WARRANT AGREEMENT FOR
PUBLIC TRANSACTION
THERMOVIEW, INDUSTRIES, INC.
WARRANT AGREEMENT
______________, 1999
Southwest Securities, Inc.
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Gentlemen:
ThermoView Industries, Inc., a Delaware corporation (the "Company"),
hereby agrees to issue and sell to you, and you hereby agree to purchase from
the Company, at a purchase price of $___________, a stock purchase warrant
entitling the holder to purchase _____________ shares of Common Stock,
$_________ par value ("Common Stock") of the Company to be evidenced by an
instrument in the form attached hereto as Exhibit A (hereinafter referred to
as the "Warrant", and the Warrant and all instruments hereafter issued in
replacement, substitution, combination or subdivision thereof being
hereinafter collectively referred to as the "Warrants"). The number of shares
of Common Stock purchasable upon exercise of the Warrants is subject to
adjustment as provided in Section 6 below. The Warrants will be exercisable
by you or any other Warrantholder as to all or any lesser number of shares of
Common Stock covered thereby, at the Purchase Price per share as defined
below, at any time and from time to time on and after the first anniversary
of the date hereof and ending at 5:00 p.m., Dallas time, on the fifth
anniversary of the date hereof.
The purchase and sale of the Warrants shall take place at the same date
and time as the sale by the Company to you of any shares of Common Stock, $.001
par value per share, pursuant to the terms and conditions of that certain
Underwriting Agreement, dated as of even date herewith, by and between the
Company and you, at which time you shall deliver a check for the full purchase
price of the Warrants. At such time, the Company will deliver to you such
certificates of its officers, opinions of its counsel and letters from its
independent accountants with respect to this Warrant Agreement and the Warrants
as you may reasonably request.
1. DEFINITIONS.
As used herein the following terms, unless the context otherwise
requires, shall have for all purposes hereof the following respective meanings:
(a) The term "Common Stock" refers to all stock of any class or classes
(however designated) of the Company, now or hereafter authorized, the holders of
which shall have the right, without limitation as to amount, either to all or to
a part of the balance of current dividends
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and liquidating dividends after the payment of dividends and distributions on
any shares entitled to preference, and the holders of which shall ordinarily
in the absence of contingency be entitled to vote for the election of a
majority of the directors of the Company (even though the right so to vote
has been suspended by the occurrence of such a contingency).
(b) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 6 below or otherwise.
(c) The term "Prospectus" refers to the prospectus related to the
Registration Statement in the form first filed with the Securities and Exchange
Commission (the "Commission") pursuant to Rule 424(b) of the Rules and
Regulations of the Commission under the Act.
(d) The term "Act" refers to the Securities Act of 1933, as amended
from time to time.
(e) The term "Commission" refers to the Securities and Exchange
Commission.
(f) The term "Purchase Price" refers to the per share purchase price of
the shares of the Underlying Common Stock subject to this Warrant Agreement and
the Warrants and issuable upon exercise, in whole or in part, of the Warrants.
The Purchase Price shall equal the amount produced by multiplying the initial
public offering price per share of Common Stock, as set forth on the cover page
of the Prospectus, by one hundred twenty percent (120%).
The Purchase Price is subject to adjustment as provided in Section 6
below.
(g) The term "Registration Statement" refers to the Company's
Registration Statement on Form S-1 (No. 333-84571), as amended, when it first is
declared effective by the Commission.
(h) The term "Underlying Common Stock" refers to the shares of Common
Stock (or Other Securities) issuable or issued under this Warrant Agreement and
the Warrants pursuant to the exercise, in whole or in part, of the Warrants.
(i) The term "Warrantholder" refers to Southwest Securities, Inc. and
any transferee or transferees of Southwest Securities, Inc. permitted by Section
3(a) below. Such term, when used in this Warrant Agreement in reference to or in
the context of a person who holds or owns shares of Underlying Common Stock
issued upon exercise of a Warrant, refers where appropriate to such person who
holds or owns such shares of Underlying Common Stock.
(j) The terms "you" and "your" refer to Southwest Securities, Inc. and
also, where appropriate, shall be deemed to apply with equal effect to any
person to whom a Warrant has
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been transferred in accordance with the terms of this Warrant Agreement and
to any person holding or owning shares of Underlying Common Stock.
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2. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to you as follows:
(a) CORPORATE AND OTHER ACTION. The Company has all requisite power and
authority (corporate and other), and has taken all necessary corporate action,
to authorize, execute, deliver and perform this Warrant Agreement, to execute,
issue, sell and deliver the Warrants and a certificate or certificates
evidencing the Warrants, to authorize and reserve for issue and, upon payment
from time to time of the Purchase Price, to issue, sell and deliver, the shares
of the Underlying Common Stock issuable upon exercise of the Warrants, and to
perform all of its obligations under this Warrant Agreement and the Warrants.
This Warrant Agreement has been duly executed and delivered by the Company and
is a legal, valid and binding agreement of the Company enforceable in accordance
with its terms. No authorization, approval, consent or other order of any
regulatory authority is required for such authorization, execution, delivery,
performance, issue or sale.
(b) NO VIOLATION. The execution and delivery of this Warrant Agreement,
the consummation of the transactions herein contemplated and the compliance with
the terms and provisions of this Warrant Agreement and of the Warrants will not
conflict with, or result in a breach of, or constitute a default or an event
permitting acceleration under, any statute, the Certificate of Incorporation or
Bylaws of the Company or any indenture, mortgage, deed of trust, note, bank
loan, credit agreement, franchise, license, lease, permit, or any other
agreement, understanding, instrument, judgment, decree, order, statute, rule or
regulation to which the Company is a party or by which it is or may be bound.
(c) VALIDITY. The Warrant, when delivered to you, will be duly
authorized, executed, issued and delivered and will be a legal, valid and
binding obligation of the Company enforceable in accordance with its terms. The
shares of Underlying Common Stock of the Company issued upon exercise of the
Warrants will be duly authorized and validly issued and outstanding, fully paid
and nonassessable and free of preemptive rights.
3. COMPLIANCE WITH THE ACT.
(a) TRANSFERABILITY OF WARRANTS. You agree that the Warrants may not be
transferred, sold, assigned or hypothecated, except to (i) persons who are
officers or directors of you; (ii) the corporation owning at least 50% of your
outstanding capital stock (the "Parent"), or to persons who are directors or
officers of the Parent, provided that no transfer, sale, assignment or
hypothecation to the Parent or to such persons shall be allowed for a period of
one year after the effective date of the Registration Statement; (iii) the
respective successors to you or the Parent in a merger or consolidation; (iv)
the respective purchasers of all or substantially all of your assets; (v) your
respective shareholders in the event you are liquidated or dissolved or (vi) any
member of the selling group and/or the officers or partners thereof.
(b) REGISTRATION OF UNDERLYING COMMON STOCK. The Underlying Common
Stock has been registered under the Act pursuant to the Registration Statement.
You agree not to make any sale or other disposition of the Underlying Common
Stock except pursuant to a post-effective
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amendment to the Registration Statement or pursuant to a new registration
statement which has become effective under the Act, setting forth the terms
of such offering, the underwriting discount and commissions and any other
pertinent data with respect thereto, unless you have provided the Company
with an opinion of counsel reasonably acceptable to the Company that such
registration is not required.
(c) INCLUSION IN REGISTRATION OF OTHER SECURITIES. If at any time prior
to the fifth anniversary of the date hereof, the Company shall propose the
registration on an appropriate form under the Act of any shares of Common Stock
or Other Securities, the Company shall at least thirty (30) days prior to the
filing of such registration statement give you written notice, or telegraphic or
telephonic notice followed as soon as practicable by written confirmation
thereof, of such proposed registration and, upon written notice, or telegraphic
or telephonic notice followed as soon as practicable by written confirmation
thereof, given to the Company within fifteen (15) business days after the giving
of such notice by the Company, and shall include or cause to be included in any
such registration statement all or such portion of the Underlying Common Stock
as you may request on behalf of the Warrantholders; provided, however, that the
Company may at any time withdraw or cease proceeding with any such registration
if it shall at the same time withdraw or cease proceeding with the registration
of such Common Stock or such Other Securities originally proposed to be
registered. In the event that the proposed registration by the Company is, in
whole or in part, an underwritten public offering of securities of the Company,
any request pursuant to this Subsection 3(c) to register may specify that such
Underlying Common Stock is to be included in the underwriting (i) on the same
terms and conditions as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration, or (ii) on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances in the event that no shares of Common Stock,
other than Underlying Common Stock, are being sold through underwriters under
such registration.
(d) COMPANY'S OBLIGATIONS IN REGISTRATION. In the event you timely
elect to participate in an offering by including your shares of Underlying
Common Stock in a registration statement pursuant to Subsection 3(c) above, the
Company shall:
(i) notify you as to the filing thereof and of all amendments
or supplements thereto filed prior to the effective date of such
registration statement;
(ii) comply with all applicable rules and regulations
of the Commission;
(iii) notify you immediately, and confirm the notice in
writing, (1) when the registration statement becomes effective, (2) of
the issuance by the Commission of any stop order or of the initiation,
or the threatening, of any proceedings for that purpose, (3) of the
receipt by the Company of any notification with respect to the
suspension of qualification of the Underlying Common Stock for sale in
any jurisdiction or of the initiation, or the threatening, of any
proceedings for that purpose, and (4) of the receipt of any comments,
or requests for additional information, from the Commission or any
state regulatory authority. If the Commission or any state regulatory
authority shall enter such
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a stop order or order suspending qualification at any time, the
Company will promptly use its best efforts to obtain the lifting of
such order;
(iv) during any time when a prospectus is required to be
delivered under the Act during the period required for the distribution
of the Underlying Common Stock, use its best efforts to comply with all
requirements imposed upon it by the Act, as hereafter amended, and by
the rules and regulations promulgated thereunder, so far as necessary
to permit the continuance of sales of or dealings in the Underlying
Common Stock pursuant to a prospectus complying with Section 10(a)(3)
of the Act. If at any time when a prospectus relating to the Underlying
Common Stock is required to be delivered under the Act and any event
shall have occurred as a result of which, in the opinion of counsel for
the Company or your counsel, the prospectus relating to the Underlying
Common Stock as then amended or supplemented 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, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend such
prospectus to comply with the Act and the rules and regulations of the
Commission, promulgated thereunder, the Company will promptly prepare
and file with the Commission an appropriate amendment or supplement in
form satisfactory to you and your counsel;
(v) use its best efforts, in cooperation with you, at or prior
to the time the registration statement becomes effective, to register
or qualify the Underlying Common Stock for offering and sale under the
securities laws relating to the offering or sale of the Underlying
Common Stock in such jurisdictions as you may reasonably designate and
to continue the qualifications in effect so long as required for
purposes of the sale of the Underlying Common Stock; provided, however,
that no such qualification shall be required in any jurisdiction where,
as a result thereof, the Company would be subject to service of process
for all purposes. In each jurisdiction where such qualification shall
be effected, the Company will, unless you agree that such action is not
at the time necessary or advisable, file and make such statements or
reports at such times as are or may reasonably be required by the laws
of such jurisdiction. For the purposes of this paragraph, "best
efforts" includes, but is not limited to, the same standard of care and
degree of effort as the Company will use to qualify its securities
other than the Underlying Common Stock;
(vi) make generally available to its security holders as
soon as practicable, but not later than the first day of the
_________ full calendar month following the effective date of the
registration statement, an earnings statement (which need not be
certified by independent public or independent certified public
accountants unless required by the Act or the rules and regulations
promulgated thereunder, but which shall satisfy the provisions of
Section 11(a) of the Act and any applicable rules and regulations of
the Commission thereunder) covering a period of at least twelve
months beginning after the effective date of the registration
statement;
(vii) use the Company's best efforts to cause the independent
certified public accountants of the Company to deliver to you, and to
the underwriters if the Underlying
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Common Stock is being sold through underwriters, letters on the date
that the registration statement becomes effective and on the date
the Underlying Common Stock is delivered to the underwriters for
sale pursuant to such registration or, if the Underlying Common
Stock is not being sold through underwriters, on the date that the
registration statement becomes effective, stating that they are
independent certified public accountants within the meaning of the
Act and the rules and regulations of the Commission thereunder, and
that, in their opinion, the financial statements and other financial
data of the Company included in the registration statement or
prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting
requirements of the Act, and such other financial matters as the
underwriter, if any, or Warrantholders may reasonably request;
(viii) after the effective date of such registration
statement, prepare, and promptly notify you of the proposed filing of,
and promptly file with the Commission, each and every amendment or
supplement thereto or to any prospectus forming a part thereof as may
be necessary to make any statements therein not misleading in any
material respect; provided, however, that no such amendment or
supplement shall be filed if you shall object thereto in writing
promptly after being furnished a copy thereof;
(ix) furnish to you, as soon as available, copies of any such
registration statement and each preliminary or final prospectus, or
supplement or amendment prepared pursuant thereto, all in such
quantities as you may from time to time reasonably request in order to
facilitate the public sale or other disposition of the Underlying
Common Stock;
(x) make such representations and warranties to any
underwriter of the Underlying Common Stock and to the holders thereof,
and use the Company's best efforts to cause the Company's counsel to
render, at the time or times of the letters referred to in subparagraph
(vii) above, such opinions of such underwriter, if any, and to you, as
such underwriter or you may reasonably request; and
(xi) pay all costs and expenses incident to the performance of
the Company's obligations under this Section 3, including without
limitation the fees and disbursements of the Company's auditors and
legal counsel, and of legal counsel responsible for qualifying the
Underlying Common Stock under state securities or blue sky laws, all
filing fees and printing expenses, all expenses in connection with the
transfer and delivery of the Underlying Common Stock, and all fees and
expenses in connection with the qualification of the Underlying Common
Stock under state securities or blue sky laws; provided, however, that
the Company shall not be responsible for compensation and reimbursement
of expenses to underwriters or selling agents for the included
Underlying Common Stock.
(e) AGREEMENTS BY WARRANTHOLDER. In connection with the filing of a
registration statement pursuant to this Section 3, if you participate in the
offering of the Underlying Common Stock by including shares owned by you, you
shall:
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(i) furnish the Company all material information requested by
the Company concerning yourself and your Parent and your Parent's
holdings of securities of the Company and the proposed method of sale
or other disposition of the Underlying Common Stock and such other
information and undertakings as shall be reasonably required in
connection with the preparation and filing of any such registration
statement covering all or part of the Underlying Common Stock and in
order to ensure full compliance with the Act and the rules and
regulations of the Commission thereunder;
(ii) if the Company is at the time entering into an
underwriting agreement covering its Common Stock, enter into an
underwriting agreement in customary form with the same underwriter or
underwriters who are parties to such underwriting agreement with the
Company, provided that the sales of Underlying Common Stock by you and
the Company thereunder are at the same price and upon the same terms
and conditions; and
(iii) cooperate in good faith with the Company and its
underwriters, if any, in connection with such registration, including
placing the shares of Underlying Common Stock to be included in such
registration statement in escrow or custody to facilitate the sale and
distribution thereof.
(f) INDEMNIFICATION.
(i) The Company shall indemnify and hold harmless you and any
underwriter (as defined in the Act) for you, and each person, if any,
who controls you or such underwriter within the meaning of Section 15
of the Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any loss, liability, claim,
damage and expense whatsoever (including but not limited to reasonable
attorneys' fees and any and all expense whatsoever reasonably incurred
in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or
several, to which any of you or such underwriter or such controlling
person becomes subject, under the Act or otherwise, insofar as such
loss, liability, claim, damage and expense (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 (1) a registration
statement covering the Underlying Common Stock, in the prospectus
contained therein, or in an amendment or supplement thereto or (2) in
any application or other document or communication (in this Subsection
(f) collectively called "application") executed by or on behalf of the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Underlying Common Stock under the state securities or blue sky laws
thereof or filed with the Commission, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company shall not be
obligated to indemnify you in any such case to the extent that any such
loss, claim, damage, expense or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in
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reliance upon, and in conformity with, written information duly
executed and furnished by you or such underwriter or such
controlling person specifically for use in the registration
statement, or any amendment or supplement thereto, or any
application, as the case may be.
If any action is brought against a person in respect
of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such person shall promptly notify the Company in
writing of the institution of such action and the Company shall assume
the defense of the action, including the employment of counsel
(satisfactory to the indemnified person in its or his reasonable
judgment) and payment of expenses. The indemnified person shall have
the right to employ its or his own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such
indemnified person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the
defense of the action, or unless the Company shall not have promptly
employed counsel to have charge of the defense of the action or unless
the indemnified person shall have reasonably concluded that there may
be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company
shall not have the right to direct the defense of the action on behalf
of the indemnified person), in any of which events these fees and
expenses shall be borne by the Company. Anything in this paragraph to
the contrary notwithstanding, the Company shall not be liable for any
settlement of any claim or action effected without its written consent,
which shall not be unreasonably withheld.
The Company's indemnity agreements contained in this
Subsection 3(f) shall remain in full force and effect regardless of any
investigation made by or on behalf of any indemnified person and shall
survive any termination of this Warrant Agreement. The Company agrees
promptly to notify each Warrantholder of the commencement of any
litigation or proceedings against the Company or any of its officers or
directors in connection with any registration statement pursuant to
this Section 3. The omission to notify any Warrantholder promptly of
the commencement of any action against the Company or its officers and
directors based upon an alleged act or omission, which, if proven,
would result in such Warrantholder having to indemnify the Company
pursuant to Subsection 3(f)(ii) below, if prejudicial to the
Warrantholder's ability to defend such action, shall relieve such
Warrantholder of any liability to indemnify the Company under
Subsection 3(f)(ii).
The Company further agrees that, if the indemnity
provisions of the foregoing paragraphs are held to be unenforceable,
any Warrantholder or controlling person of such Warrantholder may
recover contribution from the Company in an amount which, when added to
contributions such Warrantholder or controlling person has theretofore
received or concurrently receives from officers and directors of the
Company or controlling persons of the Company, will reimburse such
Warrantholder or controlling person for all losses, claims, damages or
liabilities and legal or other expenses; provided, however, that if the
full amount of the contribution specified in this Subsection 3(f)(i) is
not permitted by law, then such Warrantholder or controlling person
shall be entitled to
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contribution from the Company and its officers, directors and
controlling persons to the full extent permitted by law.
(ii) If you choose to include all or a part of the Underlying
Common Stock in a public offering pursuant to Subsection 3(c) or
Subsection 3(g), then you agree to indemnify and hold harmless the
Company and each of its directors and officers who have signed any such
registration statement, and any underwriter for the Company (as defined
in the Act), and each person, if any, who controls the Company or such
underwriter within the meaning of the Act, to the same extent as the
indemnity by the Company in this Subsection 3(f), but only with respect
to untrue or alleged untrue statements or omissions or alleged
omissions, if any, made in such registration statement, prospectus
contained therein, or amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written
information duly executed and furnished by you to the Company
specifically for use in the registration statement, in the prospectus
contained therein, or any amendment or supplement thereto, or any
application, as the case may be. In case any action shall be brought in
respect of which indemnity may be sought against you, you shall have
the rights and duties given to the Company, and the persons so
indemnified shall have the rights and duties given to you, by the
provisions of the first paragraph of Subsection 3(f).
(g) The Company agrees with you that upon the written request, made at
any time after twelve (12) months after the date of this Warrant Agreement, of
the holders of not less than 50% of the issued or issuable shares of Underlying
Common Stock held by Warrantholders, it will prepare and file a post-effective
amendment to the Registration Statement or a new registration statement covering
the Underlying Common Stock and will use its best efforts to cause such
amendment or registration statement to promptly become effective under the Act,
provided that the Company shall not be so obligated on more than one (1) such
occasion. The Company will use reasonable efforts to cause such registration to
become and remain effective (including the taking of such reasonable steps as
are necessary to obtain the removal of any stop order) for a period of not less
than 180 days. Prior to exercising the rights provided for in this Subsection
3(g), the Warrantholders requesting such post-effective amendment or new
registration statement shall negotiate in good faith with the Company to attempt
to agree to sell the Warrants to the Company. The Company's obligation under
this Subsection 3(g) shall expire sixty (60) months after the date of this
Warrant Agreement. The provisions of Subsections 3(d), (e) and (f) hereof shall
be applicable to such request and the related post-effective amendment to the
Registration Statement and the public offering of Underlying Common Stock
covered thereby.
4. EXERCISE OF WARRANTS; PARTIAL EXERCISE.
(a) EXERCISE IN FULL. Warrants may be exercised in full by the
Warrantholder by surrender of the Warrant, with the form of subscription at the
end thereof duly executed by such Warrantholder, to the Company at its principal
office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ accompanied by payment, in
cash or by certified or bank cashier's check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of the
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Underlying Common Stock represented by the respective Warrant or Warrants by the
Purchase Price per share (after giving effect to any adjustments as provided in
Section 6 below).
(b) PARTIAL EXERCISE. Each Warrant may be exercised in part by the
Warrantholder by surrender of the Warrant, with the form of subscription at the
end thereof duly executed by such Warrantholder, in the manner and at the place
provided in Subsection 4(a) above, accompanied by payment, in cash or by
certified or bank cashiers check payable to the order of the Company, in the
respective amount obtained by multiplying the number of shares of the Underlying
Common Stock designated by the Warrantholder in the form of subscription
attached to the Warrant by the Purchase Price per share (after giving effect to
any adjustments as provided in Section 6 below). Upon any such partial exercise,
the Company at its expense will forthwith issue and deliver to or upon the order
of the Warrantholder a new Warrant of like tenor, in the name of the
Warrantholder thereof or as the Warrantholder (upon payment by such
Warrantholder of any applicable transfer taxes) may request, subject to
Subsection 3(a), calling in the aggregate for the purchase of the number of
shares of the Underlying Common Stock equal to the number of such shares called
for on the face of the respective Warrant (after giving effect to any adjustment
herein as provided in Section 6 below) minus the number of such shares
designated by the Warrantholder in the aforementioned form of subscription.
(c) Notwithstanding anything to the contrary contained in paragraphs
4(a) and (b), the Warrantholder may elect to exercise the Warrant in whole or in
part by receiving shares of the Underlying Common Stock equal to the value (as
determined below) of the Warrant, or any part hereof, upon surrender of the
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to the Warrantholder a number of
shares of the Underlying Common Stock computed using the following formula:
X = Y(A-B)
----------
A
Where X = the number of shares of the Underlying Common Stock to be
issued to the Warrant holder;
Y = the number of Shares of the Underlying
Common Stock issuable upon exercise of the
Warrant;
A = the current fair market value of one share of Common
Stock;
B = the Purchase Price of the Warrant;
As used herein, current fair market value of
Common Stock shall mean with respect to each share of
Common Stock the average of the closing prices of the
Common Stock sold on the principal national
securities exchanges on which the Common Stock is at
the time admitted to trading or listed, or, if there
have been no sales of any such exchange on such day,
the average of the highest bid and lowest ask price
on such day as reported by Nasdaq, or any similar
organization if Nasdaq is no longer
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reporting such information, either (i) on the date which
the form of election is deemed to have been sent to the
Company (the "Notice Date") or (ii) over a period of five
(5) trading days preceding the Notice Date, whichever of
(i) or (ii) is greater. If on the date for which current
fair market value is to be determined the Common Stock is
not listed on any securities exchange or quoted in the
Nasdaq System or the over-the-counter market, the current
fair market value of Common Stock shall be the highest
price per share which the Company could then obtain from a
willing buyer (not a current employee or director) for
shares of Common Stock sold by the Company, from authorized
but unissued shares, as determined in good faith by the
Board of Directors of the Company, unless prior to such
date the Company has become subject to a binding agreement
for a merger, acquisition or other consolidation pursuant
to which the Company is not the surviving party, in which
case the current fair market value of the Common Stock
shall be deemed to be the value to be received by the
holders of the Common Stock for each share thereof pursuant
to the Company's acquisition.
(d) COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at the time of
any exercise of any Warrant, upon the request of the Warrantholder, acknowledge
in writing its continuing obligation to afford to such Warrantholder any rights
(including without limitation any right to registration under the Act and state
securities laws of the shares of the Underlying Common Stock issuable or issued
upon such exercise) to which such Warrantholder shall continue to be entitled
after such exercise in accordance with the provisions of this Warrant Agreement;
provided, however, that if the Warrantholder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such Warrantholder any such rights.
5. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE.
Any exercise of the Warrants pursuant to Section 4 shall be deemed to
have been effected immediately prior to the close of business on the date on
which the Warrants with the subscription form and the check for the aggregate
Purchase Price shall have been received by the Company. At such time, the person
or persons in whose name or names any certificate or certificates for shares of
Underlying Common Stock or Other Securities shall be issuable upon such exercise
shall be deemed to have become the holder or holders of record of the shares of
Underlying Common Stock or Other Securities so purchased. As soon as practicable
after the exercise of any Warrant in full or in part, and in any event within
ten days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of, and
delivered to the purchasing Warrantholder, a certificate or certificates for the
number of fully paid and nonassessable shares of the Underlying Common Stock or
Other Securities to which such Warrantholder shall be entitled upon such
exercise, plus in lieu of any fractional share to which such Warrantholder would
otherwise be entitled, cash in an amount determined pursuant to Subsection 7(i),
together with any other stock or other securities and property (including cash,
where applicable) to which holder is entitled upon such exercise pursuant to
Section 6 below or otherwise.
12
6. ANTI-DILUTION PROVISIONS.
The Warrants are subject to the following terms and conditions during
the term thereof:
(a) STOCK DISTRIBUTIONS, SPLITS AND COMBINATIONS; ADJUSTMENTS. In case
(i) the outstanding shares of the Common Stock (or Other Securities) shall be
subdivided into a greater number of shares, (ii) a dividend in Common Stock (or
Other Securities) shall be paid in respect of Common Stock (or Other
Securities), or (iii) the outstanding shares of Common Stock (or Other
Securities) shall be combined into a smaller number of shares thereof, the
Purchase Price per share in effect immediately prior to such subdivision or
combination or at the record date of such dividend or distribution shall
simultaneously with the effectiveness of such subdivision or combination or
immediately after the record date of such dividend or distribution be
proportionately adjusted to equal the product obtained by multiplying the
Purchase Price by a fraction, the numerator of which is the number of
outstanding shares of Common Stock (or Other Securities) prior to such
combination, subdivision or dividend, and the denominator of which is that
number of outstanding shares of Common Stock (or Other Securities) after giving
effect to such combination, subdivision or dividend. Any dividend paid or
distributed on the Common Stock (or Other Securities) in stock or any other
securities convertible into shares of Common Stock (or Other Securities) shall
be treated as a dividend paid in Common Stock (or Other Securities) to the
extent that shares of Common Stock (or Other Securities) are issuable upon the
conversion thereof.
Whenever the Purchase Price per share is adjusted as provided
in the immediately preceding paragraph, the number of shares of the Underlying
Common Stock purchasable upon exercise of the Warrants immediately prior to such
Purchase Price adjustment shall be adjusted, effective simultaneously with such
Purchase Price adjustment, to equal the product obtained (calculated to the
nearest full share) by multiplying such number of shares of the Underlying
Common Stock by a fraction, the numerator of which is the Purchase Price per
share in effect immediately prior to such Purchase Price adjustment and the
denominator of which is the Purchase Price per share in effect upon such
Purchase Price adjustment, which adjusted number of shares of the Underlying
Common Stock shall thereupon be the number of shares of the Underlying Common
Stock purchasable upon exercise of the Warrants until further adjusted as
provided herein.
(b) ISSUANCE OF COMMON STOCK; ADJUSTMENTS. Except as otherwise provided
in this Section 6, if and whenever after the date hereof the Company issues or
sells any shares of its Common Stock for a consideration per share less than the
Purchase Price in effect immediately prior to the time of such issue or sale, or
without consideration, then, and thereafter successively upon each such issuance
or sale, immediately upon such issue or sale, the Purchase Price shall be
reduced to that price (calculated to the nearest cent) which is lower than the
Purchase Price in effect immediately prior to the issuance of such additional
shares, determined by dividing:
an amount equal to (i) the number of shares of Common Stock outstanding
immediately prior to such issuance or sale (or deemed outstanding in
accordance with this Section 6), multiplied by the Purchase Price in
effect immediately prior to the time of such issue or sale, plus (ii)
the dollar amount of the consideration, if any, received by the Company
13
upon such issue or sale, by the total number of shares of Common Stock
outstanding (or deemed outstanding in accordance with this Section 6)
immediately after such issue or sale.
After each adjustment of the Purchase Price pursuant to this Subsection
6(b), the total number of shares of Common Stock purchasable upon the exercise
of the Warrants shall be proportionately adjusted to such number of shares as
the total Purchase Price of the number of shares expressed in such Warrant to be
purchasable at the original Purchase Price stated in such Warrant will pay for
at the adjusted Purchase Price. The Company shall not be required to make any
adjustment of the Purchase Price if the amount of such adjustment shall be less
than $0.01, but in such case any adjustment that would otherwise be required
then to be made shall be carried forward and shall be made at the time and
together with the next subsequent adjustment, which, together with any
adjustments so carried forward, shall amount to not less than $0.01.
For the purpose of any adjustment as provided in this Section 6(b), the
following provisions shall also be applicable:
(1) In case of the issuance of additional shares of Common
Stock for cash, the consideration received by the Company therefore
shall be deemed to be the net cash proceeds received by the Company for
such shares after deducting any commissions or other expenses paid or
incurred by the Company for any underwriting of, or otherwise in
connection with, the issuance of such shares.
(2) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value thereof as
determined in good faith by the Board of Directors of the Company.
(3) If at any time the Company grants any options or rights to
purchase Common Stock (other than Warrants) or issues or sells any
securities convertible or exchangeable into Common Stock, whether or
not the rights to exchange or convert thereunder, or such options, are
immediately exercisable, and the price per share for which Common Stock
is issuable upon the exercise of such options or upon conversion or
exchange of such convertible securities (determined by dividing (i) the
total amount, if any, received or receivable, determined in the manner
provided in subdivisions (1) and (2) above, by the Company as
consideration for the granting of such options or for the issue and
sale of such convertible securities, plus the aggregate amount of
additional consideration payable to the Company upon the exercise of
all such options or upon the conversion or exchange of the convertible
securities, by (ii) the total maximum number of shares of Common Stock
issuable upon the exercise of such options or rights or upon the
conversion or exchange of all such convertible securities) shall be
less than the Purchase Price in effect immediately preceding the time
of the granting of such options or such issue or sale of convertible
securities, then the total maximum number of shares of Common Stock
issuable upon the exercise of such options or upon conversion or
exchange of all such convertible securities shall (as of the date of
the granting of such options) be deemed to be outstanding and to have
been issued for such price per share. Except as otherwise provided in
subdivision (4) below, no adjustment of the Purchase
14
Price shall be made upon the actual issue of Common Stock upon the
exercise of such option or right or the conversion or exchange of
such convertible securities.
(4) On the expiration of the above-referenced options, or the
termination of the above-referenced rights to convert or exchange, the
Purchase Price shall be readjusted to such Purchase Price as would have
obtained had the adjustments made upon the issuance of such rights,
options or convertible securities been made upon the basis of the
delivery of only the number of shares of Common Stock actually
delivered upon the exercise of such rights or options or upon the
conversion of any such securities. Upon any change in (i) the number of
shares of Common Stock deliverable upon exercise of any such options or
rights or upon conversion of or in exchange for such convertible or
exchangeable securities, (ii) the minimum purchase price with respect
to any such options or rights or (iii) the rate at which any
convertible securities referred to in subdivision (3) are convertible
into or exchangeable for Common Stock or the consideration to be
received by the Company upon conversion or exchange of any such
convertible or exchangeable securities, then upon the delivery of the
Common Stock upon the exercise of any such option or right or upon
conversion or exchange of any such convertible security, the Purchase
Price then in effect shall immediately be adjusted to the Purchase
Price that would have been obtained pursuant to subdivision (3) giving
effect to such change; provided, however, that adjustments being made
pursuant to this subdivision (4) shall only be made if, as a result of
such adjustment, the Purchase Price in effect immediately prior to such
exercise, conversion or exchange is thereby reduced.
(5) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account
of the Company or any of its subsidiaries; provided, however, the
disposition of any such shares shall be considered an issue or sale of
Common Stock for the purposes of this Subsection 6(b).
(6) If the Company declares a dividend or other distribution
upon the Common Stock payable otherwise than out of consolidated
unreserved and unrestricted earned surplus, determined in accordance
with generally accepted accounting principles, or otherwise than in
Common Stock, then the Purchase Price shall be subject to adjustment
determined by subtracting from the Purchase Price an amount equal to
the difference between the net book value per share, on a fully diluted
basis and determined in accordance with generally accepted accounting
principles, immediately prior to such dividend or distribution and the
net book value per share after giving effect to such dividend or
distribution.
(c) REORGANIZATIONS AND RECAPITALIZATIONS. In case the Company shall be
reorganized or recapitalized by reclassifying its outstanding Common Stock (or
Other Securities) into a stock with a different par value or by changing its
outstanding Common Stock (or Other Securities) with par value to stock without
par value, then, as a condition of such reorganization or recapitalization, as
the case may be, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase, upon the terms and
conditions specified herein, in lieu of the shares of Common Stock (or Other
Securities) or assets theretofore purchasable upon the exercise of the Warrants,
the kind and amount of shares of stock, other securities or assets receivable
upon such reorganization or recapitalization by a holder of the
15
number of shares of Common Stock (or Other Securities) which the
Warrantholder might have purchased immediately prior to such
recapitalization. If any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation, shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or
in exchange for Common Stock, then, as a condition of such consolidation,
merger or sale, lawful and adequate provisions shall be made whereby the
Warrantholders shall thereafter have the right to purchase and receive upon
the basis and upon the terms and conditions specified in this Warrant
Agreement and in lieu of the shares of the Common Stock (or Other Securities)
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights set forth herein, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock (or Other Securities) equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights set forth herein had such
consolidation, merger or sale not taken place, and in any such case,
appropriate provisions shall be made with respect to the rights and interests
of the Warrantholders to the end that the provisions hereof (including
without limitation provisions for adjustments of the Purchase Price and of
the number of shares purchasable and receivable upon the exercise of the
Warrants) shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof (including an immediate adjustment, by reason of such
consolidation or merger, of the Purchase Price to the value for the Common
Stock (or Other Securities) reflected by the terms of such consolidation or
merger if the value so reflected is less than the Purchase Price in effect
immediately prior to such consolidation or merger). The Company will not
effect any such consolidation, merger or sale unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing
such assets shall assume by written instrument executed and mailed or
delivered to the registered holder of each Warrant at the last address of
such Warrantholder appearing on the books of the Company, the obligation to
deliver to such Warrantholder such shares of stock, securities or assets as,
in accordance with the foregoing provisions, such Warrantholder may be
entitled to purchase. If a purchase, tender or exchange offer is made to and
accepted by the holders of more than 50% of the outstanding shares of Common
Stock of the Company, the Company shall not effect any consolidation, merger
or sale with the Person having made such offer or with any Affiliate of such
Person, unless prior to the consummation of such consolidation, merger or
sale the Warrantholders shall have been given a reasonable opportunity to
then elect to receive upon the exercise of Warrants either the stock,
securities or assets then issuable with respect to the Common Stock (or Other
Securities) of the Company or the stock, securities or assets, or the
equivalent issued to previous holders of the Common Stock in accordance with
such offer. The term "Person" as used in this Subsection 6(c) shall mean and
include an individual, a partnership, a corporation, a trust, a joint
venture, an unincorporated organization and a government or any department or
agency thereof. For the purposes of this Subsection 6(c), an "Affiliate" of
any Person shall mean any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with, such other
Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.
16
(d) EFFECT OF DISSOLUTION OR LIQUIDATION. In case the Company shall
dissolve or liquidate all or substantially all of its assets, all rights under
this Warrant Agreement and the Warrants shall terminate as of the date upon
which a certificate of dissolution or liquidation shall be filed with the
Secretary of State of Delaware (or, if the Company theretofore shall have been
merged or consolidated with a corporation incorporated under the laws of another
state, the date upon which action of equivalent effect shall have been taken);
provided, however, that (i) no dissolution or liquidation shall affect the
rights under Subsection 6(c) of any Warrantholder and (ii) if the Company's
Board of Directors shall propose to dissolve or liquidate the Company, each
Warrantholder shall be given written notice of such proposal at the earlier of
(i) the time when the Company's shareholders are first given notice of the
proposal or (ii) the time when notice to the Company's shareholders is first
required.
(e) NOTICE OF CHANGE OF PURCHASE PRICE. Whenever the Purchase Price per
share or the kind or amount of securities or assets purchasable under the
Warrants shall be adjusted pursuant to any of the provisions of this Warrant
Agreement, the Company shall forthwith thereafter cause to be sent to each
Warrantholder a certificate setting forth the adjustments in the Purchase Price
per share and/or in such number of shares, securities or assets purchasable upon
exercise of the Warrants and also setting forth in detail the facts requiring
such adjustments, including without limitation a statement of the consideration
received or deemed to have been received by the Company for any additional
shares of stock or other securities issued by it requiring such adjustment. In
addition, the Company at its expense shall within 90 days following the end of
each of its fiscal years during the term of this Warrant Agreement, and promptly
upon the reasonable request of any Warrantholder in connection with the exercise
from time to time of all or any portion of any Warrant, cause independent
certified public accountants of recognized standing selected by the Company to
compute any such adjustment in accordance with the terms of this Warrant
Agreement and the Warrants and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company will forthwith mail a copy of each such certificate to each
Warrantholder.
(f) NOTICE OF A RECORD DATE. In the event of (i) 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 (other
than a cash dividend payable out of earned surplus of the Company) 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 assets, or to receive
any other right, (ii) any reorganization of the Company, or any reclassification
or recapitalization of the capital stock of the Company, or any transfer of all
or substantially all of the assets of the Company to, or consolidation or merger
of the Company with any other person or (iii) any voluntary or involuntary
dissolution or liquidation of the Company, then and in each such event the
Company will mail or cause to be mailed to each Warrantholder a notice
specifying not only the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, but also the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common Stock (or
Other Securities) for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution,
17
liquidation or winding-up. Such notice shall be mailed at least 20 days prior
to the proposed record date therein specified.
7. FURTHER COVENANTS OF THE COMPANY.
(a) DILUTION OR IMPAIRMENTS. The Company will not, by amendment of its
certificate or articles of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of the Warrants or of this Warrant Agreement, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Warrantholders against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(i) shall at all times reserve and keep available, solely for
issuance and delivery upon the exercise of the Warrants, all shares of
the Underlying Common Stock (or Other Securities) from time to time
issuable upon the exercise of the Warrants and shall take all necessary
actions to ensure that the par value per share, if any, of the
Underlying Common Stock (or Other Securities) is at all times equal to
or less than the then effective Purchase Price per share;
(ii) will 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 or Other Securities
upon the exercise of the Warrants from time to time outstanding;
(iii) will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding-up, unless
the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in
any such distribution of assets; and
(iv) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such
person to consolidate with or merge into the Company (if the Company is
not the surviving corporation), unless such other person shall
expressly assume in writing and will be bound by all the terms of this
Warrant Agreement and the Warrants.
(b) TITLE TO STOCK. All shares of the Underlying Common Stock delivered
upon the exercise of the Warrants shall be validly issued, fully paid and
nonassessable; each Warrantholder shall, upon such delivery, receive good and
marketable title to the Underlying Common Stock, free and clear of all voting
and other trust arrangements, liens, encumbrances, equities and claims
whatsoever; and the Company shall have paid all taxes, if any, in respect of the
issuance thereof.
18
(c) LISTING ON SECURITIES EXCHANGES; REGISTRATION. If the Company at
any time shall list any Common Stock on any national securities exchange, the
Company will, at its expense, simultaneously list on such exchange, upon
official notice of issuance upon the exercise of the Warrants, and maintain such
listing of, all shares of the Underlying Common Stock from time to time issuable
upon the exercise of the Warrants, and the Company will so list on any national
securities exchange, will so register and will maintain such listing of, any
Other Securities if and at the time that any securities of like class or similar
type shall be listed on such national securities exchange by the Company.
(d) OTHER REGISTRATIONS. The Company shall not, without your prior
written consent, grant rights to any persons to register any shares of capital
stock or other securities of the Company if such rights could reasonably be
expected to conflict with, be on parity with, or take precedence over, the
rights of holders of Warrants or Underlying Common Stock granted pursuant to
this Warrant Agreement.
(e) REMEDIES. The Company stipulates that the remedies at law of the
Warrantholder or any holder of Underlying Common Stock in the event of any
default or threatened default by the Company in the performance of or compliance
with any of the terms of this Warrant Agreement or the Warrants are not and will
not be adequate and that such terms may be specifically enforced by a decree for
the specific performance of any agreement contained herein or in the Warrants or
by an injunction against a violation of any of the terms hereof or thereof or
otherwise.
(f) EXCHANGE OF WARRANTS. Subject to Subsection 3(a) hereof, upon
surrender for exchange of any Warrant to the Company, the Company at its expense
will promptly issue and deliver to or upon the order of the holder thereof a new
Warrant of like tenor, in the name of such holder or as such holder (upon
payment by such Warrantholder of any applicable transfer taxes) may direct,
calling in the aggregate for the purchase of the number of shares of the
Underlying Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered. The Warrants and all rights thereunder are transferable
in whole or in part upon the books of the Company by the registered holder
thereof subject to the provisions of Section 3(a), in person or by duly
authorized attorney, upon surrender of the Warrant, duly endorsed, at the
principal office of the Company.
(g) REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company, at the expense of the Warrantholder, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
(h) REPORTING BY THE COMPANY. The Company agrees that during the term
of the Warrants it will use its best efforts to keep current in the filing of
all forms and other materials, if any, which it may be required to file with the
appropriate regulatory authority pursuant to the Exchange Act and all other
forms and reports required to be filed with any regulatory authority having
jurisdiction over the Company.
19
(i) FRACTIONAL SHARES. No fractional shares of Underlying Common Stock
are to be issued upon the exercise of any Warrant, but the Company shall pay a
cash adjustment in respect of any fraction of a share which would otherwise be
issuable in an amount equal to such fraction multiplied by the highest market
price per share of Underlying Common Stock on the day of exercise, as determined
by the highest sale price, regular way, or, if there shall have been no sale on
such day, the average of the highest reported bid and lowest reported asked
price, in each case as officially reported on the principal national securities
exchange on which the Underlying Common Stock is listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the
average of the highest reported bid and lowest reported asked price as furnished
by the National Quotation Bureau Incorporated, all as adjusted; provided,
however, that if the Underlying Common Stock is not traded in such manner that
the quotations referred to herein are available, the market price shall be
deemed to be the fair market value of such Underlying Common Stock.
8. OTHER WARRANTHOLDERS; HOLDERS OF UNDERLYING COMMON STOCK.
The Warrants are issued upon the following terms, to all of which each
Warrantholder by the taking thereof consents and agrees: (a) any person who
shall become a transferee, within the limitations on transfer imposed by
Subsection 3(a) hereof, of a Warrant properly endorsed shall take such Warrant
subject to the provisions of Subsection 3(a) hereof and thereupon shall be
authorized to represent himself as absolute owner thereof and, subject to the
restrictions contained in this Warrant Agreement, shall be empowered to transfer
absolute title by endorsement and delivery thereof to a permitted bona fide
purchaser for value; (b) any person who shall become a holder or owner of shares
of Underlying Common Stock shall take such shares subject to the provisions of
Subsection 3(b) hereof; (c) each prior taker or owner waives and renounces all
of his equities or rights in such Warrant in favor of each such permitted bona
fide purchaser, and each such permitted bond fide purchaser shall acquire
absolute title thereto and to all rights presented thereby; (d) until such time
as the respective Warrant is transferred on the books of the Company, the
Company may treat the registered holder thereof as the absolute owner thereof
for all purposes, notwithstanding any notice to the contrary; and (e) all
references to the words "you" or "your" in this Warrant Agreement shall be
deemed to apply with equal effect to any person to whom a Warrant has been
transferred in accordance with the terms hereof, and where appropriate, to any
person holding or owning shares of Underlying Common Stock.
9. MISCELLANEOUS.
All notices, certificates and other communications from or at the
request of the Company to any Warrantholder shall be mailed by first class,
registered or certified mail, postage prepaid, to such address as may have been
furnished to the Company in writing by such Warrantholder, or, until an address
is so furnished, to the address of the last holder of such Warrant who has so
furnished an address to the Company, except as otherwise provided herein. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in
20
this Warrant Agreement are for purposes of reference only and shall not limit
or otherwise affect any of the terms hereof. This Warrant Agreement, together
with the forms of instruments annexed hereto as Exhibit A, constitutes the
full and complete agreement of the parties hereto with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to
be executed on this day of , 1999, in Dallas, Texas, by its proper corporate
officers, thereunto duly authorized.
THERMOVIEW INDUSTRIES, INC.
BY:
----------------------------------------
[Name and Title of Officer]
The above Warrant Agreement is confirmed
this _____ day of _______________, 1999
SOUTHWEST SECURITIES, INC.
By:
--------------------------------------
[Name and Title of Officer]
21
EXHIBIT A
THERMOVIEW INDUSTRIES, INC.
COMMON STOCK PURCHASE WARRANT
THIS IS TO CERTIFY THAT Southwest Securities, Inc., or its
registered assigns, is entitled to purchase at any time or from time to time
after ________, 199_ until 5:00 o'clock p.m., Dallas Time, on
_______________, 199__, up to [ENTER NUMBERS] shares of Common Stock, $.001
par value, of ThermoView Industries, Inc., a Delaware corporation (the
"Company"), at a Purchase Price per share (at the time in effect) as defined
in the Warrant Agreement referred to herein. This Warrant is issued pursuant
to a Warrant Agreement, dated _____________, 1999 (the "Warrant Agreement"),
between the Company and Southwest Securities, Inc., and all rights of the
holder of this Warrant are subject to the terms and provisions of the Warrant
Agreement, copies of which are available for inspection at the offices of the
Company.
Transfer of this Warrant is restricted as provided in the Warrant
Agreement.
Subject to the provisions of the Securities Act of 1933, as amended,
and of the Warrant Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, at the offices of the Company, at ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ by the holder hereof in person or by his or its
duly authorized attorney, upon surrender of this Warrant, together with the
Assignment hereof duly endorsed. Until transfer hereof on the books of the
Company, the Company may treat the registered holder as the owner hereof for all
purposes.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and its corporate seal to be hereunto affixed in Dallas, Texas, by its proper
corporate officers thereunto duly authorized.
THERMOVIEW INDUSTRIES, INC.
[Date]
By:
-------------------------------------
[Name and Title of Officer]
ATTEST:
----------------------------------
[Name and Title of Officer]
A-1
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To ThermoView Industries, Inc.
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, ____________* shares of Common Stock of
ThermoView Industries, Inc. and herewith makes payment of $__________
therefor, and requests that the certificate or certificates for such shares
be issued in the name of and delivered to the undersigned.
Dated:
----------------------------------
----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
within Warrant)
----------------------------------
(Address)
---------------
* Insert here the number of shares called for on the face of the Warrant or, in
the case of a partial exercise, the portion thereof as to which the Warrant is
being exercised, in either case without making any adjustment for additional
Common Stock or any other stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant Agreement pursuant to which
the Warrant was granted, may be deliverable upon exercise.
A-2
FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto ____________________ the right represented by the within
Warrant to purchase ______________ shares of Common Stock of ThermoView
Industries, Inc. to which the within Warrant relates, and appoints
__________________________ Attorney to transfer such right on the books of
ThermoView Industries, Inc. with full power of substitution in the premises.
The undersigned represents and warrants that the transfer of the within
Warrant is permitted by the terms of the Warrant Agreement pursuant to which the
within Warrant has been issued, and the transferee hereof, by his acceptance of
this Assignment, represents and warrants that he is familiar with the terms of
said Warrant Agreement and agrees to be bound by the terms thereof with the same
force and effect as if a signatory thereto.
Dated:
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(Signature must conform in all
respects to name of holder as
specified on the face of the
within Warrant)
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(Address)
Signed in the presence of:
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A-3