EXHIBIT 10.2
_____________________________________________________________________________
Warrant Agreement
Dated as of July 2, 2003
Warrants Exercisable for Common Stock
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TABLE OF CONTENTS
Section 1. Issuance of Warrants; Execution and Delivery
of Warrant Certificates. 1
1.1 Issuance of Warrants 1
1.2 Execution and Delivery of Warrant Certificates 1
Section 2. Warrant Price, Manner of Exercise. 2
2.1 Warrant Price, Term, Expiration and Notice 2
2.2 Manner of Exercise 2
2.3 Cashless Exercise 2
2.4 When Exercise Deemed Effected 2
2.5 Delivery of Stock Certificates, etc. 2
Section 3. Adjustment of Shares of Common Stock Purchasable
and Warrant Price. 3
3.1 Antidilution Provision 3
3.2 Consolidation, Merger, Sale of Assets, Reorganization, etc. 4
3.3 Warrant Price Adjustment 5
3.4 Statements on Warrant Certificates 5
3.5 Accountants' Report as to Adjustments 5
Section 4. Notices of Corporate Action 5
Section 5. Legend on Warrant Stock
Section 6. Reservation of Stock. 6
6.1 Reservation of Stock 6
Section 7. Other Provisions Relating to Rights and Obligations
of Holders of Warrant Certificates. 6
7.1 No Rights as Stockholder Conferred by Warrants
or Warrant Certificates 7
7.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates
7.3 Warrantholder May Enforce Rights 7
Section 8. Registration Rights. 7
8.1 Requested Registration 7
8.2 Company Registration 9
8.3 Expenses of Registration 11
8.4 Registration Procedures 11
8.5 Related Registration Matters 12
8.6 Indemnification and Contribution 12
8.7 Information by Stockholders 14
8.8 Sales Without Registration 14
8.9 Rule 144 14
8.10 Transfer of Registration Rights 14
8.11 Post-Effective Amendments 14
8.12 Cessation of Sale Activities 14
8.13 Supplements 15
Section 9. Exchange and Transfer of Warrant Certificates. 15
9.1 Exchange and Transfer of Warrant Certificates 15
9.2 Treatment of Holders of Warrant Certificates 15
9.3 Cancellation of Warrant Certificates 15
Section 10. Notices 16
Section 11. Representations and Warranties 16
11.1 Capitalization 16
11.2 Authorization; Enforceability 17
11.3 Issuance of Shares 17
Section 12. Miscellaneous. 17
12.1 Amendment 17
12.2 Parties in Interest 17
12.3 Applicable Law 17
12.4 Consent to Jurisdiction 17
12.5 Waiver of Jury Trial 17
12.6 Counterparts 17
12.7 Inspection of Agreement 18
12.8 Headings 18
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement"), dated as of July 2, 2003, is made
by and between INFINITY, INC., a Colorado corporation (the "Company") and
HIGHBRIDGE/▇▇▇▇▇ SPECIAL OPPORTUNITIES FUND, L.P., a Delaware limited
partnership ("Grantee" and, together with any transferee of Warrants or
Warrant Stock, the ("Warrantholder").
W I T N E S S E T H:
Recitals:
A. Reference is made to that certain Credit Agreement, dated July 2,
2003, by and among Infinity Oil & Gas of Wyoming, Inc., a Wyoming corporation
(the "Borrower"), the lenders signatory thereto (the "Lenders"), and
Highbridge/▇▇▇▇▇ Special Opportunities Fund, L.P., as Administrative Agent
(the "Credit Agreement").
B. The Company has guaranteed the obligations of the Borrower to the
Lenders and the Administrative Agent pursuant to the Credit Agreement. As a
consequence of the contractual relationship among the Borrower, the Lenders
and the Administrative Agent under the Credit Agreement, the Company has and
will continue to receive substantial benefits from the Lenders and the
Administrative Agent.
C. The Company proposes to issue to Grantee as partial consideration
for the Lenders' and the Administrative Agent's entering into the Credit
Agreement, in the aggregate 125,000 common stock purchase warrants (the
"Warrants") to purchase shares (the "Warrant Shares") of the Company's common
stock, par value $0.0001 per share (the "Common Stock"), each Warrant
entitling the holder thereof to purchase one share of Common Stock.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
Section 1. Issuance of Warrants; Execution and Delivery of Warrant
Certificates.
1.1 Issuance of Warrants. The Company will issue and deliver the
Warrants to Grantee on the Effective Date as defined in the Credit Agreement
(the "Closing Date"). The aggregate number of Warrants to be issued and
delivered shall be 125,000. The Warrants shall be exercisable on or after the
Closing Date. Such Warrants shall be evidenced by a certificate (the "Warrant
Certificate") which the Company will issue and deliver to Grantee on the
Closing Date.
1.2 Execution and Delivery of Warrant Certificates. Each original
Warrant Certificate issued shall be in substantially the form set forth in
Appendix A hereto and may have such letters, numbers, or other marks of
identification or designation and such legends or endorsements printed thereon
as the officers of the Company executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not
inconsistent with this Agreement, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto. The Warrant
Certificates shall be executed on behalf of the Company by its President or
one of its Vice Presidents and by its Treasurer or its Secretary.
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In case any officer of the Company who shall have signed any Warrant
Certificate shall cease to be an officer before the Warrant Certificate so
signed shall have been delivered by the Company, such Warrant Certificate may
be delivered notwithstanding that such person ceased to be an officer of the
Company, and any Warrant Certificate may be signed on behalf of the Company by
such person as, at the actual date of the execution of the Warrant
Certificate, shall be the proper officer of the Company, even if at the date
of the execution of this Agreement such person was no such officer.
Section 2. Warrant Price, Manner of Exercise.
2.1 Warrant Price, Term, Expiration and Notice. Each Warrant
Certificate shall entitle the Warrantholder, subject to the provisions thereof
and of this Agreement, to purchase from the Company one share of Common Stock
for each of the Warrants evidenced thereby at a price per share equal to $8.75
per share, subject to adjustment as provided herein (the "Warrant Price").
The Warrantholder may exercise any Warrants issued pursuant to this Agreement
at any time or from time to time, from the date hereof and prior to 5:00 p.m.,
Houston, Texas time, on July 2, 2008 (the "Expiration Date"). If the
Expiration Date is not a Business Day, then this Warrant may be exercised on
the next succeeding Business Day. For purposes hereof, the term "Business
Day" shall mean any day other than a Saturday or a Sunday or a day on which
commercial banking institutions in the Cities of New York, New York or
Houston, Texas are authorized or required by law to be closed, and provided
that any reference to "days" (unless Business Days are specified) shall mean
calendar days.
2.2 Manner of Exercise. The Warrants may be exercised by the
Warrantholder, in whole or in part, during normal business hours on any
Business Day by surrender of a Warrant Certificate, together with the form of
Election to Exercise included as Appendix B hereto (or a reasonable facsimile
thereof) duly executed by such Warrantholder, to the Company at its principal
office, accompanied by the required payment of the Warrant Price as then in
effect, in cash or other immediately available funds, or as provided in
Section 2.3 below, or a combination thereof.
2.3 Cashless Exercise. The Warrantholder shall have the right to pay
all or a portion of the Warrant Price by making a "Cashless Exercise" pursuant
to this Section 2.3, in which case the Warrantholder shall not pay the Warrant
Price in cash and the number of shares of Common Stock otherwise issuable
pursuant to the Election to Exercise shall be reduced by the total number of
shares of Common Stock otherwise issuable to the Warrantholder multiplied by
the Warrant Price and divided by the Current Market Price per share of the
Common Stock on the date of the Election to Exercise, determined as provided
in Section 3.1(d)(ii) of this Agreement.
2.4 When Exercise Deemed Effected. Each exercise of Warrants
pursuant to this Agreement shall be deemed to have been effected immediately
upon surrender of such Warrants to the Company as provided in Section 2.2, and
at such time, the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such exercise
as provided in Section 2.5 shall be deemed to have become the holder of record
thereof.
2.5 Delivery of Stock Certificates, etc. As soon as practicable
after the exercise of Warrants pursuant to this Agreement, in whole or in
part, the Company at its expense will cause
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(a) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock to which
the Warrantholder shall be entitled upon such exercise, to be issued in the
name of and delivered to such Warrantholder or such other name as shall be
designated by the Warrantholder in the Election of Exercise; and
(b) in case less than all the Warrants represented by a Warrant
Certificate are exercised, a new Warrant Certificate of the same tenor and for
the number of Warrants not exercised to be registered in such name or names as
may be directed in writing by the Warrantholder and to be delivered to the
person entitled to receive such new Warrant Certificate.
Section 3. Adjustment of Shares of Common Stock Purchasable and
Warrant Price.
3.1 Antidilution Provision. So long as any Warrants are outstanding
and unexercised, in whole or in part:
(a) if the Company shall pay a dividend in Common Stock or make any
other distribution in Common Stock on or with respect to its Common Stock, the
number of shares of Common Stock purchasable upon exercise of each Warrant
outstanding and unexercised at such time shall be increased by multiplying
such number of shares by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
day immediately preceding the date of such dividend or other distribution and
the numerator of which shall be the sum of such number of shares and the total
number of shares of Common Stock constituting such dividend or other
distribution, such increase to become effective immediately after the record
date of such dividend or other distribution;
(b) in the event outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the number of
shares of Common Stock purchasable upon exercise of each Warrant shall be
proportionately increased, and conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common
Stock, the number of shares of Common Stock purchasable upon exercise of each
Warrant shall be proportionately decreased, such increase or decrease, as the
case may be, to become effective immediately after the effective date of such
subdivision or combination;
(c) if the Company issues or distributes to all holders of Common
Stock (i) rights or warrants entitling them to subscribe for or purchase
shares of any class of capital stock of the Company or (ii) evidences of its
indebtedness, cash or other assets (including cash dividends but excluding
stock dividends referred to in subsection (a) above), the Company shall issue
or distribute to each Warrantholder such rights, warrants, evidences of
indebtedness, cash or other assets that such Warrantholder would have been
entitled to receive as a stockholder if such Warrantholder had exercised all
of its Warrants immediately prior thereto; and
(d)
(i) if the Company shall sell or issue shares of Common Stock
or securities convertible or exchangeable into shares of Common Stock or
rights, options or warrants to purchase shares of Common Stock, or
securities convertible or exchangeable into shares of Common Stock
(collectively, the "Additional Shares"), other than Employee Shares (as
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defined below), at a price per share of Common Stock lower than the
Warrant Price per share of Common Stock immediately prior to such sale
or issuance, then the number of shares of Common Stock issuable upon
exercise of the Warrant shall be adjusted to that number determined by
multiplying the number of shares of Common Stock issuable upon exercise
of the Warrant immediately prior to such adjustment by a fraction (y)
the numerator of which shall be number of shares of Common Stock
outstanding immediately prior to the issuance of such Additional Shares
plus the number of such Additional Shares to be issued and (z) the
denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such Additional Shares
plus the number of shares of Common Stock which the aggregate
consideration for the total number of such Additional Shares to be
issued would purchase at the Warrant Price. Notwithstanding the
foregoing, the provisions of this Section 3.1(d) shall not apply to any
securities issued (A) in any of the transactions described in Sections
3.1(a), (b) or (c), or (B) upon exercise of this Warrant;
(ii) For the purposes of this Agreement, the "Current Market
Price" shall mean the average price per share of the Company's Common
Stock sold on all securities exchanges located in the United States on
which the Common Stock may at the time be listed or traded (including,
for this purpose, the NASDAQ National Market System or the NASDAQ
SmallCap Market System) on the date of any Cashless Exercise exercised
pursuant to Section 2.3; and
(iii) If, at any time after any adjustment of the number of
shares of Common Stock purchasable upon exercise of each Warrant
pursuant to this Section 3.1(d), such rights, options, warrants or
convertible or exchangeable securities shall expire or no longer be
outstanding and shall not have been exercised for or converted or
exchanged into Common Stock, such previous adjustment shall be rescinded
and annulled and the Additional Shares which are deemed to have been
issued by virtue of the computation made in connection with the
adjustment so rescinded and annulled, shall no longer be deemed to have
been issued by virtue of such computation. Thereupon, a recomputation
shall be made to give effect to the expiration or non-exercise of, or
failure to convert, such rights, options, warrants or convertible or
exchangeable securities.
For purposes of this Section 3.1, "Employee Shares" means shares of
Common Stock or securities convertible or exchangeable into shares of Common
Stock or rights, options or warrants to purchase shares of Common Stock, or
securities convertible or exchangeable into shares of Common Stock, that are
in each case granted by the Board of Directors of the Company as part of an
employee benefit plan or qualified stock option plan of the Company to
employees, directors and consultants of the Company; provided that the number
of shares issuable or otherwise exchangeable for shares of Common Stock in
connection with such grants would not exceed, in the aggregate, 1,000,000
shares of Common Stock and would not be issued below the current market price
for the shares of Common Stock.
3.2 Consolidation, Merger, Sale of Assets, Reorganization, etc.
(a) If the stockholders of the Company shall participate in a share
exchange or if the Company shall be a party to any transaction (including,
without limitation, a merger, consolidation, sale of all or substantially all
of the Company's assets, liquidation or recapitalization of the Common Stock)
in which the previously outstanding Common Stock shall be changed into or
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exchanged for different securities of the Company or common stock or other
securities of another corporation, or interests in a non-corporate entity or
other property (including cash), or any combination of the foregoing (each
such transaction being herein called a "Transaction"), then the Company, in
the case of the recapitalization or liquidation of the Common Stock, or such
other corporation or entity, in the case of a share exchange, merger,
consolidation or sale of all or substantially all of the assets, shall make
lawful and adequate provision so that, upon the exercise thereof at any time
on or after the consummation of the Transaction, each Warrantholder shall be
entitled to receive, and such Warrant shall represent the right to receive, in
lieu of the Common Stock, the securities or other property (including cash) to
which the Warrantholder would have been entitled upon the consummation of the
Transaction if such Warrantholder had exercised such Warrant immediately prior
thereto, subject to adjustment from and after the consummation date as nearly
equivalent as possible to the adjustments provided for in Section 3.1.
(b) The provisions of this Section 3 shall similarly apply to
successive share exchanges, consolidations, mergers, sales of all or
substantially all of the assets, or successive recapitalizations and changes
of shares of Common Stock.
3.3 Warrant Price Adjustment. Whenever the number of shares of
Common Stock purchasable upon exercise of a Warrant is adjusted as provided
herein, the Warrant Price payable upon exercise of the Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of shares
of Common Stock purchasable upon exercise of the Warrant immediately prior to
such adjustment, and the denominator of which shall be the number of shares of
Common Stock purchasable immediately thereafter; provided, however, that in no
event shall the Warrant Price be adjusted below the par value of the Common
Stock (currently, $.0001 per share).
3.4 Statements on Warrant Certificates. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to
this Section 3 and Warrant Certificates issued after such adjustment may state
the same Warrant Price and the same number of shares of Common Stock as are
stated in the Warrant Certificates initially issued pursuant to this
Agreement.
3.5 Accountants' Report as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or other securities)
issuable upon the exercise of the Warrants, the chief financial officer of the
Company at the Company's expense will promptly compute such adjustment or
readjustment in accordance with the terms of the Warrants and prepare a report
setting forth such adjustment or readjustment and showing in reasonable detail
the method of calculation thereof and the facts upon which such adjustment or
readjustment is based. The Company will forthwith mail a copy of each such
report to each Warrantholder. The Company will also keep copies of all such
reports at its principal office and will cause the same to be available for
inspection at such office during normal business hours by any Warrantholder or
any prospective purchaser of a Warrant designated by the Warrantholder.
Section 4. Notices of Corporate Action. In the event of:
(a) any offer to any holders of Common Stock of rights to subscribe
for or to purchase any Additional Shares or other securities, or
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(b) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, or
(c) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any consolidation
or merger involving the Company and any other person or entity, any share
exchange involving stockholders of the Company or any transfer of all or
substantially all the assets of the Company to any other person or entity, or
(d) any voluntary or involuntary dissolution, liquidation or winding
up of the Company,
the Company will mail to each known Warrantholder a notice specifying (i) the
terms of such offer, and (ii) the date or expected date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right, and
(iii) the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, share exchange,
transfer, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for
the securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, share exchange,
transfer, dissolution, liquidation or winding up. Such notice shall be mailed
at least 15 days prior to the date therein specified.
Section 5. Legend on Warrant Stock. Each certificate for Warrant
Shares initially issued upon exercise of this Warrant, unless at the time of
exercise such Warrant Shares are registered under the Securities Act of 1933,
as amended from time to time (the "Securities Act"), shall bear the following
legend (and any additional legend(s) required by any securities exchange upon
which such Warrant Stock may, at the time of such exercise, be listed) on the
face thereof:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or registered
or qualified under applicable state securities laws. Such shares may
not be offered, sold, transferred, pledged or hypothecated in the
absence of an effective registration statement in effect with respect to
the shares under such Act and registration or qualification under any
applicable state securities laws or an opinion of counsel reasonably
satisfactory to the Company that such registration or qualification is
not required under applicable federal and state securities laws."
Section 6. Reservation of Stock.
6.1 Reservation of Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon exercise of the
Warrants, the number of shares of Common Stock from time to time issuable upon
exercise of all Warrants at the time outstanding. All shares of Common Stock
shall be duly authorized and, when issued upon such exercise and payment of
the Warrant Price, shall be validly issued, fully paid and nonassessable with
no liability on the part of the holders thereof.
Section 7. Other Provisions Relating to Rights and Obligations of
Holders of Warrant Certificates.
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7.1 No Rights as Stockholder Conferred by Warrants or Warrant
Certificates. No Warrant Certificate or Warrant evidenced thereby shall
entitle the Warrantholder to any of the rights of a holder of Common Stock,
including, without limitation, any right to vote at, or to receive notice of,
any meeting of stockholders of the Company; the consent of any Warrantholder
shall not be required with respect to any action or proceeding of the Company.
7.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. Upon
receipt by the Company of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of an indemnity from the Warrantholder reasonably satisfactory
to the Company and, in the case of mutilation, upon surrender of the Warrant
Certificate to the Company for cancellation, then, in the absence of notice to
the Company that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver, in exchange for or in lieu
of the lost, stolen, destroyed or mutilated Warrant Certificate, a substitute
Warrant Certificate of the same tenor and evidencing a like number of
Warrants. Upon the issuance of any substitute Warrant Certificate under this
Section 7.2, the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto
and any other expenses in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section 7.2 in lieu of any
lost, stolen or destroyed Warrant Certificate shall represent the contractual
obligation of the Company.
7.3 Warrantholder May Enforce Rights. Notwithstanding any of the
provisions of this Warrant Agreement, any Warrantholder, without the consent
of the holder of any Common Stock or the holder of any other Warrant
Certificate, may, on its own behalf and for its own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Warrantholder's right to
exercise the Warrants evidenced by such Warrantholder's Warrant Certificate in
the manner provided in its Warrant Certificate and in this Agreement.
Section 8. Registration Rights.
8.1 Requested Registration.
(a) Request for Registration. Until the date 18 months after the
Expiration Date, to the extent the Company is eligible to effect a
registration of the Registrable Securities on Form S-3 (or any successor form
thereto), the holders of a majority of the Registrable Securities (as defined
below) then outstanding shall have the right upon written request to the
Company (the "Demand Registration"), to require the Company to effect a
registration of the Registrable Securities. Upon receipt of such notice, the
Company will:
(i) promptly give written notice of the proposed registration
to all other holders of Registrable Securities, which written notice
shall include the name or names of the underwriter or underwriters to be
employed; and
(ii) use its diligent good faith efforts to effect, as soon as
practicable, such registration (including, without limitation, the
filing of post-effective amendments, appropriate qualification under the
applicable blue sky or other state securities laws and appropriate
compliance with the Securities Act and any other governmental
requirements or regulations) as may be so requested by any holder of
Registrable Securities within five days after written notice is given by
the Company and as would permit or facilitate the sale and distribution
of all or such portion of the Registrable Securities so requested to be
included in such registration;
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provided that the Company shall not be obligated to take any action to effect
any such registration pursuant to this Section 8.1.1: (a) in any particular
jurisdiction in which the Company would be required to execute a general
consent to service of process, to register as a securities broker or dealer or
to cause any officer or employee of the Company to register as a salesman in
effecting such registration or (b) after the Company has effected two such
registrations pursuant to this Section 8.1.1which have been declared or
ordered effective.
Subject to the foregoing, the Company shall prepare and file a
registration statement covering the Registrable Securities so requested to be
registered as soon as reasonably practicable and in any event within 60 days
after such request is received.
Notwithstanding the foregoing, the Company shall not be obligated to
effect a registration, qualification or compliance under this Section 8.1.1
during any period during which the Company is in the process of negotiating or
preparing, and ending on a date 180 days following the effective date of, a
registration statement pertaining to an underwritten or "best efforts" public
offering of securities for the account of the Company, provided that the
Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective and such registration
statement becomes effective within three months from the date of delivery to
the Company of a written request to effect such registration, qualification or
compliance.
As used in this Agreement, the term "Registrable Securities" shall
mean, collectively, the shares of Common Stock acquired or to be acquired by
the Warrantholder upon exercise of the Warrants pursuant to this Agreement and
any shares of Common Stock or other securities issued with respect to such
Common Stock by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, share
exchange, reorganization or otherwise; provided, however, that such Common
Stock (or any part thereof) or other securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the disposition
of such Common Stock or other securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with the plan of distribution set forth in such registration statement, (ii)
and to the extent, such Common Stock or other securities may be sold pursuant
to Rule 144 (or any successor provision) under the Securities Act, (iii) an
opinion of counsel, reasonably satisfactory to the Company and the holders of
Common Stock or other securities to which the opinion relates shall have been
delivered to the Company and such holders to the effect that the subsequent
disposition of such Common Stock or other securities may be made pursuant to
Rule 144(k) (or any successor provision) under the Securities Act, or (iv)
such Common Stock or other securities shall cease to be outstanding.
(b) Selection of Underwriter. If any Demand Registration is an
underwritten offering, the holders of a majority of the Registrable Securities
to be included in such registration will select a managing underwriter or
managing underwriters of nationally recognized standing which shall be
reasonably acceptable to the Company. The Company shall (together with the
holders proposing to distribute their Registrable Securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting in the manner set
forth above.
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The holders of Registrable Securities participating in a registration
under this Section 8.1 shall, to the extent required by the managing
underwriter(s), execute and deliver a custody agreement and power of attorney
with respect to the Registrable Securities to be registered (a "Custody
Agreement" and "Power of Attorney," respectively). The Custody Agreement and
Power of Attorney will provide, among other things, that the holders will
deliver to and deposit in custody with the custodian named therein a
certificate or certificates representing such Registrable Securities (duly
endorsed in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint said custodian
and attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney, respectively, on such holder's behalf with
respect to matters specified therein, including the execution and delivery of
an underwriting agreement.
Notwithstanding any of the other provisions of this Section 8.1, if the
managing underwriter determines and advises the Company that marketing factors
require a limitation of the number of shares to be underwritten, then all
holders of Registrable Securities that have previously elected to participate
in such registration shall be advised of the same, and the number of shares of
Registrable Securities that may be included in the registration and
underwriting shall be allocated among all such holders in proportion, as
nearly as practical, to the respective amounts of Registrable Securities that
were proposed to be sold by such holders. No Registrable Securities excluded
from the underwriting by reason of the underwriter's marketing limitation
shall be in such registration.
If any holder of Registrable Securities disapproves of the terms of the
underwriting, such holder may elect to withdraw therefrom by written notice to
the Company and the managing underwriter and the other holders who have
previously elected to participate in the registration. The Registrable
Securities so withdrawn shall also be withdrawn from registration; provided
that if by the withdrawal of such Registrable Securities a greater number of
Registrable Securities held by other holders may be included in such
registration (up to a maximum of any limitation imposed by the underwriters),
then the Company shall offer to all holders who have included Registrable
Securities in the registration the right to include additional shares in the
same proportion used in effecting the limitation referred to above in this
Section 8.1.2.
8.2 Company Registration.
(a) Right to Inclusion. If at any time (or from time to time) the
Company shall determine to register any of its securities in an underwritten
offering, either for its own account or the account of a holder of Registrable
Securities or any other holder of securities of the Company, other than (i) a
registration pursuant to Section 8.1 hereof, (ii) a registration relating
solely to employee benefit or stock option plans, (iii) a registration
relating solely to a transaction described in Rule145 under the Securities
Act, (iv) a transaction registered on Form S-4 or successor form to Form S-4
relating solely to an exchange offering, merger, acquisition, or other
transaction described in the instructions to Form S-4, or (v) a transaction
relating solely to an acquisition of assets or property for securities, then
the Company will:
(i) promptly give to each holder of Registrable Securities
written notice thereof (which shall include a list of the jurisdictions
in which the Company intends to attempt to qualify the offer and sale of
such securities under the applicable blue sky or other state securities
laws); and
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(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified
in any written request or requests by any holder received by the Company
within 15 days after such written notice is given.
(b) Underwriting. The right of any holder of Registrable Securities
to registration pursuant to Section 8.2.1 shall be conditioned upon such
holder's participation in the underwriting and the inclusion of such holder's
Registrable Securities in the underwriting to the extent provided herein. All
holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company.
Such holders of Registrable Securities shall also execute and deliver, to the
extent required by the managing underwriter, a Custody Agreement and Power of
Attorney satisfactory to the Company with respect to the Registrable
Securities to be registered. The Custody Agreement and Power of Attorney will
provide, among other things, that such holders of Registrable Securities will
deliver to and deposit in custody with the custodian named therein a
certificate or certificates representing such Registrable Securities (duly
endorsed in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint said custodian
and attorney-in-fact with full power and authority to act under the Custody
Agreement and Power of Attorney, respectively, on the holder's behalf with
respect to matters specified therein, including the execution and delivery of
an underwriting agreement.
Notwithstanding any other provisions of this Section 8.2, if the managing
underwriter determines and advises the Company that marketing factors require
a limitation on the number of shares to be underwritten, the underwriter and
the Company may limit or exclude entirely the Registrable Securities to be
included in any registration and underwriting. In such event, the Company
shall so advise all holders of Registrable Securities that would otherwise be
registered and underwritten pursuant hereto, and the number of shares of
Common Stock (including the Registrable Securities) or other securities that
may be included in the registration and underwriting shall be allocated among
all holders of Registrable Securities and any other holders of Common Stock or
other securities requesting to be registered in proportion, as nearly as
practicable, to the respective amounts of Common Stock (including the
Registrable Securities) or other securities that were proposed to be sold by
all holders of Registrable Securities and holders of Common Stock or other
securities entitled to participate therein. No Registrable Securities
excluded from the underwriting by reason of the underwriter's marketing
limitation shall be included in such registration.
If any holder of Registrable Securities disapproves of the terms of the
underwriting, such holder may elect to withdraw therefrom by written notice to
the Company and the managing underwriter(s). The Registrable Securities so
withdrawn shall also be withdrawn from registration; provided that if by the
withdrawal of such Registrable Securities a greater number of Registrable
Securities held by other holders may be included in such registration (up to
the maximum of any limitation imposed by the underwriters), then the Company
shall offer to all holders who have included Registrable Securities in the
registration the right to include additional shares in the same proportion
used in effecting the limitation referred to above in this Section 8.2.2.
With respect to any registration withdrawal by the Company pursuant to this
Section 8.2.2, the Company shall have the right to withdraw such registration
at any time at its sole discretion without the consent or approval of any
stockholder, including the holders of Registrable Securities, in such
registration.
10
8.3 Expenses of Registration. All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 8,
including, without limitation, all registration, filing and qualification
fees, printing expenses, escrow fees, fees and disbursements of counsel for
the Company and fees and expenses of accountants incidental to or required by
such registration, the fees and disbursements of one special counsel retained
by the holders of Registrable Securities covered by such registration, (but
excluding underwriters' fees, discount and commissions relating to the
Registrable Securities sold), shall be borne by the Company.
8.4 Registration Procedures. In the case of such registration,
qualification or compliance effected by the Company pursuant to this Section
8, the Company will keep each holder of Registrable Securities participating
therein advised in writing as to the initial filing of each registration,
qualification and compliance and as to the completion thereof. At its
expense, the Company will:
(a) keep such registration, qualification or compliance pursuant to
Sections 8.1 or 8.2 effective for a period of 180 days or until the holders of
Registrable Securities participating therein have completed the distribution
described in the registration statement relating thereto, whichever occurs
first;
(b) furnish such number of prospectuses and other documents incident
thereto as a holder of Registrable Securities participating therein from time
to time may reasonably request;
(c) make available, upon reasonable notice and during business hours,
for inspection by the managing underwriter all financial and other records,
pertinent corporate documents, agreements and properties of the Company as
shall be reasonably necessary to enable such managing underwriter to exercise
its due diligence responsibilities, and cause the Company's officers,
directors and employees to supply all information reasonably requested by such
managing underwriter in connection with the registration;
(d) during the period when the registration is required to be
effective, notify the holders of the Registrable Securities participating in
the registration of the happening of any event as a result of which the
prospectus included in the registration statement contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Company will forthwith prepare a supplement or amendment to such prospectus or
take other appropriate action so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not contain an
untrue statement or a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading;
(e) cause such Registrable Securities included in the registration to
be listed or authorized for trading on each securities exchange (including,
for this purpose, the NASDAQ National Market System or NASDAQ SmallCap System)
on which similar securities issued by the Company are then traded; provided
that the Company is eligible to do so under applicable listing requirements;
and
(f) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission (the
"Commission") and all of the terms and provisions of this Agreement.
11
8.5 Related Registration Matters. The Company shall enter into an
underwriting agreement in connection with any registration subject to the
provisions of Sections 8.1 and 8.2 hereof, which agreement shall contain such
terms, provisions and agreements as are customary and appropriate for such
registration. In connection with the registration, to the extent not provided
in the underwriting agreement related to such registration, the Company also
shall:
(a) engage a bank or other company to act as transfer agent and
registrar for the Registrable Securities;
(b) cause customary opinions of counsel, comfort letters of
accountants and other appropriate documents to be delivered by representatives
of the Company, which documents shall be addressed to the holders of
Registrable Securities participating in the offering in addition to the
Underwriters or other parties designated as addressees in such documents; and
(c) as soon as practicable after the effective date of the
registration statement, and, in any event, within 16 months thereafter, make
"generally available to its stockholders" within the meaning of Rule 158 under
the Securities Act) an earnings statement (which need not be audited)
complying with Section 11(a) of the Securities Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
8.6 Indemnification and Contribution.
(a) In the event of registration of any of the Registrable Securities
under the Securities Act, the Company will indemnify and hold harmless each
holder of Registrable Securities included in such registration and each of its
directors and officers, each underwriter of such Registrable Securities and
each of its directors and officers, and each other person and each of its
directors and officers, if any, who controls such seller or underwriter within
the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), or otherwise, against any
losses, claims, damages or liabilities (or actions in respect thereof), joint
or several, to which such seller, underwriter or controlling person (or their
respective directors and officers) may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (and each of its directors and officers or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Registrable Securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the registration
statement, or any amendment or supplement to such registration statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person (and their respective directors
and officers) for any legal or any other expenses reasonably incurred by such
seller, underwriter or controlling person (and their respective directors and
officers) in connection with investigating or defending any such loss, claim,
damage, liability or action; provided that the Company will not have any
liability (and shall not be required to provide such indemnity and hold
harmless obligation) to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such registration statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by or
on behalf of such holder of Registrable Securities or underwriter specifically
for use in preparation thereof.
12
(b) In the event of any registration of any of the Registrable
Securities under the Securities Act, each holder of Registrable Securities
included in such registration, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors and officers and each
underwriter (if any) and each of its directors and officers and each person
and each of its directors and officers, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against losses, claims, damages or liabilities (or actions in respect
thereof), joint or several, to which the Company, such directors and officers,
underwriter or controlling person (or their respective directors and officers)
may become subject under the Securities Act, Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement under
which such Registrable Securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the registration
statement, or any amendment or supplement to the registration statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of such holder, specifically for use in connection
with the preparation of such registration statement, prospectus, amendment or
supplement; provided the liability of each holder of Registrable Securities
pursuant to this Section 8.6(b) shall be limited to the proceeds actually
received by such holder from the disposition of the Registrable Securities
disposed of by such holder pursuant to such registration.
(c) Each party entitled to indemnification under this Section 8.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld, delayed or conditioned), and the Indemnified Party may
participate in such defense at such party's expense, and provided, further,
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
8.6 (except and to the extent the rights of the Indemnifying Party are
materially prejudiced thereby). After notice from the Indemnifying Party to
the Indemnified Party of its election to assume the defense of such claim or
litigation, the Indemnifying Party will not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation so long as and to the extent the Indemnifying Party
continues to defend the Indemnified Party, unless the Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to 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 to such claim or litigation.
(d) To the extent the Company after the date hereof shall agree to
provide for contribution in any written agreement entered into with the
stockholders of the Company if the indemnification obligations are otherwise
unavailable, then the Company shall provide such similar rights to the
Warrantholders in the registration of their shares.
13
8.7 Information by Stockholders. Each holder of Registrable
Securities requesting to be included in any registration shall furnish to the
Company such information regarding such holder and the distribution proposed
by such holder as the Company may request in writing and as shall be required
in connection with any registration, qualification or compliance referred to
in this Section 8.
8.8 Sales Without Registration. If, at the time of any transfer of
any Registrable Securities, such Registrable Securities shall not be
registered under the Securities Act, the Company may require, as a condition
of allowing such transfer, that the holder of Registrable Securities or
transferee furnish to the Company an opinion of legal counsel satisfactory in
form and substance to the Company to the effect that such transfer may be made
without registration under the Securities Act; provided that nothing contained
in this Section 8.8 shall relieve the Company from complying with any request
for registration, qualification or compliance made pursuant to the other
provisions of this Section 8.
8.9 Rule 144. The Company covenants that it will file the reports
required to be filed by it under the 1933 Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder so long as
necessary to permit sales of Registrable Securities under Rule 144 under the
1933 Act, and it will take such other action as any holder of Registrable
Securities may reasonably request, all to the extent required from time to
time to enable such holder to sell Registrable Securities without registration
under the 1933 Act within the limitation of the exemptions provided by (a)
Rule 144 under the 1933 Act, as such Rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any holder of Registrable Securities, the Company will deliver
to such holder a written statement as to whether it has complied with such
requirements.
8.10 Transfer of Registration Rights. The rights to cause the
Company to register Registrable Securities granted by the Company under
Section 8.1 and the right to participate in Company registration under Section
8.2 may be assigned by any holder of Registrable Securities to a transferee or
assignee of any Registrable Securities (if such transfer or assignment of
Registrable Securities is permitted under Section 5), unless such transferee
or assignee acquires such Registrable Securities through a transaction or
chain of transactions involving a public offering or a sale effected pursuant
to Rule 144; provided that the holder shall give the Company written notice at
the time of or within ten days after said transfer, setting forth the name and
address of said transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being assigned.
8.11 Post-Effective Amendments. In connection with any registration
statement filed pursuant to this Section 8, the Company shall file any
post-effective amendment or amendments to the registration statement which may
be required under the Securities Act during the period set forth in Section
8.4(a).
8.12 Cessation of Sale Activities. The Company shall notify each
participating holder of Registrable Securities during the period any
registration statement filed pursuant to this Section 8 is required to remain
effective, or at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result
of which such registration statement or the prospectus contained therein, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading. Each participating holder agrees, upon
14
receipt of such notice, forthwith to cease making offers and sales of such
securities pursuant to such registration statement or deliveries of the
prospectus contained therein for any purpose and to return to the Company the
copies of such prospectus not theretofore delivered by such holder.
8.13 Supplements. At a participating holder's request, the Company
shall prepare and furnish to such participating holder a reasonable number of
copies of any supplement to or amendment of such prospectus that may be
necessary so that, as thereafter delivered to the purchaser of any shares of
Registrable Securities, such prospectus shall not include any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statement therein not misleading in the light
of the circumstances then existing. The Company shall promptly notify each
participating holder of any stop order or similar proceeding initiated by
state or Federal regulatory bodies and use reasonable efforts to take all
necessary steps expeditiously to remove such stop order or similar proceeding.
Section 9. Exchange and Transfer of Warrant Certificates.
9.1 Exchange and Transfer of Warrant Certificates. Subject to the
terms contained in this Agreement, upon surrender at the principal office of
the Company, Warrant Certificates evidencing Warrants may be exchanged for
Warrant Certificates in other denominations evidencing such Warrants or the
transfer thereof may be registered in whole or in part; provided that such
other Warrant Certificates evidence the same aggregate number of Warrants as
the Warrant Certificates so surrendered. The Company shall keep the Warrant
register in which, subject to such reasonable regulations as it may prescribe,
it shall register Warrant Certificates upon surrender of such Warrant
Certificates to the Company at its principal office for exchange or
registration of transfer, properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company. No service charge shall be made for
any exchange or registration of transfer of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any stamp or other
tax or other governmental charge that may be imposed in connection with any
such exchange or registration of transfer. Whenever any Warrant Certificates
are so surrendered for exchange or registration of transfer, the authorized
officers of the Company shall execute and deliver to the person or persons
entitled thereto a Warrant Certificate or Warrant Certificates duly authorized
and executed by the Company, as so requested. All Warrant Certificates issued
upon any exchange or registration of transfer of the Warrant Certificates
shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Warrant Certificate surrendered for such exchange or registration of transfer.
9.2 Treatment of Holders of Warrant Certificates. Every holder of a
Warrant Certificate, by accepting the same, consents and agrees with the
Company and with every subsequent holder of such Warrant Certificate that
until the transfer of the Warrant Certificate is registered on the Warrant
register, before such Warrant Certificate is surrendered for transfer pursuant
to Section 9.1 hereof, the Company may treat the registered holder of a
Warrant Certificate as the absolute owner thereof for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
9.3 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered for exchange, registration of transfer or transfer or exercise of
the Warrants evidenced thereby shall be surrendered to the Company, and all
Warrant Certificates surrendered and so delivered to the Company shall be
15
promptly cancelled by the Company and shall not be reissued and, except as
expressly permitted by this Agreement, no Warrant Certificate shall be issued
hereunder in exchange or in lieu thereof.
Section 10. Notices. Any notice or other document required or
permitted to be given or delivered hereunder shall be deemed to have been
given when actually delivered to the addressee at the address provided herein.
Any notice or other document required or permitted to be given or delivered to
the Warrantholders prior to the transfer or other disposition of any Warrant
by the original recipient of this Warrant shall be delivered at or sent by
certified or registered mail to the following address or such other address as
shall have been furnished in writing by such original recipient to the
Company:
Highbridge/▇▇▇▇▇ Special Opportunities Fund, L.P.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telefax: ____________________
Thereafter, any notice or other document required or permitted to be given or
delivered to the Warrantholders shall be delivered at, or sent by certified or
registered mail to, each such holder at the last address shown on the books of
the Company maintained at the principal office of the Company for the
registration of transfer of the Warrants or at any more recent address of
which any Warrantholder 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 Registrable Securities 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 addresses set forth below 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 Registrable Securities:
Infinity, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Section 11. Representations and Warranties. The Company represents
and warrants as follows:
11.1 Capitalization. The authorized capital stock of the Company
consists of 300,000,000 shares of Common Stock, of which 8,037,408 shares were
issued and outstanding as of June 30, 2003, and 5,000,000 shares of preferred
stock, none of which are issued and outstanding. All of the shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable. The
only rights, options or other agreements which are outstanding which authorize
the acquisition of newly issued shares of Common Stock are set forth on
Schedule 11.1 attached hereto.
16
11.2 Authorization; Enforceability. The Company has the corporate
power and authority to enter into and perform its obligations under this
Agreement. The execution and delivery by the Company of this Agreement have
been approved by all requisite corporate action and no other corporate
proceeding on its part are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement constitutes the valid and
binding obligation of the Company, except as it may be affected by bankruptcy,
insolvency, moratorium, reorganization or other laws and judicial decisions
affecting the rights of creditors generally and general principles of equity.
11.3 Issuance of Shares. The issuance of the shares of Common Stock
subject to the Warrants has been duly authorized and, when issued upon
exercise of the Warrants, such shares will have been validly issued and will
be fully paid and nonassessable.
Section 12. Miscellaneous.
12.1 Amendment. This Warrant Agreement may be amended by the
Company, with the consent of the Warrantholders representing a majority of the
then outstanding Warrants, for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision contained herein,
or making any other provisions with respect to matters or questions arising
under this Agreement as the Company may deem necessary or desirable, provided
that such action shall not affect adversely the interests of the
Warrantholders. This Agreement may otherwise be amended only with the consent
of the Company and all of the Warrantholders.
12.2 Parties in Interest. The agreements of the Company contained
herein, other than those applicable solely to the Warrants and the
Warrantholders thereof, shall continue to inure to the benefit of, and be
enforceable by, any Warrantholder(s) subsequent to the time Common Stock is
issued upon the exercise of Warrants, whether so expressed or not.
12.3 Applicable Law. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF
THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND OF THE
RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF COLORADO WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
12.4 Consent to Jurisdiction. The Company hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located
in Denver, Colorado, in any action, claim or other proceeding arising out of
any dispute in connection with this Agreement, any rights or obligations
hereunder, or the performance of such rights and obligations. The Company
hereby irrevocably consents to the service of a summons and complaint and
other process in any action, claim or proceeding brought by the Warrantholder
in connection with this Agreement, any rights or obligations hereunder, or the
performance of such rights and obligations.
12.5 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW, THE COMPANY AND THE WARRANTHOLDER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
12.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same
instrument.
17
12.7 Inspection of Agreement. A copy of this Agreement shall be
available at all reasonable times at the principal office of the Company for
inspection by the holder of any Warrant Certificate. The Company may require
such holder to submit his Warrant Certificate for inspection by it.
12.8 Headings. The section headings in this Agreement are for the
purposes of convenience only and shall not constitute a part hereof.
18
IN WITNESS WHEREOF, the Company and the Warrantholder have caused their
respective duly authorized officers to sign this Agreement.
INFINITY, INC.
By: ___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
Signature Page to the Warrant Agreement
S-1
WARRANTHOLDER:
HIGHBRIDGE/▇▇▇▇▇ SPECIAL
OPPORTUNITIES FUND, L.P.
By: Highbridge/▇▇▇▇▇ Capital Management, LLC
By: __________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Principal
Appendices:
Appendix A Form of Warrant Certificate
Appendix B Election to Exercise
Schedules:
Schedule 11.1 Outstanding Options, Etc.
Signature Page to the Warrant Agreement
S-2
APPENDIX A
[FORM OF WARRANT CERTIFICATE]
Warrant No. ____ ____ Warrants
WARRANT TO PURCHASE COMMON STOCK OF
INFINITY, INC.
THIS WARRANT IS SUBJECT TO RESTRICTIONS
ON TRANSFER SET FORTH IN THE
AGREEMENT REFERENCED BELOW.
This certificate certifies that _________________ is the registered owner
of the above indicated number of Warrants, each Warrant entitling such owner
to purchase initially one share of Common Stock, $.0001 par value ("Common
Stock"), of Infinity, Inc., a Colorado corporation, (hereinafter called the
"Company"), at the price per share (the "Warrant Price") set forth in Section
2 of the Warrant Agreement, subject to the terms of that Warrant Agreement
hereafter referred to.
The holder may exercise the Warrant evidenced hereby by surrender, to the
Company at its principal office in Denver, Colorado, of this Warrant
Certificate and the form of Election to Exercise attached hereto, both duly
filled in and signed, along with payment in full to the Company of the Warrant
Price in cash or immediately available funds or pursuant to a Cashless
Exercise, all as provided in the Warrant Agreement and upon compliance with
and subject to the conditions set forth herein and in the Warrant Agreement.
According to the terms of the Warrant Agreement, the Warrants shall cease to
be exercisable at 5:00 p.m., Houston, Texas time, on July ___, 2008.
The Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of July __, 2003 (the "Warrant Agreement"), by and
between the Company and _________________, and is subject to the terms and
provisions of the Warrant Agreement, which terms and provisions are hereby
incorporated by reference herein and made a part hereof. Each holder of this
Warrant Certificate consents to all of the terms contained in the Warrant
Agreement by acceptance hereof. A copy of the Warrant Agreement is available
for inspection by the registered holder hereof at the principal office of the
Company in Denver, Colorado.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. THE COMPANY WILL NOT TRANSFER SUCH
SECURITIES EXCEPT UPON RECEIPT OF A FAVORABLE OPINION OF COUNSEL AND/OR
EVIDENCE SATISFACTORY TO THE COMPANY THAT THE REGISTRATION PROVISIONS OF
SUCH ACT HAVE BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE
SECURITIES LAWS.
Appendix A-1
The Warrant Agreement and each Warrant Certificate, including this
Warrant Certificate, shall be deemed a contract made under the laws of the
State of Colorado and for all purposes shall be construed in accordance with
the laws of the State of Colorado.
Dated:
____________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
Appendix A-2
APPENDIX B
ELECTION TO EXERCISE
(To be executed only upon exercise of warrant)
To _____________________
The undersigned registered holder of the attached warrant hereby
irrevocably exercises and surrenders to the Company such warrant for, and
purchases thereunder, ________* shares of Common Stock of Infinity, Inc., and
herewith makes payment of $__________ therefor, in cash or immediately
available funds or pursuant to a Cashless Exercise as requested below, and
requests that the certificates for such shares (less any shares, if any,
utilized pursuant to a Cashless Exercise) be issued in the name of, and
delivered to ___________________________, whose address is
_______________________________________________________________.
Check one of the following boxes: [ ] Payment in cash or immediately
available funds
[ ] Cashless Exercise
Dated: _________________
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
this warrant)
__________________________________________
(Street Address)
__________________________________________
(City) (State) (Zip Code)
_________________________________
* Insert here the number of shares called for on the face of this warrant
(or, in the case of a partial exercise, the portion thereof as to which this
warrant is being exercised), in either case without making any adjustment for
additional shares of common stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of this warrant,
may be delivered upon exercise. In the case of a partial exercise, a new
warrant or warrants will be issued and delivered, representing the unexercised
portion of this warrant, to the holder surrendering the same. In the case of
a Cashless Exercise, the number of shares to be issued shall be reduced as set
forth in Section 2.3 of the Warrant Agreement.
Appendix B-1