EXHIBIT 10.9
THIS WARRANT AND THE COMMON STOCK OF SUMMIT BROKERAGE SERVICES, INC., (THE
"COMPANY") ISSUABLE UPON CONVERSION HEREOF (UNTIL SUCH TIME AS SUCH COMMON STOCK
IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES STATUTE, AND NO SALE, TRANSFER,
OR OTHER DISPOSITION OF ANY INTEREST HEREIN MAY BE MADE UNLESS, IN THE WRITTEN
OPINION OF COUNSEL TO THE COMPANY, SUCH TRANSFER WOULD NOT VIOLATE OR REQUIRE
REGISTRATION UNDER ANY SUCH STATUTE.
WARRANT
To Purchase Common Stock of
SUMMIT BROKERAGE SERVICES, INC.
This is to certify that, for value received, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (together
with his successors and permitted assigns, "Holder"), is entitled to purchase
from Summit Brokerage Services, Inc., a Florida corporation (the "Company"), at
any time and from time to time beginning March 19, 2003 and ending at 5 P.M.
local time on March 18, 2008, forty thousand (40,000) shares (the "Warrant
Shares"), of Common Stock, par value $.0001 per share, of the Company ("Common
Stock"), at the Current Warrant Price (as hereinafter defined) in lawful money
of the United States of America. The purchase price hereunder at any time of a
single share of Common Stock is referred to herein as the "Current Warrant
Price." Initially, and until adjustment in the manner hereinafter provided, the
Current Warrant Price with respect to such 40,000 shares shall be $.30 per
share. The number of shares of Common Stock purchasable hereunder and the
Current Warrant Price are subject to adjustment from time to time in the manner
provided in Article 3 below. Certain terms in this Warrant are defined in
Article 10 below.
ARTICLE 1
EXERCISE OF WARRANT
Section 1.1. Method of Exercise. Subject to the provisions of Article 2
below, to exercise this Warrant in whole or in part, Holder shall deliver to the
Company: (i) a written notice, in substantially the form of the Subscription
Notice appearing at the end of this Warrant, of such Holder's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased; (ii) a certified or official bank check payable to the
order of the Company in the aggregate amount equal to the Current Warrant Price
multiplied by the total number of shares of Common Stock being purchased; and
(iii) this Warrant. The Company shall as promptly as practicable, and in any
event within 10 days after receipt by the Company of such notice, execute and
deliver or cause to be executed and delivered, in accordance with said notice, a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said notice. The stock certificate or certificates so
delivered shall be in the denomination as may be specified in said notice and
shall be issued in the name of such holder or such other name as shall be
designated in said notice. Such certificate or certificates shall be deemed to
have been issued and such holder or any other person so designated to be named
therein shall be deemed for all purposes to have become a holder of record of
such shares as of the date the consideration specified for such shares is
received by the Company as aforesaid. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of said certificate or
certificates, deliver to such holder a new Warrant evidencing the rights of such
holder to purchase the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of such holder, appropriate notation may be made on
this Warrant and the same returned to such holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issuance and delivery of such stock certificates and any new Warrant, except
that, in case such stock certificates or new Warrant shall be registered in a
name or names other than the name of the holder of this Warrant, funds
sufficient to pay all stock transfer taxes which shall be payable upon the
issuance of such stock certificate or certificates or any new Warrant shall be
paid by the holder hereof at the time of delivering the notice of exercise
mentioned above or promptly upon receipt of a written request of the Company for
payment of the same.
Section 1.2. Shares to be Issued. All shares of Common Stock issued upon
the exercise of this Warrant, upon full payment for the shares so exercised,
shall be validly issued, fully paid and nonassessable. Further, until the
expiration of this Warrant, the Company will at all times have authorized, and
reserved for the purpose of issuance upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for exercise of this Warrant.
Section 1.3. No Fractional Shares to be Issued. The Company shall not be
required upon any exercise of this Warrant to issue a certificate representing
any fraction of a share of Common Stock, but, in lieu thereof, shall pay Holder
cash in an amount equal to a corresponding fraction (calculated to the nearest
1/100 of a share) of the Current Market Price of one share of Common Stock as of
the date of receipt by the Company of notice of exercise of this Warrant.
Section 1.4. Legend on Warrant Shares. Each certificate for shares issued
upon exercise of this Warrant, unless at the time of exercise such Warrant
Shares are registered under the Act, shall bear a conspicuous legend in
substantially the following form:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the laws of any state and may
not be sold or otherwise transferred except pursuant to an effective
registration statement or a written opinion of counsel satisfactory to Summit
Brokerage Services, Inc. that such registration is not required."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of: (i) a public distribution pursuant to a registration statement; or (ii) an
exempt sale pursuant to Rule 144 or Rule 144A under the Act of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the holder thereof as shall be reasonably acceptable to the Company,
the securities represented thereby need no longer be subject to the restrictions
contained in Article 2 below. The provisions of Article 2 below shall be binding
upon all subsequent holders of this Warrant.
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ARTICLE 2
RESTRICTIONS ON EXERCISE
AND TRANSFER; REGISTRATION RIGHTS
Section 2.1. Restrictions on Exercise and Transfer. Holder, as of the date
of issuance hereof, by acceptance of this Warrant, represents to the Company
that Holder is not acquiring the Warrant with a view to the distribution
thereof. Notwithstanding any provisions contained in this Warrant to the
contrary, this Warrant and the related Warrant Shares shall not be transferable
except pursuant to the proviso contained in the following sentence or upon the
conditions specified in this Article 2, which conditions are intended, among
other things, to insure compliance with the provisions of the Act and applicable
state law in respect of the transfer of this Warrant or such Warrant Shares. The
Holder of this Warrant, by its acceptance hereof, agrees that it will not
transfer this Warrant or the related Warrant Shares: (a) prior to delivery to
the Company of a written notice of Holder's instruction to effect such transfer
together with an opinion of counsel reasonably satisfactory to the Company to
the effect that the proposed transfer of this Warrant and/or such Warrant Shares
may be effected without registration under the Act or applicable state law, or
(b) until registration of such Warrant Shares under the Act has become effective
or after a sale of such Warrant or Warrant Shares has been consummated pursuant
to Rule 144 or Rule 144A under the Act.
The aforementioned notwithstanding, the Holder agrees that Holder shall not
publicly dispose of any Warrant Shares before the following dates: (i) with
respect to fifty percent (50%) of the Warrant Shares, January 1, 2004 and (ii)
with respect to all other Warrant Shares, July 1, 2004.
Section 2.2. "Piggyback Registrations".
(a) If the Company at any time prior to the expiration of this Warrant,
proposes to register any of its Common Stock under the Act on Forms
▇-▇, ▇-▇, ▇-▇ or SB-1, or SB-2 (but not Form S-4 or Form S-8 or other
comparable form) or on any other form upon which may be registered
Common Stock, it will at each such time give written notice at least
30 days prior to the filing of the registration statement to Holder of
its intention so to do. Such notice shall specify the proposed date of
the filing of the registration statement and advise Holder of its
right to participate therein. Upon the written request of Holder given
prior to the proposed date of filing set forth in such notice, the
Company will cause each Warrant Share which the Company has been
requested to register by Holder to be registered under the Act, all to
the extent requisite to permit the sale or other disposition by Holder
of the Warrant Shares so registered.
(b) If, in the written opinion of the underwriter or underwriters managing
the public offering which is the subject of a registration pursuant to
Section 2.2(a) above (or in the event that such distribution shall not
be underwritten, in the written opinion of an investment banking firm
of recognized standing), the total amount of shares of Common Stock to
be so registered, when added to the total amount of Warrant Shares
which the Holder and all other Warrantholders have requested to be
registered pursuant to Section 2.2(a) above, will exceed the maximum
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amount of Common Stock of the Company which can be marketed: (i) at a
price reasonably related to their then current market value; or (ii)
without otherwise materially and adversely affecting the entire
offering, then the Company shall have the right to exclude from such
registration such number of Warrant Shares of Holder and the other
Warrantholders which it would otherwise be required to register
pursuant to Section 2.2(a) above as is necessary to reduce the total
amount of shares of Common Stock of the Company to be so registered to
the maximum amount of shares of Common Stock which can be so marketed;
provided, however, that if the total amount of shares of Common Stock
which can be sold is less than the number of Warrant Shares requested
by Holder and the other Warrantholders to be included in the
registration together with the number of other shares of Common Stock
duly requested to be registered by any affiliates of the Company and
other selling security holders included in the registration statement
who are subject to contractual cut-back agreements, then the number of
shares of Common Stock to be excluded from such registration shall be
allocated among Holder, and such other Warrantholders, affiliates and
selling security holders in proportion to the respective number of
shares of Common Stock held of record by each of them. In such event,
the Company shall give Holder prompt written notice of the number of
shares of Holder's Warrant Shares excluded from such registration at
the request of the managing underwriter. No such exclusion shall
reduce the securities being offered by the Company for its own account
to be included in such registration statement.
(c) The Company may, in its sole discretion and without the consent of
Holder, at any time after it shall have given written notice to Holder
in accordance with this Warrant, delay the filing or effectiveness of
the registration statement or withdraw such registration statement and
abandon the proposed offering in which Holder had requested to
participate; provided, however, that such delay, withdrawal and/or
abandonment is with respect to all securities under such registration,
and provided further, that any delay, withdrawal and/or abandonment
shall not preclude or otherwise prejudice subsequent requests for
registration pursuant to this Section 2.2.
(d) Holder will cooperate with the Company in all material respects in
connection with this Agreement, including, without limitation, timely
supplying all information reasonably requested by the Company and
executing and returning all documents reasonably requested in
connection with the registration and sale of the Warrant Shares.
(e) In connection with each registration covering an underwritten public
offering, the Company and Holder agree to enter into a written
agreement with the managing underwriter containing such provisions as
are customary in the securities business for such an arrangement
between an underwriter and companies of the Company's size and
investment stature.
Section 2.3. Company's Obligations in Registration. If and whenever the
Company is obligated by the provisions of this Article 2 to effect the
registration of any Warrant Shares under the Act, as expeditiously as possible
the Company will:
(a) prepare and file with the Commission a registration statement and use
its best efforts to cause such registration statement to become and
remain effective during the period required for the distribution of
the securities covered by the registration statement; provided,
however, that in the event that the Warrant Shares covered by such
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registration statement are not to be sold to or through underwriters
acting for the Company, the Company shall not be required to keep such
registration statement in effect, or to prepare and file any
amendments or supplements thereto, after the expiration of six months
following the date on which such registration statement becomes
effective under the Act or such longer period during which the
Commission requires that such registration statement be kept effective
with respect to any of the Warrant Shares so registered;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Act with respect to
the disposition of all Warrant Shares covered by such registration
statement, whenever the Holder for whom such Warrant Shares are
registered shall desire to dispose of the same, subject, however to
the proviso contained in Section 2.3(a) above;
(c) furnish to the Holder for whom such Warrant Shares are registered and
to any underwriter or underwriters such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as Holder may
reasonably request in order to facilitate the disposition of such
Warrant Shares;
(d) subject to Section 2.4 herein, use its reasonable efforts to register
or qualify the Warrant Shares covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as
the Holder for whom such Warrant Shares are registered or are to be
registered shall reasonably request, and do any and all other
reasonable acts and things to so register or qualify which may be
necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of such Warrant Shares except that
the Company shall not for any such purpose be required to: (i) qualify
to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or to file therein any general consent to service
of process or be subject to any escrow or other similar conditions; or
(ii) take any other actions or submit itself or its directors or
officers to any restrictions, obligations or burdens having a material
adverse economic effect on it or them. Notwithstanding anything to the
contrary contained herein, the Company shall be obligated to register
or qualify the Warrant Shares of Holder and of any other
Warrantholders covered by such registration statement in not more than
5 states or jurisdictions.
Section 2.4. Payment of Registration Expenses. The costs and expenses of
all registrations under the Act and of all other actions which the Company is
required to take or effect pursuant to this Article 2 shall be paid for by the
Company (including, without limitation, all registration, qualification and
filing fees, printing expenses, expenses of distributing prospectuses and other
documents, fees and disbursements of counsel and accountants for the Company,
and expenses of any special audits incident to or required in connection with
any such registration hereof, but excluding the fees and disbursements of
special counsel for Holder or the other Warrantholders, any consultants retained
by Holder or the other Warrantholders and underwriters' or brokers' discounts or
commissions applicable to any Warrant Shares).
Section 2.5. Information from Warrantholders. Notices and requests
delivered by Holder to the Company pursuant to this Article 2 shall contain such
information regarding Holder and Holder's Warrant Shares and the intended method
of disposition thereof as shall reasonably be required in connection with the
action to be taken.
5
Section 2.6. Company's Indemnification. To the extent permitted by law, the
Company shall indemnify and hold harmless Holder and each of its officers,
partners, directors, employees and representatives, each underwriter of such
Warrant Shares thereunder and each other person, if any, who controls Holder or
such underwriter within the meaning of the Act, against any losses, damages,
costs, claims, expenses and liabilities, including, without limitation,
reasonable attorneys', paralegals' and accountants' fees and expenses, before
and at trial and at all applicable appellate levels (individually and
collectively, "Losses"), to which they may become subject under the Act or other
federal or state law, insofar as such Losses arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, and/or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however,
that the Company shall not be liable in any such case if and to the extent that
any such Losses arise out of or are based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by Holder, any such underwriter or any such
controlling person in writing specifically for use in such registration
statement or prospectus; or (ii) Holder's failure to deliver a copy of the final
prospectus as then amended or supplemented after the Company has furnished
Holder with a sufficient number of copies of the same, but only if delivery of
same is required by law and the same would have cured the defect giving rise to
any such Losses.
(a) Holder's Indemnification. In the event of a registration of any of
Holder's Warrant Shares under the Act pursuant to the provisions of
this Agreement, Holder shall furnish to the Company in writing such
information and affidavits with respect to Holder as the Company
reasonably requests for use in connection with any such registration
statement (or prospectus contained therein) and Holder will indemnify
and hold harmless to the extent permitted by law, the Company, each
person, if any, who controls the Company within the meaning of the
Act, each officer and director of the Company, each underwriter and
each person who controls any underwriter within the meaning of the
Act, against all Losses to which the Company or such officer,
director, underwriter or controlling person may become subject under
the Act or otherwise, insofar as such Losses arise out of or are based
upon any statements or information provided in writing by Holder,
including each of its officers, partners, directors, employees and
representatives, to the Company or underwriter in connection with the
offer and sale of Warrant Shares. Notwithstanding the foregoing, the
amount Holder shall be obligated to indemnify pursuant to this
Agreement shall be limited to an amount equal to the proceeds received
by Holder of the Warrant Shares sold pursuant to the registration
statement which gives rise to such obligation to indemnity (less the
aggregate amount which Holder has been otherwise required to pay in
respect of such Loss or any substantially similar Loss arising from
the sale of such Warrant Shares).
Section 2.7. Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder will: (a) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification;
and (b) unless, in such indemnified party's reasonable judgment, a conflict of
interest may exist between such indemnified and indemnifying parties with
6
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
provided, however, that the failure of an indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Section 2.7 with respect to such indemnified party, except to the
extent that the indemnifying party is actually prejudiced by such failure.
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to the entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of the claim against the
indemnified party, will not be obligated to pay the fees and expenses of more
than one counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels.
If for any reason the indemnification provided for in the preceding
Sections 2.7 and 2.8 above is unavailable to an indemnified party as
contemplated thereby, the indemnifying party shall contribute to the amount paid
or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of fraudulent
misrepresentation.
Section 2.8. Rule 144 Reporting. The Company covenants that it will use its
best efforts to timely file the reports required to be filed by it under the
Exchange Act and the rules and regulations adopted by the Commission thereunder
to enable Holder to sell Warrant Shares without registration under the Act
within the limitation of the exemptions provided by (i) Rule 144 under the Act,
as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission.
ARTICLE 3
ANTI-DILUTION PROVISIONS
Section 3.1. Adjustment of Current Warrant Price and Number of Shares
Purchasable. The Current Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall be subject to adjustment
from time to time as hereinafter provided in this Article 3. Upon each
adjustment of the Current Warrant Price, the Holder of this Warrant shall
thereafter be entitled to purchase at the Current Warrant Price resulting from
such adjustment, the number of shares (calculated to the nearest whole share) of
Common Stock calculated by multiplying the Current Warrant Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Current Warrant Price resulting from such adjustment.
7
Section 3.2. Effect of "Split-ups" and Stock Dividends. In case at any time
or from time to time the Company shall subdivide or combine as a whole, by
reclassification, by the issuance of a stock dividend on the Common Stock
payable in Common Stock, or otherwise, the number of shares of Common Stock then
Outstanding into a greater or lesser number of shares of Common Stock, with or
without par value, the Current Warrant Price shall be reduced or increased (as
applicable) proportionately. The issuance of such a stock dividend shall be
treated as a subdivision of the whole number of shares of Common Stock
Outstanding immediately prior to such dividend into a number of shares equal to
such whole number of shares so outstanding plus the number of shares issued as a
stock dividend. Upon any such adjustment, the number of shares shall be rounded
upward to the nearest whole share.
Section 3.3. Effect of Merger, Consolidation. In case the Company shall,
while this Warrant remains outstanding, enter into any consolidation with or
merger into any other corporation wherein the Company is not the surviving
corporation, or wherein securities of a corporation other than the Company are
distributable to holders of Common Stock, or sell or convey its property in the
entirety or substantially as an entirety followed by distribution of any or all
of the proceeds thereof to shareholders, and in connection with such
consolidation, merger, sale or conveyance, shares of stock or other securities
or property shall be issuable or deliverable in exchange for the Common Stock,
then, as a condition of such consolidation, merger, sale or conveyance, lawful
and adequate provision shall be made whereby the holder of this Warrant shall
thereafter be entitled to purchase pursuant to this Warrant (in lieu of the
number of shares of Common Stock which such holder would have been entitled to
purchase immediately prior to such consolidation, merger, sale or conveyance)
the shares of stock or other securities or property to which such number of
shares of Common Stock would have been entitled at the time of such
consolidation, merger, sale or conveyance, at an aggregate purchase price equal
to that which would have been payable if such number of shares of Common Stock
had been purchased by exercise of this Warrant immediately prior thereto. In
case of any such consolidation, merger, sale or conveyance, an appropriate
provision shall be made with respect to the rights and interests thereafter of
any holder of this Warrant, to the end that all the provisions of this Warrant
(including the provisions of this Article 3) shall thereafter be applicable, as
nearly as practicable, to such stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
Section 3.4. Reorganization or Reclassification. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(except as provided in Section 3.2 above) while this Warrant remains
outstanding, then lawful and adequate provision shall be made whereby the holder
of this Warrant shall thereafter be entitled to purchase pursuant to this
Warrant (in lieu of the number of shares of Common Stock which such holder would
have been entitled to purchase immediately prior to such reorganization or
reclassification) the shares of stock of any class or classes or other
securities or property to which such number of shares of Common Stock would have
been entitled at the time of such reorganization or reclassification, at an
aggregate purchase price equal to that which would have been payable if such
number of shares of Common Stock had been purchased immediately prior to such
reorganization or reclassification. In case of any such capital reorganization
or reclassification, appropriate provision shall be made with respect to the
rights and interests thereafter of the holder of this Warrant, to the end that
all the provisions of this Warrant (including the provisions of this Article 3)
8
shall thereafter be applicable, as nearly as practicable, to such stock or other
securities or property thereafter deliverable upon the exercise of the Warrant.
Section 3.5. Statement of Adjustment. Upon each adjustment of the Current
Warrant Price and the number of shares of Common Stock purchasable hereunder,
and in the event of any change in the rights of the holder of this Warrant by
reason of other events herein set forth, then and in each such case the Company
will promptly prepare a schedule setting forth the adjusted Current Warrant
Price and the adjusted number of shares purchasable hereunder, or specifying the
other shares of stock, other securities or property and the amount thereof
receivable as a result of such change in rights, and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based. The Company will promptly mail a copy of such schedule to the registered
holder of this Warrant.
Section 3.6. Notifications by the Company. In case at any time the Company
proposes:
(a) to pay any dividend payable in stock (of any class or classes);
(b) to effect any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to,
another corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(d) the Company shall enter into a letter of intent or agreement with
respect to a transaction by which all of the Outstanding shares of
Common Stock of the Company are to be acquired by a third party; then
the Company shall mail or cause to be mailed to Holder at the time
outstanding a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend,
distribution or rights, and stating the amount and character of such
dividend, distribution or rights, (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time,
if any is to be fixed, as to which the holders of record of Common
Stock shall be entitled to exchange their shares for securities or
other property deliverable upon the completion of such transaction, or
(iii) the closing of the acquisition by a third party of all of the
Outstanding shares of Common Stock. Such notice shall be mailed as
soon as practicable after the occurrence or likelihood of such event
is publicly disclosed, but in any event at least twenty (20) business
days prior to the date specified in such notice.
ARTICLE 4
CERTAIN COVENANTS OF THE HOLDER
The Holder represents, warrants, covenants and agrees that:
(a) this transaction is intended to be exempt from the registration
provisions of the Act and, accordingly neither the Warrant nor the
Warrant Shares have been registered under the Act; Holder is acquiring
9
the Warrant and Warrant Shares for investment purposes only and not
with a view to or for resale in connection with any distribution of
the Warrant or Warrant Shares, nor with any present intention of
distribution (within the meaning of the Act) of the Warrant or Warrant
Shares; because the Warrant and Warrant Shares will not have been
registered under the Act, the Company will not permit the transfer of
such shares without registration under the Act, or upon the issuance
to the Company of a favorable opinion from counsel satisfactory to the
Company to the effect that such transfer, whether pursuant to Rule 144
of the Act or otherwise, shall not be in violation of the Act, and any
applicable state securities laws; and the share certificates
representing the Warrant Shares will be issued with a restrictive
legend providing notice of such restriction;
(b) Holder has had an opportunity to ask questions of, and receive answers
from, appropriate officers and representatives of the Company
concerning the terms and conditions of the issuance of this Warrant
and the Warrant Shares and to obtain any additional information
concerning the Company, its business and operations which they have
requested; and
(c) the Company has made available for inspection by them various
documents connected with the Company's business and has not refused in
any way to permit them to inspect any document requested to be
inspected by them.
ARTICLE 5
NOTICE
Any notice or other document required to be given or delivered to the
Holder shall be delivered at, or sent by certified or registered mail to, such
Holder at the last address shown on the books of the Company maintained at the
Company's headquarters for the registration and registration of transfer of this
Warrant or at any more recent address of which the Holder shall have notified
the Company in writing. Any notice or other document required or permitted to be
given or delivered to holders of record of outstanding Warrant Shares shall be
delivered at, or sent by certified or registered mail to, each such holder at
such holder's address as the same appears on the stock records of the Company.
Any notice or other document required or permitted to be given or delivered to
the Company, shall be delivered at, or sent by certified or registered mail to,
the office of the Company at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address within the United States of America as
shall have been furnished by the Company to the Warrantholders and the holders
of record of Warrant Shares. Any notice or other document sent by certified or
registered mail, return receipt requested, shall be deemed to have been
delivered and received when sent if the receipt is appropriately completed and
returned. Notices or documents delivered in any other manner than as set forth
above shall be deemed to have been delivered only when and if received.
ARTICLE 6
NOT SHAREHOLDERS
The Holder shall have no voting rights or any other rights as a shareholder
(except the rights stated herein) with respect to shares covered by this Warrant
until the date of exercise of such shares.
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ARTICLE 7
LOSS, DESTRUCTION, ETC. OF WARRANT
Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Warrant, the Company will
make and deliver a new Warrant, of like tenor, in lieu of such lost, stolen,
destroyed or mutilated Warrant. Any Warrant issued under the provisions of this
Article 7 in lieu of any Warrant alleged to be lost, destroyed or stolen, or in
lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
ARTICLE 8
LAW GOVERNING
This Warrant shall be governed by, and construed and enforced in accordance
with, the law of the State of Florida, without reference to its choice of law
principles.
ARTICLE 9
SUCCESSORS AND ASSIGNS
The rights and obligations of the parties hereunder shall be binding upon
and inure to the benefit of their respective successors and assigns.
ARTICLE 10
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise requires,
the following terms shall have the following respective meanings:
"Act": the Securities Act of 1933, as amended from time to time, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Commission": the Securities and Exchange Commission, or any other federal
agency then administering the Act.
"Current Market Price": the "Closing Price" (as defined below) of the
Common Stock on the last business day immediately preceding any date of
reference. For the purpose of determining Current Market Price, the "Closing
Price" of the Common Stock on any business day shall be: (i) if the Common Stock
is listed or admitted for trading on any United States national securities
exchange, the last reported sale price of Common Stock on such exchange; (ii) if
the Common Stock is listed or admitted for trading on any tier of The Nasdaq
Stock Market, the last reported sale price of Common Stock on such tier; or
(iii) if the Common Stock is traded in the over-the-counter market, the average
of the closing bid and asked prices for the Common Stock as quoted on the OTC
Bulletin Board.
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"Current Warrant Price": (per share of Common Stock at any date): the price
at which one share of Common Stock may be purchased hereunder at any time,
initially $.30. The Current Warrant Price is subject to adjustment from time to
time pursuant to Article 3 above.
"Exchange Act": the Securities Exchange Act of 1934, as amended from time
to time, or any successor federal statute, and the rules and regulations of the
Commission thereunder.
"Outstanding": when used with reference to Common Stock at any date, all
issued shares of Common Stock (including, but without duplication, shares deemed
issued pursuant to Article 3 above) at such date, except shares then held in the
treasury of the Company.
"Person": an individual, corporation, partnership, joint venture, trust
estate, unincorporated organization or government or an agency or political
subdivision thereof.
"Warrant Shares": the shares of Common Stock purchasable or purchased by a
Warrantholder upon the exercise of the Warrants. Unless otherwise expressly
stated herein, Warrant Shares shall not include shares of Common Stock purchased
upon exercise of the Warrant which have been sold by a Warrantholder pursuant to
a registration statement under the Act.
"Warrantholders": the Holder and all other holders of Warrants or any
related Warrant Shares.
"Warrant": the warrant issued by the Company hereunder evidencing the right
initially to purchase an aggregate of 40,000 shares of Common Stock and all
warrants issued in substitution or subdivision hereof.
"Warrants": the warrants issued by the Company (including this Warrant)
having the same terms, conditions and expiration date as this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
name on July 28, 2003 as of and effective March 19, 2003.
SUMMIT BROKERAGE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
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SUBSCRIPTION NOTICE
SUMMIT BROKERAGE SERVICES, INC.
The undersigned, the holder of the foregoing Warrant (the "Holder"), hereby
elects to exercise purchase rights represented by said Warrant for, and to
purchase thereunder, _______ shares of the Common Stock covered by said Warrant
and (a) herewith makes payment in full therefor of $___________ by certified or
official bank check payable to the order of the Company, and (b) requests (1)
that certificates for such shares (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to
_______________________________, whose address is
________________________________ and whose Social Security or Tax Identification
Number is ________________________________ (2) if such shares shall not include
all of the shares issuable as provided in said Warrant, that a new Warrant of
like tenor and date for the balance of the shares issuable thereunder be
delivered to the undersigned.
The Holder hereby represents and warrants to and agrees with the Company
that, if the shares of Common Stock which the Holder hereby subscribes for have
not been effectively registered under the Securities Act of 1933, as amended, or
any similar Federal statute in effect at the date of this Subscription Notice,
the Holder is purchasing said shares of Common Stock for his or its own account
for investment, and not with a view to, or for sale in connection with, any
distribution of such shares and without any present intention of distributing or
selling such shares.
Signature of Holder:
Dated:
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Add Medallion Guaranty of Signature:
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ the rights represented by the foregoing Warrant of Summit
Brokerage Services, Inc. and appoints ______________________________ attorney to
transfer said rights on the books of said corporation, with full power of
substitution in the premises.
The Holder hereby represents and warrants to and agrees with the Company
that, if the shares of Common Stock which the Holder hereby subscribes for have
not been effectively registered under the Securities Act of 1933, as amended, or
any similar Federal statute in effect at the date of this Election to Purchase,
the Holder is purchasing said shares of Common Stock for his or its own account
for investment, and not with a view to, or for sale in connection with, any
distribution of such shares and without any present intention of distributing or
selling such shares.
Assignor's Signature:
Dated:
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Add Medallion Guaranty of Signature:
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