1
EXHIBIT 4.6
SERIES C WARRANT AGREEMENT
THIS WARRANT AGREEMENT ("Agreement") is made and entered into as of the ___ day
of __________, 1999, by and between PawnMart, Inc., a Delaware corporation
("Company"), and Continental Stock Transfer & Trust Company, a New York
corporation, as warrant agent ("Warrant Agent").
WHEREAS, the Company proposes to offer and sell a maximum of $10,000,000
principal amount of 12% Subordinated Notes Due 2004 (the "Notes") and, in
connection with the offering of the Notes, plans to issue up to 600,000 Series C
Redeemable Common Stock Purchase Warrants (the "Series C Warrants" or
"Warrants") pursuant to a Registration Statement on Form S-1 (the "Prospectus"),
File Number _______________, filed with the Securities and Exchange Commission;
and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing so to act, in connection with the issuance,
registration, registration of transfer, exchange and exercise of the Series C
Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent
to act as agent for the Company in accordance with the instructions hereinafter
set forth in this Agreement, and the Warrant Agent hereby accepts such
appointment.
2. Form of Warrants. The text and the terms of the Warrants, and the form of
election to purchase shares of Common Stock appearing on the reverse side
thereof shall be substantially as set forth in Exhibit A attached hereto and
made a part hereof. The Warrants shall be executed on behalf of the Company by
the manual or facsimile signature of the Chairman, Vice Chairman of the Company
or President or Chief Executive Officer and by the manual or facsimile signature
of the secretary or assistant secretary of the Company under its corporate seal,
affixed or in facsimile.
The Warrants shall be dated by the Warrant Agent as of the initial date of
issuance thereof, and upon transfer or exchange, the Warrant shall be dated as
of such subsequent issuance date.
The Warrants shall expire at 5:00 p.m. (New York time) on March 31, 2005. If
such date shall, in the State of New York, be a holiday or a day in which banks
are authorized to close, then the Warrants shall expire the next following day
which in the State of New York is not a holiday or a day on which banks are
authorized to close.
3. Registration and Countersignature. The Warrant Agent shall maintain books for
the transfer and registration of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective registered holders, and upon subsequent issuance, such
Warrants shall be registered in the names of the respective succeeding
registered holders. The Warrants shall be countersigned by the Warrant Agent (or
by any successor to the Warrant Agent then acting as warrant agent under this
Agreement) and shall not be valid for any purpose unless so countersigned.
Warrants may be so countersigned, however, by the Warrant Agent (or by its
successor as warrant agent) and be delivered by the Warrant Agent,
notwithstanding that the persons whose manual or facsimile signature appear
thereon as proper officers of the Company shall have ceased to be such officers
at the time of such countersignature or delivery. Until a Warrant is transferred
on the books of the Warrant Agent, the Company and the Warrant Agent may treat
any registered holder of Warrants as the absolute owner thereof for all
purposes, notwithstanding any notice to the contrary.
4. Registration of Transfers and Exchanges. The Warrant Agent shall transfer any
outstanding Warrants on the books to be maintained by the Warrant Agent for that
purpose, upon surrender thereof for transfer, properly endorsed or accompanied
by appropriate instructions for transfer with proper documentary stamps affixed
thereto, if requested. Upon any such transfer, a new Warrant shall be issued to
the transferee, and the surrendered Warrant shall be canceled by the Warrant
Agent. Warrants so canceled shall be delivered by the Warrant Agent to the
Company from time to time. Warrants may be exchanged at the option of the holder
thereof when surrendered at the
1
2
office of the Warrant Agent, for another Warrant, or other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of shares of Common Stock. The Warrant Agent is hereby
irrevocably authorized to countersign and deliver the Warrants in accordance
with the provisions of this Paragraph 4, and the Company, whenever required by
the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
5. Exercise of Warrants. Subject this Agreement, each registered holder of
Warrants shall have the right, which right may be exercised as in such Warrants
as expressed, to purchase from the Company, and the Company shall issue and sell
to such registered holder of Warrants, the number of fully paid and
nonassessable shares of Common Stock specified in such Warrants, upon surrender
to the Company at the office of the Warrant Agent, with the form of election to
purchase on the reverse side thereof duly completed and signed, and upon payment
to the Warrant Agent for the account of the Company of the Exercise Price for
the number of shares of Common Stock in respect of which such Warrants are then
exercised. Payment of such Exercise Price may be made in cash or by certified
check, bank draft, or postal or express money order, payable in United States
dollars, to the order of the Company. Subject to the provisions of Paragraph 8
hereof, upon such surrender of Warrants and payment of the Exercise Price as
aforesaid, the Company, acting through the Warrant Agent, shall issue and cause
to be delivered with all reasonable dispatch to or upon the written order of the
registered holder of such Warrants and in such name or names as such registered
holder may designate, a certificate or certificates for the number of full
shares of Common Stock so purchased upon the exercise of such Warrants. Such
certificates shall be deemed to have been issued, and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Common Stock, as of the date of surrender of such Warrants and payment of the
Exercise Price, as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and the payment of such Exercise Price, the transfer
books for the Common Stock purchasable upon the exercise of such Warrants shall
be closed, the certificates for the Common Stock in respect of which such
Warrants are then exercised shall be issuable as of the date on which such books
shall next be opened, and until such date the Company shall be under no duty to
deliver any certificate for such shares; provided further, however, that the
transfer books aforesaid, unless otherwise required by law, shall not be closed
at any one time for a period longer than 20 days. The right of purchase
represented by the Warrants shall be exercisable, at the election of the
registered holders thereof, either as an entirety or, from time to time, for
only part of the Common Stock specified therein, and in the event that any
Warrant is exercised in respect of less than all of the Common Stock specified
therein at any time prior to the date of expiration of the Warrants, a new
Warrant or Warrants will be issued for the remaining number of Common Stock
specified in the Warrant so surrendered, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrants
pursuant to the provisions of this Paragraph 5 and of Paragraph 3 of this
Agreement, and the Company, whenever required by the Warrant Agent, will supply
the Warrant Agent with Warrants duly executed on behalf of the Company for such
purposes.
Notwithstanding anything contained herein to the contrary, no Warrant may be
exercised if the issuance of Common Stock in connection therewith would
constitute a violation of the registration provisions of federal or state
securities laws.
Upon 30 days prior written notice to all holders of the Warrants, the Company
shall have the right to reduce the exercise price and/or extend the term of the
Warrants in compliance with the requirements of Rule 13e-4 to the extent
applicable.
The "Exercise Price" of the Warrants shall mean the exercise price specified in
the Warrants until the occurrence of a recapitalization or reclassification
that, pursuant to the provisions hereof, shall require an increase or decrease
in the exercise price of the Warrants, and thereafter shall mean said price as
adjusted from time to time in accordance with the provisions hereof. No such
adjustment shall be made unless such adjustment would change the then purchase
price per share by ten cents ($.10) or more; provided, however, that all
adjustments not so made shall be deferred and made when the aggregate thereof
would change the then purchase price per share by ten cents ($.10) or more. No
adjustment made pursuant to any provision hereof shall have the effect of
increasing the total consideration payable upon exercise of any of the Warrants.
6. Adjustments in Certain Cases. In case the Company shall at any time prior to
the exercise or termination of any of the Warrants effect a recapitalization or
reclassification of such character that its Common Stock shall be changed into
or become exchangeable for a larger or smaller number of shares, then, upon the
effective date thereof, the number of shares of Common Stock that the holders of
the Warrants shall be entitled to purchase upon exercise thereof shall be
increased or decreased, as the case may be, in direct proportion to the increase
or decrease in such number of shares of Common Stock by reason of such
recapitalization or reclassification, and the purchase price per
2
3
share of such recapitalized or reclassified Common Stock shall, in the case of
an increase in the number of shares, be proportionately decreased and, in the
case of a decrease in the number of shares, be proportionately increased.
In case the Company shall at any time prior to the exercise or termination of
any of the Warrants distribute to holders of its Common Stock cash, evidences of
indebtedness, or other securities or assets, other than as dividends or
distributions payable out of current or accumulated earnings, then, in any such
case, the holders of the Warrants shall be entitled to receive, upon exercise
thereof, with respect to each share of Common Stock issuable upon such exercise,
the amount of cash or evidences of indebtedness or other securities or assets
that such holder would have been entitled to receive with respect to the Common
Stock as a result of the happening of such event, had the Warrants been
exercised immediately prior to the record date or other date fixing shareholders
to be affected by such event (without giving effect to any restriction upon such
exercise).
In case the Company shall at any time prior to the exercise or termination of
any of the Warrants consolidate or merge with any other corporation or transfer
all or substantially all of its assets to any other corporation preparatory to a
dissolution, then the Company shall, as a condition precedent to such
transaction, cause effective provision to be made so that the holders of the
Warrants, upon the exercise thereof after the effective date of such
transaction, shall be entitled to receive the kind and amount of shares,
evidences of indebtedness, and/or other property receivable on such transaction
by a holder of the number of shares of Common Stock as to which the Warrants
were exercisable immediately prior to such transaction (without giving effect to
any restriction upon such exercise); and, in any such case, appropriate
provision shall be made with respect to the rights and interests of the holders
thereof to the effect that the provisions of the Warrants shall thereafter be
applicable (as nearly as may be practicable) with respect to any shares,
evidences of indebtedness, or other securities or assets thereafter deliverable
upon exercise of the Warrants.
Whenever the number of shares of Common Stock or other types of securities or
assets purchasable upon exercise of any of the Warrants shall be adjusted as
provided herein, the Company shall forthwith obtain and file with its corporate
records a certificate or letter from a firm of independent public accountants of
recognized standing setting forth the computation and the adjusted number of
shares of Common Stock or other securities or assets purchasable hereunder
resulting from such adjustments, and a copy of such certificate or letter shall
be mailed to each of the registered holders of the Warrants. Any such
certificate or letter shall be conclusive evidence as to the correctness of the
adjustment or adjustments referred to therein and shall be available for
inspection by the holders of the Warrants on any day during normal business
hours.
In the event that at any time as a result of an adjustment made pursuant hereto
the holders of the Warrants shall become entitled to purchase upon exercise
thereof shares, evidences of indebtedness, or other securities or assets (other
than Common Stock), then, wherever appropriate, all references herein to Common
Stock shall be deemed to refer to and include such shares, evidences of
indebtedness, or other securities or assets, and thereafter the number of such
shares, evidences of indebtedness, or other securities or assets shall be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions hereof.
7. Redemption. The Series C Warrants may be redeemed at the option of the
Company, at a redemption price of $.05 per Warrant, upon not less than 30 days
nor more than 60 days prior written notice, if the closing price of the Common
Stock, as reported by the principal exchange on which the Common Stock is
traded, the Nasdaq SmallCap Market or the National Quotation Bureau,
Incorporated, as the case may be, for seven days during any 10 consecutive
trading day period ending not more than 15 days prior to the date the notice of
redemption is mailed equals or exceeds $9.00 per share, subject to adjustment
under certain circumstances and provided there is a current registration
statement under the Securities Act of 1933, as amended, with respect to the
issuance and sale of Common Stock upon the exercise of the Warrants. On and
after the date fixed for redemption, the Registered Holder shall have no rights
with respect to the Warrants except to receive the $.05 per Warrant upon
surrender of this Warrant Certificate.
8. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of securities upon the exercise of the
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes that may be payable in respect of any transfer involved in the
issuance or delivery of any securities in a name other than that of the
registered holder of Warrants in respect of which such securities are issued
and, in such case, neither the Company nor the Warrant Agent shall be required
to issue or deliver any certificate representing such securities or any Warrant
until the person requesting the same has paid to the Company or the Warrant
Agent the amount of such tax or has established to the Company's satisfaction
that such tax has been paid.
3
4
9. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Warrant Agent may countersign and
deliver in exchange and substitution for and upon cancellation of the mutilated
Warrant or in lieu of and substitution for the Warrant lost, stolen or
destroyed, a new Warrant of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the Warrant Agent of
such loss, theft or destruction of such Warrants and indemnity, if requested,
also satisfactory to them. Applicants for such substitute Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
10. Reservation of Common Stock. Prior to the issuance of any Warrants, there
shall have been reserved, and the Company shall at all times keep reserved out
of the authorized and unissued Common Stock, a number of shares of Common Stock
sufficient to provide for the exercise of the rights of purchase represented by
the Warrants, and the transfer agent for the Common Stock and every subsequent
transfer agent for any of the Company's Common Stock issuable upon the exercise
of any of the rights of purchase aforesaid are hereby irrevocably authorized and
directed at all times to reserve such number of authorized and unissued Common
Stock as shall be requisite for such purpose. The Company agrees that all Common
Stock issued upon exercise of the Warrants shall be, at the time of delivery of
the certificates representing such Common Stock, validly issued and outstanding,
fully paid and non-assessable. The Company will keep a copy of this Agreement on
file with the transfer agent for the Common Stock and with every subsequent
transfer agent for the Company's Common Stock issuable upon the exercise of the
right of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such transfer agent
stock certificates required to honor outstanding Warrants that have been
exercised. The Company will supply such transfer agent with duly executed stock
certificates for such purpose. All Warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Warrant Agent and shall
thereafter be delivered to the Company, and such canceled Warrants shall
constitute sufficient evidence of the number of shares of Common Stock that have
been issued upon the exercise of such Warrants. All Warrants surrendered for
transfer, exchange or partial exercise shall be canceled by the Warrant Agent
and delivered to the Company. Promptly after the date of expiration of the
Warrants, the Warrant Agent shall certify to the Company the total aggregate
amount of Warrants then outstanding and, thereafter, no Common Stock shall be
subject to reservation in respect of such Warrants.
11. Disposition of Proceeds on Exercise of Warrants. Unless otherwise instructed
by the Company in writing, the Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and shall promptly deposit in an
account for the benefit of the Company, in a bank designated by the Company, all
moneys received by the Warrant Agent for the purchase of Common Stock through
the exercise of such Warrants.
12. Merger or Consolidation or Change of Name of Warrant Agent. Any corporation
or company that may succeed to the business of the Warrant Agent by merger or
consolidation or otherwise to which the Warrant Agent shall be a party, or any
corporation or company or otherwise succeeding to the business of the Warrant
Agent shall be the successor to the Warrant Agent hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Paragraph 14 of
this Agreement. In case at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement or in case at any time the name
of the Warrant Agent shall be changed, and any of the Warrants shall have been
countersigned but not delivered, any such successor to the Warrant Agent may
adopt the countersignature of the original Warrant Agent and deliver such
Warrants so countersigned; and in case at the time any of the Warrants shall not
have been countersigned, the successor to the Warrant Agent may countersign such
Warrants, either in the name of the predecessor Warrant Agent or in the name of
the successor Warrant Agent; and in all such cases, such Warrants shall have the
full force provided in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at such
time any of the Warrants shall have been countersigned but not delivered, the
Warrant Agent may adopt the countersignature under its prior name and deliver
Warrants so countersigned; and if at that time any of the Warrants shall not
have been countersigned, the Warrant Agent may countersign such Warrants either
in its prior name or in its changed name; and in all such cases, such Warrants
shall have the full force provided in the Warrants and this Agreement.
13. Duties of the Warrant Agent.
(a) The Warrant Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
shall be bound:
4
5
(i) The statements contained herein and in the Warrants shall be taken
as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same, except such
as describe the Warrant Agent or action or actions taken or to be
taken by it. The Warrant Agent assumes no responsibility with
respect to the distribution of the Warrants, except as herein
otherwise provided.
(ii) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this
Agreement or in the Warrants to be complied with by the Company.
(iii) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder, either
itself, or by or through its attorneys, agents or employees.
(iv) The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company), and the Warrant Agent
shall incur no liability or responsibility to the Company or to any
holder of any Warrant in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the
opinion or advice of such counsel, provided the Warrant Agent shall
have exercised reasonable care in the selection and continued
employment of such counsel.
(v) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant for any action taken in
reliance upon any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument reasonably
believed by it to have been signed, sent or presented by the proper
party or parties.
(vi) The Company agrees to pay the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of
this Agreement; to reimburse the Warrant Agent for all expenses,
taxes, governmental charges and other charges of any kind and nature
incurred by the Warrant Agent in the execution of this Agreement;
and to indemnify the Warrant Agent and save it harmless from and
against any and all liabilities, including judgments, costs and
reasonable attorneys' fees for anything done or omitted by the
Warrant Agent in the execution of this Agreement, except as a result
of the Warrant Agent's negligence or bad faith.
(vii) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding, or to take any other action likely
to involve expense, unless the Company or one or more registered
holders of Warrants shall furnish the Warrant Agent with reasonable
security and indemnity. All rights of action under this Agreement or
under any of the Warrants or in the production thereof at any trial
or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its
name as Warrant Agent, and any recovery of judgment shall be for the
benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(viii) The Warrant Agent and any shareholder, director, officer, partner or
employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as
fully and freely as though it were not the Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal
entity.
(ix) The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything that it may do or
refrain from doing in connection with this Agreement, except for
liabilities that arise out of its negligence or bad faith.
(x) The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of the Warrants during normal business hours
at its principal office in New York.
14. Change of Warrant Agent. The Warrant Agent may resign and be discharged from
its duties under this Agreement by giving notice in writing to the Company and
by giving notice by mailing to holders of the Warrants at their addresses as
such addresses appear on the Warrant register of such resignation, specifying a
date when such resignation shall take effect, which date shall not be less than
30 days after the mailing of said notice. The Warrant Agent may be removed at
the discretion of the Company by like notice to the Warrant Agent from the
Company and by like mailing of notice to the holders of the Warrants. If the
Warrant Agent shall resign or be removed or otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent. If the
Company
5
6
shall fail to make such appointment within a period of 30 days after such
removal, or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the registered
holder of a Warrant (who shall, with such notice, submit his Warrant for
inspection by the Company), then the registered holder of any Warrant may apply
to any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. After appointment, any successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed, but the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall give notice thereof to
the predecessor Warrant Agent and each transfer agent for the Common Stock, and
shall forthwith give notice to the holders of the Warrants in the manner
prescribed in this section. Failure to file or mail any notice provided for in
this Section 14, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Warrant Agent or the
appointment of any successor Warrant Agent, as the case may be.
15. Identity of Transfer Agent. Forthwith upon the appointment of any transfer
agent other than the Warrant Agent for the Common Stock of the Company issuable
upon the exercise of the rights of purchase represented by the Warrants, the
Company will file with the Warrant Agent a statement setting forth the name and
address of such transfer agent.
16. Notices. Any notice pursuant to this Agreement to be given or made by the
Warrant Agent or by the registered holder of any Warrant to the Company shall be
deemed to have been sufficiently given or made if sent by certified mail, return
receipt requested, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows:
To the Company: PawnMart, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
To the Warrant Agent: Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
--------------------------------
Any notice pursuant to this Agreement to be given or made by the Company or by
the registered holder of any Warrant to the Warrant Agent shall be deemed to
have been sufficiently given or made if sent by certified mail, return receipt
requested, postage prepaid, addressed (until another address is filed in writing
by the Warrant Agent with the Company) to the Warrant Agent as set forth above.
17. Standard of Conduct. Notwithstanding any implication to the contrary
elsewhere herein, whenever the Company or the Warrant Agent are required or
permitted to make any judgment or to take any action, no such judgment or action
shall be made or taken in bad faith or in any arbitrary or capricious fashion.
18. Supplements and Amendments. The Company and the Warrant Agent may, from time
to time, supplement or amend this Agreement without the approval of any of the
holders of the Warrants in order to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder that the Company and the Warrant Agent
may deem necessary or desirable, that shall not be inconsistent with the
provisions of the Warrants, and that shall not materially adversely affect the
rights of the holders of the Warrants.
19. Successors. All of the covenants and provisions hereof by or for the benefit
of the Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
20. Merger or Consolidation of the Company. The Company will not merge or
consolidate with or into any other corporation, unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume,
by supplemental agreement satisfactory in form to the Warrant Agent and executed
and delivered to the Warrant Agent, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
6
7
21. Texas Contract. This Agreement and each Warrant issued hereunder shall be
deemed to be a contract made under the laws of the State of Texas and for all
purposes shall be construed in accordance with the laws of said state.
22. Benefits of this Agreement. Nothing in this Agreement shall be construed to
give any person or corporation, other than the Company, the Warrant Agent and
the registered holders of the Warrants, any legal or equitable right, remedy or
claim under this Agreement, but this Agreement shall be for the sole and
exclusive benefit of the Company and the Warrant Agent and their respective
successors and of the holders of the Warrant Certificates.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PAWNMART, INC.
By:
Its:
ATTEST:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By:
Its:
ATTEST:
7
8
EXHIBIT A
8
9
NO. W _____________ VOID AFTER _______________, 2004
_________ WARRANTS
SERIES C REDEEMABLE COMMON STOCK PURCHASE WARRANT
CERTIFICATE TO PURCHASE ONE SHARE OF COMMON STOCK
PAWNMART, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED the holder hereof or registered assigns
(the "Registered Holder") is the owner of the number of Series C Redeemable
Common Stock Purchase Warrants (the "Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.01 par value, of PawnMart, Inc., a Delaware corporation (the "Company"), at
any time between _______________, 1999 (the "Initial Warrant Exercise Date"),
and the Expiration Date (as hereinafter defined) upon the presentation and
surrender of this Warrant Certificate with the Election to Purchase on the
reverse hereof duly executed, at the corporate office of Continental Stock
Transfer & Trust Company, a New York corporation, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $6.00 subject to
adjustment (the "Purchase Price"), in lawful money of the United States of
America in cash or by check made payable to the Warrant Agent for the account of
the Company.
This Warrant Certificate and each Warrant represented hereby are issued pursuant
to and are subject in all respects to the terms and conditions set forth in the
Warrant Agreement (the "Warrant Agreement"), dated _______________, 1999, by and
between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant Agreement, the
Purchase Price and the number of shares of Common Stock subject to purchase upon
the exercise of each Warrant represented hereby are subject to modification or
adjustment.
Each Warrant represented hereby is exercisable at the option of the Registered
Holder, but no fractional interests will be issued. In the case of the exercise
of less than all the Warrants represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof and shall execute and deliver a
new Warrant Certificate or Warrant Certificates of like tenor, which the Warrant
Agent shall countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on March 31,
2005. If such date shall in the State of New York be a holiday or a day on which
the banks are authorized to close, then the Expiration Date shall mean 5:00 p.m.
(New York time) the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to the
exercise of this Warrant unless a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to such securities is
effective or an exemption thereunder is available. The Company has covenanted
and agreed that it will file a registration statement under the Federal
securities laws, use its best efforts to cause the same to become effective, use
its best efforts to keep such registration statement current, if required under
the Act, while any of the Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Warrant. This Warrant shall not be exercisable by a Registered
Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
of Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
9
10
Prior to the exercise of any Warrant represented hereby, the Registered Holder
shall not be entitled to any rights of a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be redeemed
at the option of the Company, at the redemption price of $.05 per Warrant, on
not less than 30 nor more than 60 days written notice ("Notice of Redemption")
if the closing price for the Common Stock for seven trading days during a 10
consecutive trading day period ending not more than 15 days prior to the date
notice of redemption is mailed equals or exceeds $9.00 per share (150% of the
initial offering price to the public) subject to adjustment under certain
circumstances and provided there is then a current registration statement under
the Securities Act of 1933, as amended, with respect to the issuance and sale of
Common Stock upon the exercise of the Warrants. On and after the date fixed for
redemption, the Registered Holder shall have no rights with respect to the
Warrants except to receive the $.05 per Warrant upon surrender of this Warrant
Certificate.
Under certain circumstances, the Representatives (as that term is defined in the
Warrant Agreement) or their designees collectively shall be entitled upon the
exercise or redemption of the Warrants to receive a fee equal to 5% of the gross
proceed received by the Company from the exercise of the Warrants and 5% of the
aggregate redemption for the Warrants represented hereby.
Prior to due presentment for registration of transfer hereof, the Company and
the Warrant Agent may deem and treat the Registered Holder as the absolute owner
hereof and of each Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly authorized officer
of the Company or the Warrant Agent) for all purposes and shall not be affected
by any notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the conflicts of laws
principles thereof.
This Warrant Certificate is not valid unless countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: ____, 1999
PAWNMART, INC.
By:
Name:
Title:
By:
Name:
Title:
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
AS WARRANT AGENT
By:
Name:
Title:
10
11
ELECTION TO PURCHASE
(To be signed only upon exercise of Warrant)
TO: PawnMart, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the Holder of Series C Warrant Certificate Number____ (the
"Warrant"), representing ______________ Series C Warrants of PawnMart, Inc. (the
"Company"), which Warrant Certificate is being delivered herewith, hereby
irrevocably elects to exercise the purchase right provided by the Warrant
Certificate for, and to purchase thereunder, _____________ shares of Common
Stock of the Company, and herewith makes payment of $____________ therefor, and
requests that the certificates for such securities be issued in the name of, and
delivered to, _____________ whose address is __________, all in accordance with
the Warrant Agreement and the Warrant Certificate.
Dated:
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant Certificate)
-----------------------------------
-----------------------------------
(Address)
11
12
(FORM OF ASSIGNMENT)
(To be exercised by the registered holder if such holder
desires to the Warrant Certificate.)
FOR VALUE RECEIVED ______________________________________________ hereby sells,
assigns and transfers unto
(Print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint___________________________
___________________________ Attorney, to transfer the within Warrant Certificate
on the books of the within-named Company, and full power of substitution.
Dated: Signature:
--------------------- --------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the fact of the
Warrant Certificate)
--------------------------------------
(Insert Social Security or
Other Identifying Number of
Assignee)
12