WARRANT AGREEMENT by and between LAMBERT’S COVE ACQUISITION CORPORATION and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent Dated as of [●], 2008
by
and
between
▇▇▇▇▇▇▇’▇
COVE ACQUISITION CORPORATION
and
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY,
as
Warrant Agent
Dated
as
of [●], 2008
TABLE
OF CONTENTS
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Page
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Section
1.
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Appointment
of Warrant Agent
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1
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Section
2.
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Warrant
Certificates
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1
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Section
3.
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Execution
of Warrant Certificates
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1
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Section
4.
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Registration
and Countersignature
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2
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Section
5.
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Registration
of Transfers and Exchanges; Transfer Restrictions
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2
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Section
6.
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Terms
of Warrants.
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4
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Section
7.
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Payment
of Taxes
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7
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Section
8.
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Mutilated
or Missing Warrant Certificates
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7
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Section
9.
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Reservation
of Warrant Shares
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7
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Section
10.
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Obtaining
Stock Exchange Listings; State Registration
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8
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Section
11.
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Adjustment
of Number of Warrant Shares.
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8
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Section
12.
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Fractional
Interests
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17
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Section
13.
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Notices
to Warrant Holders
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17
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Section
14.
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Merger,
Consolidation or Change of Name of Warrant Agent
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18
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Section
15.
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Warrant
Agent
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19
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Section
16.
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Change
of Warrant Agent
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21
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Section
17.
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Notices
to Company and Warrant Agent
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22
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Section
18.
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Supplements
and Amendments
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22
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Section
19.
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Successors
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23
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Section
20.
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Termination
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23
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Section
21.
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Governing
Law
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23
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Section
22.
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Benefits
of This Agreement
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23
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Section
23.
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Counterparts
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23
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Section
24.
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Force
Majeure
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23
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EXHIBIT
A
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Form
of Warrant
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A-1
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EXHIBIT
B
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Legend
for Private Warrants
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B-1
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i -
This
Warrant Agreement (this “Warrant
Agreement”)
is
made as of [●], 2008 by and between ▇▇▇▇▇▇▇’▇ Cove Acquisition Corporation, a
Delaware corporation (the “Company”),
and
Continental Stock Transfer & Trust Company, a New York corporation, as
Warrant Agent (the “Warrant
Agent”).
WHEREAS,
the Company has filed a registration statement (File No. 333-149812) (the
“Registration
Statement”)
with
the Securities Exchange Commission for the initial public offering of units
(the
“Initial
Public Offering”),
each
unit (“Unit”)
consisting of one share of the Company’s common stock, par value $0.0001 per
share (“Common
Stock”),
and
one warrant to purchase one share of Common Stock at an exercise price of $7.50
per share.
WHEREAS,
the Company has agreed to issue (i) in a private placement to occur concurrently
with the execution of that certain Securities Subscription Agreement, dated
March 11, 2008, by and between the Company and the Company’s sponsor, ▇▇▇▇▇▇▇’▇
Cove Holdings, LLC (the “Sponsor”),
2,875,000 units (the “Founders
Units”),
each
Founders Unit consisting of one share of Common Stock (the “Founders
Shares”)
and
one warrant to purchase one share of Common Stock at an exercise price of $7.50
per share (the “Founders
Warrants”),
to
the Sponsor, (ii) in a private placement to occur immediately prior to the
date
of the Company’s final prospectus for the Initial Public Offering, 3,050,000
warrants to the Sponsor, with each such warrant representing the right of the
holder thereof to purchase one share of Common Stock at an exercise price of
$7.50 per share (the “Insider
Warrants”
and
together with the Founders Warrants, the “Private
Warrants”)
and
(iii) in connection with the Initial Public Offering of the Units, up to
11,500,000 warrants to public investors with each such warrant representing
the
right of the holder thereof to purchase one share of Common Stock (the
“Public
Warrants”
and,
together with the Private Warrants, the “Warrants”).
The
shares of Common Stock issuable on exercise of the Warrants are referred to
as
the “Warrant
Shares”.
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance, transfer,
exchange and exercise of Warrants and other matters as provided
herein;
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereto agree as follows:
SECTION
1. Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company in
accordance with the instructions set forth hereinafter in this Warrant
Agreement, and the Warrant Agent hereby accepts such appointment.
SECTION
2. Warrant
Certificates.
The
certificates evidencing the Warrants (the “Warrant
Certificates”)
to be
delivered pursuant to this Warrant Agreement shall be in registered form only
and shall be substantially in the form set forth in Exhibit A attached hereto
and the warrant certificates for the Private Warrants shall bear the legend
set
forth in Exhibit B except as set forth herein.
SECTION
3. Execution
of Warrant Certificates.
Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or Chief Executive Officer or a Vice President and by
its
Secretary or an Assistant Secretary. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or
any
future Chairman of the Board, President, Chief Executive Officer, Vice
President, Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Warrant Certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who shall have been Chairman
of the Board, President, Chief Executive Officer, Vice President, Secretary
or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered or disposed of he or she
shall
have ceased to hold such office.
In
case
any officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer before the Warrant Certificates so signed shall
have been countersigned by the Warrant Agent, or disposed of by the Company,
such Warrant Certificates nevertheless may be countersigned and delivered or
disposed of as though such person had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company
by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any such person
was not such officer.
Warrant
Certificates shall be dated the date of countersignature by the Warrant
Agent.
SECTION
4. Registration
and Countersignature.
Warrant
Certificates shall be countersigned by the Warrant Agent and shall not be valid
for any purpose unless so countersigned. The Warrant Agent shall, upon written
instructions of the Chairman of the Board, the President or Chief Executive
Officer, a Vice President, the Treasurer or the Chief Financial Officer of
the
Company, countersign, issue and deliver Warrants as provided in this Warrant
Agreement.
The
Company and the Warrant Agent may deem and treat the registered holder(s) of
the
Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any
notice to the contrary.
SECTION
5. Registration
of Transfers and Exchanges; Transfer Restrictions.
The
Warrant Agent shall from time to time, subject to the limitations of this
Section 5, register the transfer of any outstanding Warrant Certificates upon
the records to be maintained by it for that purpose, upon surrender thereof
duly
endorsed or accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
duly executed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney. Upon
any such registration of transfer, a new Warrant Certificate shall be issued
to
the transferee(s) and the surrendered Warrant Certificate shall be cancelled
by
the Warrant Agent. Cancelled Warrant Certificates shall thereafter be disposed
of by the Warrant Agent in its customary manner.
Notwithstanding
anything herein to the contrary, the Warrant Agent shall not register for
transfer any Private Warrants until one year after the consummation of an
Initial Business Combination (as defined below in Section 6(a)) in the case
of
the Founders Warrants and until 30 days after the consummation of an Initial
Business Combination in the case of the Insider Warrants, except for transfers
(i) with respect to an Initial Holder who is an entity, to such Initial Holder’s
members upon liquidation, (ii) by gift to a member of the Initial Holder’s
immediate family or to a trust or other entity, the beneficiary of which is
an
Initial Holder or a member of an Initial Holder’s immediate family, (iii) by
virtue of the laws of descent and distribution upon the death of any Initial
Holder, (iv) pursuant to a qualified domestic relations order, (v) to an entity
that is an Initial Holder, (vi) to any person or entity controlling, controlled
by, or under common control with, an Initial Holder or (vii) with respect to
an
Initial Holder who is an individual, to an entity controlled by such Initial
Holder, on condition that prior to such registration for transfer, the Warrant
Agent shall be presented with written documentation pursuant to which each
permitted transferee (“Permitted
Transferee”)
or the
trustee or legal guardian for each Permitted Transferee agrees to be bound
by
the terms of the escrow agreement to be entered into in connection with the
Initial Public Offering by the Company and the Sponsor (the “Escrow
Agreement”)
and
the letter agreement to the representatives of the underwriters of the Initial
Public Offering and the Company, executed by the transferring Initial Holder
and
filed as an exhibit to the Registration Statement (the “Insider
Letter”).
For
purposes of this Warrant Agreement, the term “Initial
Holder”
shall
have the meaning given to it in the Escrow Agreement. The certificates
evidencing the Private Warrants shall bear the legend set forth on Exhibit
B
hereto.
2
The
holders of any Private Warrants or Warrant Shares issued upon exercise of any
Private Warrants further agree prior to any transfer of such securities, to
give
written notice to the Company expressing its desire to effect such transfer
and
describing briefly the proposed transfer. Upon receiving such notice, the
Company shall present copies thereof to its counsel and the holder agrees not
to
make any disposition of all or any portion of such securities unless and
until:
(a) there
is
then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement, in which case the legends set forth in Exhibit B or
Section 6(c) hereof, as the case may be (collectively the “Legends”)
with
respect to such securities sold pursuant to such registration statement shall
be
removed; or
(b) if
reasonably requested by the Company, (i) the holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company,
that
such disposition will not require registration of such Securities under the
Securities Act, (ii) the Company shall have received customary representations
and warranties regarding the transferee that are reasonably satisfactory to
the
Company signed by the proposed transferee and (iii) the Company shall have
received an agreement by such transferee to the restrictions contained in the
Legends.
Each
Public Warrant shall initially be issued together with one share of Common
Stock
as a Unit. The shares of Common Stock and Public Warrants comprising a Unit
shall not be separately transferable before the later of five Business Days
following the earlier to occur of: (a) the expiration of the underwriters’
over-allotment option included in the underwriting agreement with respect to
the
publicly offered Units, (b) the exercise of such option in full or (c) the
announcement by the underwriters of their intention not to exercise all or
any
remaining portion of the over-allotment option, subject to (i) the preparation
of an audited balance sheet reflecting the Company’s receipt of the gross
proceeds of the offering of the Units and the filing by the Company of such
audited balance sheet with the Securities and Exchange Commission on a Current
Report on Form 8-K or similar form and (ii) the Company issuing a press release
announcing when such separate trading will begin (the later of such dates,
the
“Detachment
Date”).
Prior
to the Detachment Date, Public Warrants may be transferred or exchanged only
together with the Unit in which such Public Warrant is included, and only for
the purpose of effecting, or in conjunction with, a transfer or exchange of
such
Unit. Furthermore, prior to the Detachment Date, each transfer of a Public
Unit
on the register relating to such Units shall operate also to transfer the Public
Warrant included in such Unit.
Subject
to the terms of this Warrant Agreement, Warrant Certificates may be exchanged
at
the option of the holder(s) thereof, when surrendered to the Warrant Agent
at
its principal corporate trust office, which is currently located at the address
listed in Section 17 hereof, for another Warrant Certificate or other Warrant
Certificates of like tenor and representing in the aggregate a like number
of
Warrants. Any holder desiring to exchange a Warrant Certificate shall deliver
a
written request to the Warrant Agent, and shall surrender, duly endorsed or
accompanied (if so required by the Warrant Agent) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, the Warrant
Certificate or Certificates to be so exchanged. Warrant Certificates surrendered
for exchange shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by such Warrant Agent in its customary
manner.
3
The
Warrant Agent is hereby authorized to countersign, in accordance with the
provisions of this Section 5 and of Section 4 hereof, the new Warrant
Certificates required pursuant to the provisions of this Section 5.
SECTION
6. Terms
of Warrants.
(a) Exercise
Price and Exercise Period.
The
initial exercise price per share that Warrant Shares shall be purchasable upon
the exercise of Warrants (the “Exercise
Price”)
shall
be $7.50 per share, and each Warrant shall be initially exercisable to purchase
one share of Common Stock.
Subject
to the terms of this Warrant Agreement (including without limitation Section
6(d) below), each Warrant holder shall have the right, which may be exercised
commencing at the opening of business on the first day of the applicable Warrant
Exercise Period set forth below and until 5:00 p.m., New York City time, on
the
last day of such Warrant Exercise Period, to receive from the Company the number
of fully paid and nonassessable Warrant Shares which the holder may at the
time
be entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares. No adjustments as to dividends
will be made upon exercise of the Warrants.
The
“Warrant
Exercise Period”
shall
commence (subject to Section 6(d) below), (A) for all Warrants other than the
Founders Warrants, on the later of: (i) the date that is 12 months from the
date
of the final prospectus for the Initial Public Offering and (ii) the date on
which the Company completes its initial business combination, as that term
is
described in the Registration Statement (the “Initial
Business Combination”)
and
(B) for the Founders Warrants, on the earlier of (i) the date that the Closing
Price (as defined in Section 11(h)) of the Company’s Common Stock exceeds $14.25
per share for any 20 trading days within a 30 trading day period beginning
after
the Initial Business Combination, and (ii) the date that is 12 months from
the
date of the consummation of the Initial Business Combination, and shall end
on
the earlier of: (i) the date that is five years from the date of the Company’s
final prospectus for the Initial Public Offering and (ii) the Business Day
(as
defined in Section 11) preceding the date on which such Warrants are redeemed
pursuant to Section 6(b) below or expire pursuant to Section 6(c) below.
Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the last day
of
the Warrant Exercise Period shall become void and all rights thereunder and
all
rights in respect thereof under this Warrant Agreement shall cease as of such
time.
(b) Redemption
of Warrants
The
Company may call the Warrants for redemption, in whole and not in part, at
a
price of $.01 per Warrant, upon not less than 30 days’ prior written notice of
redemption to each Warrant holder, at any time after such Warrants have become
exercisable pursuant to Section 6(a), if, and only if, (a) the Closing Price
(as
defined in Section 11(h)) has equalled or exceeded $14.25 per share for any
20
trading days within a 30-trading-day period ending on the third Business Day
(as
defined in Section 11) prior to the notice of redemption to Warrant holders
and
(b) at all times between the date of such notice of redemption and the
redemption date a registration statement is in effect covering the Warrant
Shares issuable upon exercise of the Warrants and a current prospectus relating
to those Warrant Shares is available. Notwithstanding the foregoing, no Private
Warrants shall be redeemable at the option of the Company so long as they are
held by the Sponsor or its Permitted Transferees, provided that the fact that
one or more Private Warrants are non redeemable because of the reason described
above shall not affect the Company’s right to redeem the Public Warrants and the
Private Warrants that are not held by the Sponsor or its Permitted Transferees.
4
(c) Exercise
Procedure.
A
Warrant
may be exercised upon surrender to the Company at the principal stock transfer
office of the Warrant Agent, which is currently located at the address listed
in
Section 17 hereof, of the certificate or certificates evidencing the Warrants
to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed and such other documentation as the Warrant Agent may
reasonably request, and upon payment to the Warrant Agent for the account of
the
Company of the Exercise Price (adjusted as herein provided if applicable) for
the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Exercise Price shall be made:
(i) in
cash
or by certified or official bank check payable to the order of the Company
in
New York Clearing House Funds, or the equivalent thereof; or
(ii) with
respect to any Private Warrants held by the Sponsor or its Permitted Transferees
and exercised after the consummation of the Initial Business Combination, by
surrendering such Private Warrants for that number of shares of Common Stock
equal to the quotient obtained by dividing (x) the product of the number of
shares of Common Stock underlying such Private Warrants, multiplied by the
difference between the Exercise Price of the Private Warrants and the “Fair
Market Value” (as defined below) by (y) the Fair Market Value; provided,
however, that the Fair Market Value is greater than the Exercise Price of the
Private Warrants. Solely for the purpose for this Section 6(c)(ii), the
“Fair
Market Value”
shall
mean the average reported last sale price for the regular trading session of
the
Common Stock on the principal securities exchange or market on which the shares
of Common Stock are then listed for the ten trading days ending on the third
trading day prior to the date on which the Private Warrants are
exercised.
In
no
event will any Warrants be settled on a net cash basis.
Subject
to the provisions of Section 7 hereof, upon such surrender of Warrants and
payment of the Exercise Price, the Company shall issue and cause to be delivered
with all reasonable dispatch to and in such name or names as the Warrant holder
may designate, a certificate or certificates for the number of full Warrant
Shares issuable upon the exercise of such Warrants together with cash as
provided in Section 12 hereof. 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 Warrant Shares as of the date
of the surrender of such Warrants and payment of the Exercise
Price.
The
Warrants shall be exercisable, at the election of the holders thereof, either
in
full or from time to time in part and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration
of
the Warrants, a new certificate evidencing the remaining Warrant or Warrants
will be issued, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrant Certificate or Certificates
pursuant to the provisions of this Section 6 and of Section 4 hereof, and the
Company, whenever required by the Warrant Agent, shall supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purpose. The Warrant Agent may assume that any Warrant presented for exercise
is
permitted to be so exercised under applicable law and shall have no liability
for acting in reliance on such assumption.
All
Warrant Certificates surrendered upon exercise of Warrants shall be cancelled
by
the Warrant Agent. Such cancelled Warrant Certificates shall then be disposed
of
by the Warrant Agent in its customary manner. The Warrant Agent shall account
promptly to the Company with respect to Warrants exercised and concurrently
pay
to the Company all monies received by the Warrant Agent for the purchase of
the
Warrant Shares through the exercise of such Warrants.
5
The
Warrant Agent shall keep copies of this Warrant Agreement and any notices given
or received hereunder available for inspection by the holders with reasonable
prior written notice during normal business hours at its office. The Company
shall supply the Warrant Agent from time to time with such numbers of copies
of
this Warrant Agreement as the Warrant Agent may request.
Certificates
evidencing Warrant Shares issued upon exercise of a Private Warrant shall
contain the following legend:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
SECURITIES
EVIDENCED BY THIS CERTIFICATE WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER
A
REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
(d) Registration
Requirement.
Notwithstanding anything else in this Section 6, no Warrants (including any
Private Warrants) may be exercised unless at the time of exercise (i) a
registration statement covering the Warrant Shares to be issued upon exercise
(other than Warrant Shares to be issued upon exercise of any Private Warrant)
is
effective under the Securities Act of 1933, as amended (the “Act”),
and
(ii) a prospectus thereunder relating to the Warrant Shares (other than Warrant
Shares to be issued upon exercise of any Private Warrant) is current. The
Company shall use its best efforts to have a registration statement in effect
covering Warrant Shares issuable upon exercise of the Warrants (other than
Warrant Shares to be issued upon exercise of any Private Warrant) from the
date
the Warrants become exercisable and to maintain a current prospectus relating
to
those Warrant Shares until the Warrants expire or are redeemed. In the event
that, at the end of the Warrant Exercise Period, a registration statement
covering the Warrant Shares to be issued upon exercise (other than Warrant
Shares to be issued upon exercise of any Private Warrant) is not effective
under
the Act, all the rights of holders hereunder shall terminate and all of the
Warrants shall expire unexercised and worthless, and as a result purchasers
of
the Units will have paid the full Unit price solely for the share of Common
Stock included in each Unit. In no event shall the Warrants be settled on a
net
cash basis nor shall the Company be required to issue unregistered shares upon
the exercise of any Warrant that is not a Private Warrant.
(e) Expiry
Upon Liquidation of Trust Account.
If the
Company is dissolved because it fails to effect an Initial Business Combination,
all of the rights of holders hereunder shall terminate and all of the Warrants
shall expire unexercised and worthless and as a result purchasers of the Units
will have paid the full Unit purchase price solely for the share of Common
Stock
included in each Unit.
(f) Forfeiture
of Founders Warrants.
In the
event that the underwriters of the Initial Public Offering fail to exercise
any
portion or all of the over-allotment option granted to them pursuant to the
underwriting agreement within 30 days of the date of the final prospectus for
the Initial Public Offering, up to 375,000 of the Founders Warrants will be
immediately forfeited to the Company by their holders in connection with the
forfeiture of up to 375,000 of the Founders Units pursuant to that certain
Securities Subscription Agreement, dated as of March 11, 2008, between the
Company and the Sponsor, such that the holders of the Founders Units (including
the underlying shares of Common Stock and Founders Warrants) shall, in the
aggregate, beneficially own no greater than 20% of the Units of the Company
issued and outstanding pursuant to such Securities Subscription Agreement and
the Initial Public Offering.
6
SECTION
7. Payment
of Taxes.
The
Company will pay all documentary stamp taxes attributable to the initial
issuance of Warrant Shares upon the exercise of Warrants; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that
of
the registered holder of a Warrant Certificate surrendered upon the exercise
of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant 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.
SECTION
8. Mutilated
or Missing Warrant Certificates.
In case
any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
the Company shall issue and the Warrant Agent shall countersign, in exchange
and
substitution for and upon cancellation of the mutilated Warrant Certificate,
or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory
to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity, also satisfactory to the Company and the
Warrant Agent. Applicants for such new Warrant Certificates must pay such
reasonable charges as the Company may prescribe.
SECTION
9. Reservation
of Warrant Shares.
The
Company will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Common Stock or
its
authorized and issued Common Stock held in its treasury, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise
of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants. The Warrant Agent
shall have no duty to verify availability of such shares set aside by the
Company.
The
Company or, if appointed, the transfer agent for the Common Stock (the
“Transfer
Agent”)
and
every subsequent transfer agent for any shares of the Company’s Common Stock
issuable upon the exercise of any of the Warrants will be irrevocably authorized
and directed at all times to reserve such number of authorized shares as shall
be required for such purpose. The Company will keep a copy of this Warrant
Agreement on file with the Transfer Agent and with every subsequent transfer
agent for any shares of the Company’s Common Stock issuable upon the exercise of
the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition
from time to time from such Transfer Agent the stock certificates required
to
honor outstanding Warrants upon exercise thereof in accordance with the terms
of
this Warrant Agreement. The Company will supply such Transfer Agent with duly
executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 12 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments
and certificates related thereto, transmitted to each holder pursuant to Section
13 hereof.
Before
taking any action which would cause an adjustment pursuant to Section 11 hereof
to reduce the Exercise Price below the then par value (if any) of the Warrant
Shares, the Company will take any commercially reasonable corporate action
which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
The
Company covenants that all Warrant Shares which may be issued upon exercise
of
Warrants will, upon payment of the Exercise Price therefor and issue, be fully
paid, nonassessable, free of preemptive rights and free from all taxes, liens,
charges and security interests with respect to the issue thereof.
7
SECTION
10. Obtaining
Stock Exchange Listings; State Registration.
The
Company will from time to time take all commercially reasonable actions which
may be necessary so that the Warrant Shares, immediately upon their issuance
upon the exercise of Warrants, will be listed on the principal securities
exchanges and markets within the United States of America, if any, on which
other shares of Common Stock are then listed. To the extent that the Common
Stock is not listed on a national securities exchange or there is no exemption
from state “blue sky” securities laws for the issuance of the Warrant Shares,
the Company will take all commercially reasonable actions which may be necessary
so that the Warrant Shares are registered in all states in which the holders
of
the Warrants reside.
SECTION
11. Adjustment
of Number of Warrant Shares.
The
number of Warrant Shares issuable upon the exercise of each Warrant is subject
to adjustment from time to time upon the occurrence of the events enumerated
in
this Section 11. For purposes of this Section 11, “Common
Stock”
means
shares now or hereafter authorized of any class of common stock of the Company
and any other stock of the Company, however designated, that has the right
(subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount.
(a) Adjustment
for Change in Capital Stock.
If
the
Company:
(i) pays
a
dividend or makes a distribution on its Common Stock in either case in shares
of
its Common Stock;
(ii) subdivides
its outstanding shares of Common Stock into a greater number of
shares;
(iii) combines
its outstanding shares of Common Stock into a smaller number of
shares;
(iv) makes
a
distribution on its Common Stock in shares of its capital stock other than
Common Stock; or
(v) issues
by
reclassification of its Common Stock any shares of its capital stock, then
the
number of shares of Common Stock issuable upon exercise of each Warrant
immediately prior to such action shall be proportionately adjusted so that
the
holder of any Warrant thereafter exercised shall receive the aggregate number
and kind of shares of capital stock of the Company which he would have owned
immediately following such action if such Warrant had been exercised immediately
prior to such action. The adjustment shall become effective immediately after
the record date in the case of a dividend or distribution and immediately after
the effective date in the case of a subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment
for Rights Issue.
If
the
Company distributes any rights, options or warrants to all holders of its Common
Stock entitling them to purchase shares of Common Stock at a price per share
less than the Closing Price per share on the Business Day immediately preceding
the ex-dividend date for such distribution of rights, options or warrants,
the
number of shares of Common Stock issuable upon exercise of each Warrant shall
be
adjusted in accordance with the formula:
8
|
N’ = N x
|
O+A
|
|
O+(A
x P/M)
|
|
where:
|
|
|
N’
=
|
the
adjusted number of shares of Common Stock issuable upon exercise
of each
Warrant.
|
|
N
=
|
the
current number of shares of Common Stock issuable upon exercise of
each
Warrant.
|
|
O
=
|
the
number of shares of Common Stock outstanding on the record date for
such
distribution.
|
|
A
=
|
the
number of additional shares of Common Stock issuable pursuant to
such
rights or warrants.
|
|
P
=
|
the
purchase price per share of the additional shares.
|
|
M
=
|
the
Closing Price per share of Common Stock on the record
date.
|
The
adjustment shall be made successively whenever any such rights, options or
warrants are issued and shall become effective immediately after the record
date
for the determination of stockholders entitled to receive the rights, options
or
warrants. If at the end of the period during which such rights, options or
warrants are exercisable, not all rights, options or warrants shall have been
exercised, the number of shares of Common Stock issuable upon exercise of each
Warrant shall be immediately readjusted to what it would have been if “N” in the
above formula had been the number of shares actually issued.
(c) Adjustment
for Other Distributions.
If
the
Company distributes to all holders of its Common Stock any of its assets
(including cash) or debt securities or any rights, options or warrants to
purchase debt securities, assets or other securities of the Company (other
than
Common Stock), the number of shares of Common Stock issuable upon exercise
of
each Warrant shall be adjusted in accordance with the formula:
|
N’ = N x
|
M
|
|
M
-
F
|
|
where:
|
|
|
N’
=
|
the
adjusted number of shares of Common Stock issuable upon exercise
of each
Warrant.
|
|
N
=
|
the
current number of shares of Common Stock issuable upon exercise of
each
Warrant.
|
|
M
=
|
the
Closing Price per share of Common Stock on the Business Day immediately
preceding the ex-dividend date for such
distribution.
|
9
|
F
=
|
the
fair market value on the ex-dividend date for such distribution of
the
assets, securities, rights or warrants distributable to one share
of
Common Stock after taking into account, in the case of any rights,
options
or warrants, the consideration required to be paid upon exercise
thereof.
The Board of Directors of the Company shall reasonably determine
the fair
market value in good faith.
|
The
adjustment shall be made successively whenever any such distribution is made
and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such distribution.
This
subsection (c) does not apply to regular quarterly cash dividends including
increases thereof or rights, options or warrants referred to in subsection
(b)
of this Section 11. If any adjustment is made pursuant to this subsection (c)
as
a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable, not
all such rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted as if “F” in the above formula was the fair
market value on the ex-dividend date for such distribution of the indebtedness
or assets actually distributed upon exercise of such rights, options or warrants
divided by the number of shares of Common Stock outstanding on the ex-dividend
date for such distribution. Notwithstanding anything to the contrary contained
in this subsection (c), if “M−F” in the above formula is less than $1.00, the
Company may elect to, and if “M−F” or is a negative number, the Company shall,
in lieu of the adjustment otherwise required by this subsection (c), distribute
to the holders of the Warrants, upon exercise thereof, the evidences of
indebtedness, assets, rights, options or warrants (or the proceeds thereof)
which would have been distributed to such holders had such Warrants been
exercised immediately prior to the record date for such
distribution.
(d) Adjustment
for Common Stock Issue.
If
the
Company issues shares of Common Stock for a consideration per share less than
the Closing Price per share on the date the Company fixes the offering price
of
such additional shares, the number of shares of Common Stock issuable upon
exercise of each Warrant shall be adjusted in accordance with the
formula:
|
N’ = N x
|
A
|
|
O
+
P/M
|
|
where:
|
|
|
N’
=
|
the
adjusted number of shares of Common Stock issuable upon exercise
of each
Warrant.
|
|
N
=
|
the
current number of shares of Common Stock issuable upon exercise of
each
Warrant.
|
|
O
=
|
the
number of shares outstanding immediately prior to the issuance of
such
additional shares.
|
|
P
=
|
the
aggregate consideration received for the issuance of such additional
shares.
|
10
|
M
=
|
the
Closing Price per share on the date of issuance of such additional
shares.
|
|
A
=
|
the
number of shares outstanding immediately after the issuance of such
additional shares.
|
The
adjustment shall be made successively whenever any such issuance is made, and
shall become effective immediately after such issuance.
This
subsection (d) does not apply to:
(i) any
of
the transactions described in subsections (b) and (c) of this Section
11,
(ii) the
exercise of Warrants, or the conversion or exchange of other securities
convertible or exchangeable for Common Stock, or the issuance of Common Stock
upon the exercise of rights or warrants issued to the holders of Common
Stock,
(iii) Common
Stock (and options exercisable therefor) issued to the Company’s employees,
officers, directors, consultants or advisors (whether or not still in such
capacity on the date of exercise) under bona fide employee benefit plans or
stock option plans adopted by the Board of Directors of the Company and approved
by the holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this subsection (d),
(iv) Common
Stock issued in a bona fide public offering for cash,
(v) Common
Stock issued in a bona fide private placement to non-affiliates of the Company,
including without limitation the issuance of equity as consideration or partial
consideration for acquisitions from persons that are not affiliates of the
Company.
(e) Adjustment
for Convertible Securities Issue.
If
the
Company issues any securities convertible into or exchangeable for Common Stock
(other than securities issued in transactions described in subsections (b)
and
(c) of this Section 11) for a consideration per share of Common Stock initially
deliverable upon conversion or exchange of such securities less than the Closing
Price per share on the date of issuance of such securities, the number of shares
of Common Stock issuable upon exercise of each Warrant shall be adjusted in
accordance with this formula:
|
N’ = N x
|
O+D
|
|
O+P
x P/M
|
|
where:
|
|
|
N’
=
|
the
adjusted number of shares of Common Stock issuable upon exercise
of each
Warrant.
|
|
N
=
|
the
current number of shares of Common Stock issuable upon exercise of
each
Warrant.
|
|
O
=
|
the
number of shares outstanding immediately prior to the issuance of
such
securities.
|
11
|
P
=
|
the
aggregate consideration received for the issuance of such
securities.
|
|
M
=
|
the
Closing Price per share on the date of issuance of such
securities.
|
|
D
=
|
the
maximum number of shares deliverable upon conversion or in exchange
for
such securities at the initial conversion or exchange
rate.
|
The
adjustment shall be made successively whenever any such issuance is made, and
shall become effective immediately after such issuance.
If
all of
the Common Stock deliverable upon conversion or exchange of such securities
have
not been issued when such securities are no longer outstanding, then the number
of shares of Common Stock issuable upon exercise of each Warrant shall promptly
be readjusted to what it would have been had the adjustment upon the issuance
of
such securities been made on the basis of the actual number of shares of Common
Stock issued upon conversion or exchange of such securities.
This
subsection (e) does not apply to:
(i) convertible
securities issued in a bona fide public offering for cash; or
(ii) convertible
securities issued in a bona fide private placement to non-affiliates of the
Company, including the issuance of convertible securities as consideration
or
partial consideration for acquisitions from persons that are not affiliates
of
the Company.
(f) Adjustment
for Tender or Exchange Offer.
If
the
Company or any of its subsidiaries makes a payment in respect of a tender offer
or exchange offer for the Common Stock, if the cash and value of any other
consideration included in the payment per share of the Common Stock exceeds
the
Closing Price of the Common Stock on the trading day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender or
exchange offer, the number of shares of Common Stock issuable upon exercise
of
each Warrant will be increased based on the following formula:
|
AC
+
|
|
|
N’ = No x
|
(SP’
x OS’)
|
|
OSo
x SP’
|
|
where,
|
|
|
N’
=
|
the
adjusted number of shares of Common Stock issuable upon exercise
of each
Warrant;
|
|
No
=
|
the
current number of shares of Common Stock issuable upon exercise of
each
warrant;
|
|
AC
=
|
the
aggregate value of all cash and any other consideration (as determined
by
the Board of Directors of the Company) paid or payable
for
|
shares
purchased in such tender or exchange offer;
|
OSo
=
|
the
number of shares of Common Stock outstanding immediately prior to
the date
such tender or exchange offer
expires;
|
12
|
OS’
=
|
the
number of shares of Common Stock outstanding immediately after the
date
such tender or exchange offer expires; and
|
|
SP’
=
|
the
Closing Price of the Common Stock on the trading day next succeeding
the
date such tender or exchange offer
expires.
|
The
adjustment shall be made successively and shall become effective immediately
following the date such tender or exchange offer expires.
(g) Consideration
Received.
For
purposes of any computation respecting consideration received pursuant to
subsections (d), (e) and (f) of this Section 11, the following shall
apply:
(i) in
the
case of the issuance of shares of Common Stock for cash, the consideration
shall
be the amount of such cash, provided that in no case shall any deduction be
made
for any commissions, discounts or other expenses incurred by the Company for
any
underwriting or other sale or disposition of the issue or otherwise in
connection therewith;
(ii) in
the
case of the issuance of shares of Common Stock for a consideration in whole
or
in part other than cash, the consideration other than cash shall be deemed
to be
the fair market value thereof as reasonably determined by the Board of Directors
of the Company (irrespective of the accounting treatment thereof) and described
in a Board resolution which shall be filed with the Warrant Agent;
and
(iii) in
the
case of the issuance of securities convertible into or exchangeable for shares,
the aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such securities plus
the additional minimum consideration, if any, to be received by the Company
upon
the conversion or exchange thereof for the maximum number of shares used to
calculate the adjustment (the consideration in each case to be determined in
the
same manner as provided in clauses (i) and (ii) of this
subsection).
(h) Defined
Terms; When De Minimis Adjustment May Be Deferred.
As
used
in this section 11:
(i) “Closing
Price”
of
the
Common Stock on any date of determination means: the closing sale price for
the
regular trading session (without considering after hours or other trading
outside regular trading session hours) of the Common Stock (regular way) on
the
American Stock Exchange on that date (or, if no closing price is reported,
the
last reported sale price during that regular trading session), (i) if the Common
Stock is not listed for trading on the American Stock Exchange on that date,
as
reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, (ii) if the Common
Stock is not so reported, the last quoted bid price for the Common Stock in
the
over-the-counter market as reported by the OTC Bulletin Board, the National
Quotation Bureau or similar organization, or (iii) if the Common Stock is not
so
quoted, the average of the mid‑point
of
the last bid and ask prices for the Common Stock from at least three nationally
recognized investment‑banking
firms that the Company selects for this purpose.
13
(ii) “ex-dividend
date”
means
the first date on which the shares of Common Stock trade on the applicable
exchange or in the applicable market, regular way, without the right to receive
the issuance or distribution in question;
(iii) “trading
day”
means,
with respect to the Common Stock or any other security, a day during which
(A)
trading in the Common Stock or such other security generally occurs, (B) there
is no market disruption event (as defined below) and (C) a Closing Price for
the
Common Stock or such other security (other than a Closing Price referred to
in
the next to last clause of such definition) is available for such day; provided
that if the Common Stock or such other security is not admitted for trading
or
quotation on or by any exchange, bureau or other organization, “trading day”
will mean any Business Day;
(iv) “market
disruption event”
means,
with respect to the Common Stock or any other security, the occurrence or
existence of more than one-half hour period in the aggregate or any scheduled
trading day for the Common Stock or such other security of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or such other
security or in any options, contract, or future contracts relating to the Common
Stock or such other security, and such suspension or limitation occurs or exists
at any time before 1:00 p.m. (New York time) on such day; and
(v) “Business
Day”
means,
any day on which the American Stock Exchange is open for trading and which
is
not a Saturday, a Sunday or any other day on which banks in the City of New
York, New York, are authorized or required by law to close.
No
adjustment in the number of shares of Common Stock issuable upon exercise of
each Warrant need be made unless the adjustment would require an increase or
decrease of at least 1% in such number. Any adjustments that are not made shall
be carried forward and taken into account in any subsequent
adjustment.
All
calculations under this Section 11 shall be made to the nearest cent or to
the
nearest 1/100th of a share, as the case may be.
(i) When
No Adjustment Required.
No
adjustment need be made for a transaction referred to in subsections (b), (c),
(d), (e) or (f) of this Section 11 if Warrant holders are to participate,
without requiring the Warrants to be exercised, in the transaction on a basis
and with notice that the Board of Directors of the Company reasonably determines
to be fair and appropriate in light of the basis and notice on which holders
of
Common Stock participate in the transaction.
No
adjustment need be made for a change in the par value or no par value of the
Common Stock.
To
the
extent the Warrants become convertible into cash, no adjustment need be made
thereafter as to the amount of cash into which such Warrants are exercisable.
Interest will not accrue on the cash.
(j) Notice
of Adjustment.
Whenever
the number of shares of Common Stock issuable upon exercise of each Warrant
is
adjusted, the Company shall provide the notices required by Section 13
hereof.
14
(k) Notice
of Certain Transactions.
If:
(i) the
Company takes any action that would require an adjustment in the Exercise Price
pursuant to subsections (a), (b), (c), (d), (e) or (f) of this Section 11 and
if
the Company does not arrange for Warrant holders to participate pursuant to
subsection (i) of this Section 11;
(ii) the
Company takes any action that would require a supplemental Warrant Agreement
pursuant to subsection (l) of this Section 11; or
(iii) there
is
a liquidation or dissolution of the Company, the Company shall mail to Warrant
holders a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the
transaction.
(l) Reorganization
of Company.
If
the
Company consolidates or merges with or into, or transfers or leases all or
substantially all its assets to, any person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind
and
amount of securities, cash or other assets which the holder of a Warrant would
have owned immediately after the consolidation, merger, transfer or lease if
such holder had exercised the Warrant immediately before the effective date
of
the transaction; provided that (a) if the holders of Common Stock were entitled
to exercise a right of election as to the kind or amount of securities, cash
or
other assets receivable upon such consolidation or merger, then the kind and
amount of securities, cash or other assets for which each Warrant shall become
exercisable shall be deemed to be the weighted average of the kind and amount
received per share by the holders of Common Stock in such consolidation or
merger that affirmatively make such election or (b) if a tender or exchange
offer shall have been made to and accepted by the holders of Common Stock under
circumstances in which, upon completion of such tender or exchange offer, the
maker thereof, together with members of any group (within the meaning of Rule
13d-5(b)(1) under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”))
of
which such maker is a part, and together with any affiliate or associate of
such
maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members
of any such group of which any such affiliate or associate is a part, own
beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more
than
50% of the outstanding shares of Common Stock, the holder of a Warrant shall
be
entitled to receive the highest amount of cash, securities or other property
to
which such holder would actually have been entitled as a stockholder if such
Warrant holder had exercised the Warrant prior to the expiration of such tender
or exchange offer, accepted such offer and all of the Common Stock held by
such
holder had been purchased pursuant to such tender or exchange offer, subject
to
adjustments (from and after the consummation of such tender or exchange offer)
as nearly equivalent as possible to the adjustments provided for in this Section
11. Concurrently with the consummation of any such transaction, the corporation
or other entity formed by or surviving any such consolidation or merger if
other
than the Company, or the person to which such sale or conveyance shall have
been
made, shall enter into a supplemental Warrant Agreement so providing and further
providing for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Section. The successor Company
shall mail to Warrant holders a notice describing the supplemental Warrant
Agreement.
15
If
the
issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
If
this
subsection (l) applies, subsections (a), (b), (c), (d), (e) and (f) of this
Section 11 do not apply.
(m) Warrant
Agent’s Disclaimer.
The
Warrant Agent has no duty to determine when an adjustment under this Section
11
should be made, how it should be made or what it should be. The Warrant Agent
has no duty to determine whether any provisions of a supplemental Warrant
Agreement under subsection (l) of this Section 11 are correct. The Warrant
Agent
makes no representation as to the validity or value of any securities or assets
issued upon exercise of Warrants. The Warrant Agent shall not be responsible
for
the Company’s failure to comply with this Section.
(n) When
Issuance or Payment May Be Deferred.
In
any
case in which this Section 11 shall require that an adjustment in the number
of
shares of Common Stock issuable upon exercise of each Warrant be made effective
as of a record date for a specified event, the Company may elect to defer until
the occurrence of such event (i) issuing to the holder of any Warrant exercised
after such record date the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise over and above the Warrant Shares
and other capital stock of the Company, if any, issuable upon such exercise
on
the basis of the number of shares of Common Stock issuable upon exercise of
each
Warrant and (ii) paying to such holder any amount in cash in lieu of a
fractional share pursuant to Section 12 hereof; provided, however, that the
Company shall deliver to such holder a due ▇▇▇▇ or other appropriate instrument
evidencing such holder’s right to receive such additional Warrant Shares, other
capital stock and cash upon the occurrence of the event requiring such
adjustment.
(o) Adjustment
in Exercise Price.
Upon
each
event that provides for an adjustment of the number of shares of Common Stock
issuable upon exercise of each Warrant pursuant to this Section 11, each Warrant
outstanding prior to the making of the adjustment shall thereafter have an
adjusted Exercise Price (calculated to the nearest ten millionth) obtained
from
the following formula:
|
E’ = E x
|
N
|
|
N’
|
|
where:
|
|
|
E’
=
|
the
adjusted Exercise Price.
|
|
E
=
|
the
Exercise Price prior to adjustment.
|
|
N’
=
|
the
adjusted number of Warrant Shares issuable upon exercise of a Warrant
by
payment of the adjusted Exercise Price.
|
|
N
=
|
the
number of Warrant Shares previously issuable upon exercise of a Warrant
by
payment of the Exercise Price prior to adjustment.
|
16
Following
any adjustment to the Exercise Price pursuant to this Section 11, the
amount payable, when adjusted and together with any consideration allocated
to
the issuance of the Warrants, shall never be less than the par value per Warrant
Share at the time of such adjustment. Such adjustment shall be made successively
whenever any event listed above shall occur.
(p) Form
of Warrants.
Irrespective
of any adjustments in the number or kind of shares issuable upon the exercise
of
the Warrants or the Exercise Price, Warrants theretofore or thereafter issued
may continue to express the same number and kind of shares and Exercise Price
as
are stated in the Warrants initially issuable pursuant to this Warrant
Agreement.
(q) Other
Dilutive Events.
In
case
any event shall occur affecting the Company, as to which the provisions of
this
Section 11 are not strictly applicable, but would impact the holders of Warrants
adversely as compared to holders of Common Stock, and the failure to make any
adjustment would not fairly protect the purchase rights represented by the
Warrants in accordance with the essential intent and principles of this Section
then, in each such case, the Company shall appoint a firm of independent public
accountants, investment banking or other appraisal firm of recognized national
standing which shall give their opinion upon the adjustment, if any, on a basis
consistent with the essential intent and principles established in this
Section 11, necessary to preserve, without dilution, the purchase rights
represented by the Warrants.
The
provisions of this Section 11 shall not apply until issuance of the Public
Warrants.
SECTION
12. Fractional
Interests.
The
Company shall not be required to issue fractional Warrant Shares on the exercise
of Warrants. If more than one Warrant shall be presented for exercise in full
at
the same time by the same holder, the number of full Warrant Shares which shall
be issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants
so
presented. If any fraction of a Warrant Share would, except for the provisions
of this Section 12, be issuable on the exercise of any Warrants (or specified
portion thereof), the Company shall pay an amount in cash equal to the fair
market value on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction.
SECTION
13. Notices
to Warrant Holders.
Upon
any adjustment of the Exercise Price pursuant to Section 11, the Company shall
promptly thereafter, and in any event within five days, (a) cause to be filed
with the Warrant Agent a certificate executed by the Chief Financial Officer
or
principal financial officer of the Company setting forth the number of Warrant
Shares issuable upon exercise of each Warrant after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based, and (b) cause to be given to each of the registered
holders of the Warrant Certificates at his address appearing on the Warrant
register written notice of such adjustments by first-class mail, postage
prepaid. Where appropriate, such notice may be given in advance and included
as
a part of the notice required to be mailed under the other provisions of this
Section 13. The Warrant Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
17
In
case:
(a) the
Company shall authorize the issuance to all holders of shares of Common Stock
of
rights, options or warrants to subscribe for or purchase shares of Common Stock
or of any other subscription rights or warrants; or
(b) the
Company shall authorize the distribution to all holders of shares of Common
Stock of evidences of its indebtedness or assets (other than regular cash
dividends or dividends payable in shares of Common Stock or distributions
referred to in subsection (b) of Section 11 hereof); or
(c) of
any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the conveyance or transfer
of the properties and assets of the Company substantially as an entirety, or
of
any reclassification or change of Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common Stock;
or
(d) of
the
voluntary or involuntary dissolution, liquidation or winding up of the Company;
or
(e) the
Company proposes to take any action not specified above which would require
an
adjustment of the Exercise Price pursuant to Section 11 hereof; then the Company
shall cause to be filed with the Warrant Agent and shall cause to be given
to
each of the registered holders of the Warrant Certificates at his address
appearing on the Warrant register, at least 10 calendar days prior to the
applicable record date hereinafter specified, or as promptly as practicable
under the circumstances in the case of events for which there is no record
date,
by first-class mail, postage prepaid, a written notice stating (i) the date
as
of which the holders of record of shares of Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which
it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 13 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
Nothing
contained in this Warrant Agreement or in any of the Warrant Certificates shall
be construed as conferring upon the holders thereof the right to vote or to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or the election of Directors of the Company or any other matter,
or
any rights whatsoever as stockholders of the Company.
SECTION
14. Merger,
Consolidation or Change of Name of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated, or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party, or any corporation succeeding to
all
or substantially all the corporate trust or agency business of the Warrant
Agent, shall be the successor to the Warrant Agent hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor warrant agent under the provisions of Section 16. In case at
the
time such successor to the Warrant Agent shall succeed to the agency created
by
this Warrant Agreement, and in case at that time any of the Warrant Certificates
shall have been countersigned but not delivered, any such successor to the
Warrant Agent may adopt the countersignature of the original Warrant Agent;
and
in case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the
name
of the successor to the Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force and effect provided in the Warrant
Certificates and in this Warrant Agreement.
18
In
case
at any time the name of the Warrant Agent shall be changed and at such time
any
of the Warrant Certificates shall have been countersigned but not delivered,
the
Warrant Agent whose name has been changed may adopt the countersignature under
its prior name, and in case at that time any of the Warrant Certificates shall
not have been countersigned, the Warrant Agent may countersign such Warrant
Certificates either in its prior name or in its changed name, and in all such
cases such Warrant Certificates shall have the full force and effect provided
in
the Warrant Certificates and in this Warrant Agreement.
SECTION
15. Warrant
Agent.
The
Warrant Agent undertakes the duties and obligations imposed by this Warrant
Agreement (and no implied duties or obligations shall be read into this Warrant
Agreement against the Warrant Agent) upon the following terms and conditions,
by
all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The
statements contained herein and in the Warrant Certificates shall be taken
as
statements of the Company and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the Warrant Agent
or
action taken or to be taken by it. The Warrant Agent assumes no responsibility
with respect to the distribution of the Warrant Certificates except as herein
otherwise provided.
(b) The
Warrant Agent shall not be responsible for any failure of the Company to comply
with any of the covenants contained in this Warrant Agreement or in the Warrant
Certificates to be complied with by the Company.
(c) The
Warrant Agent may consult at any time with counsel of its own selection (who
may
be counsel for the Company) and the Warrant Agent shall incur no liability
or
responsibility to the Company or to any holder of any Warrant Certificate in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel. The Warrant
Agent may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or through agents or attorneys and the Warrant Agent
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(d) The
Warrant Agent may conclusively rely, as to the truth of the statements and
the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Warrant Agent and conforming to the requirements of this
Warrant Agreement. The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant Certificate for any action taken
in reliance on any Warrant Certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument (whether in its original or facsimile form) believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
(e) The
Company agrees to pay to the Warrant Agent such compensation for all services
rendered by the Warrant Agent in the administration and execution of this
Warrant Agreement as the Company and the Warrant Agent shall agree in writing
to
reimburse the Warrant Agent for all expenses, taxes and governmental charges
and
other charges of any kind and nature incurred by the Warrant Agent in the
execution of this Warrant Agreement (including fees and expenses of its counsel)
and to indemnify the Warrant Agent (and any predecessor Warrant Agent) and
save
it harmless against any and all claims (whether asserted by the Company, a
holder or any other person), damages, losses, expenses (including taxes other
than taxes based on the income of the Warrant Agent), liabilities, including
judgments, costs and counsel fees and expenses, for anything done or omitted
by
the Warrant Agent in the execution of this Warrant Agreement except as a result
of its negligence or willful misconduct. The provisions of this Section 15(e)
shall survive the expiration of the Warrants and the termination of this Warrant
Agreement.
19
(f) The
Warrant Agent shall be under no obligation to institute any action, suit or
legal proceeding or to take any other action likely to involve expense unless
the Company or one or more registered holders of Warrant Certificates shall
furnish the Warrant Agent with security and indemnity satisfactory to it for
any
costs and expenses which may be incurred, but this provision shall not affect
the power of the Warrant Agent to take such action as it may consider proper,
whether with or without any such security or indemnity. All rights of action
under this Warrant Agreement or under any of the Warrants may be enforced by
the
Warrant Agent without the possession of any of the Warrant Certificates or
the
production thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent and any recovery of judgment shall be for the
ratable benefit of the registered holders of the Warrants, as their respective
rights or interests may appear.
(g) The
Warrant Agent, and any stockholder, director, officer or employee of it, may
buy, sell or deal in any of the Warrants or other securities of the Company
or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act
as
fully and freely as though it were not Warrant Agent under this Warrant
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(h) The
Warrant Agent shall act hereunder solely as agent for the Company, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent
shall not be liable for anything that it may do or refrain from doing in
connection with this Warrant Agreement except for its own negligence or willful
misconduct. The Warrant Agent shall not be liable for any error of judgment
made
in good faith by it, unless it shall be proved that the Warrant Agent was
negligent in ascertaining the pertinent facts. Notwithstanding anything in
this
Warrant Agreement to the contrary, in no event shall the Warrant Agent be liable
for special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Warrant
Agent has been advised of the likelihood of the loss or damage and regardless
of
the form of the action.
(i) The
Warrant Agent shall not at any time be under any duty or responsibility to
any
holder of any Warrant Certificate to make or cause to be made any adjustment
of
the Exercise Price or number of the Warrant Shares or other securities or
property deliverable as provided in this Warrant Agreement, or to determine
whether any facts exist which may require any of such adjustments, or with
respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall
not
be accountable with respect to the validity or value or the kind or amount
of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
(j) Notwithstanding
anything in this Warrant Agreement to the contrary, neither the Company nor
the
Warrant Agent shall have any liability to any holder of a Warrant Certificate
or
other Person as a result of its inability to perform any of its obligations
under this Warrant Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that (i) the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible and (ii) nothing in this Section 15(j)
shall affect the Company’s obligation under Section 6(d) to use its best efforts
to have a registration statement in effect covering the Warrant Shares issuable
upon exercise of the Warrants and to maintain a current prospectus relating
to
those Warrant Shares.
20
(k) Any
application by the Warrant Agent for written instructions from the Company
may,
at the option of the Warrant Agent, set forth in writing any action proposed
to
be taken or omitted by the Warrant Agent under this Warrant Agreement and the
date on and/or after which such action shall be taken or such omission shall
be
effective. The Warrant Agent shall not be liable for any action taken by, or
omission of, the Warrant Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date
shall
not be less than three Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or
the
effective date in the case of an omission), the Warrant Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(l) No
provision of this Warrant Agreement shall require the Warrant Agent to expend
or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights.
(m) In
addition to the foregoing, the Warrant Agent shall be protected and shall incur
no liability for, or in respect of, any action taken or omitted by it in
connection with its administration of this Warrant Agreement if such acts or
omissions are not the result of the Warrant Agent’s reckless disregard of its
duty, gross negligence or willful misconduct and are in reliance upon (i) the
proper execution of the certification concerning beneficial ownership appended
to the form of assignment and the form of the election attached hereto unless
the Warrant Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(n) The
Warrant Agent hereby waives any and all right, title, interest or claim of
any
kind (“Claim”)
in or
to any distribution of the Trust Account (as defined in that certain Investment
Management Trust Agreement to be entered into in connection with the Initial
Public Offering by and between the Company and the Warrant Agent as trustee
thereunder), and hereby agrees not to seek recourse, reimbursement, payment
or
satisfaction for any Claim against the Trust Account for any reason
whatsoever.
SECTION
16. Change
of Warrant Agent.
The
Warrant Agent may at any time resign as Warrant Agent upon 60 days’ written
notice to the Company. If the Warrant Agent shall become incapable of acting
as
Warrant Agent, the Company shall appoint a successor to such Warrant Agent.
If
the Company shall fail to make such appointment within a period of 30 days
after
it has been notified in writing of such resignation or of such incapacity by
the
Warrant Agent or by the registered holder of a Warrant Certificate, then the
registered holder of any Warrant Certificate or the Warrant Agent may apply,
at
the expense of the Company, to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to such Warrant Agent, either by the Company or by such a court,
the
duties of the Warrant Agent shall be carried out by the Company. The holders
of
a majority of the unexercised Warrants shall be entitled at any time to remove
the Warrant Agent and appoint a successor to such Warrant Agent. If a Successor
Warrant Agent shall not have been appointed within 30 days of such removal,
the
Warrant Agent may apply, at the expense of the Company, to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Such successor to the Warrant Agent need not be approved by the Company or
the
former Warrant Agent. Any successor Warrant Agent, whether appointed by the
Company or by such court, shall be a corporation organized and existing under
the laws of the State of New York, in good standing and having its principal
office in the Borough of Manhattan, City and State of New York, and authorized
under such laws to exercise corporate trust powers and subject to supervision
or
examination by federal or state authority. After appointment the successor
to
the Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent upon payment of all fees
and
expenses due it and its agents and counsel shall deliver and transfer to the
successor to the Warrant Agent any property at the time held by it hereunder
and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose. Failure to give any notice provided for in this Section 16,
however, or any defect therein, shall not affect the legality or validity of
the
appointment of a successor to the Warrant Agent.
21
SECTION
17. Notices
to Company and Warrant Agent.
Any
notice or demand authorized by this Warrant Agreement to be given or made by
the
Warrant Agent or by the registered holder of any Warrant Certificate to or
on
the Company shall be sufficiently given or made when and if deposited in the
mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent), as
follows:
▇▇▇▇▇▇▇’▇
Cove Acquisition Corporation
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax
No.:
[●]
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer and President
In
case
the Company shall fail to maintain such office or agency or shall fail to give
such notice of the location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the principal
corporate trust office of the Warrant Agent.
Any
notice pursuant to this Warrant Agreement to be given by the Company or by
the
registered holder(s) of any Warrant Certificate to the Warrant Agent shall
be
sufficiently given when and if deposited in the mail, first-class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company) to the Warrant Agent as follows:
Continental
Stock Transfer & Trust Company
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
[●]
SECTION
18. Supplements
and Amendments.
The
Company and the Warrant Agent may from time to time supplement or amend this
Warrant Agreement without the approval of any holders of Warrant Certificates
in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions in regard to matters or questions arising
hereunder which the Company and the Warrant Agent may deem necessary or
desirable and which shall not in any way adversely affect the interests of
the
holders of Warrant Certificates theretofore issued. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
18, the Warrant Agent shall execute such supplement or amendment.
Notwithstanding anything in this Warrant Agreement to the contrary, the prior
written consent of the Warrant Agent must be obtained in connection with any
supplement or amendment that alters the rights or duties of the Warrant Agent.
The Company and the Warrant Agent may amend any provision herein with the
consent of the holders of Warrants exercisable for a majority of the Warrant
Shares issuable on exercise of all outstanding Warrants that would be affected
by such amendment; provided that any amendment affecting the Public Warrants
must be approved by the holders of a majority of the Public Warrants. Without
limiting the generality of the foregoing, prior to the issuance of any Public
Warrants, this Warrant Agreement (including Exhibit A hereto) may be amended
by
the Company and the Warrant Agent, without the consent of any holder of Private
Warrants, to modify in any way or provide for the terms of the Public
Warrants.
22
SECTION
19. Successors.
All the
covenants and provisions of this Warrant Agreement by or for the benefit of
the
Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION
20. Termination.
This
Agreement will terminate on any earlier date if all Warrants have been exercised
or expired without exercise. The provisions of Section 15 hereof shall survive
such termination.
SECTION
21. Governing
Law.
This
Agreement and each Warrant Certificate issued hereunder shall be deemed to
be a
contract made under the laws of the State of New York and for all purposes
shall
be construed in accordance with the internal laws of said State. The parties
agree that, all actions and proceedings arising out of this Warrant Agreement
or
any of the transactions contemplated hereby, shall be brought in the United
States District Court for the Southern District of New York or in a New York
State Court in the County of New York and that, in connection with any such
action or proceeding, submit to the jurisdiction of, and venue in, such court.
Each of the parties hereto also irrevocably waives all right to trial by jury
in
any action, proceeding or counterclaim arising out of this Warrant Agreement
or
the transactions contemplated hereby.
SECTION
22. Benefits
of This Agreement.
Nothing
in this Warrant Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the registered holders
of the Warrant Certificates any legal or equitable right, remedy or claim under
this Warrant Agreement, and this Warrant Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the registered holders
of the Warrant Certificates.
SECTION
23. 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 but one and the same
instrument.
SECTION
24. Force
Majeure.
In no
event shall the Warrant Agent be responsible or liable for any failure or delay
in the performance of its obligations under this Warrant Agreement arising
out
of or caused by, directly or indirectly, forces beyond its reasonable control,
including without limitation strikes, work stoppages, accidents, acts of war
or
terrorism, civil or military disturbances, nuclear or natural catastrophes
or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software or hardware) services.
[Signature
Page Follows]
23
IN
WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be
duly executed, as of the day and year first above written.
|
▇▇▇▇▇▇▇’▇
COVE ACQUISITION CORPORATION
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
EXHIBIT
A
FORM
OF
WARRANT
CERTIFICATE (FACE)
Warrant
▇▇▇▇▇▇▇’▇
COVE ACQUISITION CORPORATION
This
Warrant Certificate certifies that ________________________, or registered
assigns, is the registered holder of __________ warrants (the “Warrants”)
to
purchase shares of Common Stock, $0.0001 par value (the “Common
Stock”),
of
▇▇▇▇▇▇▇’▇ Cove Acquisition Corporation, a Delaware corporation (the
“Company”).
Each
Warrant entitles the holder, upon exercise during the period set forth in the
Warrant Agreement referred to below, to receive from the Company that number
of
fully paid and nonassessable shares of Common Stock (each, a “Warrant
Share”)
as set
forth below at the exercise price (the “Exercise
Price”)
as
determined pursuant to the Warrant Agreement payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and payment
of the Exercise Price at the office or agency of the Warrant Agent, but only
subject to the conditions set forth herein and in the Warrant
Agreement.
Each
Warrant is initially exercisable for one share of Common Stock. The number
of
Warrant Shares issuable upon exercise of the Warrants are subject to adjustment
upon the occurrence of certain events set forth in the Warrant
Agreement.
The
initial Exercise Price per share of Common Stock for any Warrant is equal to
$7.50 per share. The Exercise Price is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.
Warrants
may be exercised only during the Warrant Exercise Period subject to the
conditions set forth in the Warrant Agreement and to the extent not exercised
by
the end of such Warrant Exercise Period such Warrants shall become
void.
Reference
is hereby made to the further provisions of this Warrant Certificate set forth
on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This
Warrant Certificate shall not be valid unless countersigned by the Warrant
Agent, as such term is used in the Warrant Agreement.
This
Warrant Certificate shall be governed and construed in accordance with the
internal laws of the State of New York, without regard to conflicts of laws
principles thereof.
|
▇▇▇▇▇▇▇’▇
COVE ACQUISITION
CORPORATION
|
||||
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
A-1
|
Countersigned:
|
|||||
|
Dated
_____________, 20__
|
|||||
|
CONTINENTAL
STOCK TRANSFER & TRUST
COMPANY,
as Warrant Agent
|
|||||
|
By:
|
|||||
|
Name:
|
|||||
|
Title:
|
|||||
A-2
Form
of Warrant Certificate (Reverse)
The
Warrants evidenced by this Warrant Certificate are part of a duly authorized
issue of Warrants entitling the holder on exercise to receive shares of Common
Stock, par value $0.0001 per share, of the Company (the “Common
Stock”),
and
are issued or to be issued pursuant to a Warrant Agreement dated as of [●], 2008
(the “Warrant
Agreement”),
duly
executed and delivered by the Company to Continental Stock Transfer & Trust
Company, a New York corporation, as warrant agent (the “Warrant
Agent”),
which
Warrant Agreement is hereby incorporated by reference in and made a part of
this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words “holders” or “holder” meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. Defined terms used in this Warrant Certificate but not defined herein
shall have the meanings given to them in the Warrant Agreement.
Warrants
may be exercised at any time during the Warrant Exercise Period set forth in
the
Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price as specified in the Warrant Agreement at
the
principal corporate trust office of the Warrant Agent. In the event that upon
any exercise of Warrants evidenced hereby the number of Warrants exercised
shall
be less than the total number of Warrants evidenced hereby, there shall be
issued to the holder hereof or his assignee a new Warrant Certificate evidencing
the number of Warrants not exercised. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of this
Warrant.
Notwithstanding
anything else in this Warrant Certificate or the Warrant Agreement, no Warrant
may be exercised unless at the time of exercise (i) a registration statement
covering the Warrant Shares to be issued upon exercise (other than Warrant
Shares to be issued upon exercise of any Private Warrant) is effective under
the
Act and (ii) a prospectus thereunder relating to the Warrant Shares (other
than
Warrant Shares to be issued upon exercise of any Private Warrant) is current.
In
no event shall the Warrants be settled on a net cash basis during the Warrant
Exercise Period nor shall the Company be required to issue unregistered shares
upon the exercise of any Warrant that is not a Private Warrant.
The
Warrant Agreement provides that upon the occurrence of certain events the number
of Warrant Shares set forth on the face hereof may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company will pay the cash value
thereof determined as provided in the Warrant Agreement.
Warrant
Certificates, when surrendered at the principal corporate trust office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in
the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number
of
Warrants.
Upon
due
presentation for registration of transfer of this Warrant Certificate at the
office of the Warrant Agent 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 in the Warrant Agreement, without charge except for
any
tax or other governmental charge imposed in connection therewith.
A-3
The
Company and the Warrant Agent may deem and treat the registered holder(s)
thereof 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, of any distribution to the holder(s) hereof,
and
for all other purposes, and neither the Company nor the Warrant Agent shall
be
affected by any notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitles any holder hereof to any rights of a stockholder of the
Company.
A-4
Election
to Purchase
(To
Be
Executed Upon Exercise Of Warrant)
The
undersigned hereby irrevocably elects to exercise the right, represented by
this
Warrant Certificate, to receive __________ shares of Common Stock and herewith
tenders payment for such shares to the order of ▇▇▇▇▇▇▇’▇ Cove Acquisition
Corporation in the amount of $______ in accordance with the terms hereof. The
undersigned requests that a certificate for such shares be registered in the
name of ________________, whose address is _______________________________
and
that such shares be delivered to ________________ whose address is ___________
______________________. If said number of shares is less than all of the shares
of Common Stock purchasable hereunder, the undersigned requests that a new
Warrant Certificate representing the remaining balance of such shares be
registered in the name of ______________, whose address is
_________________________, and that such Warrant Certificate be delivered to
_________________, whose address is __________________..
Signature:
___________________________
Date:
_____________, 20__
Signature
Guaranteed: ___________________________
A-5
EXHIBIT
B
LEGEND
FOR PRIVATE WARRANTS
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING THE SHARES OF COMMON
STOCK
OF THE COMPANY ISSUABLE UPON EXERCISE OF SUCH SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN
ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS SET FORTH IN THE WARRANT AGREEMENT REFERRED TO HEREIN
AND
UNDER AN ESCROW AGREEMENT TO BE EXECUTED BY THE COMPANY AND THE SPONSOR [AND
ARE
SUBJECT TO FORFEITURE IN CERTAIN CIRCUMSTANCES].1
SECURITIES
EVIDENCED BY THIS CERTIFICATE AND SHARES OF COMMON STOCK OF THE COMPANY ISSUABLE
UPON EXERCISE OF SUCH SECURITIES WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER
A
REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.
No.
_____
_______ Warrants
1
Only applies to Founders Warrants.
B-1