EXHIBIT 4.2
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. TIMCO AVIATION SERVICES, INC. (THE "COMPANY"), WILL
TRANSFER SUCH WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
THEREOF ONLY UPON RECEIPT OF AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN FORM
AND SUBSTANCE 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.
COMMON STOCK WARRANT CERTIFICATE
TIMCO AVIATION SERVICES, INC.
For the Purchase of Shares
of Common Stock of TIMCO Aviation Services, Inc.
As of May 14, 2003
FOR VALUE RECEIVED, LJH, LTD., or its registered assign(s) (the holder
hereof a the applicable time being referred to herein as the "Holder"), is
hereby granted the right to purchase from TIMCO AVIATION SERVICES, INC., a
Delaware corporation (the "Company"), such number of shares of authorized but
unissued common stock of the Company as is equal to thirty percent (30%) of the
outstanding common stock, par value $0.001 per share (the "Common Stock") of the
Company, on a fully-diluted basis and taking into account shares issued under
this Warrant, as defined, as of the date that this Warrant is exercised (the
"Warrant Shares"), at an exercise price of $0.001 per share, exercisable in
whole, but not in part, from May 14, 2003 until 5:00 p.m. on January 31, 2007
(the "Exercise Period"), on the terms and conditions set forth in this Warrant
Certificate (this "Warrant").
1. EXERCISE
1.1. EXERCISE OF WARRANT. This Warrant may be exercised, in whole
but not in part, at any time during the Exercise Period, by (i) surrendering
this Warrant Certificate, with the form of exercise notice attached hereto as
EXHIBIT A duly executed by the Holder, to the Company at its principal office,
and (ii) making payment to the Company of the aggregate Exercise Price for the
Warrant Shares in cash, by certified check, bank check or wire transfer to an
account designated by the Company.
1.2. ISSUANCE OF WARRANT SHARES. The Warrant Shares purchased shall
be issued as of the close of business on the date on which all actions required
to be taken by the Holder and all payments required to be received by the
Company, pursuant to Section 1.1, shall have been so taken and received.
Certificates for the Warrant Shares so purchased shall be delivered, to the
extent possible, in such denomination or denominations as the Holder shall
reasonably request and shall be registered in the name of the Holder or such
other name or names as shall be designated by the Holder, and shall be delivered
to the Holder or such other person to as soon as practicable after this Warrant
is surrendered and the Exercise Price is received, but in any event within 10
business days thereafter.
1.3. LEGEND. The certificates representing the Warrant Shares shall
bear the following legend unless and until the Company shall have received a
no-action letter from the Securities and Exchange Commission, an opinion of
counsel, or other evidence, in form and substance reasonably satisfactory to the
Company, that such legend is not required in order to ensure compliance with the
Securities Act:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY
COUNTRY AND/OR STATE WITH RESPECT THERETO, OR IN ACCORDANCE WITH AN
OPINION OF COUNSEL OR OTHER EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
1.4. RESERVATION AND AUTHORIZATION OF COMMON STOCK, REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY. From and after the date hereof,
the Company shall at all times reserve and keep available for issuance upon the
exercise of the Warrant such number of its authorized but unissued shares of
Common Stock, free from preemptive rights, as will be sufficient to permit the
exercise in full of the Warrant. All shares of Common Stock issuable pursuant to
the terms hereof, when issued upon exercise of this Warrant with payment
therefor in accordance with the terms hereof, shall be duly and validly issued
and fully paid and nonassessable, not subject to preemptive rights and shall be
free and clear of any mortgage, pledge, deed of trust, lien, charge, encumbrance
or security interest of any kind.
If any shares of Common Stock required to be reserved for issuance upon
exercise of this Warrant require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Company will in good faith and as expeditiously as possible and
at its expense endeavor to cause such shares to be duly registered.
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2. RIGHTS OF THE HOLDER.
2.1. NO RIGHTS AS SHAREHOLDER. The Holder shall not, solely by
virtue of this Warrant and prior to the issuance of the Warrant Shares upon due
exercise hereof, be entitled to any rights of a shareholder in the Company.
3. TRANSFER OR LOSS OF WARRANT.
3.1. TRANSFER. Subject to compliance with federal and state
securities laws, the Holder may sell, assign, transfer or otherwise dispose of
this Warrant and the holder(s) of the Warrant Shares acquired upon the exercise
of the Warrant may sell, assign, transfer or otherwise dispose of all or any
portion of such Warrant Shares at any time and from time to time. Upon the sale,
assignment, transfer or other disposition of the Warrant, the Holder shall
deliver to the Company a written notice of such in the form attached hereto as
EXHIBIT B duly executed by Holder which includes the identity and address of any
such purchaser, assignor or transferee.
3.2. LOSS. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification or bond, and upon surrender and cancellation of
this Warrant, if mutilated, the Company shall execute and deliver a new Warrant
of like tenor and date.
4.REGISTRATION RIGHTS.
4.1. INCIDENTAL REGISTRATION. If the Company at any time proposes
to file on its behalf and/or on behalf of any of its security holders (the
"demanding security holders") a Registration Statement under the Securities Act
on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of the Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash with respect to the Common Stock
or any other class of equity security (as defined in Section 3(a)(11) of the
Exchange Act) of the Company, it will give written notice to the Holder and the
holders of Warrant Shares at least 15 days before the initial filing with the
Securities and Exchange Commission (the "Commission") of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company. The notice shall offer
to include in such filing the aggregate number of Warrant Shares, and the number
of shares of Common Stock for which this Warrant is exercisable, as the holders
of such Warrant Shares and/or the Holder may request.
Notwithstanding the foregoing, no piggyback registration rights shall
be available if a shelf registration statement with respect to the Warrant
Shares is then in effect.
The Holder and the holders of Warrant Shares shall advise the Company
in writing within 15 days after the date of receipt of such offer from the
Company, setting forth the amount of Warrant Shares for which registration is
requested. The Company shall thereupon include in such
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filing the number of Warrant Shares for which registration is so requested,
subject to the next sentence, and shall use its best efforts to effect
registration under the Securities Act of such shares. If the managing
underwriter of a proposed public offering shall advise the Company in writing
that, in its opinion, the distribution of the Warrant Shares requested to be
included in the registration concurrently with the securities being registered
by the Company or such demanding security holder would materially and adversely
affect the distribution of such securities by the Company or such demanding
security holder, then all selling security holders (including any demanding
security holder who initially requested such registration), shall reduce the
amount of securities each intended to distribute through such offering on a pro
rata basis. Except as otherwise provided in Section 4.4, all expenses of such
registration shall be borne by the Company.
4.2. REGISTRATION PROCEDURE. If the Company is required by the
provisions of this Section 4 to effect the registration of any of its securities
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for a period of time
required for the disposition of such securities by the holders thereof, but not
to exceed one year,
(b) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all securities covered by such Registration
Statement until the earlier of such time as all of such securities have been
disposed of in a public offering or the expiration of such Registration
Statement as permitted under paragraph (a) above;
(c) furnish to the holders of such securities such number
of copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents, as such holders may reasonably request;
(d) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States as the holders of
such securities shall request (provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service or process), and do such other reasonable acts and things as
may be required of it to enable such holders to consummate the disposition in
such jurisdiction of the securities covered by such Registration Statement;
(e) furnish, at the request of the holders of such
securities, on the date that the Warrant Shares are delivered to the
underwriters for sale pursuant to such registration or, if such Warrant Shares
are not being sold through underwriters, on the date that the Registration
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Statement with respect to such Warrant Shares becomes effective, (1) an opinion,
dated such date, of the independent counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any, and if the
Warrant Shares are not being sold through underwriters, then to such holders, in
customary form and covering matters of the type customarily covered in such
legal opinions, and (2) a comfort letter dated such date, from the independent
certified public accountants of the Company, addressed to the underwriters, if
any, and if the Warrant Shares not being sold through underwriters, then to such
holders and, if such accountants refuse to deliver such letter to such holders,
then to the Company in a customary form and covering matters of the type
customarily covered by such comfort letters as the underwriters or such holders
shall reasonably request;
(f) enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
securities; and
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, but not later than 18
months after the effective date of the Registration Statement, an earnings
statement covering a period of at least 12 months beginning after the effective
date of such Registration Statement, which earnings statements shall satisfy the
provisions of Section 11 (a) of the Securities Act.
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 4 in respect of the securities which
are to be registered at the request of the holders of such securities that such
holders shall furnish to the Company such information regarding the securities
held by such holders and the intended method of disposition thereof as the
Company shall reasonably request and as shall be required in connection with the
action taken by the Company.
4.3. EXPENSES. All expenses incurred in complying with Section 4,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the National Association of Securities
Dealers), printing expenses, fees and disbursements of counsel for the Company,
expenses of any special audits incident to or required by any such registration
and expenses of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 4.2(d), shall be paid by the Company, except
that the Company shall not be liable for any fees, discounts or commissions to
any underwriter in respect of the Warrant Shares sold by each such holder or for
the expenses of Holder's counsel in connection with such registration.
4.4. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of any registration of any of the
Warrant Shares under the Securities Act pursuant to this Section 4, the Company
shall indemnify and hold harmless the holders of Warrant Shares, each such
holder's directors and officers, and each other person (including each
underwriter) who participated in the offering of such Warrant Shares and each
other person, if any, who controls each such holder or such participating person
within the
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meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the holder or any such director or
officer or participating person or controlling person may become subject under
the Securities Act or any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any alleged untrue statement of any material fact
contained, on the effective date thereof, in any Registration Statement under
which such securities were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or (ii) any alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and shall reimburse the holder or such director, officer or participating person
or controlling person for any legal or any other expenses reasonably incurred by
the holder or such director, officer or participating person or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or alleged
omission made in such Registration Statement, preliminary prospectus, prospectus
or amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such holder specifically for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such holder of Warrant Shares or such
director, officer or participating person or controlling person, and shall
survive the transfer of such securities by such holder.
(b) Each holder of Warrant Shares, by acceptance thereof,
agrees to indemnify and hold harmless the Company, its directors and officers
and each other person, if any, who controls the Company within the meaning of
the Securities Act against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director or officer or any such person
may become subject under the Securities Act or any other statute or at common
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon information in writing provided
to the Company by such holder specifically for use in the following documents
and contained, on the effective date thereof, in any Registration Statement
under which securities were registered under the Securities Act at the request
of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, but in an amount not to exceed
the net proceeds received by such holder in the offering.
(c) If the indemnification provided for in this Section 4
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates
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to information supplied by, such indemnifying party or indemnified parties, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding. The
liability of any holder of Warrant Shares hereunder shall not exceed the net
proceeds received by it in the offering.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 (c) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
4.5. TERMINATION OF RESTRICTIONS. Notwithstanding any other
provision of this Warrant, the legend requirements of Section 1.3 shall
terminate as to any particular Warrant Shares when and so long as such security
shall have been effectively registered under the Securities Act and disposed of
pursuant thereto. Whenever the restrictions imposed by Section 1.3 shall
terminate as to any Warrant Shares, as hereinabove provided, the holder thereof
shall be entitled to receive from the Company, at the Company's expense, a new
certificate representing such Warrant Shares not bearing the restrictive legend
set forth in Section 1.3.
4.6. LISTING ON SECURITIES EXCHANGE. So long as any shares of
Common Stock shall be listed on a securities exchange, the Company shall, at its
expense, list thereon, maintain and, when necessary, increase such listing of,
all shares of Common Stock issued or, to the extent permissible under the
applicable securities exchange rules, issuable upon the exercise of this
Warrant.
4.7. SELECTION OF MANAGING UNDERWRITERS. The managing underwriter
or underwriters for any offering of Warrant Shares to be registered pursuant to
Section 4.1 shall be selected by the holders of Warrant Shares and shall be
reasonably acceptable to the Company.
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5.MISCELLANEOUS.
5.1. NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), or guaranteed overnight
delivery, to the Company at the address at which its principal business office
is located from time to time, and to the Holder at the address set forth in the
books of the Company.
5.2. EXPENSES; TAXES. All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly issued,
fully paid and nonassessable, issued without violation of any preemptive rights
and free and clear of any mortgage, pledge, deed of trust, lien, charge,
encumbrance or security interest of any kind. The Company shall pay all expenses
in connection with, and all taxes and other governmental charges that may be
imposed with respect to any such stock issuance or transfer or the transactions
contemplated hereby (other than taxes on the income of any holder of Warrant
Shares or any such holder's franchise taxes), unless such tax or charge is
imposed by applicable law upon such holder, in which case such taxes or charges
shall be paid by such holder, and the Company shall reimburse such holder
therefor on an after-tax basis; provided that such holder shall be required to
pay any taxes with respect to any transfer of such Common Stock to any other
person.
5.3. NO IMPAIRMENT; REGULATORY COMPLIANCE COOPERATION; FURTHER
ASSURANCES. The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value (if any) of any
shares of Common Stock issuable upon the exercise of this Warrant above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, free and clear of any
mortgage, pledge, deed of trust, lien, charge, encumbrance or security interest
of any kind, (c) obtain all such authorizations, exemptions or consents from any
governmental authority as may be necessary to enable the Company to perform its
obligations under this Warrant and (d) execute, acknowledge and deliver such
other further agreements, instruments and documents and do such further acts as
may be necessary to preserve and maintain in full force and effect this Warrant
and the rights of the Holder herein and to carry out more effectively the
provisions and purposes of this Warrant.
5.4. AMENDMENT; WAIVER. This Warrant Certificate may not be
modified, amended, supplemented, canceled or discharged, except by written
instrument executed by the Company and the Holder. No failure to exercise, and
no delay in exercising, any right, power or privilege under this Warrant
Certificate shall operate as a waiver, nor shall any single or partial exercise
of any right, power or privilege hereunder preclude the exercise of any other
right, power or
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privilege. No waiver of any breach of any provision shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision,
nor shall any waiver be implied from any course of dealing between the Company
and the Holder. No extension of time for performance of any obligations or other
acts hereunder or under any other agreement shall be deemed to be an extension
of the time for performance of any other obligations or any other acts.
5.5. HEADINGS. The headings contained in this Warrant Certificate
are for convenience of reference only and are not to be given any legal effect
and shall not affect the meaning or interpretation of this Warrant Certificate.
5.6. GOVERNING LAW; INTERPRETATION. This Warrant Certificate shall
be construed in accordance with and governed for all purposes by the laws of the
State of Delaware.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed and delivered, effective as of the day and year first above written.
TIMCO AVIATION SERVICES, INC.
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Corporate Secretary
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EXHIBIT A
EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of the attached Warrant Certificate
irrevocably exercises this Warrant for the purchase of the number of shares of
Common Stock, par value $.001 per share ("Common Stock"), of TIMCO Aviation
Services, Inc. (the "Company"), as is set forth below, and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
the attached Warrant Certificate and requests that certificates for the shares
of Common Stock hereby purchased be issued in the name of and delivered to the
person specified below whose address is set forth below.
Date:_________________
Amount of Shares Purchased:____________________
Aggregate Purchase Price: $____________________
Printed Name of Registered Holder:_____________
Signature of Registered Holder:________________
NOTICE: The signature on this Exercise Notice must correspond with the
name as written upon the face of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Stock Certificates to be issued and registered in the following name, and
delivered to the following address:
(Name)
(Street Address)
(City) (State) (Zip Code)
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EXHIBIT B
ASSIGNMENT NOTICE
[To be executed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the person named below, whose address is set forth below, the rights
represented by the attached Warrant Certificate to purchase the number of shares
of Common Stock, par value $.001 per share ("Common Stock"), of TIMCO Aviation
Services, Inc. (the "Company"), as is set forth below, to which the attached
Warrant Certificate relates, and appoints ____________________ attorney to
transfer such rights on the books of the Company with full power of substitution
in the premises. If such shares of Common Stock of the Company shall not include
all of the shares of Common Stock now and hereafter issuable as provided in the
attached Warrant Certificate, then the Company shall promptly issue to the
undersigned a new Warrant Certificate of like tenor and date for the balance of
the Common Stock issuable thereunder.
Date:____________________
Amount of Shares Purchased:______________________
Aggregate Purchase Price: $______________________
Printed Name of Registered Holder:_______________
Signature of Registered Holder:__________________
NOTICE: The signature on this Assignment Notice must correspond with
the name as written upon the face of the attached Warrant
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Warrant Certificate for transferred Warrants to be issued and registered in the
following name, and delivered to the following address:
(Name)
(Street Address)
(City) (State) (Zip Code)
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