Exhibit 4.1
--------------------------------------------------------------------------------
WARRANT AGREEMENT
By and Between
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
and
STRASBOURGER ▇▇▇▇▇▇▇ TULCIN ▇▇▇▇▇ INCORPORATED
Dated as of October __, 1998
--------------------------------------------------------------------------------
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of October __, 1998 by and between
▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation (the "Company"), and STRASBOURGER
▇▇▇▇▇▇▇ TULCIN ▇▇▇▇▇ INCORPORATED ("Strasbourger").
The Company proposes to issue to Strasbourger warrants as hereinafter
described (the "Strasbourger Warrants") to purchase up to an aggregate of
150,000 shares, subject to adjustment as provided in Section 8 hereof (such
shares, as adjusted, being hereinafter referred to as the "Shares") of the
Company's Common Stock, par value $.001 per share (the "Common Shares"), each
Strasbourger Warrant entitling the holder thereof to purchase one Common Share.
All capitalized terms used herein and not otherwise defined herein shall have
the same meanings as in that certain underwriting agreement, of even date
herewith, by and between the Company and Strasbourger (the "Underwriting
Agreement"). In this Agreement, the singular includes the plural and the plural
includes the singular.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
parties hereto agree as follows;
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. The Company will issue,
sell and deliver the Strasbourger Warrants to Strasbourger or its bona fide
officers for an aggregate price of $150.00. The form of the Strasbourger
Warrants and the form of election to purchase Shares to be attached thereto
shall be substantially as set forth on Exhibit A attached hereto. The
Strasbourger Warrants shall be executed on behalf of the Company by the manual
or facsimile signature of the present or any future Chief Executive Officer,
President or any Vice President of the Company, under its corporate seal,
affixed or in facsimile, and attested by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
2. REGISTRATION. The Strasbourger Warrants shall be numbered and
shall be registered in a Strasbourger Warrant register (the "Strasbourger
Warrant Register"). The Company shall be entitled to treat the registered
holder of any Strasbourger Warrant on the Strasbourger Warrant Register (the
"Holder") as the owner in fact thereof for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in such Strasbourger
Warrant on the part of any other person, and shall not be liable for any
registration of transfer of Strasbourger Warrants which are registered or are to
be registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration of transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith.
The Strasbourger Warrants shall be registered initially in the name of
"Strasbourger ▇▇▇▇▇▇▇ Tulcin ▇▇▇▇▇ Incorporated" in such denominations as
Strasbourger may request in writing to the Company; provided, however, that
Strasbourger may designate that all or a portion of the Strasbourger Warrants be
issued in varying amounts directly to its bona fide officers, and not to
Strasbourger. Such designation will only be made by Strasbourger if it
determines that such issuances would not violate the
2
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. (the "NASD") relating to the review of corporate
financing arrangements.
3. TRANSFER OF WARRANTS. The Strasbourger Warrants will not be sold,
transferred, assigned or hypothecated, in part or in whole (other than by will
or pursuant to the laws of descent and distribution), except to officers of
Strasbourger and thereafter only upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In all
cases of transfer by an attorney, the original power of attorney, duly approved,
or an official copy thereof, duly certified, shall be deposited with the
Company. In case of transfer by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited with the Company in its
discretion. Upon any registration of transfer, the Company shall deliver a new
Strasbourger Warrant or Strasbourger Warrants to the persons entitled thereto.
The Strasbourger Warrants may be exchanged at the option of the Holder thereof
for another Strasbourger Warrant, or other Strasbourger Warrants, of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Common Shares upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause Strasbourger Warrants to be transferred on its books to any
person if such transfer would violate the Securities Act of 1933, as amended
(the "Act").
4. TERM OF WARRANTS; EXERCISE OF WARRANTS. Each Strasbourger Warrant
entitles the registered owner thereof to purchase one Share at a purchase price
of $7.70 per Share (the "Exercise Price") at any time from the first anniversary
of the effective date of the Registration Statement until 5:00 p.m., New York
City time, on October __, 2003 (the "Warrant Expiration Date"). Prior to the
Warrant Expiration Date, the Company will not take any action which would
terminate the Strasbourger Warrants. The Exercise Price and the Shares issuable
upon exercise of the Strasbourger Warrants are subject to adjustment upon the
occurrence of certain events pursuant to the provisions of Section 8 of this
Agreement. Subject to the provisions of this Agreement, each Holder shall have
the right, which may be exercised as set forth in such Strasbourger Warrants, to
purchase from the Company (and the Company shall issue and sell to such Holder)
the number of fully paid and nonassessable Common Shares specified in such
Strasbourger Warrants, upon surrender to the Company, or its duly authorized
agent, of such Strasbourger Warrants with the form of election to purchase
attached thereto duly completed and signed, with signatures guaranteed by a
member firm of a national securities exchange, a commercial bank or trust
company located in the United States or a member of the NASD and upon payment to
the Company of the Exercise Price, as adjusted in accordance with the provisions
of Section 8 of this Agreement, for the number of Shares in respect of which
such Strasbourger Warrants are then exercised.
Payment of such Exercise Price may be made at the Holder's election (i) by
certified or official bank check, (ii) in the event that the Holder holds Common
Shares of the Company and such Common Shares are listed on a domestic stock
exchange or quoted in the domestic over-the-counter market, by transferring to
the Company an amount of such Common Shares which, when multiplied by the
current market price of the Common Shares at the time of exercise of
3
such Strasbourger Warrant, equals the aggregate amount of the consideration
payable upon such exercise, (iii) by surrendering to the Company the right to
receive a portion of the number of Shares with respect to which such
Strasbourger Warrant is then being exercised equal to the product obtained by
multiplying such number of Shares by a fraction, the numerator of which is the
Exercise Price in effect on the date of such exercise and the denominator of
which is the current market price of the Common Shares in effect on such date,
or (iv) by a combination of the foregoing methods of payment selected by the
Holder. In any case where the consideration payable upon such exercise is being
paid in whole or in part pursuant to the provisions of clause (ii) or clause
(iii) of the preceding sentence, such exercise shall be accompanied by written
notice from the Holder specifying the manner of payment thereof, and in the case
of clause (ii), stating the amount of Common Shares of the Company to be applied
to such payment, and in the case of clause (iii), containing a calculation
showing the number of Shares with respect to which rights are being surrendered
thereunder and the net number of Shares to be issued after giving effect to such
surrender. No adjustment shall be made for any dividends on any Shares issuable
upon exercise of a Strasbourger Warrant. Upon each surrender of Strasbourger
Warrants and payment of the Exercise Price as aforesaid, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the Holder of such Strasbourger Warrants and in such name or names as
such Holder may designate, a certificate or certificates for the number of full
Shares so purchased upon the exercise of such Strasbourger Warrants, together
with cash, as provided in Section 9 of this Agreement, in respect of any
fractional Shares otherwise issuable upon such surrender. Such certificate or
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
Shares as of the date of the surrender of Strasbourger Warrants and payment of
the Exercise Price as aforesaid; provided, however, that if, at the date of
surrender of such Strasbourger Warrants and payment of such Exercise Price, the
transfer books for the Common Shares or other class of securities issuable upon
the exercise of such Strasbourger Warrants shall be closed, the certificates for
the Shares shall be issuable as of the date on which such books shall next be
opened (whether before, on or after the Warrant Expiration Date) 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 of record, unless
otherwise required by law, shall not be closed at any one time for a period
longer than twenty (20) days. The rights of purchase represented by the
Strasbourger Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, in the event that any
Strasbourger Warrant is exercised in respect of less than all of the Shares
issuable upon such exercise at any time prior to the Warrant Expiration Date, a
new Strasbourger Warrant or Strasbourger Warrants will be issued for the
remaining number of Shares specified in the Strasbourger Warrant so surrendered.
5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of Shares upon the exercise of
Strasbourger Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue or delivery of any certificates for Shares in a name other than
that of the Holder of Strasbourger Warrants in respect of which such Shares are
issued.
6. MUTILATED OR MISSING WARRANTS. In case any of the Strasbourger
Warrants shall be mutilated, lost, stolen or destroyed, the Company may, in its
discretion, issue and deliver in
4
exchange and substitution for and upon cancellation of the mutilated
Strasbourger Warrant, or in lieu of and substitution for the Strasbourger
Warrant lost, stolen or destroyed, a new Strasbourger Warrant of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence
reasonably satisfactory to the Company of such mutilation, loss, theft or
destruction of such Strasbourger Warrant and indemnity, unless mutilated, also
reasonably satisfactory to the Company. An applicant for such substitute
Strasbourger Warrants shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe.
7. RESERVATION OF SHARES, ETC. There have been reserved, and the
Company shall at all times keep reserved, out of the authorized and unissued
Common Shares, a number of Common Shares sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Strasbourger Warrants.
American Stock Transfer & Trust Company, transfer agent for the Common Shares
(the "Transfer Agent"), and every subsequent transfer agent, if any, for the
Company's securities issuable upon the exercise of the Strasbourger Warrants
will be irrevocably authorized and directed at all times until the Warrant
Expiration Date to reserve such number of authorized and unissued Common Shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent and with every subsequent transfer
agent of the Company's securities issuable upon the exercise of the Strasbourger
Warrants. The Company will supply the Transfer Agent or any subsequent transfer
agent with duly executed certificates for such purpose and will itself provide
or otherwise make available any cash which may be distributable as provided in
Section 9 of this Agreement. All Strasbourger Warrants surrendered in the
exercise of the rights thereby evidenced shall be canceled, and such canceled
Strasbourger Warrants shall constitute sufficient evidence of the number of
Shares that have been issued upon the exercise of such Strasbourger Warrants.
No Common Shares shall be subject to reservation in respect of unexercised
Strasbourger Warrants subsequent to the Warrant Expiration Date.
8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number and kind of securities issuable upon exercise of each
Strasbourger Warrant shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
(a) In case the Company shall (i) declare a dividend on its
Common Shares in Common Shares or make a distribution of Common
Shares, (ii) subdivide its outstanding Common Shares, (iii) combine
its outstanding Common Shares into a smaller number of Common Shares
or (iv) issue by reclassification of its Common Shares other
securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation), the number of Shares purchasable upon
exercise of each Strasbourger Warrant immediately prior thereto shall
be adjusted so that the Holder of each Strasbourger Warrant shall be
entitled to receive the kind and number of Shares or other securities
of the Company which he would have owned or have been entitled to
receive after the happening of any of the events described above, had
such Strasbourger Warrant been exercised immediately prior to the
happening of such event or any record date with respect
5
thereto. An adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event
retroactive to immediately after the record date, if any, for such
event.
(b) In case the Company shall issue rights, options or warrants
to all holders of its Common Shares, without any charge to such
holders, entitling them (for a period expiring within 45 days after
the record date mentioned below in this paragraph (b)) to subscribe
for or to purchase Common Shares at a price per share that is lower at
the record date mentioned below than the then current market price per
Common Share (as defined in paragraph (d) below), the number of Shares
thereafter purchasable upon exercise of each Strasbourger Warrant
shall be determined by multiplying the number of Shares theretofore
purchasable upon exercise of each Strasbourger Warrant by a fraction,
of which the numerator shall be the number of Common Shares
outstanding on such record date plus the number of additional Common
Shares offered for subscription or purchase, and of which the
denominator shall be the number of Common Shares outstanding on such
record date plus the number of shares which the aggregate offering
price of the total number of Common Shares so offered would purchase
at the then current market price per Common Share. Such adjustment
shall be made whenever such rights, options or warrants are issued,
and shall become effective retroactively to immediately after the
record date for the determination of shareholders entitled to receive
such rights, options or warrants.
(c) In case the Company shall distribute to all holders of its
Common Shares stock other than Common Shares or evidences of its
indebtedness or assets (excluding cash dividends payable out of
consolidated earnings or retained earnings and dividends or
distributions referred to in paragraph (a) above) or rights, options
or warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase Common Shares (excluding those
referred to in paragraph (b) above), then in each case the number of
Shares thereafter issuable upon the exercise of each Strasbourger
Warrant shall be determined by multiplying the number of Shares
theretofore issuable upon the exercise of each Strasbourger Warrant,
by a fraction, of which the numerator shall be the current market
price per Common Share (as defined in paragraph (d) below) on the
record date mentioned below in this paragraph (c), and of which the
denominator shall be the current market price per Common Share on such
record date, less the then fair value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive) of
the portion of the shares of stock other than Common Shares or assets
or evidences of indebtedness so distributed or of such subscription
rights, options or warrants, or of such convertible or exchangeable
securities applicable to one Common Share. Such adjustment shall be
made whenever any such distribution is made, and shall become
effective on the date of distribution retroactive to immediately after
the record date for the determination of shareholders entitled to
receive such distribution.
6
(d) For the purpose of any computation under paragraphs (b) and
(c) of this Section 8, the current market price per Common Share at
any date shall be the average of the daily closing prices for fifteen
(15) consecutive trading days commencing twenty (20) trading days
before the date of such computation. The closing price for each day
shall be the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the closing bid
and asked prices regular way for such day, in either case on the
principal national securities exchange on which the shares are listed
or admitted to trading, or if they are not listed or admitted to
trading on any national securities exchange, but are traded in the
over-the-counter market, the closing sale price of the Common Shares
or, in case no sale is publicly reported, the average of the
representative closing bid and asked quotations for the Common Shares
on the Nasdaq SmallCap Market or any comparable system, or if the
Common Shares are not listed on the Nasdaq SmallCap Market or a
comparable system, the closing sale price of the Common Shares or, in
case no sale is publicly reported, the average of the closing bid and
asked prices as furnished by two members of the NASD selected from
time to time by the Company for that purpose.
(e) No adjustment in the number of Shares purchasable hereunder
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Shares
purchasable upon the exercise of each Strasbourger Warrant; provided,
however, that any adjustments which by reason of this paragraph (e)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment, but not later than three years
after the happening of the specified event or events. All
calculations shall be made to the nearest one thousandth of a share.
Anything in this Section 8 to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to make such
changes in the number of Shares purchasable upon the exercise of each
Strasbourger Warrant, in addition to those required by this Section 8,
as it in its discretion shall determine to be advisable in order that
any dividend or distribution in shares of Common Shares, subdivision,
reclassification or combination of Common Shares, issuance of rights,
warrants or options to purchase Common Shares, or distribution of
shares of stock other than Common Shares, evidences of indebtedness or
assets (other than distributions of cash out of consolidated earnings
or retained earnings) or convertible or exchangeable securities
hereafter made by the Company to the holders of its Common Shares
shall not result in any tax to the holders of its Common Shares or
securities convertible into Common Shares.
(f) Whenever the number of Shares purchasable upon the exercise
of each Strasbourger Warrant is adjusted, as herein provided, the
Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior to
7
such adjustment by a fraction, of which the numerator shall be the
number of Shares purchasable upon the exercise of each Strasbourger
Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of Shares so purchasable immediately
thereafter.
(g) For the purpose of this Section 8, the term "Common Shares"
shall mean (i) the class of stock designated as the Common Shares of
the Company at the date of this Agreement or (ii) any other class of
stock resulting from successive changes or reclassifications of such
shares consisting solely of changes in par value, or from no par value
to par value, or from par value to no par value. In the event that at
any time, as a result of an adjustment made pursuant to paragraph (a)
above, the Holders shall become entitled to purchase any shares of
capital stock of the Company other than Common Shares, thereafter the
number of such other shares so purchasable upon exercise of each
Strasbourger Warrant and the Exercise Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Shares contained in paragraphs (a) through (f), inclusive, and
paragraphs (h) through (m), inclusive, of this Section 8, and the
provisions of Sections 4, 5, 7 and 10, with respect to the Shares,
shall apply on like terms to any such other shares.
(h) Upon the expiration of any rights, options, warrants or
conversion rights or exchange privileges, if any thereof shall not
have been exercised, the Exercise Price and the number of Common
Shares purchasable upon the exercise of each Strasbourger Warrant
shall, upon such expiration, be readjusted and shall thereafter be
such as it would have been had it originally been adjusted (or had the
original adjustment not been required, as the case may be) as if (i)
the only Common Shares so issued were the Common Shares, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion rights or exchange privileges and (ii) such
Common Shares, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the aggregate
consideration, if any, actually received by the Company for the
issuance, sale or grant of all of such rights, options, warrants or
conversion rights or exchange privileges whether or not exercised;
provided, however, that no such readjustment shall have the effect of
increasing the Exercise Price by an amount in excess of the amount of
the adjustment initially made in respect to the issuance, sale or
grant of such rights, options, warrants or conversion rights or
exchange privileges.
(i) The Company may, at its option, at any time during the term
of the Strasbourger Warrants, reduce the then current Exercise Price
to any amount deemed appropriate by the Board of Directors of the
Company.
(j) Whenever the number of Shares issuable upon the exercise of
each Strasbourger Warrant or the Exercise Price of such Shares is
adjusted, as herein provided, the Company shall promptly mail by first
class mail postage prepaid, to each Holder notice of such adjustment
or adjustments. The Company shall retain
8
a firm of independent public accountants (who may be the regular
accountants employed by the Company) to make any computation required
by this Section 8 and shall cause such accountants to prepare a
certificate setting forth the number of Shares issuable upon the
exercise of each Strasbourger Warrant and the Exercise Price of such
Shares after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by
which such adjustment was made. Such certificate shall be conclusive
on the correctness of such adjustment and each Holder shall have the
right to inspect such certificate during reasonable business hours.
(k) Except as provided in this Section 8, no adjustment in
respect of any dividends shall be made during the term of the
Strasbourger Warrants or upon the exercise of the Strasbourger
Warrants.
(l) In case of any consolidation of the Company with or merger
of, the Company with or into another corporation or in case of any
sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the Company or
such successor or purchasing corporation (or an affiliate of such
successor or purchasing corporation), as the case may be, agrees that
each Holder shall have the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase
upon exercise of each Strasbourger Warrant the kind and amount of
shares and other securities and property (including cash) which he
would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale or conveyance had such
Strasbourger Warrant been exercised immediately prior to such action.
The provisions of this paragraph (l) shall similarly apply to
successive consolidations, mergers, sales or conveyances.
(m) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the
Strasbourger Warrants pursuant to this Agreement, certificates for
Strasbourger Warrants issued prior or subsequent to such adjustment
may continue to express the same price and number and kind of Shares
as are initially issuable pursuant to this Agreement.
9. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of Shares on the exercise of Strasbourger Warrants. If more than one
Strasbourger Warrant shall be presented for exercise in full at the same time by
the same Holder, the number of Shares which shall be issuable upon the exercise
thereof shall be computed on the basis number of Shares issuable on exercise of
the Strasbourger Warrants so presented. If any fraction of a Share would,
except for the provisions of this Section 9, be issuable on the exercise of any
Strasbourger Warrant (or specified portions thereof), the Company shall purchase
such fraction for an amount in cash equal to the same fraction of the current
market price per Common Share (determined as provided in the second sentence of
Section 8(d) of this Agreement) on the date of exercise.
9
10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and
agrees with Strasbourger and any other or subsequent Holders of the Registrable
Securities (as defined in paragraph (e) of this Section 10) that, upon written
request of the then Holder(s) of at least a majority of the aggregate of the
Registrable Securities which were originally issued on the date hereof to
Strasbourger or its designees, made at any time within the period commencing one
year and ending five years after the Effective Date, the Company will file as
promptly as practicable and, in any event, within 45 days after receipt of such
written request, at its sole expense, no more than once, a post-effective
amendment (the "Amendment") to the Registration Statement, or a new Registration
Statement or a Regulation A Offering Statement (an "Offering Statement") under
the Act, registering or qualifying the Registrable Securities for sale. Within
fifteen (15) days after receiving any such notice, the Company shall give notice
to the other Holders of the Registrable Securities advising that the Company is
proceeding with such Amendment, Registration Statement or Offering Statement and
offering to include therein the Registrable Securities of such Holders. The
Company shall not be obligated to any such other Holder unless such other Holder
shall accept such offer by notice in writing to the Company within ten (10) days
thereafter. No other securities of the Company shall be entitled to be included
in such Amendment, Registration Statement or Offering Statement. The Company
will use its best efforts, through its officers, directors, auditors and counsel
in all matters necessary or advisable, to file and cause to become effective
such Amendment, Registration Statement or Offering Statement as promptly as
practicable and for a period of two years thereafter to reflect in the
Amendment, Registration Statement or Offering Statement financial statements
which are prepared in accordance with Section 10(a)(3) of the Act and any facts
or events arising that, individually, or in the aggregate, represent a
fundamental and/or material change in the information set forth in the
Amendment, Registration Statement or Offering Statement to enable any Holders of
the Strasbourger Warrants to either sell such Strasbourger Warrants or to
exercise such Strasbourger Warrants and sell Shares, or to enable any holders of
Shares to sell such Shares, during said two-year period. The Holders may sell
the Registrable Securities pursuant to the Amendment, Registration Statement or
the Offering Statement without exercising the Strasbourger Warrants. If any
registration pursuant to this paragraph (a) is an underwritten offering, the
Holders of a majority of the Registrable Securities to be included in such
registration shall be entitled to select the underwriter or managing underwriter
(in the case of a syndicated offering) of such offering.
(b) PIGGYBACK REGISTRATION RIGHTS. The Company covenants and
agrees with Strasbourger and any other Holders or subsequent Holders of the
Registrable Securities that if, at any time within the period commencing one
year and ending five years after the Effective Date, it proposes to file a
Registration Statement or Offering Statement with respect to any class of
security (other than in connection with an offering to the Company's employees)
under the Act in a primary registration on behalf of the Company and/or in a
secondary registration on behalf of holders of such securities and the
registration form or Offering Statement to be used may be used for registration
of the Registrable Securities, the Company will give prompt written notice
(which, in the case of a Registration Statement or notification pursuant to the
exercise of demand registration rights other than those provided in Section
10(a)
10
of this Agreement, shall be within ten (10) business days after the Company's
receipt of notice of such exercise, in any event, shall be at least 45 days
prior to such filing) to, the Holders of Registrable Securities (regardless of
whether some of the Holders shall have theretofore availed themselves of the
right provided in Section 10(a) of this Agreement) at the addresses appearing on
the records of the Company of its intention to file a Registration Statement or
Offering Statement and will offer to include in such registration statement or
Offering Statement to the maximum extent possible, and limited, in the case of a
Regulation A offering, to the amount of the available exemption, subject to
sub-paragraphs (i) and (ii) of this paragraph (b), such number of Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten (10) days after the giving of notice by the
Company. All registrations requested pursuant to this Section 10(b) are referred
to herein as "Piggyback Registrations." All Piggyback Registrations pursuant to
this Section 10(b) will be made solely at the Company's expense. This paragraph
is not applicable to a Registration Statement filed by the Company with the
Commission on Forms S-4 or S-8 or any successor forms.
(i) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration includes an underwritten primary registration on behalf
of the Company and the underwriter(s) for the offering being
registered by the Company shall determine in good faith and advise the
Company in writing that in its/their opinion the number of Registrable
Securities requested to be included in such registration exceeds the
number that can be sold in such offering without materially adversely
affecting the distribution of such securities by the Company, the
Company will include in such registration (A) first, the securities
that the Company proposes to sell and (B) second, the Registrable
Securities requested to be included in such registration, apportioned
pro rata among the Holders of Registrable Securities and (C) third,
securities of the holders of other securities requesting registration.
(ii) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration consists only of an underwritten secondary registration
on behalf of holders of securities of the Company (other than pursuant
to Section 10(a)), and the underwriter(s) for the offering being
registered by the Company advise the Company in writing that in
its/their opinion the number of Registrable Securities requested to be
included in such registration exceeds the number which can be sold in
such offering without materially adversely affecting the distribution
of such securities by the Company, the Company will include in such
registration (A) first, the securities requested to be included
therein by the holders requesting such registration and the
Registrable Securities requested to be included in such registration
above, pro rata, among all such holders on the basis of the number of
shares requested to be included by each such holder and (B) second,
other securities requested to be included in such registration.
11
Notwithstanding the foregoing, if any such underwriter shall
determine in good faith and advise the Company in writing that the distribution
of the Registrable Securities requested to be included in the registration
concurrently with the securities being registered by the Company would
materially adversely affect the distribution of such securities by the Company,
then the Holders of such Registrable Securities shall delay their offering and
sale for such period ending on the earliest of (1) 90 days following the
effective date of the Company's registration statement, (2) the day upon which
the underwriting syndicate, if any, for such offering shall have been disbanded
or, (3) such date as the Company, managing underwriter and Holders of
Registrable Securities shall otherwise agree. In the event of such delay, the
Company shall file such supplements, post-effective amendments and take any such
other steps as may be necessary to permit such Holders to make their proposed
offering and sale for a period of 120 days immediately following the end of such
period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter, and Strasbourger. Notwithstanding the foregoing, the
Company shall not be required to file a registration statement to include Shares
pursuant to this Section 10(b) if an opinion of independent counsel, reasonably
satisfactory to counsel for the Company and counsel for Strasbourger, that the
Shares proposed to be disposed of may be transferred pursuant to the provisions
of Rule 144 under the Act, shall have been delivered to counsel for the Company.
(c) OTHER REGISTRATION RIGHTS. In addition to the rights above
provided, the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any Registration Statement or Offering
Statement, in addition to the Registration Statements and Offering Statements
discussed above, required in order to sell or transfer the Registrable
Securities and will supply all information required therefor, but such
additional Registration Statement or Offering Statement shall be at the then
Holders' cost, and expense; provided, however, that if the Company elects to
register or qualify additional Common Shares, the cost and expense of such
Registration Statement or Offering Statement will be pro rated between the
Company and the Holders of the Registrable Securities according to the aggregate
sales price of the securities being issued. Notwithstanding the foregoing, the
Company will not be required to file a Registration Statement or Offering
Statement at a time when the audited financial statements required to be
included therein are not available, which time shall be limited to the period
commencing 45 days after the end of a fiscal year and ending 90 days after the
end of such fiscal year.
(d) ACTION TO BE TAKEN BY THE COMPANY. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or qualification
under paragraphs (a) or (b) of this Section 10, including, but
not limited to, legal, accounting and printing fees; provided,
however, that in no event shall the Company be obligated to pay
(A) any fees and disbursements of special counsel for Holders of
Registrable Securities, or (B) any underwriters' discount or
commission in respect of such Registrable Securities, or
12
(C) upon the exercise of and demand registration right provided
for in paragraph (a) of this Section 10, the cost of and
liability or similar insurance required by an underwriter, to the
extent that such costs are attributable solely to the offering of
such Registrable Securities, payment of which shall, in each
case, be the sole responsibility of the Holders of the
Registrable Securities;
(ii) Use its best efforts to register or qualify the
Registrable Securities for offer or sale under state securities
or Blue Sky laws of such jurisdictions as Strasbourger shall
reasonably request and to do any and all other acts and things
which may be necessary or advisable to enable the holders to
consummate the proposed sale, transfer or other disposition of
such securities in any jurisdiction; and
(iii) Enter into a cross-indemnity agreement, in customary
form, with each underwriter, if any, and each holder of
securities included in such Amendment, Registration Statement or
Offering Statement,
(e) For purposes of this Section 10, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall mean
the Strasbourger Warrants and the Shares, issued upon exercise of the
Strasbourger Warrants.
11. NOTICES TO HOLDERS.
(a) Nothing contained in this Agreement or in any of the
Strasbourger Warrants shall be construed as conferring upon the Holders thereof
the right to vote or to receive dividends or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company; provided, however, that in the event that a meeting
of shareholders shall be called to consider and take action on a proposal for
the voluntary dissolution of the Company, other than in connection with a
consolidation, merger or sale of all, or substantially all, or its property,
assets, business and good will as an entirety, then and in that event the
Company shall cause a notice thereof to be sent by first-class mail, postage
prepaid, at least twenty (20) days prior to the date filed as a record date or
the date of closing the transfer books in relation to such meeting, to each
registered Holder of Strasbourger Warrants at such Holder's address appearing in
the Strasbourger Warrant Register; but failure to mail or to receive such notice
or any defect therein or in the mailing thereof shall not affect the validity of
any action taken in connection with such voluntary dissolution. If such notice
shall have been so given and if such a voluntary dissolution shall be authorized
at such meeting or any adjournment thereof, then from and after the date on
which such voluntary dissolution shall have been duly authorized by the
shareholders, the purchase rights represented by the Strasbourger Warrants and
all other rights with respect thereto shall cease and terminate.
(b) In the event the Company intends to make any distribution on
its Common Shares (or other securities which may be issuable in lieu thereof
upon the exercise of
13
Strasbourger Warrants), including, without limitation, any such distribution to
be made in connection with a consolidation or merger in which the Company is the
continuing corporation, or to issue subscription rights or warrants to holders
of its Common Shares, the Company shall cause a notice of its intention to make
such distribution to be sent by first-class mail, postage prepaid, at least
twenty (20) days prior to the date fixed as a record date or the date of closing
the transfer books in relation to such distribution, to each registered Holder
of Strasbourger Warrants at such Holder's address appearing on the Strasbourger
Warrant Register, but failure to mail or to receive such notice or any defect
therein or in the mailing thereof shall not affect the validity of any action
taken in connection with such distribution.
12. NOTICES. Any notice pursuant to this Agreement to be given or
made by the Holder of any Strasbourger Warrant and/or the holder of any Share to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed as follows or to such other address as the
Company may designate by notice given in accordance with this Section 12, to the
Holders of Strasbourger Warrants and/or the holders of Shares:
▇▇▇▇▇▇▇▇▇.▇▇▇, inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇ ▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Notices or demands authorized by this Agreement to be given or
made by the Company to or on the Holder of any Strasbourger Warrant and/or the
holder of any Share shall be sufficiently given or made (except as otherwise
provided in this Agreement) if sent by first-class mail, postage prepaid,
addressed to such Holder or such holder of Shares at the address of such Holder
or such holder of Shares as shown on the Strasbourger Warrant Register or the
books of the Company, as the case may be.
13. GOVERNING LAW. THIS AGREEMENT AND EACH STRASBOURGER WARRANT
ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICT OF LAWS. The Company hereby agrees to accept service of process by
notice given to it pursuant to the provisions of Section 12.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same agreement.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day, month and year first above written.
(Corporate Seal) ▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
Attest: By:
--------------------------------
Name: ▇▇ ▇. ▇▇▇▇▇
Title: President
------------------------------
Secretary
(Corporate Seal) STRASBOURGER ▇▇▇▇▇▇▇ TULCIN
▇▇▇▇▇ INCORPORATED
Attest: By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
------------------------------
15
EXHIBIT A
No. ________ ________ Warrants
VOID AFTER 5:00 P.M. NEW YORK CITY TIME
ON _________, 2003
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received ______________ or registered
assigns, is the owner of the number of warrants set forth above, each of
which entitles the owner thereof to purchase at any time from October ___,
1999, until 5:00 p.m., New York City time on _________, 2003 (the "Warrant
Expiration Date"), one fully paid and nonassessable Common Share, par value
$.001 per share (the "Common Shares"), of ▇▇▇▇▇▇▇▇▇.▇▇▇, inc., a Delaware
corporation (the "Company"), at the purchase price of $7.70 per share (the
"Exercise Price") upon presentation and surrender of this Warrant Certificate
with the Form of Election to Purchase duly executed. The number of Warrants
evidenced by this Warrant Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of the date of
original issuance of the Warrants, based on the Common Shares of the Company
as constituted at such date. As provided in the Warrant Agreement referred to
below, the Exercise Price and the number or kind of shares which may be
purchased upon the exercise of the Warrants evidenced by this Warrant
Certificate are, upon the happening of certain events, subject to
modification and adjustment.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated as of
October ___, 1998 (the "Warrant Agreement") between the Company and Strasbourger
▇▇▇▇▇▇▇ Tulcin ▇▇▇▇▇ Incorporated which Warrant Agreement is hereby incorporated
herein by reference and made a part hereof and to which Warrant Agreement
reference is hereby made for a full description of the rights, limitations of
rights, duties and immunities hereunder of the Company and the holders of the
Warrant Certificates. Copies of the Warrant Agreement are on file at the
principal office of the Company.
16
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate number of
Common Shares as the Warrants evidenced by the Warrant Certificate or Warrant
Certificates surrendered entitled such holder to purchase. If this Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional Common Shares will be issued upon the exercise of any
Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote or
receive dividends or be deemed the holder of Common Shares, any other securities
of the Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue of stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance, or otherwise) or,
except as provided in the Warrant Agreement, to receive notice of meetings, or
to receive dividends or subscription rights or otherwise, until the Warrant or
Warrants evidenced by this Warrant Certificate shall have been exercised and the
shares shall have become deliverable as provided in the Warrant Agreement.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for the Company's Common Shares or other class
of stock purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates for
shares purchasable upon such exercise until the date of the reopening of said
transfer books.
17
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. has caused the signature (or
facsimile signature) of its President and its Secretary to be printed hereon and
its corporate seal (or facsimile) to be printed hereon.
Dated: __________, 1998
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
-----------------------------
Name: ▇▇ ▇. ▇▇▇▇▇
Title: President
[Corporate Seal]
Attest:
----------------------------
Secretary
18
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate.)
TO: _______________________
The undersigned hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate to purchase the Common Shares issuable
upon the exercise of such Warrants and requests that certificates for such
shares be issued in the name of:
Please insert social security or other identifying number
--------------------------------------
--------------------------------------
------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
Please insert social security number or other identifying number
--------------------------------------
--------------------------------------
------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------
Dated: _________, ___
--------------------------------
Signature
(signature must conform in all respects
to name of holder as specified on the
face of this Warrant Certificate)
Signature Guaranteed:
19
FORM OF
ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificates.)
FOR VALUE RECEIVED, ________________________ hereby sells, assigns and
transfers unto [_____________________________] this Warrant Certificate,
together with all right, title and interest herein, and does hereby irrevocably
constitute and appoint ________________, to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _____________, ____
Signature
----------------------------
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment must correspond to the name
as written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
20