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EXHIBIT 10.18
DRAFT
6/5/97
WARRANT AGREEMENT
By and Between
JAYMARK, INC.
and
▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC.
Dated as of __________ __, 1997
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of ________ __, 1997 by and between JAYMARK,
INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC. (the
"Representative") (the Company and the Representative are referred to
collectively herein as the "Parties").
The Company proposes to issue to the Representative warrants as
hereinafter described (the "Warrants") to purchase up to an aggregate of 130,000
shares of the Company's Class A Common Stock, $0.001 par value per share (the
"Class A Common Stock"), subject to adjustment as provided in Section 8 hereof
(such 130,000 shares, as adjusted, being hereinafter referred to as the
"Shares"), each Warrant entitling the holder ("Holder") thereof to purchase one
share of Class A Common Stock. All capitalized terms used herein and not
otherwise defined herein shall have the same meanings as in that certain
underwriting agreement, of even date herewith, by and between the Company and
the several underwriters named therein (the "Underwriting Agreement").
NOW, THEREFORE, in consideration of the following promises and mutual
agreements and for other good and valuable consideration, the Parties agree as
follows:
1. Issuance of Warrants; Form of Warrant. On the Closing Date the
Company will issue, sell and deliver the Warrants to the Representative or its
bona fide officers for an aggregate price of $100. The Warrants shall be issued
to the Representative or such designees in the amounts set forth on Schedule I
attached hereto. The form of the Warrant and of the form of election to purchase
Shares to be attached thereto shall be substantially as set forth on Exhibit A
attached hereto. The Warrants shall be executed on behalf of the Company by the
manual or facsimile signature of the present or any future President or any Vice
President of the Company, under its corporate seal, affixed or in facsimile, and
attested by the manual or facsimile signature of the present or any future
Secretary or Assistant Secretary of the Company.
2. Registration. The Warrants shall be numbered and shall be registered
in a Warrant register (the "Warrant Register"). The Company shall be entitled to
treat the registered holder of any Warrant on the Warrant Register as the owner
in fact thereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration or transfer of Warrants
which are registered or are to be registered in the name of a fiduciary or the
nominee
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of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration or
transfer, or with such knowledge of such facts that its participation therein
amounts to bad faith. The Warrants shall be registered initially in the name
of the Representative in such denominations as the Representative may request
in writing from the Company; provided, however, that the Representative may
designate that all or a portion of the Warrants be issued in varying amounts
directly to its bona fide officers and not to the Representative. Such
designation will only be made by the Representative if it determines that such
issuances would not violate the interpretation of the Board of Governors of the
National Association of Securities Dealers, Inc. (the "NASD"), relating to the
review of corporate financing arrangements.
3. Transfer of Warrants. The Warrants will not be sold, transferred,
assigned or hypothecated, in part or in whole, prior to the first anniversary of
the effective date of the Registration Statement, and thereafter only to bona
fide officers, directors, shareholders, employees or registered representatives
of the Representative upon written request to the Company delivered in
accordance with Section 12 and upon delivery of the Warrant Certificate duly
endorsed by the Holder or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or an official copy thereof, duly certified, shall be
deposited with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited with the
Company in its discretion. Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the persons entitled thereto. Any of the
Warrants may be exchanged at the option of its Holder for other Warrants of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of shares of Class A Common Stock upon surrender
to the Company or its duly authorized agent. The Company may require payment of
a sum sufficient to cover all taxes and other governmental charges that may be
imposed in connection with any voluntary transfer, exchange or other disposition
of the Warrants. However, the Company shall have no obligation to cause Warrants
to be transferred on its books to any person, if such transfer would violate the
Securities Act of 1933, as amended (the "Act"), or applicable state securities
laws.
4. Term of Warrants; Exercise of Warrants.
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(a) Term of Warrants. Each Warrant entitles the registered
owner thereof to purchase one Share at a purchase price of $____ per
Share (as adjusted from time to time pursuant to the provisions hereof,
the "Exercise Price") at any time from the first anniversary of the
effective date of the Registration Statement until 5:00 p.m., New York
City time, on ________ __, 2002 (the "Warrant Expiration Date").
(b) Exercise of Warrants. The Exercise Price and the Shares
issuable upon exercise of Warrants are subject to adjustment upon the
occurrence of certain events, pursuant to the provisions of Section 8
of this Agreement. Subject to the provisions of this Agreement, and in
addition to the right to surrender warrants without any cash payment as
set forth in subsection (c) below, each Holder shall have the right,
which may be exercised as set forth in such Warrants, to purchase from
the Company (and the Company shall issue and sell to such Holder) the
number of fully paid and nonassessable Shares specified in such
Warrants, upon surrender to the Company, or its duly authorized agent,
of such Warrants, with the form of election to purchase attached
thereto duly completed and signed, with signatures guaranteed by an
eligible guarantor institution participating in an approved signature
guarantee medallion program and upon payment to the Company of the
Exercise Price, as adjusted in accordance with the provisions of
Section 8 of this Agreement, for the number of Shares in respect of
which such Warrants are then exercised. No adjustment shall be made for
any dividends on any Shares issuable upon exercise of a Warrant. Upon
each surrender of Warrants and payment of the Exercise Price, the
Company shall issue and cause to be delivered with all reasonable
dispatch, but in no event later than three trading days following such
surrender, to or upon the written order of the Holder of such Warrants
and in such name or names as such Holder may designate, a certificate
or certificates for the number of full Shares so purchased upon the
exercise of such Warrants, together with cash, as provided in Section 9
of this Agreement, in respect of any fractional Shares otherwise
issuable upon such surrender. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such
Shares as of the date of the surrender of Warrants and payment of the
Exercise Price as aforesaid; provided, however, that if, at the date of
surrender of such Warrants, the transfer books for the Common Stock or
other class of securities issuable upon the exercise of such Warrants
shall be closed, the certificates for the Shares shall be issuable as
of the date on which such books shall next be opened (whether before,
on or after the Warrant Expiration Date) and until such date the
Company
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shall be under no duty to deliver any certificate for such Shares;
provided, further, however, that the transfer books of record, unless
otherwise required by law, shall not be closed at any one time for a
period longer than twenty (20) days. The rights of purchase represented
by the Warrants shall be exercisable, at the election of the Holder(s)
thereof, either in full or from time to time in part and, in the event
that any Warrant is exercised in respect of less than all of the Shares
issuable upon such exercise at any time prior to the Warrant Expiration
Date, a new Warrant or Warrants will be issued for the remaining number
of Shares specified in the Warrant so surrendered.
(c) Payment of Exercise Price. Payment of the Exercise Price
may be made in cash or by certified check or official bank check
payable to the order of the Company. In addition and in lieu of any
cash payment, the Holder of the Warrants shall have the right at any
time and from time to time to exercise the Warrants in full or in part
by surrendering the Warrant in exchange for the number of Shares equal
to the product of (x) the number of shares as to which the Warrants are
being exercised multiplied by (y) a fraction, the numerator of which is
the Market Price (as defined below) of the Shares less the Exercise
Price and the denominator of which is such Market Price. Solely for the
purposes of this paragraph, "Market Price" shall be the average last
reported sale price of the Common Stock as calculated over the five (5)
trading day period preceding the date on which the Election to Purchase
is surrendered to the Company.
5. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the issuance of Shares upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any taxes
payable in respect of any transfer involved in the issue or delivery of any
certificates for Shares in a name other than that of the Holder of Warrants in
respect of which such Shares are issued.
6. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but only
upon receipt of evidence reasonably satisfactory to the Company of such
mutilation, loss, theft or destruction of such Warrant and indemnity, if
requested, reasonably satisfactory to the Company. An applicant for such
substitute Warrants shall also comply with such other reasonable
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regulations and pay such other reasonable charges and expenses as the Company
may prescribe.
7. Reservation of Shares, etc. The Company has reserved, and shall at
all times keep reserved, out of the authorized and unissued Class A Common
Stock, a number of shares of Class A Common Stock sufficient to provide for the
exercise of the rights of purchase represented by the outstanding Warrants. U.S.
Stock Transfer Corporation, transfer agent for the Class A Common Stock (the
"Transfer Agent"), and any subsequent transfer agent for the Company's
securities issuable upon the exercise of the Warrants will be irrevocably
authorized and directed at all times until the Warrant Expiration Date to
reserve such number of authorized and unissued shares as shall be required for
such purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's securities issuable upon the exercise of the Warrants. The Company
will supply the Transfer Agent or any subsequent transfer agent with duly
executed certificates for such purpose and will itself provide or make available
any cash distributable as provided in Section 9 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced shall be cancelled,
and such cancelled Warrants shall constitute sufficient evidence of the number
of Shares that have been issued upon the exercise of such Warrants. No shares of
Class A Common Stock shall be subject to reservation in respect of unexercised
Warrants after the Warrant Expiration Date.
8. Adjustments of Exercise Price and Number of Shares. The Exercise
Price and the number and kind of securities issuable upon exercise of each
Warrant shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) If the Company (i) declares a dividend on its Class A
Common Stock in shares of Class A Common Stock or makes a distribution
in shares of Class A Common Stock, (ii) subdivides its outstanding
shares of Class A Common Stock, (iii) combines its outstanding shares
of Class A Common Stock into a smaller number of shares of Class A
Common Stock or (iv) issues by reclassification of its shares of Class
A Common Stock other securities of the Company (including any such
reclassification in connection with a consolidation or merger in which
the Company is the surviving entity), the number of Shares purchasable
upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to
receive the kind and number of Shares or other securities of the
Company which he would have owned or have been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised
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immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this paragraph (a)
shall become effective immediately after the effective date of such
event retroactive to immediately after the record date, if any, for
such event.
(b) If the Company issues rights, options or warrants to all
holders of its shares of Class A Common Stock, without any charge to
such holders, entitling them (for a period expiring within 45 days
after the record date mentioned below in this paragraph (b)) to
subscribe for or to purchase shares of Class A Common Stock at a price
per share lower than the then current market price per share of Class A
Common Stock at the record date mentioned below (as defined in
paragraph (d) below), the number of Shares thereafter purchasable upon
exercise of each Warrant shall be determined by multiplying the number
of Shares theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares of Class
A Common Stock outstanding on such record date plus the number of
additional shares of Class A Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Class A Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of shares
of Class A Common Stock so offered would purchase at the then current
market price per share of Class A Common Stock. Such adjustment shall
be made whenever such rights, options or warrants are issued, and shall
become effective retroactively to immediately after the record date for
the determination of shareholders entitled to receive such rights,
options or warrants.
(c) If the Company distributes to all holders of its shares of
Class A Common Stock shares of stock other than Class A Common Stock or
evidences of its indebtedness or assets (excluding cash dividends
payable out of consolidated earnings or retained earnings and dividends
or distributions referred to in paragraph (a) above) or rights, options
or warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Class A Common Stock
(excluding those referred to in paragraph (b) above), then in each case
the number of Shares thereafter issuable upon the exercise of each
Warrant shall be determined by multiplying the number of Shares
theretofore issuable upon the exercise of each Warrant, by a fraction,
of which the numerator shall be the current market price per share of
Class A Common Stock (as defined in paragraph (d) below) on the record
date mentioned below in this paragraph (c), and of which the
denominator shall be
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the current market price per share of Class A Common Stock on such
record date, less the then fair value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
conclusive) of the portion of the shares of stock other than Class A
Common Stock or assets or evidences of indebtedness so distributed or
of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Class
A Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of
distribution retroactive to immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs (b)
and (c) of this Section 8, the current market price per share of Class
A Common Stock at any date shall be the average of the daily closing
prices for fifteen (15) consecutive trading days commencing twenty (20)
trading days before the date of such computation. The closing price for
each day shall be the last reported sale price regular way or, in case
no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in either case
on the principal national securities exchange on which the shares are
listed or admitted to trading, or if they are not listed or admitted to
trading on any national securities exchange, but are traded in the
over- the-counter market, the closing sale price of the Class A Common
Stock or, in case no sale is publicly reported, the average of the
representative closing bid and asked quotations for the Class A Common
Stock, on the NASDAQ system or any comparable system, or if the Class A
Common Stock is not listed on the NASDAQ system or a comparable system,
the closing sale price of the Class A Common Stock or, in case no sale
is publicly reported, the average of the closing bid and asked prices
as furnished by two members of the NASD selected from time to time by
the Company for that purpose.
(e) No adjustment in the number of Shares purchasable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of
Shares purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this paragraph (e) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment but not later than three years after the
happening of the specified event or events. All calculations shall be
made to the nearest one thousandth of a share.
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(f) Whenever the number of Shares purchasable upon exercise of
each Warrant is adjusted, as herein provided, the Exercise Price shall
be adjusted by multiplying the Exercise Price in effect immediately
prior to such adjustment by a fraction, of which the numerator shall be
the number of Shares purchasable upon the exercise of each Warrant
immediately prior to such adjustment, and of which the denominator
shall be the number of Shares so purchasable immediately thereafter.
(g) For the purpose of this Section 8, the term "shares of
Class A Common Stock" shall mean (i) the class of stock designated as
the Class A Common Stock of the Company at the date of this Agreement
or (ii) any other class of stock resulting from successive changes or
reclassifications of such shares consisting solely of changes in par
value, or from no par value to par value, or from par value to no par
value. If at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders become entitled to purchase any shares
of capital stock of the Company other than shares of Class A Common
Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Exercise Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Shares contained in paragraphs (a) through (f), inclusive, and
paragraphs (h) through (m), inclusive, of this Section 8, and the
provisions of Sections 4, 5, 7 and 10, with respect to the Shares,
shall apply on like terms to any such other shares.
(h) Upon the expiration of any rights, options, warrants or
conversion rights or exchange privileges, if any thereof have not been
exercised, the Exercise Price and the number of shares of Class A
Common Stock purchasable upon the exercise of each Warrant shall, upon
such expiration, be readjusted and shall thereafter be such as it would
have been had it originally been adjusted (or had the original
adjustment not been required, as the case may be) as if (i) the only
shares of Class A Common Stock so issued were the shares of Class A
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion rights or exchange privileges
and (ii) such shares of Class A Common Stock, if any, were issued or
sold for the consideration actually received by the Company upon such
exercise plus the aggregate consideration, if any, actually received by
the Company for the issuance, sale or grant of all of such rights,
options, warrants or conversion rights or exchange privileges whether
or not exercised; provided, however, that no such readjustment shall
have the effect of decreasing the number of shares issuable upon the
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exercise of each Warrant or increasing the Exercise Price by an amount
in excess of the amount of the adjustment initially made in respect of
the issuance, sale or grant of such rights, options, warrants or
conversion rights or exchange privileges.
(i) The Company may, at its option at any time during the term
of the Warrants, reduce the then current Exercise Price for all
Warrants to any amount deemed appropriate by the Board of Directors of
the Company. Such reduction may be for all or any portion of the
remaining term of the Warrants; provided, that the expiration of the
reduction may not be less than 30 days following the mailing of the
notice required by paragraph (j) below.
(j) Whenever the number of Shares issuable upon the exercise
of each Warrant or the Exercise Price of such Shares is adjusted, as
herein provided, the Company shall promptly mail by first class mail,
postage prepaid, to each Holder notice certified by its Chief Financial
Officer of such adjustment or adjustments. Such notice shall set forth
the number of Shares issuable upon the exercise of each Warrant and the
Exercise Price of such Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made. Such
certificate shall be conclusive as to the correctness of such
adjustment and each Holder shall have the right to inspect such
certificate during reasonable business hours.
(k) Except as provided in this Section 8, no adjustment in
respect of any dividends shall be made during the term of a Warrant or
upon the exercise of a Warrant.
(l) If the Company consolidates with or merges into another
corporation or if the Company sells or conveys all or substantially all
its property to another corporation, the Company or such successor or
purchasing corporation (or an affiliate of such successor or purchasing
corporation), as the case may be, agrees that each Holder shall have
the right thereafter upon payment of the Exercise Price in effect
immediately prior to such action to purchase upon exercise of each
Warrant the kind and amount of shares and other securities and property
(including cash) which such Holder would have owned or been entitled to
receive after the happening of the consolidation, merger, sale or
conveyance had such Warrant been exercised immediately prior to such
action. The provisions of this paragraph (l) shall apply to successive
consolidations, mergers, sales or conveyances.
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(m) Notwithstanding any adjustment in the Exercise Price or
the number or kind of shares purchasable upon the exercise of the
Warrants pursuant to this Agreement, certificates for Warrants issued
prior or subsequent to such adjustment may continue to express the same
price and number and kind of Shares as are initially issuable pursuant
to this Agreement.
9. Fractional Interests. The Company shall not be required to issue
fractions of Shares on the exercise of Warrants. If more than one Warrant is
presented for exercise in full at the same time by the same Holder, the number
of Shares issuable upon the exercise thereof shall be computed on the basis of
the aggregate number of Shares issuable on exercise of the Warrants so
presented. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of any Warrant (or specified portions
thereof), the Company shall purchase such fraction for an amount in cash equal
to the same fraction of the current market price per share of Class A Common
Stock (determined as provided in Section 8(d) of this Agreement) on the date of
exercise.
10. Registration Rights.
(a) Demand Registration Rights. The Company covenants and agrees with
the Representative and any other or subsequent Holders of the Registrable
Securities (as defined in paragraph (f) of this Section 10) that, subject to the
availability of audited financial statements complying with Regulation S-X under
the Act, upon written request of the then Holder(s) of at least a majority of
the Warrants or the Registrable Securities, or both, which were originally
issued to the Representative or its designees, made at any time within the
period commencing one year and ending five years after the Effective Date, the
Company will file as promptly as practicable and, in any event, within 60 days
after receipt of such written request, at its expense (other than the fees of
counsel and sales commissions for such Holders), no more than once, a new
registration statement under the Act, registering or qualifying the Registrable
Securities for sale. Within fifteen (15) days after receiving any such notice,
the Company shall give notice to the other Holders of the Registrable Securities
advising that the Company is proceeding with such registration statement and
offering to include the Registrable Securities of such Holders. The Company
shall not be obligated to any other such Holder unless that other Holder accepts
such offer by notice in writing to the Company within ten (10) days thereafter.
The Company will use its best efforts, through its officers, directors, auditors
and counsel in all matters necessary or advisable, to file and cause such
registration statement to become effective as promptly as practicable (but in no
event within 90 days of the initial
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filing of such registration statement) and for a period of 24 months thereafter
to reflect in the registration statement financial statements which are
prepared in accordance with Section 10(a)(3) of the Act and any facts or events
arising that, individually, or in the aggregate, represent a fundamental or
material change in the information set forth in the registration statement to
enable any Holders of the Warrants to exercise such Warrants and sell Shares,
or to enable any holders of Shares to sell such Shares, during that nine-month
period. If any registration pursuant to this paragraph (a) is an underwritten
offering, the Holders of a majority of the Registrable Securities to be
included in such registration shall be entitled to select the underwriter or
managing underwriter (in the case of a syndicated offering) of such offering,
subject to the Company's approval which shall not be unreasonably withheld.
(b) Piggyback Registration Rights. The Company covenants and agrees
with the Representative and any other Holders or subsequent Holders of the
Registrable Securities that if, at any time within the period commencing one
year and ending five years after the Effective Date, it proposes to file a
registration statement with respect to any class of equity or equity-related
security (other than in connection with an offering to the Company's employees
or in connection with an acquisition, merger or similar transaction) under the
Act in a primary registration on behalf of the Company and/or in a secondary
registration on behalf of holders of such securities and the registration form
to be used may be used for registration of the Registrable Securities, the
Company will give prompt written notice (which, in the case of a registration
statement or notification pursuant to the exercise of demand registration rights
other than those provided in Section 10(a) of this Agreement, shall be within
ten (10) business days after the Company's receipt of notice of such exercise
and, in any event, at least 30 days prior to such filing) to the Holders of
Registrable Securities (regardless of whether some of the Holders have
theretofore availed themselves of the right provided in Section 10(a) of this
Agreement) at the addresses appearing on the records of the Company of its
intention to file a registration statement and will offer to include in such
registration statement any of the Registrable Securities subject to paragraphs
(i) and (ii) of this paragraph (b), such number of Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within ten (10) days after the giving of notice by the Company. All
registrations requested pursuant to this paragraph (b) are referred to herein as
"Piggyback Registrations". All Piggyback Registrations pursuant to this
paragraph (b) will be made solely at the Company's expense (other than as
provided in Section 10(d) hereof). This paragraph is not applicable to a
registration
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statement filed by the Company with the Commission on Forms S-4 or S-8 or any
successor forms.
(i) Priority on Primary Registrations. If a Piggyback
Registration includes an underwritten primary registration for the
Company, and the underwriter(s) for such offering determine in good
faith and advise the Company in writing that in their opinion the
number of Registrable Securities requested to be included in such
registration exceeds the number that can be sold in such offering
without materially adversely affecting the distribution of such
securities by the Company, the Company will include in such
registration (A) first, the securities that the Company proposes to
sell and (B) second, the Registrable Securities requested to be
included in such registration, apportioned pro rata among the Holders
of Registrable Securities, provided, however, the Company will use its
best efforts to include not less than 20% of the Registrable
Securities, and (C) third, securities of the holders of other
securities requesting registration.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration consists only of an underwritten secondary registration
for holders of securities of the Company (other than pursuant to
Section 10(a)), and the underwriter(s) for such offering advise the
Company in writing that in their opinion the number of Registrable
Securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially adversely
affecting the distribution of such securities by the Company, the
Company will include in such registration (A) first, the securities
requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included in
such registration, pro rata among all such holders on the basis of the
number of shares requested to be included by each such holder,
provided, however, the Company will use its best efforts to include not
less than 20% of the Registrable Securities, and (B) second, other
securities requested to be included in such registration.
Notwithstanding the foregoing, if any such underwriter determines in
good faith and advises the Company in writing that the distribution of the
Registrable Securities requested to be included in the registration concurrently
with the securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company, then the Holders of
such Registrable Securities shall delay their offering and sale for such period
ending on the earliest of (1) 90 days following the effective date of the
Company's registration statement, (2) the day upon which the underwriting
syndicate, if
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any, for such offering has been disbanded or, (3) such date as the Company,
managing underwriter and Holders of Registrable Securities otherwise agree. If
such a delay occurs, the Company shall file such supplements, post-effective
amendments and take any other steps necessary to permit such Holders to make
their proposed offering and sale for a period of 180 days immediately following
the end of such delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter, and the Underwriters. However, the Company shall not
be required to file a registration statement to include Shares pursuant to this
Section 10(b) if counsel, reasonably satisfactory to the Company, renders an
opinion to the Company that the Shares proposed to be disposed of may be
transferred pursuant to the provisions of Rule 144 under the Act or otherwise
without registration under the Act.
(c) Other Registration Rights. In addition to the rights above
provided, the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any registration statement, in addition to
the registration statements discussed above, required in order to sell or
transfer the Registrable Securities and will supply all information required
therefor, but such additional registration statement, shall be at the then
Holders' cost and expense; provided, however, that if the Company elects to
register or qualify additional shares of Class A Common Stock, the cost and
expense of such registration statement will be pro rated between the Company and
the Holders of the Registrable Securities according to the aggregate sales price
of the securities being issued. However, the Company will not be required to
file a registration statement pursuant to this paragraph (c), (i) at a time when
the audited financial statements required to be included therein are not
available, which time shall be limited to the period commencing 45 days after
the end of the Company's last fiscal year and ending 90 days after the end of
such fiscal year, or (ii) within 90 days after completion of a public offering
by the Company of any of its Class A Common Stock or equity-related securities
or (iii) if it would adversely impact the Company in its capital raising plans
or otherwise (in which latter case filing may be delayed no longer than 120
days).
(d) Action to be Taken by the Company. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or qualification
under paragraphs (a) or (b) of this Section 10, including, but not
limited to, legal, accounting and printing fees; provided, however,
that in no event shall
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the Company be obligated to pay (A) any fees and disbursements of
special counsel for Holders of Registrable Securities, or (B) any
underwriters' discount or commission in respect of such Registrable
Securities, (C) any stock transfer taxes attributable to the sale of
the Registrable Securities, or (D) upon the exercise of any demand
registration right provided for in paragraph (a) of this Section 10,
the cost of any liability or similar insurance required by an
underwriter, to the extent that such costs are attributable solely to
the offering of such Registrable Securities, payment of which shall, in
each case, be the sole responsibility of the Holders of the Registrable
Securities; and
(ii) Use its best efforts to register or qualify the
Registrable Securities for offer or sale under state securities or Blue
Sky laws of such jurisdictions in which the Underwriters or such
Holders shall reasonably request, provided, however, that no
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject, and to do all other acts
necessary or advisable to enable the holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction.
(e) Action to be Taken by the Holders. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company's obligation shall be conditioned as to each
such public offering upon a timely receipt by the Company in writing of:
(i) Information as to the terms of such public offering
furnished by or on behalf of each Holder intending to make a public
offering of his or its Registrable Securities; and
(ii) Such other information as the Company may reasonably
require from such Holders, or any underwriter for any of them, for
inclusion in such Registration Statement.
(f) For purposes of this Section 10, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall mean
the Shares, if issued.
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11. Notices to Holders.
(a) Nothing in this Agreement or in any Warrants shall be construed as
conferring upon the Holders the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of directors of the Company or any other matter, or
any rights whatsoever as shareholders of the Company; provided, however, that in
the event that a meeting of shareholders shall be called to consider and take
action on a proposal for the voluntary dissolution of the Company, other than in
connection with a consolidation, merger or sale of all, or substantially all, of
its property, assets, business and good will as an entirety, the Company shall
cause a notice thereof to be sent by first-class mail, postage prepaid, at least
twenty (20) days prior to the date fixed as a record date or the date of closing
the transfer books in relation to such meeting, to each registered Holder of
Warrants at such Holder's address appearing on the Warrant Register; but failure
to mail or to receive such notice or any defect therein or in the mailing
thereof shall not affect the validity of any action taken in connection with
such voluntary dissolution.
(b) If the Company intends to make any distribution on its Class A
Common Stock (or other securities which may be issuable in lieu thereof upon the
exercise of Warrants), including, without limitation, any such distribution to
be made in connection with a consolidation or merger in which the Company is the
surviving entity, or to issue subscription rights or warrants to holders of its
Class A Common Stock, the Company shall cause a notice of its intention to make
such distribution to be sent by first-class mail, postage prepaid, at least
twenty (20) days prior to the date fixed as a record date or the date of closing
the transfer books in relation to such distribution, to each registered Holder
of Warrants at such Holder's address appearing on the Warrant Register, but
failure to mail or to receive such notice or any defect therein or in the
mailing thereof shall not affect the validity of any action taken in connection
with such distribution.
12. Notices. Any notice pursuant to this Agreement to be given by the
Holder of any Warrant or the holder of any Share to the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows or to such other address as the Company may designate by
notice given in accordance with this Section 12, to the Holders of Warrants or
the holders of Shares:
Jaymark, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: President
Notices or demands authorized by this Agreement to be given or made by
the Company to or on the Holder of any Warrant or the holder of any Share shall
be sufficiently given or made (except as otherwise provided in this Agreement)
if sent by first-class mail, postage prepaid, addressed to such Holder or such
holder of Shares at the address of such Holder or such holder of Shares as shown
on the Warrant Register or the books of the Company, as the case may be.
13. Governing Law. This Agreement and each Warrant issued hereunder
shall be governed by and construed in accordance with the substantive laws of
the State of New York. The Company hereby agrees to accept service of process by
notice given to it pursuant to the provisions of Section 12.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the day, month and year first above written.
JAYMARK, INC.
By:_____________________________
Its: ________________________
▇▇▇▇▇ ▇▇▇▇▇▇ & CO., INC.
By:_____________________________
Its:_________________________
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SCHEDULE I
Name of Number of
Underwriter Warrants
----------- ---------
▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc.
Total 130,000
20
No. ____ _____ Warrants
VOID AFTER 5:00 P.M. NEW YORK CITY TIME
ON ________ __, 2002
JAYMARK, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received ________________, or registered
assigns, is the owner of the number of Warrants set forth above, each of which
entitles the owner thereof to purchase at any time from ________ __, 1998, until
5:00 p.m., New York City time on ________ __, 2002 (the "Warrant Expiration
Date"), one fully paid and nonassessable share of common stock, $0.001 par value
per share (the "Class A Common Stock"), of JAYMARK, INC., a Delaware corporation
(the "Company"), at the purchase price of $____ per share (as adjusted from time
to pursuant to the Warrant Agreement referenced below, the "Exercise Price")
upon presentation and surrender of this Warrant Certificate with the Form of
Election to Purchase duly executed, as provided in the Warrant Agreement
together with payment of the aggregate Exercise Price for the shares of Class A
Common Stock being purchased (defined below). The number of Warrants evidenced
by this Warrant Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Exercise Price per share set
forth above, are the number and Exercise Price as of the date of original
issuance of the Warrants, based on the shares of Class A Common Stock of the
Company as constituted at such date. As provided in the Warrant Agreement
referred to below, the Exercise Price and the number or kind of shares which may
be purchased upon the exercise of the Warrants evidenced by this Warrant
Certificate are, upon the happening of certain events, subject to modification
and adjustment.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated as of
________ __, 1997 (the "Warrant Agreement") between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇
& Co., Inc., which Warrant Agreement is hereby incorporated herein by reference
and made a part hereof and to which Warrant Agreement reference is hereby made
for a full description of the rights, limitations of rights, duties and
immunities hereunder of the Company and the holders of the Warrant Certificates.
Copies of
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the Warrant Agreement are on file at the principal office of the Company.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number of
shares of Class A Common Stock as the Warrants evidenced by the Warrant
Certificate or Warrant Certificates surrendered entitled such holder to
purchase. If this Warrant Certificate shall be exercised in part, the holder
hereof shall be entitled to receive upon surrender hereof another Warrant
Certificate or Warrant Certificates for the number of whole Warrants not
exercised.
No fractional shares of Class A Common Stock will be issued upon the
exercise of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote,
receive dividends, subscription rights or be deemed the holder of Class A Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained in the
Warrant Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue of stock, reclassification of stock, change of
par value or change of stock to no par value, consolidation, merger, conveyance,
or otherwise) or, except as provided in the Warrant Agreement, to receive notice
of meetings, until the Warrant or Warrants evidenced by this Warrant Certificate
shall have been exercised and the Shares shall have become deliverable as
provided in the Warrant Agreement.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for the Company's Class A Common Stock or other
class of stock purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates for
shares purchasable upon such exercise until the date of the reopening of said
transfer books, provided, however, that such books shall not be closed for
longer than a 20-day period.
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IN WITNESS WHEREOF, JAYMARK, INC. has caused the signature (or
facsimile signature) of its President and its Secretary to be printed hereon and
its corporate seal (or facsimile) to be printed hereon.
Dated ________ __, 1997
JAYMARK, INC.
By:____________________________
Its: _______________________
Attest:
_________________________
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FORM OF
ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificates.)
FOR VALUE RECEIVED __________________ hereby sells, assigns and
transfers unto this Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
____________________, to transfer the within Warrant Certificate on the books of
the within-named Company, with full power of substitution.
Dated: ______________________, ____
__________________________________
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name
as written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
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FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate).
TO: JAYMARK, INC.
The undersigned hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate to purchase ______ shares of Class A
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:
Please insert social security, tax identification or other identifying number
_________________________________
_________________________________
_________________________________
(Please print name and address)
If such number of Warrants is not all the Warrants evidenced by this Warrant
Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
Please insert social security, tax identification or other identifying number
_________________________________
_________________________________
_________________________________
(Please print name and address)
Dated: _______________, ____
______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate)
Signature Guaranteed: