1
EXHIBIT 4.1.2
--------------------------------------------------------------------------------
REPRESENTATIVE'S WARRANT AGREEMENT
by and between
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
and
CRUTTENDEN ▇▇▇▇ INCORPORATED
-----------------------
April ___, 1998
--------------------------------------------------------------------------------
2
REPRESENTATIVE'S WARRANT AGREEMENT
THIS REPRESENTATIVE'S WARRANT AGREEMENT (the "Agreement") is dated as
of April _____, 1998 and entered into by and between AMERICAN AIRCARRIERS
SUPPORT, INCORPORATED, a Delaware corporation (the "Company"), and CRUTTENDEN
▇▇▇▇ INCORPORATED (the "Warrantholder").
The Company hereby issues and sells, and the Warrantholder hereby
purchases, for the price of $0.001 per warrant, warrants, as hereinafter
described, to purchase up to an aggregate of 200,000 shares (the "Warrant
Shares") of the Company's Common Stock, $0.001 par value per share (the "Common
Stock"), in connection with the initial public offering (the "Public Offering")
by the Company of 2,000,000 Shares of Common Stock pursuant to an Underwriting
Agreement dated as of March ____, 1998 (the "Underwriting Agreement") between
the Company and the Warrantholder, as Representative of the several
Underwriters named in the Underwriting Agreement. The purchase and sale of the
Warrants shall occur on the Closing Date, as that term is defined in the
Underwriting Agreement, and be subject to the conditions to the Underwriters'
obligations to purchase the Common Stock thereunder and the performance of
such obligations by the Underwriters.
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
1. TRANSFERABILITY OF WARRANTS.
1.1 Registration. The Warrants shall be numbered and
shall be registered on the books of the Company when issued.
1.2 Transfer. The Warrants shall be transferable only on
the books of the Company maintained at its principal office in Fort Mill, South
Carolina or wherever its principal office may then be located, upon delivery
thereof duly endorsed by the Warrantholder or by its duly authorized attorney
or representative, accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver a new certificate evidencing the Warrants to the person
entitled thereto and the surrendered Warrants shall be canceled by the Company.
Canceled Warrants shall be disposed of by the Company in a manner satisfactory
to the Company.
1.3 Limitations on Transfer of the Warrants. Subject to
the provisions of Section 11 hereto, the Warrants shall not be sold,
transferred, assigned or hypothecated by the Warrantholder until April ___,
1999, except to (i) one or more persons, each of whom on the date of transfer
is an officer or partner of the Warrantholder; (ii) a successor to the
Warrantholder in a merger or consolidation; (iii) a purchaser of all or
substantially all of the Warrantholder's assets; or (iv) any person receiving
the Warrants from one or more of the persons listed in this Section 1.3 at such
person's or persons' death pursuant to will, trust or the laws of intestate
succession. The Warrants may be divided or combined, upon request to the
Company by the Warrantholder, into a certificate or certificates representing
the right to purchase the same aggregate number of Warrant Shares. Unless the
context indicates otherwise, the term "Warrantholder" shall include any
transferee or transferees of the Warrants pursuant to this Section 1.3,
3
and the term "Warrants" shall include any and all warrants outstanding pursuant
to this Agreement, including those evidenced by a certificate or certificates
issued upon division, exchange, substitution or transfer pursuant to this
Agreement.
1.4 Warrants. The number of Warrant Shares issuable upon
exercise of the Warrants is subject to adjustment upon the occurrence of
certain events, all as hereinafter provided. The Warrants shall be executed on
behalf of the Company by its President or by a Vice President, attested to by
its Secretary or an Assistant Secretary, and if none, then by its Chief
Financial Officer. A Warrant bearing the signature of an individual who was at
any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such office
prior to the delivery of such Warrant or did not hold such office on the date
of this Agreement. The Warrants shall be dated as of the date of signature
thereof by the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
1.4.1 Legend on Warrant Shares. Each certificate
for Warrant Shares initially issued upon exercise of the Warrants shall bear
the following legend, unless, at the time of exercise, such Warrant Shares are
subject to a currently effective Registration Statement under (as that term is
defined in Section 11.1) the Securities Act of 1933, as amended (the "1933
Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN ANY MANNER EXCEPT IN COMPLIANCE WITH SECTION
11 OF THE REPRESENTATIVE'S WARRANT AGREEMENT DATED APRIL ____, 1998,
PURSUANT TO WHICH THEY WERE ISSUED."
Any certificate issued at any time in exchange or substitution for
any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a Registration Statement under
the 1933 Act, of the securities represented thereby) shall also bear the above
legend unless, in the opinion of the Company's counsel, the securities
represented thereby need no longer be subject to such restrictions.
2. EXCHANGE OF WARRANT CERTIFICATE. Any Warrant certificate may
be exchanged for another certificate or certificates entitling the
Warrantholder to purchase a like aggregate number of Warrant Shares as the
certificate or certificates surrendered entitled the Warrantholder to purchase.
The Warrantholder desiring to exchange a Warrant certificate shall make such
request in writing delivered to the Company, and shall surrender, properly
endorsed, with signatures guaranteed, the certificate evidencing the Warrant to
be so exchanged. Thereupon, the Company shall execute and deliver to the
Warrantholder entitled thereto a new Warrant certificate as so requested.
4
3. TERM OF WARRANTS; EXERCISE OF WARRANTS.
3.1 Term; termination Date. Subject to the terms of this
Agreement, the Warrantholder shall have the right to exercise the Warrants as
set forth herein, at any time during the period commencing at 9:00 a.m., Los
Angeles, California time on April ____, 1998 and ending at 5:00 p.m. Los
Angeles, California time, on April ____, 2004 (the "Termination Date"), to
purchase from the Company up to the number of fully-paid and nonassessable
Warrant Shares to which the Warrantholder may at the time be entitled to
purchase pursuant to this Agreement, upon surrender to the Company, at its
principal office, or at the office of the Company's transfer agent, of the
certificate evidencing the Warrants to be exercised, together with a copy of
the purchase form attached hereto (the "Purchase Form") duly completed and
signed, with signatures guaranteed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions
of this Section 3 and Sections 7 and 8 hereof), for the number of Warrant
Shares in respect of which such Warrants are then exercised, but in no event
for less than one hundred (100) Warrant Shares (unless fewer than an aggregate
of one hundred (100) Warrant Shares are then purchasable under all outstanding
Warrants held by the Warrantholder).
3.2 Exercise Methods. Payment of the Warrant Price (as
that term is defined in Section 7 below) may be made in the manner provided
below in this Section 3.2 for the number of Warrant Shares specified in the
attached Purchase Form. The Warrantholder may make payment of the Warrant
Price, in his, her or its sole discretion, by (i) the payment of cash in the
amount of the Warrant Price multiplied by the number of Warrant Shares being
purchased in connection with such exercise; (ii) the cancellation of
indebtedness, if any, owing by the Company to the Warrantholder in the amount
of the Warrant Price multiplied by the number of Warrant Shares being purchased
in connection with such exercise; (iii) surrendering to the Company shares of
the Company's Common Stock owned by the Warrantholder and having a Current
Market Price (as determined in accordance with Section 9 below) equal to the
Warrant Price multiplied by the number of shares being purchased in connection
with such exercise; (iv) surrendering to the Company the right to acquire a
number of Warrant Shares such that the aggregate Current Market Price of such
surrendered Warrant Shares equals the Warrant Price multiplied by the total
number of Warrant Shares desired to be exercised by the Warrantholder (which
type of cashless exercise shall be referred to herein as an "Appreciation
Currency" exercise (as that term is defined in Section 3.3 below)); (v) a same
day sale brokered exercise; (vi) a margined exercise; (vii) the issuance of a
nonrecourse promissory note (which can be made recourse at any time at the
Warrantholder's option) in the amount of the Warrant Price multiplied by the
number of Warrant Shares being purchased in connection with such exercise and
secured by the Warrant Shares being purchased (or other collateral of
sufficient value specified or substituted by the Warrantholder) and payable one
(1) year from the date of such promissory note, if not prepaid earlier, and
bearing interest at the statutory rate applicable on the date of the promissory
note under the Internal Revenue Code of 1986, as amended, with such interest
payable quarterly in cash or in shares of the Company's Common Stock valued in
accordance with Section 9 hereof; or (viii) any combination of the foregoing
exercise methods. If the Warrants should be exercised only in part, the
Company shall, if the Warrants are surrendered for cancellation, execute and
deliver a new Warrant certificate of the same tenor evidencing the right of the
Warrantholder to purchase the balance of the Warrant Shares purchasable
hereunder upon the same terms and conditions as herein set forth. On receipt
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Warrants, the Company, at its cost and
expense, shall execute and deliver in lieu of the Warrants, new warrants of
like tenor and amount. Upon receipt by the Company or its transfer agent of a
Purchase Form in proper form for exercise, and (except in the case of an
exercise pursuant to clauses (iii) or (iv) above of this Section 3.2)
accompanied by payment as herein provided, the Warrantholder shall be deemed to
be the holder of record of the Warrant Shares issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that
-3-
5
certificates representing such Warrant Shares shall not then be actually
delivered to the Warrantholder. If the Warrantholder elects to use either of
the exercise methods described in clauses (iii) or (iv) of this Section 3.2,
the number of Warrant Shares issuable upon such exercise shall be based on the
determination, as of the date of the Purchase Form relating to such exercise,
of the Current Market Price of the Company's Common Stock issuable upon such
exercise as determined in accordance with Section 9 below.
Upon payment of such Warrant Price as set forth hereinabove,
the Company shall issue and cause to be delivered with all reasonable dispatch
to or upon the written order of the Warrantholder and in the name or names of
the Warrantholder or, subject to compliance with the provisions of Section 11.1
hereof, in such name or names as the Warrantholder may designate, a certificate
or certificates for the number of full Warrant Shares so purchased upon the
exercise of the Warrant, together with cash, as provided in Section 9 hereof,
in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such securities as of the date of surrender of the
Warrants and payment of the Warrant Price, as aforesaid. The Warrants shall be
exercisable, at the election of the Warrantholder, either in full or from time
to time in part and, in the event that a certificate evidencing the Warrants is
exercised in respect of less than all of the Warrant Shares specified therein
at any time prior to the Termination Date, a new certificate evidencing the
remaining portion of the Warrants will promptly be issued by the Company.
3.3 Appreciation Currency. As used herein, "Appreciation
Currency" shall mean the consideration given by the surrender of Warrants in
exchange for Warrant Shares. The number of Warrant Shares to which the holder
shall be entitled upon such surrender of Warrants shall be determined by
applying the following formula: WS=NWS$ x [(CMP$-WP$)/CMP$], where:
"WS" is the number of Warrant Shares to which the
holder shall be entitled upon surrender of Warrants;
"NWS$" is the number of Warrant Shares that would be
received if the Warrants surrendered were instead exercised for cash;
"CMP$" is the Current Market Price (as defined in
Section 9 hereof) per share of Common Stock; and
"WP$" is the Warrant Price (as defined in Section 7
hereof) as adjusted and readjusted as set forth in Section 8 hereof.
4. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of the Warrants or the
securities comprising the Warrant Shares; provided, however, that the Company
shall not be required to pay any tax or taxes that may be payable (i) in
respect of any secondary transfer of the Warrants or the securities comprising
the Warrant Shares; or (ii) as a result of the issuance of Warrant Shares to
any person or entity, other than Cruttenden ▇▇▇▇ Incorporated. The Company
shall not be required to issue or deliver any certificate for any Warrant
Shares unless and until the person or entity requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have produced
evidence that such tax has been paid to the appropriate taxing authority.
-4-
6
5. MUTILATED OR MISSING WARRANTS. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and in substitution for the
certificate or certificates that have been lost, stolen or destroyed, a new
Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
and a bond of indemnity, if requested, also satisfactory in form and amount,
and issued at the applicant's cost and expense. Any such applicant for a
substitute Warrant certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe
in writing.
6. RESERVATION OF WARRANT SHARES. There has been reserved, and
the Company shall at all times keep reserved so long as the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of
Common Stock as shall be subject to purchase under the Warrants. The Company
will supply every transfer agent for the Common Stock and other securities of
the Company issuable upon the exercise of the Warrants with duly executed stock
and other certificates, as appropriate, for such purpose and will provide or
otherwise make available any cash that may be payable as provided in Section 9
hereof.
7. WARRANT PRICE. The price per share at which Warrant Shares
shall be purchasable by the Warrantholder upon the exercise of the Warrants
(the "Warrant Price") shall be ______ Dollars and ____/No ($________ ), subject
to further adjustment pursuant to Section 8 hereof.
8. ADJUSTMENT OF NUMBER OF WARRANT SHARES. The number and kind
of securities purchasable upon the exercise of the Warrants and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
8.1 Adjustments. The number of Warrant Shares
purchasable upon the exercise of the Warrants shall be subject to adjustment as
follows: In case the Company shall (i) pay a dividend in Common Stock or make
a distribution in Common Stock; (ii) subdivide its outstanding Common Stock;
(iii) combine its outstanding Common Stock into a smaller number of shares of
Common Stock; or (iv) issue by reclassification of its Common Stock other
securities of the Company, then the Warrant Price and the number of Warrant
Shares purchasable upon exercise of the Warrants immediately prior thereto
shall be proportionately adjusted so that the Warrantholder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company that he, she or it would have owned or would have been entitled to
receive immediately after the happening of any of the events described above,
had the Warrants been exercised at the Warrant Price immediately prior to the
happening of such event or any record date with respect thereto, whichever is
earlier. Any adjustment made pursuant to this Section 8.1 shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event. For the purpose of this Section 8.1, the
term "Common Stock" shall mean (i) the class of stock designated as the Common
Stock of the Company at the date of this Agreement; or (ii) any other class of
stock resulting from successive changes in or reclassifications of such Common
Stock consisting solely of changes in its par value, or changes from par value
to no par value, or changes from no par value to par value.
-5-
7
8.2 No Adjustment for Dividends. Except as provided in
Section 8.1 hereof, no adjustment in respect of any dividends or distributions
out of earnings shall be made during the term of the Warrants or upon the
exercise of the Warrants.
8.3 Certificate of Adjustment. Whenever the number of
Warrant Shares purchasable upon the exercise of the Warrants is adjusted as
herein provided, the Company shall cause to be promptly prepared and mailed to
the Warrantholder by first class mail, postage prepaid, notice of such
adjustment and a certificate of the Chief Financial Officer of the Company
setting forth the number of Warrant Shares purchasable upon the exercise of the
Warrants after such adjustment, a brief statement of the facts requiring such
adjustment and the computation by which such adjustment was made; provided,
however, that such a notice of adjustment and certificate shall only be
required for adjustments that result in a change in the Warrant Price or in the
number of Warrant Shares purchasable upon exercise of the Warrants of five
percent (5%) or more.
8.4 Preservation of Purchase Rights upon
Reclassification, Consolidation, etc. In case of any consolidation of the
Company with or merger of the Company into another corporation or company or in
case of any sale or conveyance to another corporation or company of the
property, assets or business of the Company as an entirety or substantially as
an entirety, the Company or such successor or purchasing corporation or
company, as the case may be, shall execute with the Warrantholder an agreement
that the Warrantholder shall have the right thereafter, upon payment of the
Warrant Price in effect immediately prior to such action, to purchase, upon
exercise of the Warrants, the kind and number of Warrant Shares and other
securities and property that the Warrantholder would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale or
conveyance had the Warrants been exercised immediately prior to such action.
In the event of a merger described in Section 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended, in which the Company is the surviving
corporation, the right to purchase Warrant Shares under the Warrants shall
terminate on the date of such merger and thereupon the Warrants shall become
null and void, but only if the controlling corporation shall agree to
substitute for the Warrants its warrant entitling the holder thereof to
purchase upon its exercise the kind and amount of Warrant Shares and other
securities and property that the Warrantholder would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this Section 8.4 shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8.1 hereof. The provisions of this Section
8.4 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
8.5 Par Value of Warrant Shares. Before taking any
action that would cause an adjustment effectively reducing the portion of the
Warrant Price allocable to each Warrant Share below the then par value per
share of the Common Stock issuable upon exercise of the Warrants, the Company
will take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully-paid
and nonassessable Common Stock upon exercise of the Warrants.
8.6 Independent Public Accountants. The Company may
retain a firm of independent public accountants of recognized national standing
(which may be any such firm regularly employed by the Company) to make any
computation required under this Section 8.
-6-
8
8.7 Statement on Warrant Certificates. Irrespective of
any adjustments in the number of securities issuable upon exercise of the
Warrants, Warrant certificates theretofore or thereafter issued may continue to
express the same number of securities as are stated in the Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at
any time, make any change in the form of Warrant certificate that it may deem
appropriate and that does not affect the substance thereof; and any Warrant
certificate thereafter issued, whether upon registration of transfer of, or in
exchange or substitution for, an outstanding Warrant certificate, may be issued
in the form so changed.
9. FRACTIONAL INTERESTS; CURRENT MARKET PRICE. The Company shall
not be required to issue fractional Warrant Shares upon the exercise of the
Warrants. If any fraction of a Warrant Share would, except for the provisions
of this Section 9, be issuable upon the exercise of the Warrants (or any
portion thereof), the Company shall pay an amount in cash equal to the then
Current Market Price (as that term is defined below) per share of Common Stock
multiplied by such fraction. For purposes of this Agreement, the term "Current
Market Price" shall mean (i) if the Common Stock is traded in the
over-the-counter market and not on the Nasdaq National Market System nor on any
national securities exchange, the average of the per share closing bid price on
the twenty (20) consecutive trading days immediately preceding the date in
question, as reported by the Nasdaq SmallCap Market (or an equivalent generally
accepted reporting service if quotations are not reported on the Nasdaq
SmallCap Market); or (ii) if the Common Stock is traded on the Nasdaq National
Market System or on a national securities exchange, the average for the twenty
(20) consecutive trading days immediately preceding the date in question of the
daily per share closing prices on the Nasdaq National Market System or on the
principal stock exchange on which the Common Stock is listed, as the case may
be. For purposes of clause (i) above, if trading in the Common Stock is not
reported by the Nasdaq SmallCap Market, the applicable bid price referred to in
said clause (i) shall be the lowest bid price as reported by the Nasdaq
Electronic Bulletin Board or, if not reported thereon, as reported in the "pink
sheets" published by National Quotation Bureau, Incorporated, and, if such
securities are not so reported, shall be the price of a share of Common Stock
determined by the Company's Board of Directors in good faith. The closing price
referred to in clause (ii) above shall be the last reported sale price or, in
case no such reported sale takes place on such day, the average of the reported
closing bid and asked prices, in either case on the Nasdaq National Market
System or on the national securities exchange on which the Common Stock is then
listed.
10. NO RIGHTS AS SHAREHOLDER; NOTICES TO WARRANTHOLDER. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or its transferees any rights as a shareholder of the
Company, including the right to vote, receive dividends or other distributions,
consent or receive notices as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or any other matter,
or any rights whatsoever as shareholders of the Company. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any
one or more of the following events shall occur:
10.1 any action that would require an adjustment pursuant
to Section 8.1 hereof; or
10.2 a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger or sale of its
property, assets and business as an entirety or substantially as an entirety)
shall be proposed;
-7-
9
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least fifteen (15) days
prior to the date fixed as a record date or the date of closing the transfer
books for the determination of the shareholder entitled to any relevant
dividend, distribution, subscription rights or other rights or for the
determination of shareholders 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. The failure to give
notice required by this Section 10 or any defect therein shall not affect the
legality or validity of any dividend, distribution, right, dissolution,
liquidation or winding up, or the vote upon any action.
11. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
11.1 Written Notice. The Warrantholder agrees that prior
to making any disposition of the Warrants or the Warrant Shares, including
without limitation, to persons or entities identified in clauses (i) through
(iv), inclusive, of Section 1.3 hereof, other than pursuant to a registration
statement or other notification or post- effective amendment thereto (herein,
collectively, a "Registration Statement") filed by the Company with, and
declared effective by, the United States Securities and Exchange Commission
(the "Commission"), the Warrantholder shall give written notice to the Company
describing briefly the manner in which any such proposed disposition is to be
made and shall provide such other information as may reasonably be required by
the Company to conclude that no Registration Statement under the 1933 Act or
under applicable state "blue sky" laws, rules or regulations is required with
respect to such disposition, and no such disposition shall be made if the
Company has notified the Warrantholder in writing that in the opinion of
counsel satisfactory to the Warrantholder a Registration Statement under the
1933 Act is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and, to the extent required,
declared effective by, the Commission.
11.2 "Piggy Back" Registration Rights. Whenever during
the five (5) year period beginning on April ____, 1999 and ending on April
____, 2003, the Company proposes to file with the Commission a Registration
Statement (other than as to securities issued pursuant to an employee benefit
plan or as to a transaction subject to Rule 145 promulgated under the 1933 Act
or for which a Form S-4 Registration Statement could be used), it shall, at
least thirty (30) days prior to each such filing, give written notice of such
proposed filing to the Warrantholder and each holder of Warrant Shares, at
their respective addresses as they appear on the records of the Company, and
shall offer to include and shall, on two (2) occasions only, include in such
filing any proposed disposition of the Warrants and Warrant Shares upon receipt
by the Company, not less than ten (10) days prior to the proposed filing date,
of a request therefor setting forth the facts with respect to such proposed
disposition and all other information with respect to such person or entity
reasonably necessary to be included in such Registration Statement. In the
event that the managing underwriter for said offering advises the Company in
writing that the inclusion of such securities in the offering would be
detrimental to the offering, such securities shall nevertheless be included in
the Registration Statement as long as the Warrantholder and each holder of
Warrants and Warrant Shares desiring to have such securities included in the
Registration Statement agrees in writing, for a period of ninety (90) days
following such offering, not to sell or otherwise dispose of such securities
pursuant to such Registration Statement, which Registration Statement the
Company shall keep effective for a period of at least nine (9) months following
the expiration of such ninety (90) day period.
11.2.1 Demand Registration Rights. In addition to
any Registration Statement pursuant to Section 11.2 above, at any time during
the period the Warrants are exercisable, the Company
-8-
10
will, as promptly as practicable (but in any event within sixty (60) days),
after written request (the "Request") by Cruttenden ▇▇▇▇ Incorporated, or by a
person(s) or entity(ies) holding (or having the right to acquire by virtue of
holding the Warrants) at least fifty percent (50%) of the Warrant Shares that
have been (or may be) issued upon exercise of the Warrants, prepare and file at
its own cost and expense a Registration Statement with the Commission and
appropriate state "blue sky" authorities sufficient to permit the public
offering of the Warrants and Warrant Shares, and will use reasonable efforts at
its own cost and expense through its officers, directors, auditors and counsel,
in all matters necessary or advisable, to cause such Registration Statement to
become effective as promptly as practicable and to maintain such effectiveness
so as to permit resale of the Warrant Shares covered by the Request until the
earlier of the time that all such Warrant Shares have been sold or the
expiration of one hundred-twenty (120) days from the effective date of the
Registration Statement; provided, however, that the Company shall only be
obligated to file one (1) such Registration Statement under this Section
11.2.1.
11.3 Payment of Fees. All fees, disbursements and
out-of-pocket expenses (other than Warrantholders' and holders' of Warrant
Shares brokerage fees and commissions and legal fees of counsel to the
Warrantholders and holders of Warrant Shares, if any) in connection with the
filing of any Registration Statement under Section 11.2 hereof and in complying
with applicable securities and state "blue sky" laws, rules and regulations
shall be borne by the Company. The Company at its cost and expense will supply
any Warrantholder and any holder of Warrant Shares with copies of such
Registration Statement and the prospectus included therein and other related
documents in such quantities as may be reasonably requested by the
Warrantholder or holder of Warrant Shares.
11.4 No Obligation of File. The Company shall not be
required by this Section 11 to file such Registration Statement if, in the
opinion of counsel for the Warrantholder and holders of Warrant Shares and
counsel for the Company (or, should they not agree, in the opinion of another
counsel experienced in securities law matters acceptable to counsel for the
Warrantholder, holders of Warrant Shares and the Company), the proposed public
offering or other transfer as to which such Registration Statement is requested
is exempt from applicable federal and state securities laws, rules, regulations
and would result in unaffiliated purchasers or transferees obtaining securities
that are not "restricted securities," as that term is defined in Rule 144 under
the 1933 Act.
11.5 Regulation A Offerings. The provisions of this
Section 11 and Section 12 hereof shall apply to the extent as provided herein
if the Company chooses to file an Offering Statement under Regulation A
promulgated under the 1933 Act.
11.6 Obligation to Keep Current. The Company agrees that
until all Warrant Shares have been sold under a Registration Statement or
pursuant to Rule 144 under the 1933 Act, it will use reasonable efforts to keep
current the filing of all materials required to be filed with the Commission in
order to permit the holders of Warrant Shares to sell the same under Rule 144.
12. INDEMNIFICATION.
12.1 By the Company. In the event of the filing of any
Registration Statement with respect to the Warrant Shares pursuant to Section
11 hereof, the Company agrees to indemnify and hold harmless the Warrantholder
or any holder of such Warrant Shares and each person or entity, if any, who
controls the Warrantholder or any holder of such Warrant Shares within the
meaning of the 1933 Act,
-9-
11
against any losses, claims, damages or liabilities, joint or several (which
shall, for all purposes of this Agreement, include, but not be limited to, all
costs of defense and investigation and all reasonable attorneys' fees), to
which the Warrantholder or any holder of such Warrant Shares or such
controlling person may become subject, under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such Registration Statement, or any
related preliminary prospectus, final prospectus, or amendment or supplement
thereto, or arise out of or are based upon 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; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement, preliminary prospectus, final prospectus or amendment
or supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Warrantholder or the holder of such
Warrant Shares or any person or entity who controls the Warrantholder or any
holder of such Warrant Shares within the meaning of the 1933 Act specifically
for use in the preparation thereof. This indemnity will be in addition to any
liability that the Company may otherwise have.
12.2 By the Warrantholder. The Warrantholder and the
holders of the Warrant Shares agree that they will indemnify and hold harmless
the Company, each other person or entity referred to in subparts (1), (2) and
(3) of Section 11(a) of the 1933 Act in respect of the Registration Statement
and each person or entity, if any, who controls the Company within the meaning
of the 1933 Act, against any losses, claims, damages or liabilities (which
shall, for all purposes of this Agreement, include but not be limited to, all
costs of defense and investigation and all reasonable attorneys' fees), to
which the Company or any such director, officer or controlling person may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in such Registration Statement, or any related preliminary
prospectus, final prospectus or amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by the Warrantholder or such
holder of Warrant Shares specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability that the Warrantholder
or such holder of Warrant Shares may otherwise have.
12.3 Notice. Promptly after receipt by an indemnified
party under this Section 12 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 12, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve him, her or it from any liability that he,
she or it may have to any indemnified party otherwise than under this Section
12. In case any such action is brought against any indemnified party, and he,
she or it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that he, she or 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
-10-
12
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 him, her or it and/or other indemnified parties
that are different from or in addition to those available to the indemnifying
party that poses a conflict of interest for such counsel, 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 under this Section 12 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed 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 (1) separate counsel (together with appropriate local
counsel) approved by the indemnifying party representing all the indemnified
parties under Sections 12.1 or 12.2 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,
however, 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 claims that are the subject matter of such indemnification.
13. CONTRIBUTION. In order to provide for just and equitable
contribution under the 1933 Act in any case in which (i) the Warrantholder or
any holder of Warrant Shares or controlling person makes a claim for
indemnification pursuant to Section 12 hereof but it is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 12 hereof
provide for indemnification in such case; or (ii) contribution under the 1933
Act may be required on the part of the Warrantholder or any holder of Warrant
Shares or controlling person, then the Company and the Warrantholder or any
such holder of the Warrant Shares or controlling person shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(which shall, for all purposes of this Agreement, include, but not be limited
to, all costs of defense and investigation and all attorneys' fees), in either
such case (after contribution from others) on the basis of relative fault as
well as any other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, on the
one hand, or the Warrantholder or a holder of Warrant Shares or a controlling
person, on the other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and such holders of such securities and such controlling
persons agree that it would not be just and equitable if contribution pursuant
to this Section 13 were determined by pro rata allocation or by any other
method that does not take account of the equitable considerations referred to
in this Section 13. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this
-11-
13
Section 13 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. No person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall
be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
14. NOTICES. Any notice pursuant to this Agreement by the Company
or by the Warrantholder or a holder of Warrant Shares shall be in writing and
shall be deemed to have been duly given if delivered or mailed by certified or
registered mail, return receipt requested:
14.1 Warrantholder. If to the Warrantholder or a holder
of Warrant Shares, addressed to Cruttenden ▇▇▇▇ Incorporated, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Finance Department.
14.2 The Company. If to the Company, addressed to it at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President.
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrantholder, or the
holders of Warrant Shares shall bind and inure to the benefit of their
respective successors and permitted assigns hereunder.
16. MERGER OR CONSOLIDATION OF THE COMPANY. The Company may merge
or consolidate with or into any other corporation or company or sell all or
substantially all of its property or assets to another corporation; provided,
however, that the provisions of Section 8.4 hereof are complied with.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any schedule, exhibit, certificate or other instrument delivered
by or on behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf
of the parties to this Agreement, all representations, warranties and
agreements made by the parties to this Agreement or pursuant hereto shall
survive the execution hereof.
18. APPLICABLE LAW. This Agreement shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall be construed in accordance with the laws of said State.
19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or entity other than the Company, the
Warrantholder and the holders of Warrant Shares any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole and
exclusive benefit of the Company, the Warrantholder and the holders of Warrant
Shares.
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 all such counterparts shall together constitute one and the
same instrument.
-12-
14
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
AMERICAN AIRCARRIERS SUPPORT,
INCORPORATED
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
CRUTTENDEN ▇▇▇▇ INCORPORATED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
16
PURCHASE FORM
(To be signed only upon exercise of the Warrant)
To American Aircarriers Support, Incorporated:
The undersigned, the holder of the enclosed Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, a total of ________________________* shares of
the Common Stock of American Aircarriers Support, Incorporated, a Delaware
corporation, and herewith makes payment of $__________ therefor, and requests
that the certificate or certificates for such shares of Common Stock be issued
in the name of and delivered to the undersigned.
DATED:
-----------------------
---------------------------------------
(Signature must conform in all respects
to name of holder as specified on
the face of the Warrant)
---------------------------------------
-----------------
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the Warrant
is being exercised), in either case without making any adjustment for
additional Common Stock or any other stock or other securities or property or
cash that, pursuant to the adjustment provisions of the Warrant Purchase
Agreement, may be deliverable upon exercise.
