by such Holder(s),
without registration under the Securities Act, or (ii) the SEC shall have issued
a no-action position, in form and substance satisfactory to counsel for the
Holder(s) requesting registration of such Registrable Securities, to the effect
that the entire number of Registrable Securities proposed to be sold by such
Holder(s) may be sold by it, in the manner proposed by such Holder(s), without
registration under the Securities Act.
(l) After the date of this Agreement, the Company shall not, directly or
indirectly, enter into any merger, business combination or consolidation in
which (a) the Company shall not be the surviving corporation and (b) the
stockholders of the Company are to receive, in whole or in part, capital stock
or other securities of the surviving corporation, unless the surviving
corporation shall, prior to such merger, business combination or consolidation,
agree in writing to assume the obligations of the Company under this Agreement,
and for that purpose references hereunder to "Registrable Securities" shall be
deemed to include the securities which the Holders would be entitled to receive
in exchange for Registrable Securities under any such merger, business
combination or consolidation, provided that to the extent such securities to be
received are convertible into shares of Common Stock of the issuer thereof, then
any such shares of Common Stock as are issued or issuable upon conversion of
said convertible securities shall also be included within the definition of
"Registrable Securities".
8. Adjustments to Exercise Price and Number of Securities.
8.1 Adjustment for Dividends, Subdivisions, Combinations or
Reclassifications.
In case the Company shall (a) pay a dividend or make a distribution in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (b) subdivide its outstanding shares of Common Stock into a
greater number of shares, (c) combine its outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of its shares
of Common Stock any shares of capital stock of the Company; then, and in each
such case, the per share Exercise Price and the number of Warrant Securities in
effect immediately prior to such action shall be adjusted so that the Holder of
this Warrant thereafter upon the exercise hereof shall be entitled to receive
the number and kind of shares of the Company which such Holder would have owned
immediately following such action had this Warrant been exercised immediately
prior thereto. An adjustment made pursuant to this Section shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this Section, the Holder of this Warrant shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation of the adjusted Exercise Price
between or among shares of such class of capital stock.
Immediately upon any adjustment of the Exercise Price pursuant to this
Section, the Company shall send written notice thereof to the Holder of Warrant
Certificates (by first class mail, postage prepaid), which notice shall state
the Exercise Price resulting from such adjustment, and any increase or decrease
in the number of Warrant Securities to be acquired upon exercise of the
Warrants, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based.
8.2 Adjustment For Reorganization, Merger or Consolidation.
In case of any reorganization of the Company or 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 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 reorganization, consolidation, merger,
conveyance, sale or transfer. Such supplemental warrant agreement shall provide
for adjustments which shall be identical to the adjustments provided in Section
8 and such registration rights and other rights as provided in this Agreement.
The Company shall not effect any such consolidation, merger, or similar
transaction as contemplated by this paragraph, unless prior to or simultaneously
with the consummation thereof, the successor corporation (if other than the
Company) resulting from such consolidation or merger or the corporation
purchasing, receiving, or leasing such assets or other appropriate corporation
or entity shall assume, by written instrument executed and delivered to the
Holders, the obligation to deliver to the Holders, such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase, and to perform the other obligations of the
Company under this Agreement. The above provision of this Subsection shall
similarly apply to successive consolidations or successively whenever any event
listed above shall occur.
8.3 Dividends and Other Distributions.
In the event that the Company shall at any time prior to the exercise of
all Warrants distribute to its stockholders any assets, property, rights,
evidences of indebtedness, securities (other than a distribution made as a cash
dividend payable out of earnings or out of any earned surplus legally available
for dividends under the laws of the jurisdictions of incorporation of the
Company), whether issued by the Company or by another, the Holders of the
unexercised Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities and property receivable upon the exercise
thereof, to receive, upon the exercise of such Warrants, the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such
distribution as if the Warrants had been exercised immediately prior to such
distribution. At the time of any such distribution, the Company shall make
appropriate reserves to ensure the timely performance of the provisions of this
subsection or an adjustment to the Exercise Price, which shall be effective as
of the day following the record date for such distribution.
8.4 Adjustment in Number of Securities.
Upon each adjustment of the Exercise Price pursuant to the provisions of
this Section 8, the number of securities issuable upon the exercise of
each Warrant shall be adjusted to the nearest full amount by multiplying
a number equal to the Exercise 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 Exercise Price. 8.5 No Adjustment of
Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made if the amount of said
adjustment shall be less than 5 cents ($.05) per Share, 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 5 cents ($.05) per Share.
8.6 Accountant's Certificate of Adjustment.
In each case of an adjustment or readjustment of the Exercise Price or
the number of any securities issuable upon exercise of the Warrants, the
Company, at its expense, shall cause independent certified private accountants
of recognized standing selected by the Company (who may be the independent
certified private accountants then auditing the books of the Company) to compute
such adjustment or readjustment in accordance herewith and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to any Holder of the Warrants at the Holder's
address as shown on the Company's books. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based including, but not limited to, a statement
of (i) the Exercise Price at the time in effect, and (ii) the number of
additional securities and the type and amount, if any, of other property which
at the time would be received upon exercise of the Warrants.
9. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. Elimination of Fractional Interest.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the Warrants, nor shall
it be required to issue script or pay cash in lieu of fractional interests, it
being the intent of the parties that all fractional interests may be eliminated,
at the Company's option, by rounding any fraction up to the nearest whole number
of shares of Common Stock or other securities, properties or rights, or in lieu
thereof paying cash equal to such fractional interest multiplied by the current
value of a share of Common Stock.
11. Reservation.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Warrants, and
payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid, non-assessable and not subject to the preemptive rights of any
stockholder.
12. Notices to Warrant Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holders of the Warrants the right to vote or to consent or to receive
notice as a stockholder in respect of any meetings of stockholders for the
election of directors or any other matter, or as having any rights whatsoever as
a stockholder of the Company. If, however, at any time prior to the expiration
of the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale 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 events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date of the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notices shall
specify such record date or the date of closing the transfer books, as the case
may be. Failure to give such notice or any defect therein shall not affect the
validity of any action taken in connection with the declaration or payment of
any such dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any proposed
dissolution, liquidation, winding up or sale.
13. Notices.
All notices, requests, consents and other communications hereunder shall
be in writing and shall be deemed to have been duly given when personally
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of any of the Registrable Securities,
to the address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth below or to such other
address as the Company may designate by notice to the Holders.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Coventry Industries Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Atlas, ▇▇▇▇▇▇▇▇ & Trop & Borkson, P.A.
New River Center, Suite 1900
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
14. Entire Agreement: Modification.
This Agreement (and the Financial Advisory Agreement to the extent
applicable) contain the entire understanding between the parties hereto with
respect to the subject matter hereof, and the terms and provisions of this
Agreement may not be modified, waived or amended except in a writing executed by
the Company and the Holders of at least a majority of Registrable Securities
(based on underlying numbers of shares of Common Stock). Notice of any
modification, waiver or amendment shall be promptly provided to any Holder not
consenting to such modification, waiver or amendment.
15. Successors.
All the covenants and provisions of this Agreement shall be binding upon
and inure to the benefit of the Company, the Holders and their respective
successors and assigns hereunder.
16. Governing Law; Submission to Jurisdiction.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Florida and for all
purposes shall be construed in accordance with the laws of said State without
giving effect to the rules of said State governing the conflicts of laws. The
Company, the Investment Banker and the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Florida or
of the United States of America for the Southern District of Florida, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company, the Investment Banker and the Holders hereby irrevocably waive any
objection to such exclusive jurisdiction or inconvenient forum. Any such process
or summons to be served upon any of the Company, the Investment Banker and the
Holders (at the option of the party bringing such action, proceeding or claim)
may be served by transmitting a copy thereof, by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address set
forth in Section 14 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the party so served in any action, proceeding or
claim.
17. Severability.
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
18. Captions.
The caption headings of the Sections of this Agreement are for
convenience of reference only and are not intended, nor should they be construed
as, a part of this Agreement and shall be given no substantive effect.
19. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Investment Banker and any
other registered Holder(s) of the Warrant Certificates or Registrable
Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company and the Investment Banker and any other Holder(s)
of the Warrant Certificates or Registrable Securities. 20. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
COVENTRY INDUSTRIES CORP.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Attest:
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
▇▇▇▇▇▇ ▇▇▇▇▇ SECURITIES, INC.
By:
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
COVENTRY INDUSTRIES CORP.
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE Warrant Agreement REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M, EASTERN TIME ON JANUARY 19, 2003
NO. W- Warrants
This Warrant Certificate certifies that , or registered assigns, is the
registered holder of Warrants to purchase, initially, at any time from January
20, 1998 ("Purchase Date") until 5:30 p.m. Eastern time on January 19, 2003
("Expiration Date"), up to shares of Coventry Industries Corp. (the "Company")
Common Stock ("Shares") at the initial exercise price, subject to adjustment in
certain events (the "Exercise Price"), of $4.50 per share, upon surrender of
this Warrant Certificate and payment of the Exercise Price at an office or
agency of the Company, but subject to the conditions set forth herein and in the
Investment Banking Warrant Agreement dated as of January 20, 1998, between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇ Securities, Inc. (the "Investment Banking Warrant
Agreement"). Payment of the Exercise Price shall be made by certified check or
official bank check in New York Clearing House funds payable to the order of the
Company.
No Warrant may be exercised after 5:30 p.m., Eastern time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Investment Banking Warrant
Agreement, which Investment Banking 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 or rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Investment Banking Warrant Agreement provides that upon the
occurrence of certain events the Exercise Price and the type and/or number of
the Company's securities issuable thereupon may, subject to certain conditions,
be adjusted. In such event, the Company will, at the request of the holder,
issue a new Warrant Certificate evidencing the adjustment in the Exercise Price
and the number and/or type of securities issuable upon the exercise of the
Warrants; provided, however, that the failure of the Company to issue such new
Warrant Certificates shall not in any way change, alter, or otherwise impair,
the rights of the holder as set forth in the Investment Banking Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Investment
Banking Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Investment Banking Warrant Agreement shall have the meanings assigned to them in
the Investment Banking Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed as of the 20th day of January, 1998.
COVENTRY INDUSTRIES CORP.
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Attest:
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
EXHIBIT "A"
FORM OF SUBSCRIPTION (CASH EXERCISE)
(To be signed only upon exercise of Warrants)
TO: Coventry Industries Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the Holder of Warrant Certificate number , for the
purchase of Shares of Coventry Industries Corp. (the "Company"), which Warrant
Certificate is being delivered herewith, hereby irrevocably elects to exercise
the purchase right provided by the Warrant Certificate for, and to purchase
thereunder, Shares of the Company, and herewith makes payment of $ therefor, and
requests that the certificates for such Shares be issued in the name of, and
delivered to, , whose address is,
Dated:
(Signature must conform in all respects to name of Holder as specified
on the face of the Warrant Certificate)
(Address)
(FORM OF ASSIGNMENT)
(To be exercised by the registered holder if such holder desires to transfer the
Warrant Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Print name and address of transferee)
this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, and full power of substitution.
Dated: Signature:
(Signature must conform in all respects to name of holder as specified
on the fact of the Warrant Certificate)
(Insert Social Security or Other Identifying Number of Assignee)