AGREEMENT, dated this ____ day of _______ 1998 by and between ▇▇▇▇▇▇
ELECTRONICS, INC., a New York corporation (the "Company"), and REGISTRAR AND
TRANSFER COMPANY, as Warrant Agent (the "Warrant Agent").
WHEREAS, in connection with (i) the offering to the public of up to
950,000 shares of Common Stock, par value $.01 per share of the Company ("Common
Stock"), and up to 1,450,000 redeemable warrants each warrant entitling the
holder thereof to purchase one share of Common Stock ("Redeemable Warrants"; the
shares of Common Stock and Redeemable Warrants sometimes collectively referred
to as the "Securities"); (ii) the over-allotment option to purchase up to
142,500 shares of Common Stock from the Company as to 42,500 such shares and a
selling shareholder as to 100,000 of such shares and/or 217,500 Redeemable
Warrants (the "Over-allotment Option"); and (iii) the sale to The Thornwater
Company, L.P. ("Representative"), as representative of the several underwriters
(individually "Underwriter" and collectively "Underwriters"), its successors and
assigns of a warrant (the "Representative's Warrant") to purchase up to 95,000
shares of Common Stock and/or 145,000 Redeemable Warrants, being identical to
the Securities being sold to the public except the price to purchase one share
of commone stock shall be $7.425 (the warrants issuable upon the exercise of the
Representative's Warrant are referred to as the "Common Stock Warrants"), the
Company will issue up to 1,667,500 Redeemable Warrants and may issue up to
145,000 Common Stock Warrants (subject to increase as provided in the
Representative's Warrant Agreement); and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Redeemable Warrants and the Common Stock Warrants
(collectively, the "Warrants"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the
Underwriters, the holders of certificates representing the
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Warrants and the Warrant Agent, the parties hereto agree as follows:
SECTION 1. Definitions
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Capitalized terms used herein and not otherwise defined shall
have the meaning given thereto in the Underwriting Agreement. As used herein,
the following terms shall have the following meanings, unless the context shall
other-wise require:
(a) "Common Stock" shall mean the common stock of the
Company, par value $.01 per share.
(b) "Corporate Office" shall mean the office of the
Warrant Agent (or its successor) at which at any particular time its principal
business shall be administered, which office is located on the date hereof at
_____________________________.
(c) "Exercise Date" shall mean, subject to the
provisions of Section 5(b) hereof, as to any Warrant, the date on which the
Warrant Agent shall have received both (i) the Warrant Certificate representing
such Warrant, with the exercise form thereon duly executed by the Registered
Holder hereof with such Registered Holder's signature guaranteed, and (ii)
payment in cash or by bank or cashier's check made payable to the Warrant Agent
for the account of the Company, of the amount in lawful money of the United
States of America equal to the applicable Purchase Price.
(d) "Initial Warrant Exercise Date" shall mean
_____________, 2000, or such earlier date as to which the Representative shall
have consented, provided if the Representative shall have consented to an
earlier Initial Warrant Redemption Date the Initial Warrant Exercise Date shall
be the same as the Initial Warrant Redemption Date.
(e) "Initial Warrant Redemption Date" shall mean
__________, 2000 or such earlier date as to which the Representative shall have
consented.
(f) "Purchase Price" shall mean, subject to
modification and adjustment as provided in Section 8, _____ per share of Common
Stock as to the Redeemable Warrants or $7.425 per share of Common Stock, as to
the Common Stock Warrants.
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(g) "Registered Holder" shall mean the person in
whose name any certificate representing the Warrants shall be registered on the
books maintained by the Warrant Agent pursuant to Section 6.
(h) "Subsidiary" or "Subsidiaries" shall mean any
corporation or corporations, as the case may be, of which stock having ordinary
power to elect a majority of the Board of Directors of such corporation
(regardless of whether or not at the time stock of any other class or classes of
such corporation shall have or may have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by the Company
or by one or more Subsidiaries, or by the Company and one or more Subsidiaries.
(i) "Transfer Agent" shall mean Registrar and
Transfer Company, or its authorized successor.
(j) "Underwriting Agreement" shall mean the
underwriting agreement dated as of __________, 1998 between the Company and
Representative, relating to the purchase for resale to the public of the
Securities.
(k) "Representative's Warrant Agreement" shall mean
the agreement dated as of __________, 1998 between the Company and
Representative relating to and governing the terms and provisions of the
Representative's Warrants.
(l) "Warrant Certificate" shall mean a certificate
representing each of the Warrants substantially in the form annexed hereto as
Exhibit A.
(m) "Warrant Expiration Date" shall mean, unless the
Warrants are redeemed as provided in Section 9 hereof prior to such date, 5:00
p.m. (Eastern time) on ____________ __, 2003 or, if such date shall in the State
of New York be a holiday or a day on which banks are authorized to close, than
5:00 p.m. (Eastern time) on the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the
Registered Holder of the Warrant Certificate representing such Warrant to
purchase at the Purchase Price therefor from the Initial Warrant Exercise Date
until the Warrant Expiration Date
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one share of Common Stock upon the exercise thereof, subject to modification and
adjustment as provided in Section 8.
(b) Upon execution of this Agreement, Warrant
Certificates representing 1,450,000 Redeemable Warrants to purchase up to an
aggregate of 1,450,000 shares of Common Stock (subject to modification and
adjustment as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(c) Upon exercise of the Over-allotment Option, in
whole or in part as to the Redeemable Warrants, and payment of the applicable
sums, Warrant Certificates representing up to 195,000 Redeemable Warrants to
purchase up to an aggregate of 195,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8) shall be executed by the
Company and delivered to the Warrant Agent.
(d) Upon exercise of the Representative's Warrant as
to the Common Stock Warrants as provided therein, and payment of the applicable
exercise price, Warrant Certificates representing 145,000 Common Stock Warrants
to purchase up to an aggregate of up to 145,000 shares of Common Stock (subject
to modification and adjustment as provided in Section 8 hereof and in the
Underwriter's Warrant Agreement), shall be executed by the Company and delivered
to the Warrant Agent.
(e) From time to time, up to the Warrant Expiration
Date, as the case may be, the Warrant Agent shall countersign and deliver
Warrant Certificates in required denominations of one or whole number multiples
thereof to the person entitled thereto in connection with any transfer or
exchange permitted under this Agreement. Except as provided in Section 7 hereof,
no Warrant Certificates shall be issued except (i) Warrant Certificates
initially issued hereunder, (ii) Warrant Certificates issued upon any transfer
or exchange of Warrants, (iii) Warrant Certificates issued in replacement of
lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7,
(iv) Warrant Certificates issued upon exercise of the Representative's Warrants
(including Common Stock Warrants in excess of 145,000 Representative's Warrants
issued as a result of the anti-dilution provisions contained in the
Underwriter's Warrant Agreement), and (v) at the option of the Company, Warrant
Certificates in such form as may be approved by its Board of Directors, to
reflect any adjustment or change in the Purchase Price, the number of shares of
Common
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Stock purchasable upon exercise of the Warrants or the Redemption Price therefor
made pursuant to Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
------------------------------------------
(a)The Warrant Certificates shall be substantially in
the form annexed hereto as Exhibit A (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be dated the date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed Warrant
Certificates). Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary,
by manual signatures or by facsimile signatures printed thereon, and shall have
imprinted thereon a facsimile of the Company's seal. Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the warrant Certificates shall cease to be such officer of
the Company before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
SECTION 4. Exercise.
---------
(a) Warrants may be exercised commencing at any time
on or after the Initial Warrant Exercise Date, but not after the Warrant
Expiration Date, upon the terms and subject to the conditions set forth herein
(including the provisions set forth in Sections 5 and 9 hereof) and in the
applicable Warrant Certificate. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise Date, provided that
the Warrant Certificate
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representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof with such Registered Holder's signature guaranteed,
together with payment in cash or by bank or cashier's check made payable to the
order of the Company, of an amount in lawful money, of the United States of
America equal to the applicable Purchase Price, has been received in good funds
by the Warrant Agent. The person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the holder of such
securities as of the close of business on the Exercise Date. As soon as
practicable on or after the Exercise Date and in any event within five business
days after such date, the Warrant Agent on behalf of the Company shall cause to
be issued to the person or persons entitled to receive the same a Common Stock
certificate or certificates for the shares of Common Stock deliverable upon such
exercise, and the Warrant Agent shall deliver the same to the person or persons
entitled thereto. Upon the exercise of Warrants, the Warrant Agent shall
promptly notify the Company in writing of such fact and of the number of
securities delivered upon such exercise and, subject to subsection (b) below,
shall cause all payments of an amount in cash or by check made payable to the
order of the Company, equal to the Purchase Price, to be deposited promptly in
the Company's bank account.
(b) At any time upon the exercise of Warrants after
one year and one day from the date hereof, (i) the Market Price (as hereinafter
defined) of the Company's Common Stock is equal to or greater than the Purchase
Price, (ii) the exercise of the Warrant is solicited by an Underwriter at such
time as such Underwriter is a member of the National Association of Securities
Dealers, Inc. ("NASD"), (iii) the Warrant is not held in a discretionary
account, (iv) disclosure of the compensation arrangement is made in documents
provided to the holders of the Warrants, and (v) the solicitation of the Warrant
is not in violation of Regulation M promulgated under the Securities Exchange
Act of 1934, then the soliciting Underwriter shall be entitled to receive from
the Company upon exercise of each of the Warrants so exercised, a fee of five
percent (5%) of the aggregate price of the Warrants so exercised (the "Exercise
Fee"). Within five (5) days after the end of each month, commencing in _______
1999, the Warrant Agent will notify the Representative of each Warrant
Certificate which has been properly completed for exercise by holders of
Warrants during the last month. The Warrant Agent will provide the
Representative with such information, in connection with the exercise of each
Warrant, as the
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Representative shall reasonably request. The Company hereby authorizes and
instructs the Warrant Agent to deliver to the soliciting Underwriters, if known
to the Warrant Agent, or to the Representative if not so known, the Exercise Fee
promptly after receipt by the Warrant Agent from the Company of a check payable
to the order of the appropriate Underwriter in the amount of the Exercise Fee.
The Warrant Agent shall not issue the shares of Common Stock issuable upon
exercise of the Warrants until receipt and forwarding of such check, provided
that no check need be issued unless the amount thereof is at least $1,000
(including Exercise Fees previously earned, but not paid by reason of the
application of this provision). In the event that an Exercise Fee is paid to an
Underwriter with respect to a Warrant which was not properly completed for
exercise or in respect of which such Underwriter is not entitled to an Exercise
Fee, such Underwriter will return such Exercise Fee to the Warrant Agent which
shall forthwith return such fee to the Company. The Representative and the
Company may at any time after ____________ ___, 1999, and during business hours,
examine the records of the Warrant Agent, including its ledger of original
Warrant Certificates returned to the Warrant Agent upon exercise of warrants.
Notwithstanding any provision to the contrary, the provisions of this Section
4(b) may not be modified, amended or deleted without the prior consent of the
Representative.
(c) The Company shall not be obligated to issue any
fractional share interests or fractional warrant interests upon the exercise of
any Warrant or Warrants, nor shall it be obligated to issue scrip or pay cash in
lieu of fractional interests. Any fractional interest shall be eliminated.
(d) Anything in this Section 4 notwithstanding, no
Warrant will be exercisable unless at the time of exercise the Company has filed
with the Securities and Exchange Commission a registration statement under the
Securities Act of 1933, as amended (the "Act") covering the shares of Common
Stock issuable upon exercise of such Warrant and such shares have been so
registered or qualified or deemed to be exempt under the securities laws of the
state of residence of the holder of such Warrant.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
------------------------------------------------------
(a) The Company covenants that it will at all times
reserve and keep available out of its authorized Common
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Stock, solely for the purpose of issuance upon exercise of warrants, such number
of shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be issuable upon exercise of the Warrants shall, at the time of
delivery thereof, be duly and validly issued and fully paid and nonassessable
and free from all preemptive or similar rights, taxes, liens and charges with
respect to the issuance thereof, and that upon issuance such shares shall be
listed on each securities exchange, if any, on which the other shares of
outstanding Common Stock of the Company are then listed.
(b) The Company covenants that, so long as any
unexpired Warrants remain outstanding, the Company will file such post-effective
amendments to the registration statement, Form SB-2, Registration No. 333-42121
(the "Registration Statement"), filed pursuant to the Act with respect to the
Warrants (or other appropriate registration statements or post-effective
amendment or supplements) as may be necessary to permit it to deliver to each
person exercising a Warrant, a prospectus meeting the requirements of Section
10(a)(3) of the Act and otherwise complying therewith, and will deliver such a
prospectus to each such person. To the extent that during any period it is not
reasonably likely that the Warrants will be exercised, due to market price or
otherwise, the Company need not file such a post-effective amendment during such
period. The Company will use its reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws; provided the
Company shall not be required to qualify to do business as a foreign corporation
or file a general consent to the services of process in any such jurisdiction.
With respect to any such securities, however, Warrants may not be exercised by,
or shares of Common Stock issued to, any Registered Holder in any state in which
such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or
similar taxes and other governmental charges that may be imposed with respect to
the issuance of Warrants, or the issuance or delivery of any shares of Common
Stock upon exercise of the Warrants; provided, however, that if shares of Common
Stock are to be delivered in a name other than the name of the Registered Holder
of the Warrant Certificate representing any Warrant being exercised, then no
such delivery shall be made unless the person requesting the same has paid to
the Warrant Agent the amount of transfer taxes or charges incident thereto, if
any.
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(d) The Warrant Agent is hereby irrevocably
authorized as the Transfer Agent to requisition from time to time certificates
representing shares of Common Stock or other securities required upon exercise
of the Warrants, and the Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
--------------------------------------
(a) Warrant Certificates may be exchanged for other
Warrant Certificates representing an equal aggregate number of Warrants or may
be transferred in whole or in part. Warrant Certificates to be so exchanged
shall be surrendered to the Warrant Agent at its Corporate Office, and, upon
satisfaction of the terms and conditions hereof, the Company shall execute and
the Warrant's Agent shall countersign, issue and deliver in exchange therefor
the Warrant Certificate or Certificates which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office,
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and the transfer thereof. Upon due
presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to any Warrant Certificates
presented for registration of transfer, or for exchange or exercise, the
subscription or exercise form, as the case may be, on the reverse thereof shall
be duly endorsed or be accompanied by a written instrument or instruments of
transfer and subscription, in form satisfactory to the Company and the Warrant
Agent, duly executed by the Registered Holder thereof with such Registered
Holder's signature guaranteed.
(d) A service charge may be imposed by the Warrant
Agent for any exchange, registration or transfer of Warrant Certificates.
However, the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.
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(e) All Warrant Certificates surrendered for exercise
or for exchange shall be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or
transfer thereof, the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute owner thereof of
each Warrant represented thereby (notwithstanding any notations of ownership or
writing thereon made by anyone other than the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation.
-------------------
Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and (in the case of loss, theft or
destruction) of indemnity satisfactory to them, and (in case of mutilation) upon
surrender and cancellation thereof, the Company shall execute and the Warrant
Agent shall countersign and deliver in lieu thereof a new Warrant Certificate
representing an equal aggregate number of Warrants. Applicants for a substitute
Warrant Certificate shall also comply with such other reasonable regulations and
pay such other reasonable costs and expenses as the Warrant Agent may impose.
SECTION 8. Adjustment of Purchase Price and reasonable charges as the Warrant
------------------------------------------------------------------
Agent may prescribe.
--------------------
(a) Except as hereinafter provided, in the
event the Company shall, at any time or from time to time after the date hereof,
sell any shares of Common Stock for a consideration per share less than the
closing bid price of the Common Stock as reported on NASDAQ, if traded on the
OTC Electronic Bulletin Board or NASDAQ Small Cap Market or the last sales
price, if listed on NASDAQ National Market or a national exchange, in either
case, on the trading date next preceding such sale (the "Market Price"), or
issue any shares of Common Stock as a stock dividend to the holders of Common
Stock, or subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter
immediately before the date of such sale or the record date for each Change of
Shares, the Purchase Price for the shares of Common Stock
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issuable upon exercise of the Warrants (whether or not the same shall be issued
and outstanding) in effect immediately prior to such Change of Shares shall be
changed to a price (including any applicable fraction of a cent to the nearest
cent) determined by dividing (1) the product of (a) the Purchase Price in effect
immediately before such Change of Shares and (b) the sum of (i) the total number
of shares of Common Stock outstanding immediately prior to such Change of
Shares, and (ii) the number of shares determined by dividing (A) the aggregate
consideration, if any, received by the Company upon such sale, issuance,
subdivision or combination, by (B) the Market Price; by (2) the total number of
shares of Common Stock outstanding immediately after such Change of Shares,
however, that in no event shall the Purchase Price be adjusted pursuant too this
computation to an amount in excess of the Purchase Price in effect immediately
prior to such computation, except in the case of a combination of outstanding
shares of Common Stock, as provided by Section 8(h) hereof.
(b) For the purposes of any adjustment to be made in
accordance with this Section 8(a) the following provisions shall be applicable:
(A) In case of the issuance or sale of
shares of Common Stock (or of other securities deemed
hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be cash,
the amount of the cash portion of the consideration therefor
deemed to have been received by the Company shall be (i) the
subscription price (before deducting any commissions or any
expenses incurred in connection therewith), if shares of
Common Stock are offered by the Company for subscription, or
(ii) the public offering price (before deducting therefrom any
compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or
others performing similar services, or any expenses incurred
in connection therewith), if such securities are sold to
underwriters or dealers for public offering without a
subscription offering, or (iii) the gross amount of cash
actually received by the Company for such securities, in any
other case.
(B) In case of the issuance or sale
(otherwise than as a dividend or other distribution on any
stock of the Company, and otherwise than on
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the exercise of options, rights or warrants or the conversion
or exchange of convertible or exchangeable securities) of
shares of Common Stock (or of other securities deemed
hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other
than cash, the amount of the consideration therefor other than
cash deemed to have been received by the Company shall be the
value of such consideration as determined in good faith by the
Board of Directors of the Company.
(C) Shares of Common Stock issuable by way
of dividend or other distribution on any stock of the Company
shall be deemed to have been issued immediately after the
opening of business on the day following the record date for
the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have
been issued without consideration.
(D) The reclassification of securities of
the Company other than shares of Common Stock into securities
including shares of Common Stock shall be deemed to involve
the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close
of business on the date fixed for the determination of
security holders entitled to receive such shares, and the
value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (B) of
this Section 8(a).
(E) The number of shares of Common Stock at
any one time outstanding shall be deemed to include the
aggregate maximum number of shares issuable (subject to
readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the
conversion or exchange of convertible or exchangeable
securities.
(ii) Upon each adjustment of the Purchase Price pursuant to
this Section 8, the number of shares of Common Stock purchasable upon the
exercise of each Warrant shall be the number derived by multiplying the number
of shares of Common Stock purchasable immediately prior to such adjustment by
the Purchase Price in effect prior to such adjustment and
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dividing the product so obtained by the applicable adjusted Purchase Price.
(c) In case the Company shall at any time
after the date hereof issue options, rights or warrants to subscribe for shares
of Common Stock, or issue any securities convertible into or exchangeable for
shares of Common Stock, for a consideration per share (determined as provided in
Section 8(a) and as provided below) less than the Market Price, (including the
issuance of any such securities without consideration such as by way of dividend
or other distribution), the Purchase Price for the Warrants (whether or not the
same shall be issued and outstanding) in effect immediately prior to the
issuance of such options, rights or warrants, or such convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making the computation in accordance with the provisions of
Section 8(a) hereof, provided that:
(A) The aggregate maximum number of shares of Common
Stock issuable or that may become issuable under such options, rights or
warrants (assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding at
the time such options, rights or warrants were issued, for a consideration equal
to the minimum purchase price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration, if any, received by
the Company for such options, rights or warrants; provided, however, that upon
the expiration or other termination of such options, rights or warrants, if any
thereof shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding pursuant to this subsection (A) (and for the
purposes of subsection (E) of Section 8(a) hereof) shall be reduced by the
number of shares as to which options, warrants and/or rights shall have expired,
and such number of shares shall no longer be deemed to be issued and
outstanding, and the Purchase Price then in effect shall forthwith be readjusted
and thereafter be the price that it would have been had adjustment been made on
the basis of the issuance only of the shares actually issued plus the shares
remaining issuable upon the exercise of those options, rights or warrants as to
which the exercise rights shall not have expired or terminated unexercised.
(B) The aggregate maximum number of shares of Common Stock
issuable or that may become issuable upon conversion or exchange of any
convertible or exchangeable securities
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(assuming conversion or exchange in full even if not then currently convertible
or exchangeable in full) shall be deemed to be issued and outstanding at the
time of issuance of such securities, for a consideration equal to the
consideration received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof; provided, however, that upon the expiration or other termination of the
right to convert or exchange such convertible or exchangeable securities
(whether by reason of redemption or otherwise), the number of shares of Common
Stock deemed to be issued and outstanding pursuant to this subsection (B) (and
for the purposes of subsection (E) of Section 8(a) hereof) shall be reduced by
the number of shares as to which the conversion or exchange rights shall have
expired or terminated unexercised, and such number of shares shall no longer be
deemed to be issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the shares actually
issued plus the shares remaining issuable upon conversion or exchange of those
convertible or exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
(C) If any change shall occur in the exercise price
per share provided for in any of the options, rights or warrants referred to in
subsection (A) of this section 8(c), or in the price per share or ratio at which
the securities referred to in subsection (3) of this Section 8(c) are
convertible or exchangeable and if a change in the Purchase Price has not
occured by reason of the event giving rise to the change in the price per share
of such other options, rights, warrants or convertible or exchangeable
securities, such options, rights or warrants or conversion or exchange rights,
as the case may be, to the extent not theretofore exercised, shall be deemed to
have expired or terminated on the date when such price change became effective
in respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to have issued
upon such date new options, rights or warrants or convertible or exchangeable
securities.
(d) In case of any reclassification or change of
outstanding shares of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from no par
value to par value or as a result of subdivision or combination), or in case of
any
14
consolidation or merger of the Company with or into another corporation
(other than a merger with a subsidiary in which merger the Company is the
continuing corporation and which does not result in any reclassification or
change of the then outstanding shares of Common Stock or other capital stock
issuable upon exercise of the Warrants) or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, then, as a condition of such reclassification,
change, consolidation, merger, sale or conveyance, the Company, or such
successor or purchasing corporation, as the case may be, shall make lawful and
adequate provision whereby the Registered Holder of each Warrant then
outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and the Company shall forthwith file at the Corporate Office of the
Warrant Agent a statement signed by its President or a Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary
evidencing such provision. Such provisions shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8(a) and (b). The above provisions of this
Section 8(d) shall similarly apply to successive reclassifications and changes
of shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.
(e) Irrespective of any adjustments or changes in the
Purchase Price or the number of shares of Common Stock purchasable upon exercise
of the Warrants, the Warrant Certificates theretofore and thereafter issued
shall, unless the Company shall exercise its option to issue new Warrant
Certificates pursuant to Section 2(e) hereof, continue to express the Purchase
Price per share and the number of shares purchasable thereunder as the Purchase
Price per share and the number of shares purchasable thereunder were expressed
in the Warrant Certificates when the same were originally issued.
(f) After each adjustment of the Purchase Price
pursuant to this Section 8, the Company will promptly prepare a certificate
signed by the Chairman or President, and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, of the Company setting
forth: (i) the Purchase Price as so adjusted, (ii) the number of shares of
15
Common Stock purchasable upon exercise of each Warrant, after such adjustment,
and (iii) a brief statement of the facts accounting for such adjustment. The
Company will promptly file such certificate with the Warrant Agent and cause a
brief summary thereof to be sent by ordinary first class mail to each Registered
Holder at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity thereof. The affidavit of an officer
of the Warrant Agent or the Secretary or an Assistant Secretary of the Company
that such notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(g) No adjustment of the Purchase Price shall be made
as a result of or in connection with (A) the issuance or sale of the
Representative's Warrant or the Securities underlying the Representative's
Warrant, (B) the issuance or sale of the securities pursuant to the Initial
Public Offering, including the Option Securities and the securities underlying
the Securities, (C) the issuance or sale of shares of Common Stock pursuant to
options, warrants, stock purchase agreements and convertible or exchangeable
securities outstanding or in effect on the date hereof, or (D) the issuance or
sale of shares of Common Stock if the amount of said adjustment shall be less
than $.02 for one share of Common Stock, provided, however, that in such case,
any adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment that shall amount, together with any adjustment so carried forward,
to at least $.02 for one share of Common Stock. In addition, Registered Holders
shall not be entitled to cash dividends paid by the Company prior to the
exercise of any Warrant or Warrants held by them.
(h) Subdivision and Combination. In case the Company
shall at any time issue any shares of Common Stock in connection with a stock
dividend in shares of Common Stock or subdivide or combine the outstanding
shares of Common Stock, the Purchase Price shall forthwith be proportionately
decreased in the case of a stock dividend or a subdivision or increased in the
case combination.
SECTION 9. Redemption.
-----------
(a) Commencing on the Initial Warrant Redemption
Date, the Company may, on thirty (30) days prior
16
written notice redeem all the Redeemable Warrants at $.10 per Redeemable
Warrant, provided, however, that before any such call for redemption of Warrants
can take place, the (A) average closing bid price for the Common Stock in the
over-the-counter market as reported by the NASD Automated Quotation System or
(B) the average closing sale price on the primary exchange on which the Common
Stock is traded, if the Common Stock is traded on a national securities
exchange, shall have for twenty (20) consecutive trading days ending on the 3rd
day prior to the notice of redemption exceeded 150% of the Purchase Price
(initially $____ per share of Common Stock) (subject to adjustment in the event
of any stock splits or other similar events as provided in Section 8 hereof).
All Redeemable Warrants must be redeemed if any are redeemed.
(b) In the event the Company exercises its
right to redeem all of the Redeemable Warrants, it shall give or cause to be
given notice to the Registered Holders of the Redeemable Warrants, by mailing to
such Registered Holders a notice of redemption, first class, postage prepaid,
within 30 calendar days of the aforementioned twenty (20) consecutive trading
days and not later than the twentieth (20th) day before the date fixed for
redemption, at their last address as shall appear on the records of the Warrant
Agent. Any notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the Registered Holder receives
such notice. At the time of the mailing to the Registered Holders of the
Warrants of the notice of redemption, the Company shall deliver or cause to be
delivered to the Representative a similar notice telephonically and confirmed in
writing together with a list of the Registered Holders (including their
respective addresses and number of Warrants beneficially owned) to whom such
notice of redemption has been or will be given.
(c) The notice of redemption shall specify
(i) the redemption price, (ii) the date fixed for redemption, (iii) the place
where the Warrant Certificate shall be delivered and the redemption price shall
be paid, and (iv) that the right to exercise the Warrant shall terminate at 5:00
p.m. (New York time) on the business day immediately preceding the date fixed
for redemption. The date fixed for the redemption of the Warrants shall be the
Redemption Date. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a Registered Holder (a) to whom notice was not mailed or (b) whose
notice was defective. An affidavit of the
17
Warrant Agent or the Secretary or Assistant Secretary of the Company that notice
of redemption has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(d) Any right to exercise a warrant shall
terminate at 5:00 p.m. (New York time) on the business day immediately preceding
the Redemption Date. The redemption price payable to the Registered Holders
shall be mailed to such persons at their addresses of record.
SECTION 10. Concerning the Warrant Agent.
-----------------------------
(a) The Warrant Agent acts hereunder as agent and in
a ministerial capacity for the Company and the Representative, and its duties
shall be determined solely by the provisions hereof. The Warrant Agent shall
not, by issuing and delivering Warrant Certificates or by any other act
hereunder, be deemed to make any representations as to the validity or value or
authorization of the Warrant Certificates or the Warrants represented thereby or
of any securities or other property delivered upon exercise of any Warrant or
whether any stock issued upon exercise of any Warrant is fully paid and
nonassessable.
(b) The Warrant Agent shall not at any time be under
any duty or responsibility to any holder of Warrant Certificates to make or
cause to be made any adjustment of the Purchase Price provided in this
Agreement, or to determine whether any fact exists which may require any such
adjustment, or with respect to the nature or extent of any such adjustment, when
made, or with respect to the method employed in making the same, it shall not
(i) be liable for any recital or statement of fact contained herein or for any
action taken, suffered or omitted by it in reliance on any Warrant Certificate
or other document or instrument believed by it in good faith to be genuine and
to have been signed or presented by the proper party or parties, (ii) be
responsible for any failure on the part of the Company to comply with any of its
covenants and obligations contained in this Agreement or in any Warrant
Certificate, or (iii) be liable for any act or omission in connection with this
Agreement except for its own gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with
counsel satisfactory to it (who may be counsel for the Company) and shall incur
no liability or responsibility for any
18
action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
(d) Any notice, statement, instruction, request,
direction, order or demand of the Company shall be sufficiently evidenced by an
instrument signed by the Chairman of the Board of Directors, Vice-Chairman or
Secretary (unless other evidence in respect thereof is herein specifically
prescribed). The Warrant Agent shall not be liable for any action taken,
suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent
reasonable compensation for its services hereunder and to reimburse it for its
reasonable expenses hereunder; the Company further agrees to indemnify the
Warrant Agent and save it harmless against any and all losses, expenses and
liabilities, including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent in the execution of its duties and powers hereunder
except losses, expenses and liabilities arising as a result of the Warrant
Agent's gross negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or willful
misconduct), after giving 30 days prior written notice to the Company. At least
15 days prior to the date such resignation is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to the
Registered Holder of each Warrant Certificate at the Company's expense. Upon
such resignation the Company shall appoint in writing a new warrant agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation by the resigning Warrant
Agent, then the Registered Holder of any Warrant Certificate may apply to any
court of competent jurisdiction for the appointment of a new warrant agent. Any
new warrant agent, whether appointed by the Company or by such a court, shall be
a bank or trust company having a capital and surplus, as shown by its last
published report to its stockholders, of not less than $10,000,000 or a stock
transfer company doing business in New York, New York. After acceptance in
writing of such appointment by the new warrant agent is received by the Company,
such new warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if
19
it had been originally named herein as the warrant agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning Warrant Agent. Not later
than the effective date of any such appointment the Company shall file notice
thereof with the resigning Warrant Agent and shall forthwith cause a copy of
such notice to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant
Agent or any new warrant agent may be converted or merged, any corporation
resulting from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party, or any corporation succeeding to the corporate trust
business of the Warrant Agent or any new warrant agent shall be a successor
warrant agent under this Agreement without any further act, provided that such
corporation is eligible for appointment as successor to the Warrant Agent under
the provisions of the preceding paragraph. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed to
the Company and to the Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and
affiliates, and any of its or their officers or directors, may buy and hold or
sell Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effect as though
it were not Warrant Agent. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a
period of two years from the date of exercise any Warrant Certificate received
by it upon such exercise, marked to indicate its cancellation thereof in
accordance with Section 6(e) hereof.
SECTION 12. Modification of Agreement
-------------------------
The Warrant Agent and the Company may by supplemental
agreement make any changes or corrections in this Agreement without the approval
of any holders of Warrants (i) that they shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent provision or manifest
mistake or
20
error herein contained; (ii) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of warrant certificates;
or (iii) which may be required by law; provided, however, that this Agreement
shall not otherwise be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders representing not less than
50% of the Warrants then outstanding; provided, further, that no change in the
number of the securities purchasable upon the exercise of any Warrant, or the
Purchase Price therefor, shall be, made without the consent in writing of the
Registered Holder of the Warrant Certificate, other than such changes as are
specifically permitted or prescribed by this Agreement as originally executed.
In addition, this Agreement may not be modified, amended or supplemented without
the prior written consent of the Representative, other than (i) to cure any
ambiguity or to correct any provision which is inconsistent or which is a
manifest mistake or error; (ii) to make any such change that is necessary or
desirable and which shall not adversely affect the interests of the
Representative; or (iii) except as may be required by-law.
SECTION 13. Notices.
--------
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or five
days after mailed first-class postage prepaid, or upon receipt when sent by
facsimile, with confirmation received, if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chairman, or at such other address as
may have been furnished to the Warrant Agent in writing by the Company; and if
to the Warrant Agent, at its Corporate Office. Copies of any notice delivered
pursuant to this Agreement shall be delivered to The Thornwater Company, L.P.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President, or at
such other addresses as may have been furnished to the Company and the Warrant
Agent in writing.
SECTION 14. Governing Law.
--------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflicts of laws.
21
SECTION 15. Binding Effect.
---------------
This Agreement shall be binding upon and inure to the benefit
of the Company, the Warrant Agent and their respective successors and assigns
and the holders from time to time of Warrant Certificates or any of them. Except
as hereinafter stated, nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or claim or to
impose upon any other person any duty, liability or obligation. The
Representative is, and shall at all times irrevocably be deemed to be, a
third-party beneficiary of this Agreement, with full power, authority and
standing to enforce the rights granted to it hereunder. In the event of any
conflict relating to the Representative's Warrant between the terms hereof and
the terms of the Underwriter's Warrant Agreement, the terms of the Underwriter's
Warrant Agreement shall prevail.
SECTION 16. Counterparts.
--------------
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
▇▇▇▇▇▇ ELECTRONICS, INC.
By: ____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇, Chairman
[SEAL]
REGISTRAR AND TRANSFER COMPANY
By: ____________________________
[SEAL]
22
Exhibit A
---------
No. HEW________ VOID AFTER 5:00 P M on _____, 2001
_________ WARRANTS
REDEEMABLE WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
▇▇▇▇▇▇ ELECTRONICS, INC.
NO. _______ CUSIP: ▇▇▇▇▇▇▇▇▇
THIS CERTIFIES THAT, FOR VALUE RECEIVED _____________________ or registered
assigns (the "Registered Holder") is the owner of the number of Redeemable
Warrants (the "Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter defined), one fully
paid and non-assessable share of Common Stock, $.01 par value, of ▇▇▇▇▇▇
Electronics, Inc., a New York corporation (the "Company"), at any time from
__________ __, 2000 and prior to the Expiration Date (as hereinafter defined)
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate office
of Registrar and Transfer Company, as Warrant Agent, or its successor (the
"Warrant Agent"), accompanied by payment of $____ per share, subject to
adjustment (the "Purchase Price"), in lawful-money of the United States of
America in cash or by check made payable to the Warrant Agent for the account of
the Company.
This Warrant Certificate and each Warrant represented hereby
are issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant Agreement"), dated
_______, 1998, by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price and the number of
23
shares of Common Stock subject to purchase upon the exercise of each Warrant
represented hereby are subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional interests will be issued. In the
case of the exercise of less than all the warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York
time) on __________ __, 2003. If such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then the Expiration
Date shall mean 5:00 P.M. (New York time) the next following day which in the
State of New York is not a holiday or a day on which banks are authorized to
close.
The Company shall not be obligated to deliver any securities
pursuant to the exercise of this Warrant unless a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to such
securities is effective or an exemption thereunder is available. The Company has
covenanted and agreed that, if required by the Act, and unless during any period
it is not reasonably likely that the Warrants will be exercised, it will file a
registration statement under the Act, use its best efforts to cause the same to
become effective, keep such registration statement current, if required under
the Act, while any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant Agent,
for a new Warrant Certificate or Warrant Certificates of like tenor representing
an equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and payment of any
tax or other charge imposed in connection therewith or incident
24
thereto, for registration or transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrant Certificates representing an equal
aggregate number of Warrants will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a shareholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
Subject to the provisions of the Warrant Agreement, this
Warrant may be redeemed at the option of the Company, at a redemption price of
$.10 per Warrant, at any time commencing after ___________ __, 2000 provided
that (i) the average closing bid price for the Common Stock in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotation System, or (ii) the average closing sale price on
the primary exchange on which the Common Stock is traded, if the Common Stock is
traded on a national securities exchange, or (iii) the average closing sale
price on NASDAQ, if the Common Stock is quoted on NASDAQ, shall have for twenty
(20) consecutive trading days ending on the third (3rd) day prior to the Notice
of Redemption, as defined below, exceeded 150% of the exercise price (initially
$____ per share) of the Redeemable Warrants (subject to adjustment in the event
of any stock splits or other similar events). Notice of redemption (the "Notice
of Redemption") shall be given not later than the twentieth day before the date
fixed for redemption, all as provided in the Warrant Agreement. On and after the
date fixed for redemption, the Registered Holder shall have no rights with
respect to this Warrant except to receive the $.10 per Warrant upon surrender of
this Certificate.
Under certain circumstances, The Thornwater Company, L.P., its
successors and assigns shall be entitled to receive an aggregate of five percent
(5%) of the Purchase Price of the Warrants represented hereby.
Prior to due presentment for registration or transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered Holder as
the absolute owner hereof and of each Warrant-represented hereby
(notwithstanding any notations of ownership or writing hereon made by anyone
other than a duly
25
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary, except as provided in the
Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
conflicts of laws.
This Warrant Certificate is not, valid unless countersigned by
the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: __________, 1998
▇▇▇▇▇▇ ELECTRONICS, INC.
By: _______________________
SEAL Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman
By: _______________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Secretary
COUNTERSIGNED:
REGISTRAR AND TRANSFER COMPANY
as Warrant Agent
By: ________________________
Authorized Officer
SUBSCRIPTION FORM
-----------------
To Be Executed by the Registered Holder in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably
elects to exercise ______________ Warrants represented by this Warrant
Certificate, and to purchase the securities issuable upon the exercise of such
Warrants, and requests that certificates for such securities shall be issued in
name of
26
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and be delivered to:
---------------------------------------
---------------------------------------
---------------------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
27
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by
The Thornwater Company, L.P. [ ]
2. The exercise of this Warrant was solicited by
-------------------------------------. [ ]
3. If the exercise of this Warrant was not solicited, please check
the following box. [ ]
X
----------------------------------
Dated: _____________, 199__
----------------------------------
----------------------------------
Address
----------------------------
Social Security or Taxpayer
Identification Number
----------------------------
Signature Guaranteed
----------------------------
ASSIGNMENT
----------
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, ______________________________,
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
--------------------------------------
--------------------------------------
--------------------------------------
(please print or type name and address)
_______________________________________________________ of the Warrants
represented by this Warrant Certificate, and hereby irrevocably constitutes and
appoints
------------------------------------
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: ___________________, 199____ X______________________
Signature Guaranteed
----------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM 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 AND MUST BE MEDALLION
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE, WHO IS A MEMBER OF THE
MEDALLION PROGRAM.