As Filed With The Securities And Exchange Commission On December 13, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ICROWN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 6719 65-0960459
- --------------- ----------------- -------------
(STATE OR OTHER (PRIMARY STANDARD (IRS EMPLOYER
JURISDICTION OF INDUSTRIAL NUMBER)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
ADMIRALTY OFFICE TOWER TWO
4400 PGA BOULEVARD, SUITE 505
PALM BEACH GARDENS, FL 33410
(561) 627-0677
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT C. HACKNEY, ESQ.
HACKNEY & MILLER, P.A.
ADMIRALTY OFFICE TOWER TWO
4400 PGA BOULEVARD, SUITE 505
PALM BEACH GARDENS, FL 33410
(561) 627-0677
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
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COPIES OF ALL COMMUNICATIONS SHOULD BE SENT TO:
ROBERT C. HACKNEY, ESQ.
JOEL M. MCTAGUE, ESQ.
HACKNEY & MILLER, P.A.
ADMIRALTY OFFICE TOWER TWO
4400 PGA BOULEVARD, SUITE 505
PALM BEACH GARDENS, FL 33410
(561) 627-0677
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Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, check the following box and
list the Securities Act registration statement number or the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462
(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------ ---------------------------- --------------------------- ----------------------------
TITLE OF EACH CLASS OF AMOUNT TO BE REGISTERED PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE
SECURITIES TO BE REGISTERED PRICE PER UNIT OFFERING PRICE
- ------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Common Stock 2,000,000 $10 $20,000,000
- ------------------------------ ---------------------------- --------------------------- ----------------------------
Common Stock Purchase 2,000,000 -0- -0-
Warrants
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(1) Registration fee enclosed herewith. Estimated solely for purposes of
calculating the registration fee under Rule 457 (f)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
PROSPECTUS (SUBJECT TO COMPLETION)
Issued December 13, 1999
2,000,000 UNITS
EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK
and ONE CLASS A COMMON STOCK PURCHASE WARRANT
iCROWN CORPORATION
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iCrown, Corporation, a Florida corporation (the "Company"), has
registered 2,000,000 Units, aggregating 2,000,000 shares of its Common Stock
(the "Common Stock") and 2,000,000 Class A Common Stock Purchase Warrants (the
"Class A Warrants"), with each Class A Warrant exchangeable for one share of
Common Stock at $15 per share for a nine month period after the date of this
prospectus and $20 thereafter, which may from time to time be offered by this
Prospectus principally in connection with the acquisition, directly or
indirectly, of an ownership interest in other entities. Such shares may be
issued in exchange for the shares of capital stock (by merger or otherwise),
partnership interests or other assets representing an interest, direct or
indirect, in other companies or other entities, or in exchange for assets used
in or related to the business of such entities. In general, the terms of such
acquisitions will be determined by direct negotiations between the
representatives of the Company and the owners of the businesses or properties to
be acquired or, in the case of entities that are more widely held, through
exchange offers to stockholders or documents soliciting the approval of
statutory mergers, consolidations or sales of assets. Underwriting discounts or
commissions will generally not be paid by the Company. Under some circumstances,
however, the Company may issue shares of Common Stock covered by this Prospectus
to pay brokers' commissions incurred in connection with acquisitions.
The Company has filed a Registration Statement on Form S-4 (including
all amendments and documents incorporated by reference, the "Registration
Statement"), under the Securities Act of 1933, as amended ("the Securities
Act"), with the Securities and Exchange Commission (the "SEC") covering up to
2,000,000 shares of the Common Stock offered hereby and 2,000,000 Class A
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Common Stock Purchase Warrants. This Prospectus does not cover any resale of
Common Stock or Common Stock Purchase Warrants, and no person is authorized to
make use of this Prospectus in connection with any such resale or distribution.
The Common Stock has not yet begun trading on a national market, but
the Company will apply for NASDAQ and Chicago Stock Exchange listings under the
proposed ticker symbol "ICRC." See "Risk Factors" and "Description of Securities
of the Company."
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AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK - SEE "RISK FACTORS" BEGINNING ON PAGE ____
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THIS
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is December ___, 1999
AVAILABLE INFORMATION
The Company will be subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith will file reports, proxy and information statements and
other information with the SEC. Such reports, proxy and information statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities of the SEC, Room 1024, Judiciary
Plaza, 450 Fifth Street, NW, Washington, DC, 20549, as well as at the following
SEC Regional Offices: Seven World Trade Center, New York, NY 10048; and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661-2511. Copies can
be obtained from the SEC by mail at prescribed rates. Requests should be
directed tot he SEC's Public Reference Section, Room 1024, Judiciary Plaza, 450
Fifth Street, NW, Washington, DC, 20549.
The Company has filed the Registration Statement under the Securities
Act covering the securities described herein. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC. For
further information, reference is hereby made to the Registration
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Statement and the exhibits thereto, which may be inspected without charge at the
office of the SEC at 450 Fifth Street, NW, Washington, DC, 20549, and copies of
which may be obtained from the SEC at prescribed rates.
The SEC maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants, such as the
Company, that file electronically with the SEC. The address of such site is
http://www.sec.gov.
FORWARD LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference
contain forward-looking statements based on current expectations, estimates and
projections about the Company's industry, management's beliefs and certain
assumptions made by management. All statements, trends, analyses and other
information contained in this Prospectus relative to trends in net sales, gross
margin, anticipated expense levels and liquidity and capital resources, as well
as other statements including, but not limited to, words such as "anticipate,"
"believe," "plan," "estimate," "expect," "seek" and "intend," and other similar
expressions, constitute forward-looking statements. These forward-looking
statements involve risks and uncertainties, and actual results may differ
materially from those anticipated or expressed in such statements. Potential
risks and uncertainties include, among others, those set forth herein under
"Risk Factors." Particular attention should be paid to the cautionary statements
involving the Company's lack of operating history, the unpredictability of its
future revenues, the unpredictable and evolving nature of its business model,
the intensely competitive internet service industry and the risks associated
with capacity constraints, systems development, management of growth,
acquisitions, any new products and international or domestic business expansion.
Except as required by law, the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Readers, however, should review carefully the factors set forth in
other reports or documents that the Company will file with the SEC from time to
time.
THE COMPANY
THE INDUSTRY
The "Internet industry" includes companies from various sectors,
including Internet access providers, companies that develop software tools to
access the Internet and facilitate secure Internet transactions, and companies
that manufacture personal computers and other hardware used in conjunction with
the Internet. The Internet industry also includes companies engaged in
electronic commerce, publishing companies that provide information on the
Internet, and companies that supply information such as games, music and video,
on the Internet. The types of companies that comprise the Internet industry will
change as technology and applications change and develop. iCrown has loosely
divided the Internet industry into seven sectors: 1. E-commerce; 2.
Media/content; 3. Internet technology; 4. Infrastructure; 5. Access; 6.
Services; and 7. Hub/virtual community.
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The Internet has been subject to rapid growth in the past ten years,
and the last half in particular. Internet and Internet related companies have
seen their valuations increase disproportionately with the growth of e-commerce.
Some Internet related mutual funds, for example, have returned between 58% and
298%1. The Company, although not a mutual fund or investment holding company,
believes the returns and results will be similar to Internet and Internet
related mutual funds. Though many analysts do not expect these return to
continue in the years to come and industry wide slow down is expected, the
Company expects that even if there were a slow down in the Internet industry,
the technologies would still be essential to life in the years to come and a
sound long-term investment.
BUSINESS OF THE COMPANY
iCrown, Inc., ("iCrown" or "the Company") is a Florida corporation in
the primary business to acquire developmental stage and established Internet and
Internet related companies and assets. To date, Crown has not engaged in an
active trade or business since its inception. The Company is searching currently
for at least one active trade or business in which to acquire at least a
majority interest. Although the Company's primary long term focus is the
Internet, it may invest in non-internet related assets when Management believes
that it is advisable to do so.
The Company expects that at least 55% of its value and net income after
taxes will be derived from majority owned subsidiaries of the issuer who are not
investment companies in themselves and therefore believes itself exempt from the
Investment Company Act of 1940. The Company plans on remaining exempt for the
near future. No more than 45% of the value of the company will be invested in
non-majority owned common and preferred stock of companies engaged in Internet
and Internet related businesses. These companies may or may not be publicly
traded.
The Company expects two separate streams of revenue going forward. One
revenue stream will be from the as yet to be identified majority owned
operational subsidiaries. The other revenue stream will be from the Company's
portfolio of Internet and Internet related securities.
- --------
1 Monument Technology A Fund has a 58% one year return, and Firsthand
Technology Innovators Fund had a 298% one year return, both as of December 1,
1999.
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MAJORITY OWNED OPERATIONAL SUBSIDIARIES
Presently, the Company is researching and investigating the acquisition
of at least one majority owned operational subsidiary that is involved in an
Internet or Internet related business that is identified as belonging to one of
the seven sectors.
PORTFOLIO OF INTERNET AND INTERNET RELATED SECURITIES
PRINCIPAL INVESTMENT STRATEGIES FOR INTERNET RELATED SECURITIES
The Company's strategy to achieve its goal is to invest in companies that
provide products or services designed for the Internet. Management believes that
the Internet offers unique investment opportunities because of its ever-growing
popularity among business and personal users alike. The company intends to
invest in common stock whose research and development efforts with respect to
Internet usage may result in higher stock values.
CAPITAL APPRECIATION POTENTIAL
Management believes that capital appreciation potential is highest in the small
cap stocks that are involved in the Internet. Management is of the opinion that
the introduction of cutting edge product lines and innovative services
frequently come from small companies. According to CDA/Wiesenberger, an
independent information services firm, small company stocks have historically
provided higher returns over the long term than both large company stocks and
fixed income securities. For example, an investment of $1 in small cap stocks in
1926 would have grown to $7,343 in 1997, exceeding large company stocks by over
$5,500. Small cap stocks outperformed their large cap counterparts in 96% of
each twenty year period beginning in 1926.
THE MODEL PORTFOLIO. No more than 45% of the value of the company will
be invested in non-majority owned common and preferred stock of companies
engaged in Internet and Internet related businesses. For these non-majority
owned common and preferred stock investments, the Company's investment objective
is to generate long-term capital appreciation by investing in the stocks of
public companies with primary business operations in seven sectors of the
Internet industry identified by Management. In order to test the Company's
investment objective, Management has identified companies that it has designated
as the Model Portfolio. The Model Portfolio and has achieved a pro-forma gain of
156% between December 31, 1998 and November 30, 1999. However, these pro-forma
results are not necessarily indicative of the likely future performance of the
Company. The Company is designed for long-term investors who understand and are
willing to accept the risk of loss involved in seeking long-term capital
appreciation in large and small public companies and in start-up private
companies.
iCrown has signed an advisory contract with Crown Capital Advisors,
Inc., ("Crown Capital"), a related entity. The contract allows for periodic
payments for services provided by Crown Capital. Crown Capital is exempt from
registration from the Investment Advisors Act of
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1940 and expects to remain exempted in the near future.
RISK FACTORS
In addition to the other information contained in this Prospectus,
investors should consider carefully the following risk factors before making an
investment decision concerning the Common Stock. All statements, trend analysis
and other information contained in this Prospectus relative to markets for the
Company, as well as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "seek: and "intend" and other similar
expressions, constitute forward-looking statements. These forward-looking
statements are subject to business and economic risks, and the Company's actual
results of operations may differ materially from those contained in the
forward-looking statements.
An investment in the Common Stock offered hereby involves a high degree
of risk. The following risk factors, together with the other information set
forth in this Prospectus, should be considered carefully before acquiring the
Common Stock offered hereby.
NO OPERATING HISTORY
The Company was incorporated in November, 1999, and accordingly, the
Company has no operating history on which to base an evaluation of its business
and prospects. There is no assurance that the Company can find or develop
operating subsidiaries within the Internet field. The Company's prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of Internet related acquisitions.
Such risks for the Company include, but are not limited to, an evolving and
unpredictable business model and the management of growth. To address these
risks, the Company must, among other things, implement and successfully execute
its business and marketing strategy and it's expansion into new product and
geographic markets, continue to develop and upgrade its technology, establish,
maintain and continuously update its web site, provide superior customer service
and fulfillment, respond to competitive developments and attract, retain and
motivate qualified personnel. There can be no assurance that the Company will be
successful in addressing such risks, and the failure to do so could have a
material adverse effect on the Company's business, prospects, financial
condition and results of operations.
ABSENCE OF MARKET
At the present time, there is no public market for the Company's Common Stock
and subsequent to this offering there is no assurance that a market will
develop. The Company will apply for listing on the National Association of
Security Dealer's Automated Quotation Service, Inc. ("NASDAQ") and the Chicago
Stock Exchange to commence after this offering.
NO DIVIDENDS ANTICIPATED
The Company does not contemplate or anticipate paying any dividends upon its
Common Stock in
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the foreseeable future. It is currently anticipated that earnings, if any, will
be used to finance the development and expansion of the Company's business.
UNPREDICTABILITY OF FUTURE REVENUES; POTENTIAL FLUCTUATIONS IN QUARTERLY
OPERATING RESULTS; SEASONALITY
As a result of the Company's absence of an operating history and the
emerging nature of the markets in which it will compete, the Company is unable
to accurately forecast its revenues. The Company's current and future expense
levels are based largely on its investment plans and estimates of future
revenues and are to a large extent fixed. Sales and operating results depend
generally upon the volume of, timing of and ability to respond to client
requests, which are difficult to forecast. The Company may be unable to adjust
spending in a timely manner to compensate for any unexpected revenue shortfall.
Accordingly, any significant shortfall in revenues in relation to the Company's
planned expenditures would have an immediate adverse effect on the Company's
business, prospects, financial condition and results of operations. Further, as
a strategic response to changes in the competitive environment, the Company may
from time to time make certain pricing, service, marketing or acquisition
decisions that could have a material adverse effect on its business, prospects,
financial condition and results of operations.
The Company expects to experience significant fluctuations in its
future quarterly operating results due to a variety of factors, many of which
are outside the Company's control. Factors that may adversely affect the
Company's quarterly operating results include (i) the development, announcement
or introduction of new sites, services and products by the Company and its
competitors, (ii) the level of use of the Internet, online services and computer
software and increasing consumer acceptance of the Internet, (iii) the Company's
ability to upgrade and develop its systems and infrastructure, (iv) the
Company's ability to attract new personnel in a timely and effective manner, (v)
the Company's ability to manage effectively its development of new business
segments and markets, (vi) the Company's ability to successfully manage the
integration of operations and technology of acquisitions or other business
combinations, (vii)technical difficulties, system downtime or Internet
brownouts, (viii) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business, operations and
infrastructure, (ix) governmental regulation and taxation policies, (x)
disruptions in service by common carriers due to strikes or otherwise, and (xi)
general economic conditions and economic conditions specific to the Internet.
These factors may also affect the Company's majority owned subsidiaries as well
as its portfolio investments.
The Company expects that it will experience seasonality in its
business, reflecting a combination of seasonal fluctuations in Internet usage
and traditional business seasonality patterns. Internet usage and the rate of
Internet growth may be expected to decline during the summer.
Because of the foregoing factors, in one or more future quarters the
Company's operating results may fall below the expectations of securities
analysts or investors. In such event, the trading price of the Common Stock
would likely be materially adversely affected.
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COMPETITION
Since the Internet and Internet related businesses are relatively new,
the market is rapidly evolving and intensely competitive, and that competition
will intensify in the near future. There can be no assurances that the Company
will be able to compete successfully against current and future competitors. New
technologies and the expansion of existing technologies may increase the
competitive pressures of the Company.
COMPUTER SYSTEMS AND OPERATION RISKS
The Company's business may depend on the efficient and uninterrupted
operation of the computer and communications hardware systems of its future
majority owned subsidiaries and its portfolio companies. Such systems and
operations are vulnerable to damage or interruption from fire, flood, power
loss, telecommunications failure, break-ins, earthquakes, hurricanes, and other
similar events that are outside of the Company's control. Any system
interruption would reduce the attractiveness of the Company's product and
service offerings and could, therefore, materially adversely affect the Company.
Any inability or delay in appropriately upgrading its systems and infrastructure
would also have a material adverse effect on the Company.
RISKS OF BUSINESS COMBINATIONS AND STRATEGIC ALLIANCES
The Company will expand its operations by acquiring majority owned
subsidiaries, entering into business combinations, investments, joint ventures
or other strategic alliances with third parties. Any such transaction would be
accompanied by risks commonly encountered in such transactions, which could
include, among others, the difficulty of assimilating the operations, technology
and personnel of the combined companies, the potential disruption of the
Company's ongoing business, the inability to retain key technical and managerial
personnel, the inability of management to maximize the financial and strategic
position of the Company through the successful integration of acquired
businesses, additional expenses associated with amortization of acquired
intangible assets, the maintenance of uniform standards, controls and policies
and the impairment of relationships with existing employees and customers. There
can be no assurance that the Company would be successful in overcoming these
risks or any other problems encountered in connection with such business
combinations, investments, joint ventures or other strategic alliances, or that
such transactions would not have a material adverse effect on the Company's
business, prospects, financial condition and results of operations.
RAPID TECHNOLOGICAL CHANGE
The Internet, and computer technology in general, are characterized by
rapid technological change, changes in user and customer requirements and
preferences, frequent new products and service introductions embodying new
technologies and the emergence of new industry standards and practices that
could adversely affect the Company's future majority owned subsidiaries and/or
its portfolio investments. If the company is unable, for technical, legal,
financial or other reasons, to
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adapt in a timely manner in response to changing market conditions or customer
requirements, such inability could have a material adverse effect on the
company's business, prospects, financial condition and results of operation.
DEPENDENCE ON KEY PERSONNEL
The company's performance is substantially dependent on the continued
services and on the performance of its senior management and other key
personnel, particularly Donald W. Miller and Robert C. Hackney. The Company does
not have long-term employment agreements with any of its key personnel and
maintains no "key person" life insurance policies. The loss of the services of
its executive officers or other key employees could have a material adverse
effect on the Company's business, prospects, financial condition and results of
operations.
DEPENDENCE ON INTERNET AND COMPUTER GROWTH
The Company's long term viability is substantially dependent upon the
widespread consumer acceptance and use of the Internet as a medium of commerce.
Use of the Internet as a means of effecting retail transactions as well as
marketing is at an early stage of development, and demand and market acceptance
for recently introduced services and products over the Internet is very
uncertain.
The Internet's viability as a commercial marketplace could be adversely
affected by delays in the development of services or due to increased government
regulation. Changes in, or insufficient availability of, telecommunications
services to support the Internet also could result in slower response times and
adversely affect usage of the Internet generally. If the use of the Internet
does not continue to grow or grows more slowly than expected, or if the
infrastructure for the Internet does not effectively support growth that may
occur, the Company would be materially adversely affected.
YEAR 2000 COMPLIANCE RISK
The Company will use computer software programs and operating systems
in its internal operations, including applications used in financial business
systems and various administration functions. Computer programs have
traditionally been written using two digits rather than four to define the
applicable year. As a consequence, unless modified, computer systems will not be
able to differentiate between the years 2000 and 1900. Failure to address this
problem could result in system failures and the generation of erroneous data. In
addition, the Company cannot predict the effect of the Year 2000 problem on the
entities with which the Company transacts business, and there can be no
assurance that the effect of the Year 2000 problem on such entities will not
have a material adverse effect on the Company's business, financial condition or
results of operations.
GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES
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The Company is not currently subject to direct regulation by any
domestic or foreign government agency, other than regulations applicable to
businesses generally and laws or regulations directly applicable to access to
Internet carriers and online commerce. Due to the increasing popularity and use
of the Internet and other online services, however, it is possible that a number
of laws and regulations may be adopted with respect to the Internet or other
online services covering issues such as user privacy, pricing, content,
copyrights, distribution and characteristics and quality of products and
services. Furthermore, the growth and development of the market for online
commerce may prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business online. The
adoption of any additional laws or regulations may decrease the growth of the
Internet or other online services, which could, in turn, decrease the demand for
the Company's products and services and increase the Company's costs of doing
business, or otherwise have a material adverse effect on the Company's business,
prospects, financial condition and results of operations. Moreover, the
applicability to the Internet and other online services of existing laws in
various jurisdictions governing issues such as property ownership, sales and
other taxes, libel and personal privacy is uncertain and may take years to
resolve. Any such new legislation or regulation, the application of laws and
regulations from jurisdictions whose laws do not currently apply to the
Company's business, or the application of existing laws and regulations to the
Internet and other online services could have a material adverse effect on the
Company's business, prospects, financial condition and result of operations.
INVESTMENT REGULATION
At the present time, the Company believes itself exempt from the
Investment Holding Company Act of 1940 and the corresponding Florida statute by
relying on certain exemptions. The Company intends on maintaining its exempt
status, however, there is no guarantee it will do so. The exemptions may be
modified and/or abolished by government agencies responsible for Rule making,
though the Company is not aware of any attempts to do so.
Furthermore, the Company believes the Investment Advisor, Crown Capital
Advisors, Inc., is exempt from the Investment Advisors Act of 1940 and the
corresponding Florida statute by relying on certain exemptions. Crown Capital
Advisors intends on maintaining its exempt status.
In the event that either Company loses their exempt status, the
Companies plan on correcting the problem either by modifying the corporate
structure or by applying for the appropriate licenses.
PORTFOLIO RISK
SMALLER CAPITALIZED COMPANIES. All of the Company's assets that are invested in
non-majority owned companies may be invested in smaller capitalized public
companies (of less than $100 million market capitalization) as well as private
companies. While the Management believes that such companies offer greater
potential for earnings growth and capital appreciation, investment in such
companies involves greater risks. Furthermore, the securities in such companies
may be traded less frequently and in smaller lots than larger companies and,
consequently, be susceptible to larger price movements, and the securities of
private companies will have no liquid market.
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INVESTMENT OBJECTIVE RISK. Current income is incidental to the Company's
investment objective. The Company is designed for long-term investors who
understand and are willing to accept the risk of loss involved in investing in a
Company seeking long-term capital appreciation. Investors should consider their
investment goals, their time horizon for achieving them, and their tolerance for
risks before investing in the Company. If an investor seeks an aggressive
approach to capital growth and accepts the above average level of price
fluctuations that this Company is expected to experience, this Company could be
an appropriate part of overall investment strategy. The Company should not be
used as a trading vehicle and should not be used as a complete investment
program.
Management believes that because of continuing rapid advances in technologies,
an investment in a range of companies in the Internet and Internet related
companies will offer substantial opportunities for long-term capital
appreciation. The technology area continues to expand dramatically, both through
increasing demand for existing products and services and the broadening and
development of the technology market. Nevertheless, the price of common stocks
of such companies is subject to market risk and may decline.
The Company is of the opinion that the expansion of technology areas, however,
also provides a favorable environment for investment in small to medium
capitalized companies. The Company's investment policy is not limited to any
minimum capitalization requirement, and the Company may hold securities without
regard to the capitalization of the issuer.
MANAGEMENT OF THE COMPANY
Following are summaries of the background of the Directors of the Company.
DONALD W. MILLER, 46, has been a director and the President of the
Company since its inception. Since August, 1997, he has been a partner in the
law firm of Hackney & Miller, P.A. Mr. Miller has practiced business, real
estate and corporate law since 1981. From June, 1994 until August 1997, he was
the sole shareholder in the law firm of Donald W. Miller P.A. representing
domestic and international companies in relation to mergers and acquisitions,
business financing and corporate management. From 1984 until 1994, Mr. Miller
was the President and Chief Executive Officer of First Partners Investment
Corporation responsible for the acquisition, financing, development, asset
management and brokerage of investment-grade real estate. Mr. Miller received
his JD from Michigan State University's T. M. Cooley School of Law, and his
Bachelor of Arts degree in Business Administration from the University of Miami.
He is a member of The Florida Bar, the State Bar of New Jersey, the Palm Beach
County Bar Association and was chosen for the first class of Leadership Palm
Beach County.
PETER V. DE SANCTIS, 43, has been a director of the Company since its
inception. Since 1989, Mr. De Sanctis has been a Shareholder in Hixon, Marion,
Powell & De Sanctis, P.A., a regional certified public accounting firm with
offices in North Miami Beach and Palm Beach Gardens,
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Florida. Mr. De Sanctis has worked in the field of public accounting since 1975.
Prior to his association with his present accounting firm, he was associated
with the "Big Six" firm of Coopers & Lybrand, as well as the international firm
of Grant Thornton. He has served as Chief Financial Officer of Associated
Mortgage Investors which is a publicly held diversified real estate company
principally engaged in real estate development, property management and
investment partnership syndication. During his service as Chief Financial
Officer, Associated Mortgage Investors held in excess of $100,000,000 of assets.
Mr. De Sanctis graduated from the Bernard M. Baruch College where he obtained
his Bachelor of Business Administration degree. He is a member of the American
and Florida Institutes of Certified Public Accountants, the New York State
Society of Certified Public Accountants and is listed in the Who's Who Registry.
ROBERT C. HACKNEY, 49, has been a director, and the
Secretary/Treasurer, of the Company since its inception. For two decades his
corporate and securities law practice has included public and private securities
offerings, mergers and acquisitions, tender offers, and complex corporate
transactions. Since January, 1997, he has been a partner in the law firm of
Hackney & Miller, P.A. Mr. Hackney also serves on the Board of Directors of
Micro Typing Systems, Inc., a Johnson & Johnson affiliate that manufactures
medical diagnostic products. From June, 1995 until January 1997, he was the sole
shareholder in the law firm of Robert C. Hackney & Associates, Chartered. From
November, 1988, until June, 1995, Mr. Hackney was a partner in the law firm of
DeSantis, Gaskill & Hunston P. A., in North Palm Beach, Florida. From January
1996 until December 1996, he also served as a director of Net Lnnx, Inc., an
Internet Service Provider and from January 1996 until August, 1996, he also
served as its President. He is a former securities fraud prosecutor and state
securities regulator. Mr. Hackney is a member of The Florida Bar, the United
States District Court, Southern District of Florida, the United States District
Court, Middle District of Florida, the United States Court of Appeals for the
Fifth Circuit, and the United States Court of Appeals for the Eleventh Circuit.
He received his Juris Doctor degree from Stetson University College of Law and
his Bachelor of Arts degree from Florida State University. He has lectured and
authored several books in the area of corporate and securities law, including
"The Complete Guide to Mergers & Acquisitions," (1989), "An Insider's Guide to
Non-Bank Business Financing" (1990), and "Firesale! Advice on Buying Financially
Distressed Companies" (1991). Mr. Hackney is a member of United States Senator
Connie Mack's Senate Roundtable and is listed in the Who's Who Registry.
ROBERT MOREYRA, 41, has been a director of the Company since its
inception. Since May, 1999, Mr. Moreyra has been responsible for The First
American Investment Banking Corporation's Investment Banking Group, which
includes capital raising, capital restructuring, mergers and acquisitions advice
and investor relations assistance activities. Prior to joining First American,
Mr. Moreyra was Vice President of Corporate Finance with William R. Hough & Co.,
one of the largest regional investment banking firms in the southeastern United
States, from December, 1997 until May, 1999. From January 1996 until May, 1997,
Mr. Moreyra was a Director with Tunstall Consulting, Inc., a corporate financial
consulting firm specializing in strategic and financial planning for high-growth
companies seeking capital from institutional lenders and investment banks. From
1986 until January, 1996, Mr. Moreyra served as Chief Executive Officer of
Pardue, Heid, Church, Smith & Waller, Inc. which during his tenure grew to be
the country's largest privately held real estate consulting firm. Mr. Moreyra is
a frequent lecturer on the topic of strategic planning and
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corporate finance to groups such as Inc. Magazine, The Executive Committee
(TEC), Watermark International, and numerous colleges and universities. Mr.
Moreyra received his M.B.A. from the University of Central Florida and is also a
graduate of Florida International University where he received his B.B.A.
majoring in Finance. He is a member of the University of Florida's Graduate
School of Business Advisory Board, and serves on numerous corporate boards of
directors.
DIRECTORS COMPENSATION
No Compensation has been paid to any directors for service in such capacity in
the past, and no such compensation is presently payable to directors, but
directors may be reimbursed for certain expenses in connection with attendance
at Board and committee meetings. At such time as the Board of Directors deems
appropriate, the Company intends to adopt an appropriate policy to compensate
non-employee directors, in order to attract and retain the services of qualified
non-employee directors.
1999 EQUITY INCENTIVE PLAN
The iCrown 1999 Equity Incentive Plan (the "Plan") was approved by the
Board of Directors and the shareholders on November 30, 1999. The following
summary of the Plan is qualified in its entirety by reference to the complete
text of the Plan.
The Plan is intended to promote the interests of the Company and its
shareholders by (a) attracting and retaining key employees, consultants and
non-employee directors of the Company, (b) motivating such individuals by means
of performance-related incentives to achieve long-term performance goals, (c)
enabling such individuals to participate in the long-term growth and financial
success of the Company, and (d) linking compensation to the long-term interests
of the shareholders.
The Plan is designed so that certain awards granted thereunder may
comply with the requirements of performance-based compensation under Section
162(m) ("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the
"Code"). Section 162(m) generally limits the deductibility of certain
compensation in excess of $1 million per year paid by a publicly traded
corporation to the following individuals who are employed as of the end of the
corporation's tax year: the chief executive officer and the four other executive
officers named in the summary compensation table of the corporation's proxy
statement ("Covered Officers"). Compensation that qualifies as
"performance-based" compensation is, however, exempt from the $1 million
deductibility limitation. For compensation granted pursuant to the Plan to
qualify for this exemption, among other things, the material terms under which
the compensation is to be paid must be disclosed to and approved by shareholders
in a separate vote prior to payment, and the compensation must be paid solely on
account of the attainment of preestablished, objective performance goals.
Accordingly, if the Plan is approved by shareholders and the other conditions of
Section 162(m) relating to performance-based compensation are satisfied, certain
compensation paid to Covered Officers pursuant to the Plan will not fail to be
deductible under Section 162(m).
General
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The Plan provides for the granting of awards to such employees and
consultants of the Company and its affiliates as the committee of the Board (the
"Committee") appointed to administer the Plan may select from time to time. In
addition, non-employee directors are eligible to receive the non-employee
director awards described below.
Subject to the adjustment provisions described below, an aggregate of
2,000,000 shares of common stock are reserved for issuance of awards under the
Plan, of which 1,000,000 are reserved for issuance of awards other than stock
options. Such shares may be authorized but unissued common stock or common stock
held in the Company's treasury or a combination thereof. Generally, shares
subject to an award that remain unissued upon expiration or cancellation of the
award will be available for other awards under the Plan.
In the event that stock options or other awards are exercised by
delivery of shares of common stock or awards are satisfied by the withholding of
shares of common stock, the number of shares available for awards under the Plan
will be increased by the number of shares so delivered or withheld. In addition,
shares of common stock underlying awards granted solely as an assumption of, or
substitution for, outstanding awards previously granted by a separate entity
acquired by the Company, or with which the Company combined, will not be counted
against the shares of common stock available for awards under the Plan, unless
otherwise required by Section 16 of the Securities Exchange Act of 1934.
Subject to the adjustment provisions described below, the total number
of shares of common stock subject to Options (as defined below) granted to any
participant in the Plan during any calendar year may not exceed 500,000;
PROVIDED, HOWEVER, that during the initial year of the Plan or in the calendar
year in which a participant commences employment with the Company, the total
number of shares of common stock subject to Options (as defined below) granted
to such participant may not exceed 1,000,000.
In the event that the Committee determines that any dividend, other
distribution, recapitalization, stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, exchange of shares
of common stock or other securities of the Company, issuance of warrants or
other rights to purchase shares of common stock or other securities of the
Company, or other similar corporate transaction or event, affects the common
stock such that an adjustment is appropriate to prevent dilution or enlargement
of the benefits under the Plan, then the Committee shall make such adjustments
as it deems equitable to the number and kind of shares of Company securities
that may thereafter be issued in connection with awards, the limit on individual
awards, the number and kind of shares of Company securities subject to each
outstanding award, and the exercise price of each award. In addition, if deemed
appropriate, the Committee shall provide for an equivalent award.
Awards under the Plan may be made in the form of (a) incentive stock
options (which are designed to satisfy the applicable requirements set forth in
Section 422 of the Code), (b) non-qualified stock options (incentive stock
options and non-qualified stock options are collectively
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referred to as "Options"), (c) restricted stock, (d) restricted stock units, (e)
performance awards, (f) other stock-based awards, including dividend equivalent
rights, and (g) non-employee director awards.
Administration
The Plan will be administered by the Committee, which will be the
Compensation Committee unless the Board appoints a different committee (which
may include the entire Board) to administer the Plan. The Committee is
authorized, among other things, to interpet and administer the provisions of the
Plan, to select the person to whom awards will be granted, to determine the
terms and conditions of such awards and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
Subject to the terms of the Plan and applicable law, the Committee may delegate
to one or more officers or managers of the Company or an affiliate, or to a
committee of such officers or managers, certain of its authorities under the
Plan, but solely with respect to participants who are not officers or directors
of the Company for purposes of, or who are not otherwise subject to, Section 16
of the Securities Exchange Act of 1934.
Awards under the Plan
Stock Options
Option granted pursuant to the Plan will be exercisable at such time or
times, and subject to such other terms and conditions as the Committee
determines, in the applicable award agreements or thereafter. The purchase price
per share payable upon the exercise of an option (the "option exercise price")
will be established by the Committee; PROVIDED, HOWEVER, that the option
exercise price may be no less than the fair market value of a share of common
stock on the date of grant. The option exercise price is payable in cash (or its
equivalent), or by surrender of shares of common stock owned by the participant
for at least six months, having a fair market value on the date of exercise
equal to the option exercise price, or by any combination of the foregoing. In
addition, a participant may elect to pay all or any portion of the aggregate
exercise price by having shares of common stock with a fair market value on the
date of exercise equal to the aggregate option exercise price withheld by the
Company or sold by a broker-dealer. Options may not be exercisable after the
expiration of ten years from the date of grant.
Restricted Stock
The Committee may grant restricted shares of common stock ("Restricted
Stock") to such persons, in such amounts, and subject to such terms and
conditions (including the attainment of performance goals and forfeiture
provisions) as the Committee may determine, in its discretion. Except for
restrictions on transfer and such other restrictions as the Committee may
impose, participants will have all the rights of a shareholder with respect to
the restricted stock, including dividend and voting rights, unless the Committee
determines otherwise.
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Restricted Stock Units
The Committee may grant restricted stock units ("Restricted Stock
Units") to such persons, in such amounts, and subject to such terms and
conditions (including the attainment of performance goals and forfeiture
provisions) as the Committee may determine, in its discretion. Each Restricted
Stock Unit has a value equal to the fair market value of one share of common
stock. Restricted Stock Units may be paid out in cash, shares of common stock or
other considerations, as determined by the Committee, upon the lapse of the
applicable restrictions.
Performance Awards
The Committee may grant performance awards to such persons, in such
amounts, and subject to such terms and conditions as the Committee may
determine, in its discretion. Peformance awards may be denominated in cash or
shares of common stock, valued, as determined by the Committee, based on the
achievement of performance goals over performance periods to be determined by
the Committee, and paid, at such time and in such form as the Committee may
determine, in the form of a lump sum or installments, or on a deferred basis, in
accordance with procedures established by the Committee.
Other Stock-Based Awards
The Committee may grant other stock-based awards valued in whole or in
part by reference to, or otherwise based on, common stock, including dividend
equivalent rights, as the Committee deems consistent with the purposes of the
Plan. Subject to the provisions of the Plan, the Committee will determine the
persons to whom such other stock-based awards will be granted and all the terms
and conditions of such awards.
Section 162(m) Awards and Performance Goals, Generally
With respect to performance awards, and specifically, awards intended
to comply with Section 162(m), the Plan is designed so that a committee
satisfies the applicable requirements of Section 162(m) may establish
performance goals expressed in terms of the achievement of any one or more of
the following performance measures; earnings before interest, taxes,
depreciation and/or amortization; operating income or profits; return on equity,
assets, capital employed or investment; after tax operating income; net income;
earnings or book value per share; cash flow(s); total sales or revenue, or sales
or revenues per employee; production (separate work units); stock price or total
shareholder return; dividends, strategic business objectives, consisting of one
or more objectives based
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BENEFICIAL OWNERSHIP OF COMMON STOCK
<TABLE>
<CAPTION>
Name of Beneficial Owner Amount and Nature of Ownership Percent of Ownership
<S> <C> <C>
Crown Capital Holdings, Inc. 2,000,000 100%
Total 2,000,000 100%
</TABLE>
DESCRIPTION OF SECURITIES
The following description is a summary and is qualified in its entirety by the
provisions of the Company's Articles of Incorporation and Bylaws, copies of
which have been filed as exhibits to the Registration Statement of which this
Prospectus is a part.
GENERAL
The Company is authorized to issue 300,000,000 shares of Common Stock, $.0001
par value per share, and 50,000,000 shares of Preferred Stock, $.0001 par value
per share. At November 30, 1999, there were 2,000,000 shares of Common Stock
issued and outstanding, and no shares of Preferred Stock issued and outstanding.
All shares of Common Stock outstanding are validly issued, fully paid and
non-assessable.
COMMON STOCK
VOTING RIGHTS. Each share of Common Stock entitles the holder thereof to one
vote, either in person or by proxy, at meetings of shareholders. The holders are
not permitted to vote their shares cumulatively. Accordingly, the holders of
Common Stock holding, in the aggregate, more than fifty percent (50%) of the
total voting rights can elect all of the directors of the Company.
DIVIDEND POLICY. All shares of Common Stock are entitled to participate ratably
in dividends when and as declared by the Company's Board of Directors out of the
funds legally available therefore and subject to the rights, if any, of the
holders of outstanding shares of preferred stock. Any such dividends may be paid
in cash, property or additional shares of Common Stock. The Company has not paid
any dividends since its inception and presently anticipates that all earnings,
if any, will be retained for development of the Company's business and that no
dividends on the shares of Common Stock will be declared in the foreseeable
future. Any future dividends will be subject to the discretion of the Company's
Board of Directors and will depend upon, among other things, future
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earnings, the operating and financial condition of the Company, its capital
requirements, general business conditions and other pertinent facts. Therefore,
there can be no assurance that any dividends on the Common Stock will be paid in
the future.
MISCELLANEOUS RIGHTS AND PROVISIONS. Holders of Common Stock have no preemptive
or other subscription rights, conversion rights, redemption or sinking fund
provisions. In the event of the dissolution, whether voluntary or involuntary,
of the Company, each share of Common Stock is entitled to share ratably in any
assets available for distribution to holders of the equity of the Company after
satisfaction of all liabilities and payment of the applicable liquidation
preference of any outstanding shares of Preferred Stock.
CLASS A COMMON STOCK PURCHASE WARRANTS
GENERAL. Our Class A Warrants may be exercised at any time during the period
commencing 30 days after this offering and ending on the second anniversary date
of the date of this prospectus, the expiration date. Each Class A Warrant
entitles the holder to purchase one share of our Common Stock at an exercise
price during the nine month period after the date of this prospectus for $15.00
per share and $20.00 thereafter, subject to adjustment upon the occurrence of
certain events as provided in the warrant certificate and summarized below. A
Class A Warrantholder will not be deemed to be a holder of the underlying common
stock for any purpose until the warrant has been exercised.
SEPARATE TRANSFERABILITY. Our Class A Warrants are detachable and
separately transferable commencing on a date determined by the Company within 30
days of the effective date of this offering.
REDEMPTION. We have the right, commencing six months after the date of this
prospectus, to redeem the Class A Warrants issued in the offering at a
redemption price of $.25 per warrant after providing 30 days' prior written
notice to the warrant holders, if the average closing bid price of the common
stock equals or exceeds $12.00 for ten consecutive trading days ending within 15
days prior to the date of the notice of redemption. We will send the written
notice of redemption by first class mail to warrant holders at their last known
addresses appearing on the registration records maintained by the transfer agent
for our warrants. No other form of notice or publication or otherwise will be
required. If we call the warrants for redemption, they will be exercisable until
the close of business on the business day next preceding the specified
redemption date or the right to exercise will lapse.
EXERCISE. A Class A Warrant holder may exercise our warrants only if an
appropriate registration statement is then in effect with the Securities and
Exchange Commission and if the shares of common stock underlying our Class A
Warrants are qualified for sale under the securities laws of the state in which
the holder resides.
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Our Class A Warrants may be exercised by delivering to our transfer agent
the applicable warrant certificate on or prior to the expiration date or the
redemption date, as applicable, with the form on the reverse side of the
certificate executed as indicated, accompanied by payment of the full exercise
price for the number of warrants being exercised. Fractional shares of common
stock will not be issued upon exercise of our redeemable warrants.
ADJUSTMENTS OF EXERCISE PRICE. The exercise price is subject to adjustment
if we declare any stock dividend to stockholders, or effect any split or share
combination with respect to our Common Stock. Therefore, if we effect any stock
split or stock combination with respect to our common stock, the exercise price
in effect immediately prior to this stock split or combination will be
proportionately reduced or increased, as the case may be. Any adjustment of the
exercise price will also result in an adjustment of the number of shares
purchasable upon exercise of a warrant or, if we elect, an adjustment of the
number of warrants outstanding.
PREFERRED STOCK
The Company also has the right to issue up to 50,000,000 shares of Preferred
Stock. This Preferred Stock may have such rights and preferences that are
greater than the Company's Common Stock. As of the date of this Prospectus, no
Preferred Stock has been issued. The board of directors is expressly authorized
to adopt, from time to time, a resolution or resolutions providing for the issue
of preferred stock in one or more series, to fix the number of shares in each
such series and to fix the designations and the powers, preferences and
relative, participating, optional and other special rights and the
qualifications, limitations and restrictions of such shares, of each such
series.
INDEMNIFICATION PROVISIONS OF FLORIDA LAW AND OF THE COMPANY'S ARTICLES OF
INCORPORATION AND BYLAWS
The Company's Articles of Incorporation and Bylaws require the Company to
indemnify its directors and officers to the fullest extent permitted by Florida
law. Florida law presently provides that in the case of a nonderivative action
(that is, an action other than by or in the right of a corporation to procure a
judgment in its own favor), a corporation has the power to indemnify any person
who was or is a party or is threatened to be made a party to any proceeding by
reason of the fact that the person is or was an agent of the corporation,
against expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with the proceeding if that person acted in
good faith and in a manner the person reasonably believed to be in the best
interests of the corporation and, in the case of a criminal proceeding, had no
reasonable cause to believe that the conduct of the person was unlawful. The
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent does not, of itself, create a
presumption that the person did not act in good faith and in a manner that the
person reasonably believed to be in the best interests of the corporation or
that the person had reasonable cause to believe that the person's conduct was
unlawful.
With respect to derivative actions, Florida law provides that a corporation has
the power to
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indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was an agent of the corporation, against expenses actually and
reasonably incurred by that person in connection with the defense or settlement
of the action if the person acted in good faith, in a manner the person believed
to be in the best interests of the corporation and its shareholders.
Indemnification is not permitted to be made in respect of any claim, issue, or
matter as to which the person shall have been adjudged to be liable to the
corporation in the performance of that person's duty to the corporation and its
shareholders, unless and only to the extent that the court in which the
proceeding is or was pending determines that, in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnity for
expenses, and then only to the extent that the court shall determine.
ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE COMPANY'S POISON PILL PLAN,
THE EQUITY INCENTIVE PLAN, AND FLORIDA LAW
POISON PILL.
On November 30, 1999, the Board of Directors (the "Board") of iCrown Corporation
(the "Company") declared a dividend of one purchase warrant (a "warrant") for
every outstanding share of the Company's Common Stock, $.0001 par value (the
"Common Stock"). The Warrants will be distributed on December 30, 1999 to
stockholders of record as of the close of business on that date (the "Dividend
Record Date"). The terms of the Warrants are set forth in the Warrants Agreement
dated as of November 30, 1999, (the "Warrants Agreement") between the Company
and North American Transfer Co., as Warrants Agent (the "Warrants Agent"). The
Warrants Agreement provides for the issuance of one Warrant for every share of
Common Stock issued and outstanding on the Dividend Record Date and for each
share of Common Stock which is issued or sold after that date and prior to the
"Distribution Date" (as defined below).
Each Warrant entitles the holder to purchase from the Company one share
of Common Stock at a price of $.10 per share, subject to adjustment. The
Warrants will expire on December 30, 2009 (the "Expiration Date"), or the
earlier redemption of the Warrants, and are not exercisable until the
Distribution Date.
No separate Warrants certificates will be issued at the present time.
Until the Distribution Date (or earlier redemption or expiration of the
Warrants), (i) the Warrants will be evidenced by the Common Stock certificates
and will be transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after the Dividend Record Date upon
transfer or new issuance of the Company's Common Stock will contain a notation
incorporating the Warrants Agreement by reference and (iii) the surrender for
transfer of any of the Company's Common Stock certificates will also constitute
the transfer of the Warrants associated with the Common Stock represented by
such certificate.
The Warrants will separate from the Common Stock and Warrants
certificates will be issued on the Distribution Date. Unless otherwise
determined by a majority of the Board then in office, the
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Distribution Date will occur on the earlier of (i) the tenth business day
following the later of the date of a public announcement that a person,
including affiliates or associates of such person (an "Acquiring Person"),
except as described below, has acquired or obtained the Warrant to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock or
the date on which an executive officer of the Company has actual knowledge that
an Acquiring Person became such (the "Stock Acquisition Date") or (ii) the tenth
business day following commencement of a tender offer or exchange offer that
would result in any person together with its affiliates and associates owning
15% or more of the Company's outstanding Common Stock. In any event, the Board
of Directors may delay the distribution of the certificates. After the
Distribution Date, separate certificates evidencing the Warrants ("Warrant
Certificates") will be mailed to holders of record of the Company's Common Stock
as of the close of business on the Distribution Date and such separate Warrants
Certificates alone will evidence the Warrants.
If, at any time after December 30, 1999, any person or group of
affiliated or associated persons (other than the Company and its affiliates)
shall become an Acquiring Person, each holder of a Warrant will have the Warrant
to receive shares of the Company's Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a market value of one
hundred times the exercise price of the Warrant. Also, in the event that after
the Stock Acquisition Date the Company was acquired in a merger or other
business combination, or more than 25% of its assets or earning power was sold,
each holder of a Warrant would have the Warrant to exercise such Warrant and
thereby receive common stock of the acquiring company with a market value of one
hundred times the exercise price of the Warrant. Following the occurrence of any
of the events described in this paragraph, any Warrants that are, or (under
certain circumstances specified in the Warrants Agreement) were, beneficially
owned by any Acquiring Person shall immediately become null and void.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Warrants for shares of Common Stock at an exchange ratio of one share of Common
Stock per Warrant, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after November 30, 1999 (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). The Board,
however, may not effect an exchange at any time after any person (other than (i)
the Company, (ii) any subsidiary of the Company, (iii) any employee benefit plan
of the Company or any subsidiary of the Company or (iv) any entity holding
Common Stock for or pursuant to the terms of any such plan), together with all
affiliates of such person, becomes the beneficial owner of 50% or more of the
Common Stock then outstanding. Immediately upon the action of the Board ordering
the exchange of any Warrants and without any further action and without any
notice, the Warrant to exercise such Warrants will terminate and the only
Warrant thereafter of a holder of such Warrants will be to receive that number
of shares of Common Stock equal to the number of such Warrants held by the
holder multiplied by the Exchange Ratio.
The exercise price of the Warrants, and the number of shares of Common
Stock or other securities or property issuable upon exercise of the Warrants are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or
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reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain Warrants or warrants to subscribe for shares of the
Common Stock or convertible securities at less than the current market price of
the Common Stock or (iii) upon the distribution to holders of the Common Stock
of evidences of indebtedness or assets (excluding cash dividends paid out of the
earnings or retained earnings of the Company and certain other distributions) or
of subscription Warrants (other than those referred to above).
At any time prior to the earlier of the Distribution Date or the Close
of Business on the Expiration Date, the Company, by a majority vote of the Board
then in office, may redeem the Warrants at a redemption price of $.01 per
Warrant (the "Redemption Price"), as described in the Warrants Agreement.
Immediately upon the action of the Board electing to redeem the Warrants, the
Warrant to exercise the Warrants will terminate and the only right of the
holders of Warrants will be to receive the Redemption Price.
Until a Warrant is exercised, the holder thereof, as such, will have no
Warrants as a stockholder of the Company, including, without limitation, the
Warrant to vote or to receive dividends.
The Warrants Agreement may be amended by the Board at any time prior to
the Distribution Date without the approval of the holders of the Warrants. From
and after the Distribution Date, the Warrants Agreement may be amended by the
Board without the approval of the holders of the Warrants in order to cure any
ambiguity, to correct any defective or inconsistent provisions, to change any
time period for redemption or any other time period under the Warrants Agreement
or to make any other changes that do not adversely affect the interests of the
holders of the Warrants (other than any Acquiring Person or its affiliates and
associates, or their transferees).
The form of Warrants Agreement dated as of December 30, 1999, between
the Company and North American Transfer Co., as Warrants Agent, specifying the
terms of the Warrants (including as exhibits the form of the Warrants
Certificate and the Summary of Warrants) is attached hereto as an exhibit. The
foregoing description of the Warrants does not purport to be complete and is
qualified in its entirety by reference to the Warrants Agreement, which is
incorporated herein by reference.
EQUITY INCENTIVE PLAN
Additionally, the company's Equity Incentive Plan allows for all
options and awards in the company's equity to vest upon a "change in control" as
defined by the plan.
FLORIDA LAW
The laws of the State of Florida, where the company's principal
executive offices are located, impose restrictions on certain transactions
between certain foreign corporations and significant stockholders. Florida
Statutes 607.0901 to 607.0903 is an "affiliated transaction" statute which
prevents certain hostile and coercive merger devices. An affiliated transaction
is a significant transaction (e.g., merger, a sale of more than 5% of the
assets, issuance of an additional 5% of stock,
24
<PAGE>
or dissolution) with a shareholder who owns more than 10% of the outstanding
stock of a company. In additional to any approval required by law, the company
charter, or by the interests given to either bondholders to stockholders by
operation of an agreement, an affiliated transaction must also be approved by
either a majority of the corporations disinterested directors, or two thirds of
the remaining disinterested shareholders. There are three exceptions to this
rule. First, the affiliated transaction statute can be avoided if the minimum
price paid to the shareholders is at least equal to the highest price paid by an
interested shareholder in the past two years. Second, if the interested
shareholder has owned more than 80% of the corporation's outstanding shares for
at least five years before the affiliated transaction occurs, the statute does
not apply. Third, the statute would not apply if the interested shareholder
owned more than 90% of the outstanding shares when the affiliated transaction
occurs. Additionally, a corporation may elect to opt out of the statute; iCrown
has not yet chosen this option.
TRANSFER AGENT. North American Transfer Co., has been appointed the transfer
agent of the Company's Common Stock and Preferred Stock.
Exchange and Nasdaq Listing
The Company plans on applying for a listing on the NASDAQ system
immediately upon completion of this offering. In the meantime, the Company has
made an initial application for listing on the Chicago Stock Exchange under the
symbol "ICRC".
25
<PAGE>
iCROWN CORPORATION
(a development stage company)
NOVEMBER 30, 1999
INDEX TO FINANCIAL STATEMENT
Pages
-----
Report of Independent Certified Public Accountants F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
iCrown Corporation
We have audited the accompanying balance sheet of iCrown Corporation (a
development stage company) as of November 30, 1999, and the related statements
of income, changes in stockholders' equity and cash flows for the period
November 8, 1999 (inception) to November 30, 1999. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based upon audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of iCrown Corporation, (a
development stage company) as of November 30, 1999, and the results of its
operations and cash flows for the period from November 8, 1999 (inception) to
November 30, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statement have been prepared assuming the Company
will continue as a going concern. However, the Company has minimal capital
resources presently available to meet obligations, which normally can be
expected to be incurred by similar companies, and with which to carry out
planned activities. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are discussed in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Sweeney Gates & Co.
West Palm Beach, Florida
December 1, 1999
F-2
<PAGE>
iCrown Corporation
(a development stage company)
BALANCE SHEET
NOVEMBER 30, 1999
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
Current Assets:
Cash $ 1,000
-------
Total current assets 1,000
-------
$ 1,000
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ --
-------
Total current liabilities --
-------
Stockholders' equity:
Preferred stock, $.0001 value, 50,000, 000 shares
Authorized, none issued and outstanding --
Common stock, $.0001 par value, 300,000,000 shares authorized,
2,000,000 shares issued and outstanding 200
Additional paid-in capital 1,400
Deficit accumulated during the development stage (600)
-------
Total stockholders' equity 1,000
-------
$ 1,000
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
ICROWN CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
November 8
1999
(inception)
through
November 30
1999
-----------
<S> <C>
Revenues $ --
General and administrative expenses 600
-----------
Net loss $ (600)
===========
Loss per share of common stock, basic and diluted $ --
-----------
Weighted average number of common shares outstanding 2,000,000
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
ICROWN CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
PREFERRED STOCK COMMON STOCK ADDITIONAL DURING THE
------------------ ----------------------- PAID-IN DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL STAGE TOTALS
-------- -------- --------- --------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at November 8, 1999, -- $ -- -- $ -- $ -- $ -- $ --
(inception)
Issuance stock -- -- 2,000,000 200 800 -- 1,000
Contribution to capital -- -- -- -- 600 600
Net loss -- -- -- -- -- (600) (600)
-------- -------- --------- --------- -------- -------- -------
Balance, November 30, 1999 -- $ -- 2,000,000 200 $ 1,400 $ (600) $ 1,000
======== ======== ========= ========= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
ICROWN CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
November 8,
1999
(inception)
through
November 30,
1999
-----------
Cash flows from operating activities:
Net loss $ (600)
-------
Net cash used in operating activities 600
-------
Cash flows from financing activities:
Proceeds from issuance of common stock 200
Proceeds from additional paid-in capital 1,400
-------
Net cash provided by financing activities 1,600
-------
Net increase in cash 1,000
Cash at beginning of period --
-------
Cash at end of period $ 1,000
=======
Supplemental disclosures:
Cash paid for interest during the period $ --
-------
Cash paid for income tax during the period $ --
-------
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
ICROWN CORPORATION
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -iCrown Corporation (the "Company") was incorporated in the State
of Florida on November 8, 1999.
DEVELOPMENT STAGE ACTIVITIES - The Company has been in the development stage
since its inception. It has conducted no business other than to organize as a
corporation. It intends to seek and acquire merger partners that have ongoing
operations.
INCOME TAXES - The Company accounts for income taxes on an asset and liability
approach to financial accounting. Deferred income tax assets and liabilities are
computed annually for the difference between the financial statement and tax
basis of assets and liabilities that will result in taxable or deductible
amounts in the future, based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized. Income tax expense is the tax
payable or refundable for the period, plus or minus the change during the period
in deferred tax assets and liabilities. The Company has made no provision for
taxes because there has not been any taxable profit or losses since its
inception.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
LOSS PER SHARE - Financial Accounting Standards No. 128, "Earnings per Share"
("FAS 128"), requires presentation of earnings or loss per share on basic and
diluted earnings per share. The company has potentially dilutive shares;
however, because the Company has a loss, the shares are deemed anti-dilutive.
Loss per share is computed by dividing net income by the weighted average number
of shares outstanding during the period.
ORGANIZATION COSTS - In April 1998, the Accounting Standards Executive Committee
released Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"). SOP 98-5 requires that start-up costs, including
organizational costs, be expensed as incurred. The Company expensed all start-up
costs.
2. GOING CONCERN CONTINGENCY
The Company has minimal capital available to meet future obligations and to
carry out its
F-7
<PAGE>
planned operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern.
In order to begin any significant operations, the Company will have to pursue
other sources of capital, such as raising equity as discussed in Note 4. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
3. CAPITALIZED AND SALE OF STOCK
The Company has authorized the issuance of preferred stock. The rights and
provisions of the preferred stock will be set by the board of directors at the
time the stock is issued.
The Company's issued 2,000,000 shares of common stock for $1000. At the same
time, the purchaser of the stock contributed to capital $600 for organizational
expenses.
The Company has authorized an antitakover plan. On November 30, 1999, the board
of directors declared a dividend of one purchase warrant for every outstanding
share of the Company's common stock to be distributed on December 30, 1999 to
stockholders of record on that date. Each warrant entitles the holder to
purchase from the Company one share of common stock at a price of $.10 per
share, subject to adjustment. The warrants will expire on December 30, 2009. The
warrants will separate from the common stock and warrant certificates will be
issued on the distribution date defined as the earlier of (i) the tenth business
day following the later of the date of public announcement that a person has
acquired beneficial interest of 15% or more of the outstanding shares of common
stock or (ii) the tenth business day after the announcement of a tender offer
for 15% or more of the outstanding common stock.
4. SUBSEQUENT EVENTS
Subsequent to the balance sheet date, the Company expects to file a registration
statement with the Securities and Exchange Commission to offer units consisting
of 2,000,000 additional shares of common stock and 2,000,000 warrants. The
warrants are exercisable at $15 per share during the nine months period after
the date of the filing and $20 thereafter. The warrants expire on the fifth
anniversary date of the filing. These shares being registered are to be used in
an exchange offer for securities of public companies.
F-8
<PAGE>
LEGAL MATTERS
The legality of the Common Stock being offered hereby will be passed
upon for the Company by Hackney & Miller, P.A., Admiralty Office Tower Two, 4400
PGA Boulevard, Suite 505, Palm Beach Gardens, FL 33410.
EXPERTS
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THAT CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
2,000,000 UNITS
iCROWN, INC.
COMMON STOCK AND
CLASS A COMMON STOCK PURCHASE WARRANTS
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Florida Statute Section 607.0850 provides that a corporation may
indemnify directors and officers, as well as other employees and agents, along
with a director, officer, employee or agent against of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses
incurred in legal proceedings connected with their service to the corporation,
if he or she acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to, the best interests of the corporation and, had no
reasonable cause to believe his or her conduct was unlawful.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
3.0 Articles of Incorporation
3.1 Articles of Amendment to Articles of Incorporation
3.2 Bylaws
4.0 Specimen Stock Certificate
4.1 Form of Class A Common Stock Purchase Warrant Agreement
4.2 Form of Warrant Agreement
5.0 Legal Opinion
10.0 Lease Agreement
10.1 Investment Advisory Agreement with Crown Capital
Advisors, Inc.
10.2 iCrown Corporation 1999 Equity Incentive Plan
23.1 Consent of Sweeny Gates & Co., independent certified
public accountants
23.2 Consent of Hackney & Miller, P.A. (included in Exhibit 5.0)
(b) Financial Statement Schedules
Not Applicable
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes as follows:
(1) Prior to any public reoffering of the securities registered
hereunder through use of a prospectus that is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
II-1
<PAGE>
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) Every prospectus that (i) is filled pursuant to paragraph (1)
immediately preceding or (ii) purports to meet the requirements of Section
10(a)(3) of the Securities Act of 1933 and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of any
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) The undersigned registrant will deliver or cause to be delivered
with the prospectus, to each person to whom the prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirement of Rule
14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, will deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(5) The registrant will respond to requests for information that is
incorporated by reference into the prospectus pursuant to Item of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first-class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(6) The registrant will supply by means of a post-effective amendment
all information concerning a transaction, and the company being acquired
involved therein, that was not the subject of an included in the registration
statement when it became effective, except where the transaction in which the
securities being offered pursuant to the registration statement would itself
qualify for an exemption under Section 5 of the Securities Act of 1933, absent
the existence of other similar (prior or subsequent) transactions.
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be
II-2
<PAGE>
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by its is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
(8) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(A) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(B) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; and
( C) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement or any
material change to such information in the registration statement.
(9) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(10) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
II-3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant has
caused this registration statement to be signed by the undersigned, thereunto
duly authorized, in the City of Palm Beach Gardens, State of Florida, on
December 10, 1999.
iCrown Corporation
By: /S/DONALD W. MILLER
---------------------------
Donald W. Miller, President
POWER OF ATTORNEY
The undersigned constitute and appoint Donald W. Miller their true and lawful
attorney-in-fact and agent with full power of substitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Form S-4 Registration
Statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting such
attorney-in-fact the full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully and to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorney-in-fact may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated:
Signature Title Date
/S/PETER V. DESANCTIS Director December 10, 1999
- ---------------------
Peter V. DeSanctis
/S/ ROBERT MOREYRA Director December 10, 1999
- ---------------------
Robert Moreyra
/S/ ROBERT C. HACKNEY Secretary/Treasurer December 10, 1999
- --------------------- and Director
Robert C. Hackney
II-4
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
3.0 Articles of Incorporation
3.1 Articles of Amendment to Articles of Incorporation
3.2 Bylaws
4.0 Specimen Stock Certificate
4.1 Form of Class A Common Stock Purchase Warrant Agreement
4.2 Form of Warrant Agreement
5.0 Legal Opinion
10.0 Lease Agreement
10.1 Investment Advisory Agreement with Crown Capital Advisors, Inc.
10.2 iCrown Corporation 1999 Equity Incentive Plan
23.1 Consent of Sweeny Gates & Co., independent certified public accountants
23.2 Consent of Hackney & Miller, P.A. (included in Exhibit 5.0)
EXHIBIT 3.0
ARTICLES OF INCORPORATION
OF
ICROWN CORPORATION
ARTICLE 1. NAME
The name of this corporation is iCROWN CORPORATION.
ARTICLE 2. PURPOSES
The purpose or purposes for which this corporation is organized are:
To acquire and own tangible and intangible assets, including by not limited to
stock or other equity or debt in companies, limited partnerships, limited
liability companies or other such entities.
To acquire by purchase, exchange, gift, bequest, subscription or otherwise, and
to hold, own, mortgage, pledge, hypothecate, sell, assign, transfer, exchange or
otherwise dispose of or deal in or with its own corporate securities or stock or
other securities, including without limitations, any shares of stock, bonds,
debentures, notes, mortgages, or other instruments representing rights or
interests therein or any property or assets created or issued by any person,
firm, association or corporation, or any government or subdivisions, agencies or
instrumentalities thereof; to make payment therefore in any lawful manner or to
issue in exchange therefore its own securities or to use its unrestricted or
intention that the purposes specified in each of the paragraphs of this Article
2 shall be regarded as independent purposes and powers.
To do each and every thing necessary, suitable or proper for the accomplishment
of any of the purposes or the attainment of any one or more of the subjects
herein enumerated, or which may at any time appear conducive to or expedient for
the protection or benefit of this corporation, and to do said acts as fully and
to the same extent as natural persons might, or could do, in any part of the
world as principals, agents, partners, trustees or otherwise, either alone or in
conjunction with any other persons, association or corporation.
To transact any and all lawful business for which corporations may be
incorporated under the Florida General Corporation Act.
The foregoing clauses shall be construed both as purposes and powers, and shall
not be held to limit or restrict in any manner the general powers of the
corporation, and the enjoyment and exercise thereof, as conferred by Laws of the
State of Florida; and it is the intention that the purposes and powers specified
in each of the paragraphs of this Article 2 shall be regarded as independent
purposes and powers.
<PAGE>
ARTICLE 3. REGISTERED OFFICE; REGISTERED AGENT
The address of the initial registered office of the corporation is 4400 PGA
Boulevard, Suite 307, Palm Beach Gardens, Florida 33410 and the name of its
initial registered agent at such address is Joel M. McTague.
ARTICLE 4. PRINCIPAL OFFICE
The business address of the corporation's principal office is 4400 PGA
Boulevard, Suite 307, Palm Beach Gardens, Florida 33410.
ARTICLE 5. DURATION
The period of this corporation's duration is perpetual.
ARTICLE 6. DIRECTORS AND OFFICERS
6.1 Number; Initial Directors
The number of directors constituting the initial board of directors is two, and
the names and addresses of the persons who are to serve as a director until the
first annual meeting of the shareholders or until their successors are elected
and qualified are:
NAME ADDRESS
---- -------
Robert Hackney 4400 PGA Boulevard, Suite 307
Palm Beach Gardens, Florida 33410
Donald Miller 4400 PGA Boulevard, Suite 307,
Palm Beach Gardens, Florida 33410
6.2 Changes in Authorized Number of Directors
The number of directors of the corporation set forth in Section 6.1 of this
Article shall constitute the authorized number of directors until changed by an
amendment of these articles of incorporation or by a bylaw duly adopted by the
vote or written consent of the holders of a majority of the then outstanding
shares of stock in the corporation.
6.3 Powers of Directors
Subject to the limitations contained in the articles of incorporation and the
Florida General Corporation Act concerning corporate action that must be
authorized or approved by the shareholders of the corporation, all corporate
powers shall be exercised by or under the authority of the board of directors,
and the business and affairs of the corporation shall be controlled by the
board.
The board of directors shall delegate, to the extent that it considers
necessary, any portion of its authority to manage, control, and conduct the
current business of the company, to any standing or
2
<PAGE>
special committee of the corporation or to any officer or agent thereof.
Notwithstanding any delegation of authority that the board may make hereunder,
it shall exercise general supervision over the officers and agents of the
corporation and shall be responsible to the shareholders for the proper
performance of their respective duties.
6.4 Removal of Directors and Officers
Any officer elected or appointed by the board of directors, or by the Executive
Committee, or by the shareholders, or any member of the Executive Committee, or
of any other standing committee, or any director of this corporation may be
removed at any time, with or without cause, in such manner as shall be provided
in the bylaws of this corporation.
6.5 Voting for Directors
In all elections of directors of this corporation, each shareholder has the
right to cast as many votes as equal the number of shares held by the
shareholder multiplied by the number of directors to be elected, and the
shareholder may cast all of such votes for a single director or may distribute
them among the number of directors to be elected, or any two or more of them, as
such shareholder may see fit. This Section 6.5 may be amended only by a vote of
all of the outstanding shares of stock of the corporation.
ARTICLE 7. INCORPORATOR
The name and address of the incorporator is:
NAME ADDRESS
---- -------
Donald Miller 4400 PGA Boulevard, Suite 307
Palm Beach Gardens, Florida 33410
ARTICLE 8. CAPITALIZATION
The total number of shares of common stock which the corporation shall have
authority to issue is 300,000,000 with a $.01 par value. The total number of
shares of preferred stock is 50,000,000, with a par value of $.01, and such
rights and preferences as the Board of Directors from time to time may establish
in one or more separate series of stock. This Article can be amended only by the
vote or written consent of the holders of 100% of the outstanding shares.
ARTICLE 9. SHAREHOLDERS
9.1 Amendment of Bylaws
The board of directors has the power to make, repeal, amend and alter the bylaws
of the corporation, to the extent provided in the bylaws. The paramount power to
repeal, amend and alter the bylaws, or to adopt new bylaws, however, is vested
in the shareholders. This power may be exercised by a vote of all of the
shareholders present at any annual or special meeting of the shareholders.
Moreover, the directors have no power to suspend, repeal, amend or otherwise
alter
3
<PAGE>
any bylaw or portion of any bylaw so enacted by the shareholders, unless the
shareholders, in enacting any bylaw or portion of any bylaw, otherwise provide.
9.2 Personal Liability of Shareholders
The private property of the shareholders of this corporation is not subject to
the payment of corporate debts, except to the extent of any unpaid balance of
subscription for shares.
9.3 Voting Rights
Except as otherwise expressly provided by the law of the State of Florida or
these articles of incorporation, the holders of the common stock shall possess
exclusive voting power for the election of directors and for all other purposes.
Every holder of record of common stock entitled to vote and, except as otherwise
expressly provided in the resolution or resolutions of the board of directors
providing for the issue of a series of preferred stock, every holder of record
of any series of preferred stock at the time entitled to vote, shall be entitled
to one vote for each share held.
9.4 Actions by Written Consent
Whenever the vote of shareholders at a meeting of shareholders is required or
permitted to be taken for or in connection with any corporate action by any
provision of the corporation law of the State of Florida, or of these articles
of incorporation or of the bylaws authorized or permitted by that law, the
meeting and vote of shareholders may be dispensed with if the proposed corporate
action is taken with the written consent of the holders of stock having a
majority of the total number of votes which might have been cast for or in
connection with that action if a meeting were held; provided that in no case
shall the written consent be by the holders of stock having less than the
minimum percentage of the vote required by statute for that action, and provided
that prompt notice is given to all shareholders of the taking of corporate
action without a meeting and by less than unanimous written consent.
ARTICLE 10. AMENDMENTS
The corporation shall be deemed, for all purposes, to have reserved the right to
amend, alter, change or repeal any provision contained in its articles of
incorporation, as amended, to the extent and in the manner now or in the future
permitted or prescribed by statute, and all rights conferred in these articles
upon shareholders are granted subject to that reservation.
ARTICLE 11. REGULATION OF BUSINESS AND AFFAIRS OF CORPORATION
11.1 Powers of Board of Directors
(a) In furtherance and not in limitation of the powers conferred upon the board
of directors by statute, the board of directors is expressly authorized, without
any vote or other action by shareholders other than such as at the time shall be
expressly required by statute or by the provisions of these articles of
incorporation, as amended, or of the bylaw, to exercise all of the powers,
rights and privileges of the corporation (whether expressed or implied in these
articles or conferred by statute) and to do all acts and things which may be
done by the corporation, including, without limiting the generality of the
above, the right
4
<PAGE>
(i) Pursuant to a provision of the bylaw, by resolution adopted by a majority of
the actual number of directors elected and qualified, to designate from among
its members an executive committee and one or more other committees, each of
which, to the extent provided in that resolution or in the bylaw, shall have and
exercise all the authority of the board of directors except as otherwise
provided by law;
(ii) To make, alter, amend or repeal bylaw for the corporation;
(iii) To authorize the issuance from time to time of all or any shares of the
corporation, now or in the future authorized, part paid receipts or allotment
certificates in respect of any such shares, and any securities convertible into
or exchangeable for any such shares (regardless of whether those shares,
receipts, certificates or securities be unissued or issued and subsequently
acquired by the corporation), in each case to such corporations, associations,
partnerships, firms, individuals or others (without offering those shares or any
part of them to the holders of any shares of the corporation of any class now or
in the future authorized), and for such consideration (regardless of whether
more or less than the par value of the shares), and on such terms as the board
of directors from time to time in its discretion lawfully may determine;
(iv) From time to time to create and issue rights or options to subscribe for,
purchase or otherwise acquire any shares of stock of the corporation of any
class now or in the future authorized or any bonds or other obligations or
securities of the corporation (without offering the same or any part of them to
the holders of any shares of the corporation of any class now or in the future
authorized);
(v) In furtherance and not in limitation of the provisions of the above
subdivisions (iii) and (iv), from time to time to establish and amend plans for
the distribution among or sale to any one or more of the officers or employees
of the corporation, or any subsidiary of the corporation, of any shares of stock
or other securities of the corporation of any class, or for the grant to any of
such officers or employees of rights or options to subscribe for, purchase or
otherwise acquire any such shares or other securities, without in any case
offering those shares or any part of them to the holders of any shares of the
corporation of any class now or in the future authorized; such distribution,
sale or grant may be in addition to or partly in lieu of the compensation of any
such officer or employee and may be made in consideration for or in recognition
of services rendered by the officer or employee, or to provide them with an
incentive to serve or to agree to serve the corporation or any subsidiary of the
corporation, or otherwise as the board of directors may determine; and
(vi) To sell, lease, exchange, mortgage, pledge, or otherwise dispose of or
encumber all or any part of the assets of the corporation unless and except to
the extent otherwise expressly required by statute.
(b) The board of directors, in its discretion, may from time to time
(i) Declare and pay dividends upon the authorized shares of stock of the
corporation out of any assets of the corporation available for dividends, but
dividends may be declared and paid upon shares issued as partly paid only upon
the basis of the percentage of the consideration actually paid on those shares
at the time of the declaration and payment;
5
<PAGE>
(ii) Use and apply any of its assets available for dividends in purchasing or
acquiring any of the shares of stock of the corporation; and
(iii) Set apart out of its assets available for dividends such sum or sums as
the board of directors may deem proper, as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for maintaining or increasing the
property or business of the corporation, or for any other purpose it may deem
conducive to the best interests of the corporation. The board of directors in
its discretion at any time may increase, diminish or abolish any such reserve in
the manner in which it was created.
11.2 Approval of Interested Director or Officer Transactions
No contract or transaction between the corporation and one or more of its
directors or officers, or between the corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the board or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose, if:
1. The material facts as to his interest and as to the contract or transaction
are disclosed or are known to the board of directors or the committee, and the
board or committee in good faith authorizes the contract or transaction by a
vote sufficient for such purpose without counting the vote of the interested
director or directors; or
2. The material facts as to his interest and as to the contract or transaction
are disclosed or are known to the shareholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
shareholders; or
3. The contract or transaction is fair as to the corporation as of the time it
is authorized, approved or ratified, by the board of directors, a committee
thereof, or the shareholders. Interested directors may be counted in determining
the presence of a quorum at a meeting of the board of directors or of a
committee which authorizes the contract or transaction.
11.3 Indemnification
(a) The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fee),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a
6
<PAGE>
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such other
court shall deem proper.
(c) To the extent that any person referred to in paragraphs (a) and (b) of this
article has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to therein or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of this article (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b) of this
article. Such determination shall be made (a) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (b) if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the shareholders.
(e) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the board of directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as provided
in this article.
(f) The indemnification provided by this article shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled under
any statute, bylaw, agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
7
<PAGE>
(g) The corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him/her in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article 11.
(h) For the purposes of this article, references to "the corporation" include
all constituent corporations absorbed in a consolidation or merger as well as
the resulting or surviving corporation so that any person who is or was a
director, officer, employee or agent of such a constituent corporation or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise shall stand in the same position under the provisions
of this section with respect to the resulting or surviving corporation as he
would if he had served the resulting or surviving corporation in the same
capacity.
For the purpose of forming a corporation under the laws of the State of Florida,
the undersigned, has personally executed these articles of incorporation on this
___ day of _________, 1999.
- -----------------------------------
Donald Miller, Incorporator
HAVING BEEN NAMED AS REGISTERED AGENT AND TO ACCEPT SERVICE OF PROCESS FOR THE
ABOVE STATED CORPORATION AT THE PLACE DESIGNATED IN THIS CERTIFICATE, I HEREBY
ACCEPT THE APPOINTMENT AS REGISTERED AGENT AND AGREE TO ACT IN THIS CAPACITY. I
FURTHER AGREE TO COMPLY WITH THE PROVISIONS OF ALL STATUTES RELATING TO THE
PROPER AND COMPLETE PERFORMANCE OF MY DUTIES, AND I AM FAMILIAR WITH AND ACCEPT
THE OBLIGATIONS OF MY POSITION AS REGISTERED AGENT.
- ----------------------------------------- ------------------------------------
Signature/Registered Agent Date
8
<PAGE>
STATE OF FLORIDA
COUNTY OF PALM BEACH
The foregoing Articles of Incorporation were acknowledged before me by
__________________ who produced his ____________________ as identification this
the ____ day of _______________________________________, 1999.
- --------------------------------------------
Notary Public
State of Florida
9
EXHIBIT 3.1
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
OF
ICROWN CORPORATION
1. The following provision of the Articles of Incorporation of iCrown
Corporation., a Florida corporation (the "Company") filed in Tallahassee on
November 8, 1999 as Document P99000098249, and pursuant to the Florida Business
Corporation Act, be and hereby is amended to read as follows:
ARTICLE 8 - CAPITALIZATION
The total number of shares of common stock which the corporation shall have
authority to issue is 300,000,000 with a par value of $.0001. The total number
of shares of preferred stock is 50,000,000, with a par value of $.0001, and such
rights and preferences as the Board of Directors from time to time may establish
in one or more separate series of stock.
2. The foregoing amendment was adopted by a majority of the Company's Directors
and Shareholders on the 15th day of November 1999, in accordance with the
provisions of the Florida Business Corporation Act.
IN WITNESS WHEREOF, the undersigned President of the Company has executed these
Articles of Amendment on the 23rd day of November, 1999.
iCROWN CORPORATION
----------------------------------------
Donald W. Miller, President
STATE OF FLORIDA
COUNTY OF PALM BEACH
On this 23rd day of November, 1999, before me, a Notary Public, duly
authorized in the State and County named above to take acknowledgments,
personally appeared Donald W. Miller, to me known to be the person whose name is
subscribed to the within
<PAGE>
instrument, and he acknowledged that he executed the same for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------------
Notary Public - State of Florida
My Commission Expires:
2
EXHIBIT 3.2
BYLAWS
OF
iCROWN CORPORATION
DATED NOVEMBER 8, 1999
ARTICLE I. MEETING OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the
shareholders of this corporation shall be held on the 5th day of March of each
year or at such other time and place designated by the Board of Directors of the
corporation. Business transacted at the annual meeting shall include the
election of directors of the corporation. If the designated day shall fall on a
Sunday or legal holiday, then the meeting shall be held on the first business
day thereafter.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
shareholders shall be held when directed by the President or the Board of
Directors, or when requested in writing by the holders of not less than 10% of
all the shares entitled to vote at the meeting. A meeting requested by
shareholders shall be called for a date not less than 10 nor more than 60 days
after the request is made, unless the shareholders requesting the meeting
designate a later date. The call for the meeting shall be issued by the
Secretary, unless the President, Board of Directors, or shareholders requesting
the meeting shall designate another person to do so.
SECTION 3. PLACE. Meetings of shareholders shall be held at
the principal place of business of the corporation or at such other place as may
be designated by the Board of Directors.
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SECTION 4. NOTICE. Written notice stating the place, day and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than 10
nor more than 60 days before the meeting, either personally or by first class
mail, by or at the direction of the President, the Secretary or the officer or
persons calling the meeting to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid.
SECTION 5. NOTICE OF ADJOURNED MEETING. When a meeting is
adjourned to another time or place, it shall not be necessary to give any notice
of the adjourned meeting if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken, and the
adjourned meeting any business may be transacted that might have been transacted
on the original date of the meeting. If, after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, however, a notice
of the adjourned meeting shall be given as provided in this Article to each
shareholder of record on the new record date entitled to vote at such meeting.
SECTION 6. SHAREHOLDER QUORUM AND VOTING. A majority of the
shares entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders.
If a quorum is present, the affirmative vote of a majority of
the shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
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SECTION 7. VOTING OF SHARES. Each outstanding share shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.
SECTION 8. PROXIES. A shareholder may vote either in person or
by proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact. No proxy shall be valid after the duration of eleven (11)
months from the date thereof unless otherwise provided in the proxy.
SECTION 9. ACTION BY SHAREHOLDERS WITHOUT A MEETING. Any
action required by law, these bylaws, or the Articles of Incorporation of this
corporation to be taken at any annual or special meeting of shareholders, or any
action which may be taken at any annual or special meeting of shareholders, may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted, as is provided by
law.
ARTICLE II. DIRECTORS
SECTION 1. FUNCTION. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the corporation
shall be managed under the direction of, the Board of Directors.
SECTION 2. QUALIFICATION. Directors shall not be required to
be residents of this state and shall not be required to be shareholders of this
corporation.
SECTION 3. COMPENSATION. The Directors at a Board meeting
shall have authority to fix the compensation of directors.
iii
<PAGE>
SECTION 4. PRESUMPTION OF ASSENT. A director of the
corporation who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have assented to
the action taken unless he votes against such action or abstains from voting in
respect thereto because of an asserted conflict of interest.
SECTION 5. NUMBER. This corporation shall have four directors.
SECTION 6. ELECTION AND TERM. Each person named in the
Articles of Incorporation as a member of the initial Board of Directors shall
hold office until the first annual meeting of shareholders, and until his
successor shall have been elected and qualified or until his earlier
resignation, removal from office or death.
At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors of hold office until
the next succeeding annual meeting. Each director shall hold office for a term
for which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
SECTION 7. VACANCIES. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase in the number
of directors, may be filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board of Directors. A
director elected to fill a vacancy shall hold office only until the next
election of directors by the shareholders.
SECTION 8. REMOVAL OF DIRECTORS. At a meeting of shareholders
called expressly for that purpose, any director or the entire Board of Directors
may be removed,
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with or without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
SECTION 9. QUORUM AND VOTING. A majority of the number of
directors fixed by these bylaws shall constitute a quorum for the transaction of
business. The act of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
SECTION 10. EXECUTIVE AND OTHER COMMITTEES. The Board of
Directors, by resolution adopted by a majority of the full Board of Directors,
may designate from among its members an executive committee and one or more
other committees each of which, to the extent provided in such resolution shall
have and may exercise all the authority of the Board of Directors, except as is
provided by law.
SECTION 11. PLACE OF MEETING. Regular and special meetings of
the Board of Directors shall be held within the State of Florida.
SECTION 12. TIME, NOTICE AND CALL OF MEETINGS. Regular
meetings of the Board of Directors shall be held without notice on the second
Tuesday of each January, April, July & October. Written notice of the time and
place of special meetings of the Board of Directors shall be given to each
director by either personal delivery, telegram or cablegram at least days before
the meeting or by notice mailed to the director at least five days before the
meeting.
Notice of a meeting of the Board of Directors need not be
given to any director who signs a waiver of notice either before or after the
meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of such meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting, or the manner
v
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in which it has been called or convened, except when a director states, at the
beginning of the meeting, any objection to the transaction of business because
the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors to another time and
place. Notice of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and, unless the time and place
of the adjourned meeting are announced at the time of the adjournment, to the
other directors.
Meetings of the Board of Directors may be called by the
chairman of the board, by the president of the corporation or by any two
directors.
Members of the Board of Directors may participate in a meeting
of such board by means of a conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
SECTION 13. ACTION WITHOUT A MEETING. Any action required to
be taken at a meeting of the Board of Directors, or any action which may be
taken at a meeting of the Board of Directors or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, signed by all the directors, or all the members of the committee, as
the case may be, is filed in the minutes of the proceedings of the board or of
the committee. Such consent shall have the same effect as a unanimous vote.
vi
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ARTICLE III. OFFICERS
SECTION 1. OFFICERS. The officers of this corporation shall
consist of a president, a secretary and a treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers
and agents as may be deemed necessary may be elected or appointed by the Board
of Directors from time to time. Any two or more offices may be held by the same
person.
SECTION 2. DUTIES. The officers of this corporation shall have
the following duties: The President shall be the chief executive officer of the
corporation, shall have general and active management of the business and
affairs of the corporation subject to the directions of the Board of Directors,
and shall preside at all meetings of the shareholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the
corporate records except the financial records; shall record the minutes of all
meetings of the shareholders and Board of Directors, send all notices of all
meetings and perform such other duties as may be prescribed by the Board of
Directors or the President.
The Treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of receipts and
disbursements and render accounts thereof at the annual meetings of shareholders
and whenever else required by the Board of Directors or the President, and shall
perform such other duties as may be prescribed by the Board of Directors or the
President.
vii
<PAGE>
SECTION 3. REMOVAL OF OFFICERS. An officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any vacancy in any office may be filed by the Board of
Directors.
ARTICLE IV. STOCK CERTIFICATES
SECTION 1. ISSUANCE. Every holder of shares in this
corporation shall be entitled to have a certificate representing all shares to
which he is entitled. No certificate shall be issued for any share until such
share is fully paid.
SECTION 2. FORM. Certificates representing shares in this
corporation shall be signed by the President or Vice President and the Secretary
or an Assistant Secretary and may be sealed with the seal of this corporation or
a facsimile thereof.
SECTION 3. TRANSFER OF STOCK. The corporation shall register a
stock certificate presented to it for transfer if the certificate is properly
endorsed by the holder of record or by his duly authorized attorney.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. If the
shareholder shall claim to have lost or destroyed a certificate of shares issued
by the corporation, a new certificate shall be issued upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed, and, at the discretion of the Board of Directors,
upon the deposit of a bond or other indemnity in such amount and with such
sureties, if any, as the board may reasonably require.
viii
<PAGE>
ARTICLE V. BOOKS AND RECORDS
SECTION 1. BOOKS AND RECORDS. This corporation shall keep
correct and complete books and records of account and shall keep minutes of the
proceedings of its shareholders, Board of Directors and committees of directors.
This corporation shall keep at its registered office or
principal place of business a record of its shareholders, giving the names and
addresses of all shareholders and the number of the shares held by each.
Any books, records and minutes may be in written form or in
any other form capable of being converted into written form within a reasonable
time.
SECTION 2. SHAREHOLDER'S INSPECTION RIGHTS. Any person who
shall have been a holder of record of shares or of voting trust certificates
therefore at least six months immediately preceding his demand or shall be the
holder of record of, or the holder of record of voting trust certificates for,
at least five percent of the outstanding shares of the corporation, upon written
demand stating the purpose thereof, shall have the right to examine, in person
or by agent or attorney, at any reasonable time or times, for any proper purpose
its relevant books and records of accounts, minutes and records of shareholders
and to make extracts therefrom.
SECTION 3. FINANCIAL INFORMATION. Not later than four months
after the close of each fiscal year, this corporation shall prepare a balance
sheet showing in reasonable detail the financial condition of the corporation as
of the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
ix
<PAGE>
Upon the written request of any shareholder or holder of
voting trust certificates for shares of the corporation, the corporation shall
mail to each shareholder or holder of voting trust certificates a copy of the
most recent such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be
filed in the registered office of the corporation in this state, shall be kept
for at least five years, and shall be subject to inspection during business
hours by any shareholder or holder of voting trust certificates, in person or by
agent.
ARTICLE VI. DIVIDENDS
The Board of Directors of this corporation may, from time to
time, declare and the corporation may pay dividends on its shares in cash,
property or its own shares, except when the corporation is insolvent or when the
payment thereof would render the corporation insolvent, subject to the
provisions of the Florida Statutes.
ARTICLE VII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which
shall be in circular form.
ARTICLE VIII. AMENDMENT
These bylaws may be altered, amended or repealed, and new
bylaws may be adopted, by either the Board of Directors or the shareholders, but
the Board of Directors may not alter, amend or repeal any bylaws adopted by the
shareholders if the
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shareholders specifically prescribe in such bylaw that it shall not be altered,
amended or repealed by the directors.
ARTICLE IX - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by
reason of the fact that he, his testator or intestate representative is or was a
director, officer or employee of the Corporation, or of any Corporation in which
he served as much of the request of the Corporation, shall be indemnified by the
Corporation against the reasonable expenses, including attorneys' fees, actually
and necessarily incurred by him in connection with the defense of such action,
suit or proceedings, or in connection with any appeal therein, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer, director
or employee is liable for negligence or misconduct in the performance of his
duties.
(b) The foregoing right of indemnification shall not be deemed
exclusive of any other rights to which any officer or director or employee may
be entitled apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board, except that in any case where there is no
disinterested majority of the Board available, the amount shall be fixed by
arbitration pursuant to the then existing rules of the American Arbitration
Association.
xi
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The undersigned certifies that that foregoing by-laws are the
amended and restated by-laws of the Corporation.
Dated:_____________________
__________________________________
xii
EXHIBIT 4.0
FORM OF STOCK CERTIFICATE
[FRONT OF SAMPLE STOCK CERTIFICATE]
NUMBER SHARES
SEE REVERSE FOR CERTAIN DEFINITIONS
COMMON STOCK
CUSIP 45104W 10 9
iCROWN CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA
THIS CERTIFIES THAT:
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF $.0001 PAR VALUE
EACH OF
ICROWN CORPORATION
transferable on the books of the Corporation in person or by attorney upon
surrender of this certificate duly endorsed or assigned. This certificate and
the shares represented hereby are subject to the laws of the State of Florida
and to the Articles of Incorporation and Bylaws of the Corporation, as now or
hereafter amended. This certificate is not valid until countersigned by the
Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
DATED: COUNTERSIGNED:
NORTH AMERICAN TRANSFER CO.
147 W. MERRICK RD., FREEPORT, NY 11520
BY:
AUTHORIZED SIGNATURE
[CORPORATION SEAL]
/s/ Robert C. Hackney /s/ Donald W. Miller
SECRETARY PRESIDENT
<PAGE>
[BACK OF SAMPLE STOCK CERTIFICATE]
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT MIN ACT............Custodian................
(Cust) (Minor)
under Uniform Gifts to Minors
Act..............(State)
Additional abbreviations may also be used though not in the above list.
For Valued Received, ___________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares of the stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- --------------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within named Corporation
with full power of substitution in the premises.
Date _______________________
- --------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK
OR TRUST COMPANY OR A MEMBER FIRM OF A NATIONAL OR REGIONAL OR OTHER RECOGNIZED
STOCK EXCHANGE IN CONFORMANCE WITH A SIGNATURE GUARANTEE MEDALLION PROGRAM,
PURSUANT TO S.CE.C. RULE 17AD-15.
FORM OF CLASS A WARRANT AGREEMENT
CLASS A COMMON STOCK PURCHASE WARRANT AGREEMENT
between
iCROWN CORPORATION
and
NORTH AMERICAN TRANSFER CO.
Dated as of November 30, 1999
This Agreement, dated as of November 30, 1999, is between iCrown
Corporation, a Florida corporation (the "Company") and North American Transfer
Company, a New York corporation, (the "Warrant Agent").
The Company, at or about the time that it is entering into this
Agreement, proposes to issue and sell to public investors up to 2,000,000 Units
("Units"). Each Unit consists of one share of Common Stock of the Company
("Common Stock") and one Class A Warrant (collectively, the "Class A Warrants"),
each Class A Warrant exercisable to purchase one share of Common Stock for $15
or $20, upon the terms and conditions and subject to adjustment in certain
circumstances, all as set forth in this Agreement.
The Company wishes to retain the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Class A Warrants to be issued under this Agreement (the "Class A Warrant
Certificates") and the exercise of the Class A Warrants;
The Company and the Warrant Agent wish to enter into this
Agreement to set forth the terms and conditions of the Class A Warrants and the
rights of the holders thereof ("Class A Warrantholders") and to set forth the
respective rights and obligations of the Company and the Warrant Agent. Each
Class A Warrantholder is an intended beneficiary of this Agreement with respect
to the rights of Class A Warrantholders herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
<PAGE>
Section 1. APPOINTMENT OF WARRANT AGENT
The Company appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions in this Agreement and the Warrant
Agent accepts such appointment.
Section 2. DATE, DENOMINATION AND EXECUTION OF CLASS A WARRANT
CERTIFICATES
The Class A Warrant Certificates (and the Form of Election to
Purchase and the Form of Assignment to be printed on the reverse thereof) shall
be in registered form only and shall be substantially of the tenor and purport
recited in Exhibit A hereto, and may have such letters, numbers or other marks
of identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law, or with any rule or regulation made pursuant
thereto, or with any rule or regulation of any stock exchange on which the
Common Stock or the Class A Warrants may be listed or any automated quotation
system, or to conform to usage. Each Class A Warrant Certificate shall entitle
the registered holder thereof, subject to the provisions of this Agreement and
of the Class A Warrant Certificate, to purchase, on or before the close of
business on December 1, 2001 (the "Expiration Date"), one fully paid and
non-assessable share of Common Stock for each Class A Warrant evidenced by such
Class A Warrant Certificate, subject to adjustments as provided in Sections 6
hereof, for $15.00, prior to 9 months after the date of the sale prospectus and
$20.00 thereafter (the "Exercise Price"). Each Class A Warrant Certificate
issued as a part of a Unit offered to the public as described in the recitals,
above, shall be dated November 30, 1999; each other Class A Warrant Certificate
shall be dated the date on which the Warrant Agent receives valid issuance
instructions from the Company or a transferring holder of a Class A Warrant
Certificate or, if such instructions specify another date, such other date.
For purposes of this Agreement, the term "close of business" on
any given date shall mean 5:00 p.m., Eastern time, on such date; provided,
however, that if such date is not a business day, it shall mean 5:00 p.m.,
Eastern time, on the next succeeding business day. For purposes of this
Agreement, the term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in New York, New York are
authorized or obligated by law to be closed.
Each Class A Warrant Certificate shall be executed on behalf of
the Company by the Chairman of the Board or its President or a Vice President,
either manually or by facsimile signature printed thereon, and have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Class A Warrant Certificate shall be manually
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
Class A Warrant Certificate shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof by the
Company, such Class A Warrant Certificate, nevertheless, may be countersigned by
the Warrant Agent, issued and delivered with the same force and effect as though
the person who signed such Class A Warrant Certificate had not ceased to be such
officer of the Company.
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<PAGE>
Section 3. SUBSEQUENT ISSUE OF CLASS A WARRANT CERTIFICATES
Subsequent to their original issuance, no Class A Warrant
Certificates shall be reissued except (i) Class A Warrant Certificates issued
upon transfer thereof in accordance with Section 4 hereof, (ii) Class A Warrant
Certificates issued upon any combination, split-up or exchange of Class A
Warrant Certificates pursuant to Section 4 hereof, (iii) Class A Warrant
Certificates issued in replacement of mutilated,destroyed, lost or stolen Class
A Warrant Certificates pursuant to Section 5 hereof, (iv) Class A Warrant
Certificates issued upon the partial exercise of Class A Warrant Certificates
pursuant to Section 7 hereof, and (v) Class A Warrant Certificates issued to
reflect any adjustment or change in the Exercise Price or the number or kind of
shares purchasable thereunder pursuant to Section 22 hereof. The Warrant Agent
is hereby irrevocably authorized to countersign and deliver, in accordance with
the provisions of said Sections 4, 5, 7 and 22, the new Class A Warrant
Certificates required for purposes thereof, and the Company, whenever required
by the Warrant Agent, will supply the Warrant Agent with Class A Warrant
Certificates duly executed on behalf of the Company for such purposes.
Section 4. TRANSFERS AND EXCHANGES OF CLASS A WARRANT CERTIFICATES
The Warrant Agent will keep or cause to be kept books for
registration of ownership and transfer of the Class A Warrant Certificates
issued hereunder. Such registers shall show the names and addresses of the
respective holders of the Class A Warrant Certificates and the number of Class A
Warrants evidenced by each such Class A Warrant Certificate.
The Warrant Agent shall, from time to time, register the transfer
of any outstanding Class A Warrants upon the books to be maintained by the
Warrant Agent for that purpose, upon surrender of the Class A Warrant
Certificate evidencing such Class A Warrants, with the Form of Assignment duly
filled in and executed with such signature guaranteed by a banking institution
or NASD member and such supporting documentation as the Warrant Agent or the
Company may reasonably require, to the Warrant Agent at its stock transfer
office in Freeport, New York at any time on or before the Expiration Date, and
upon payment to the Warrant Agent for the account of the Company of an amount
equal to any applicable transfer tax. Payment of the amount of such tax may be
made in cash, or by certified or official bank check, payable in lawful money of
the United States of America to the order of the Company.
Upon receipt of a Class A Warrant Certificate, with the Form of
Assignment duly filled in and executed, accompanied by payment of an amount
equal to any applicable transfer tax, the Warrant Agent shall promptly cancel
the surrendered Class A Warrant Certificate and countersign and deliver to the
transferee a new Class A Warrant Certificate for the number of full Class A
Warrants transferred to such transferee; provided, however, that in case the
registered holder of any Class A Warrant Certificate shall elect to transfer
fewer than all of the Class A Warrants evidenced by such Class A Warrant
Certificate, the Warrant Agent in addition shall promptly countersign and
deliver to such registered holder a new Class A Warrant Certificate or
Certificates for the number of full Class A Warrants not so transferred.
Any Class A Warrant Certificate or Certificates may be exchanged
at the option of the holder thereof for another Class A Warrant Certificate or
Certificates of different denominations, of like tenor and representing in the
aggregate the same number of Class A
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<PAGE>
Warrants, upon surrender of such Class A Warrant Certificate or Certificates,
with the Form of Assignment duly filled in and executed, to the Warrant Agent,
at any time or from time to time after the close of business on the date hereof
and prior to the close of business on the Expiration Date. The Warrant Agent
shall promptly cancel the surrendered Class A Warrant Certificate and deliver
the new Class A Warrant Certificate pursuant to the provisions of this Section.
Section 5. MUTILATED, DESTROYED, LOST OR STOLEN CLASS A WARRANT
CERTIFICATES
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
any Class A Warrant Certificate, and in the case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
them of all reasonable expenses incidental thereto, and, in the case of
mutilation, upon surrender and cancellation of the Class A Warrant Certificate,
the Warrant Agent shall countersign and deliver a new Class A Warrant
Certificate of like tenor for the same number of Class A Warrants.
Section 6. ADJUSTMENTS OF NUMBER AND KIND OF SHARES PURCHASABLE
AND EXERCISE PRICE
The number and kind of securities or other property purchasable
upon exercise of a Class A Warrant shall be subject to adjustment from time to
time upon the occurrence, after the date hereof, of any of the following events:
A. In case the Company shall (1) pay a dividend in, or make a
distribution of, shares of capital stock on its outstanding Common Stock, (2)
subdivide its outstanding shares of Common Stock into a greater number of such
shares or (3) combine its outstanding shares of Common Stock into a smaller
number of such shares, the total number of shares of Common Stock purchasable
upon the exercise of each Class A Warrant outstanding immediately prior thereto
shall be adjusted so that the holder of any Class A Warrant Certificate
thereafter surrendered for exercise shall be entitled to receive at the same
aggregate Exercise Price the number of shares of capital stock (of one or more
classes) which such holder would have owned or have been entitled to receive
immediately following the happening of any of the events described above had
such Class A Warrant been exercised in full immediately prior to the record date
with respect to such event. Any adjustment made pursuant to this Subsection
shall, in the case of a stock dividend or distribution, become effective as of
the record date therefor and, in the case of a subdivision or combination, be
made as of the effective date thereof. If, as a result of an adjustment made
pursuant to this Subsection, the holder of any Class A Warrant Certificate
thereafter surrendered for exercise shall become entitled to receive shares of
two or more classes of capital stock of the Company, the Board of Directors of
the Company (whose determination shall be conclusive and shall be evidenced by a
Board resolution filed with the Warrant Agent) shall determine the allocation of
the adjusted Exercise Price between or among shares of such classes of capital
stock.
B. In the event of a capital reorganization or a reclassification
of the Common Stock (except as provided in Subsection A. above or Subsection E.
below), any Class A Warrantholder, upon exercise of Class A Warrants, shall be
entitled to receive, in substitution for the Common Stock to which he would have
become entitled upon exercise immediately prior to such
4
<PAGE>
reorganization or reclassification, the shares (of any class or classes) or
other securities or property of the Company (or cash) that he would have been
entitled to receive at the same aggregate Exercise Price upon such
reorganization or reclassification if such Class A Warrants had been exercised
immediately prior to the record date with respect to such event; and in any such
case, appropriate provision (as determined by the Board of Directors of the
Company, whose determination shall be conclusive and shall be evidenced by a
certified Board resolution filed with the Warrant Agent) shall be made for the
application of this Section 6 with respect to the rights and interests
thereafter of the Class A Warrantholders (including but not limited to the
allocation of the Exercise Price between or among shares of classes of capital
stock), to the end that this Section 6 (including the adjustments of the number
of shares of Common Stock or other securities purchasable and the Exercise Price
thereof) shall thereafter be reflected, as nearly as reasonably practicable, in
all subsequent exercises of the Class A Warrants for any shares or securities or
other property (or cash) thereafter deliverable upon the exercise of the Class A
Warrants.
C. Whenever the number of shares of Common Stock or other
securities purchasable upon exercise of a Class A Warrant is adjusted as
provided in this Section 6, the Company will promptly file with the Warrant
Agent a certificate signed by a Chairman or co-Chairman of the Board or the
President or a Vice President of the Company and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company
setting forth the number and kind of securities or other property purchasable
upon exercise of a Class A Warrant, as so adjusted, stating that such
adjustments in the number or kind of shares or other securities or property
conform to the requirements of this Section 6, and setting forth a brief
statement of the facts accounting for such adjustments. Promptly after receipt
of such certificate, the Company, or the Warrant Agent at the Company's request,
will deliver, by first-class, postage prepaid mail, a brief summary thereof (to
be supplied by the Company) to the registered holders of the outstanding Class A
Warrant Certificates; provided, however, that failure to file or to give any
notice required under this Subsection, or any defect therein, shall not affect
the legality or validity of any such adjustments under this Section 6; and
provided, further, that, where appropriate, such notice may be given in advance
and included as part of the notice required to be given pursuant to Section 12
hereof.
D. In case of any consolidation of the Company with, or merger of
the Company into, another corporation (other than a consolidation or merger
which does not result in any reclassification or change of the outstanding
Common Stock), 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, or
any transaction such that Section 13 of the Warrant Agreement dated November 30,
1999 is triggered, then this Class A Warrant shall be unavailable for redemption
and suspended until the Company shall notify the Transfer Agent that such event
is no longer in existence.
The Warrant Agent shall not be under any responsibility to
determine the correctness of any provision contained in any such supplemental
warrant agreement relating to either the kind or amount of shares of stock or
securities or property (or cash) purchasable by holders of Class A Warrant
Certificates upon the exercise of their Class A Warrants after any such
consolidation, merger, sale or transfer or of any adjustment to be made with
respect thereto, but subject to the provisions of Section 20 hereof, may accept
as conclusive evidence of the
5
<PAGE>
correctness of any such provisions, and shall be protected in relying upon, a
certificate of a firm of independent certified public accountants (who may be
the accountants regularly employed by the Company) with respect thereto.
E. Irrespective of any adjustments in the number or kind of shares
issuable upon exercise of Class A Warrants, Class A Warrant Certificates
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Class A Warrant
Certificates initially issuable pursuant to this Class A Warrant Agreement.
F. The Company may retain a firm of independent public accountants
of recognized standing, which may be the firm regularly retained by the Company,
selected by the Board of Directors of the Company or the Executive Committee of
said Board, and not disapproved by the Warrant Agent, to make any computation
required under this Section, and a certificate signed by such firm shall, in the
absence of fraud or gross negligence, be conclusive evidence of the correctness
of any computation made under this Section.
G. For the purpose of this Section, the term "Common Stock" shall
mean (i) the Common Stock or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par value
to par value. In the event that at any time as a result of an adjustment made
pursuant to this Section, the holder of any Class A Warrant thereafter
surrendered for exercise shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Class A Warrant 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 Common Stock
contained in this Section, and all other provisions of this Agreement, with
respect to the Common Stock, shall apply on like terms to any such other shares.
H. The Company may, from time to time and to the extent permitted
by law, reduce the exercise price of the Class A Warrants by any amount for a
period of not less than 20 days. If the Company so reduces the exercise price of
the Class A Warrants, it will give not less than 15 days' notice of such
decrease, which notice may be in the form of a press release, and shall take
such other steps as may be required under applicable law in connection with any
offers or sales of securities at the reduced price.
Section 7. EXERCISE AND REDEMPTION OF CLASS A WARRANTS
Unless the Class A Warrants have been redeemed as provided in this
Section 7, the registered holder of any Class A Warrant Certificate may exercise
the Class A Warrants evidenced thereby, in whole at any time or in part from
time to time at or prior to the close of business, on the Expiration Date,
subject to the provisions of Section 9, at which time the Class A Warrant
Certificates shall be and become wholly void and of no value. Class A Warrants
may be exercised by their holders or redeemed by the Company as follows:
A. Exercise of Class A Warrants shall be accomplished upon
surrender of the Class A Warrant Certificate evidencing such Class A Warrants,
with the Form of Election to Purchase on the reverse side thereof duly filled in
and executed, to the Warrant Agent at its stock transfer office in Freeport, New
York, together with payment to the Company of the Exercise Price (as
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<PAGE>
of the date of such surrender) of the Class A Warrants then being exercised and
an amount equal to any applicable transfer tax and, if requested by the Company,
any other taxes or governmental charges which the Company may be required by law
to collect in respect of such exercise. Payment of the Exercise Price and other
amounts may be made by wire transfer of good funds, or by certified or bank
cashier's check, payable in lawful money of the United States of America to the
order of the Company. No adjustment shall be made for any cash dividends,
whether paid or declared, on any securities issuable upon exercise of a Class A
Warrant.
B. Upon receipt of a Class A Warrant Certificate, with the Form of
Election to Purchase duly filled in and executed, accompanied by payment of the
Exercise Price of the Class A Warrants being exercised (and of an amount equal
to any applicable taxes or government charges as aforesaid), the Warrant Agent
shall promptly request from the Transfer Agent with respect to the securities to
be issued and deliver to or upon the order of the registered holder of such
Class A Warrant Certificate, in such name or names as such registered holder may
designate, a certificate or certificates for the number of full shares of the
securities to be purchased, together with cash made available by the Company
pursuant to Section 8 hereof in respect of any fraction of a share of such
securities otherwise issuable upon such exercise. If the Class A Warrant is then
exercisable to purchase property other than securities, the Warrant Agent shall
take appropriate steps to cause such property to be delivered to or upon the
order of the registered holder of such Class A Warrant Certificate. In addition,
if it is required by law and upon instruction by the Company, the Warrant Agent
will deliver to each Class A Warrantholder a prospectus which complies with the
provisions of Section 9 of the Securities Act of 1933 and the Company agrees to
supply Warrant Agent with sufficient number of prospectuses to effectuate that
purpose.
C. In case the registered holder of any Class A Warrant
Certificate shall exercise fewer than all of the Class A Warrants evidenced by
such Class A Warrant Certificate, the Warrant Agent shall promptly countersign
and deliver to the registered holder of such Class A Warrant Certificate, or to
his duly authorized assigns, a new Class A Warrant Certificate or Certificates
evidencing the number of Class A Warrants that were not so exercised.
D. Each person in whose name any certificate for securities is
issued upon the exercise of Class A Warrants shall for all purposes be deemed to
have become the holder of record of the securities represented thereby as of,
and such certificate shall be dated, the date upon which the Class A Warrant
Certificate was duly surrendered in proper form and payment of the Exercise
Price (and of any applicable taxes or other governmental charges) was made;
provided, however, that if the date of such surrender and payment is a date on
which the stock transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares as of, and the
certificate for such shares shall be dated, the next succeeding business day on
which the stock transfer books of the Company are open (whether before, on or
after the Expiration Date) and the Warrant Agent shall be under no duty to
deliver the certificate for such shares until such date. The Company covenants
and agrees that it shall not cause its stock transfer books to be closed for a
period of more than 20 consecutive business days except upon consolidation,
merger, sale of all or substantially all of its assets, dissolution or
liquidation or as otherwise provided by law.
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<PAGE>
E. The Class A Warrants outstanding at the time of a redemption
may be redeemed at the option of the Company, in whole or in part on a pro-rata
basis, at any time if, at the time notice of such redemption is given by the
Company as provided in Paragraph F, below, the Daily Price has exceeded $12.00
for the ten consecutive trading days immediately preceding the date of such
notice, at a price equal to $0.25 per Class A Warrant (the "Redemption Price").
For the purpose of the foregoing sentence, the term "Daily Price" shall mean,
for any relevant day, the closing bid price on that day as reported by the
principal exchange or quotation system on which prices for the Common Stock are
reported. On the redemption date the holders of record of redeemed Class A
Warrants shall be entitled to payment of the Redemption Price upon surrender of
such redeemed Class A Warrants to the Company at the principal office of the
Warrant Agent in Freeport, New York.
F. Notice of redemption of Class A Warrants shall be given at
least 30 days prior to the redemption date by mailing, by registered or
certified mail, return receipt requested, a copy of such notice to the Warrant
Agent and to all of the holders of record of Class A Warrants at their
respective addresses appearing on the books or transfer records of the Company
or such other address designated in writing by the holder of record to the
Warrant Agent not less than 40 days prior to the redemption date.
G. From and after the redemption date, all rights of the Class A
Warrantholders (except the right to receive the Redemption Price) shall
terminate, but only if (a) no later than one day prior to the redemption date
the Company shall have irrevocably deposited with the Warrant Agent as paying
agent a sufficient amount to pay on the redemption date the Redemption Price for
all Class A Warrants called for redemption and (b) the notice of redemption
shall have stated the name and address of the Warrant Agent and the intention of
the Company to deposit such amount with the Warrant Agent no later than one day
prior to the redemption date.
H. The Warrant Agent shall pay to the holders of record of
redeemed Class A Warrants all monies received by the Warrant Agent for the
redemption of Class A Warrants to which the holders of record of such redeemed
Class A Warrants who shall have surrendered their Class A Warrants are entitled.
I. Any amounts deposited with the Warrant Agent that are not
required for redemption of Class A Warrants may be withdrawn by the Company. Any
amounts deposited with the Warrant Agent that shall be unclaimed after six
months after the redemption date may be withdrawn by the Company, and thereafter
the holders of the Class A Warrants called for redemption for which such funds
were deposited shall look solely to the Company for payment. The Company shall
be entitled to the interest, if any, on funds deposited with the Warrant Agent
and the holders of redeemed Class A Warrants shall have no right to any such
interest.
J. If the Company fails to make a sufficient deposit with the
Warrant Agent as provided above, the holder of any Class A Warrants called for
redemption may at the option of the holder (a) by notice to the Company declare
the notice of redemption a nullity as to such holder, or (b) maintain an action
against the Company for the Redemption Price. If the holder brings such an
action, the Company will pay reasonable attorneys' fees of the holder. If the
holder fails to bring an action against the Company for the Redemption Price
within 60 days after the redemption date, the holder shall be deemed to have
elected to declare the notice of
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<PAGE>
redemption to be a nullity as to such holder and such notice shall be without
any force or effect as to such holder. Except as otherwise specifically provided
in this Paragraph J, a notice of redemption, once mailed by the Company as
provided in Paragraph F shall be irrevocable.
Section 8. FRACTIONAL INTERESTS
The Company shall not be required to issue any Class A Warrant
Certificate evidencing a fraction of a Class A Warrant or to issue fractions of
shares of securities on the exercise of the Class A Warrants. any fraction
(calculated to the nearest one-hundredth) of a Class A Warrant or a share of
securities would, except for the provisions of this Section, be issuable on the
exercise of any Class A Warrant, the Company shall, at its option, either
purchase such fraction for an amount in cash equal to the current value of such
fraction computed on the basis of the closing market price (as quoted on NASDAQ
or any other comparable tracking system) on the trading day immediately
preceding the day upon which such Class A Warrant Certificate was surrendered
for exercise in accordance with Section 7 hereof or issue the required
fractional Class A Warrant or share. By accepting a Class A Warrant Certificate,
the holder thereof expressly waives any right to receive a Class A Warrant
Certificate evidencing any fraction of a Class A Warrant or to receive any
fractional share of securities upon exercise of a Class A Warrant, except as
expressly provided in this Section 8.
Section 9. RESERVATION OF EQUITY SECURITIES
The Company covenants that it will at all times reserve and keep
available, free from any pre-emptive rights, out of its authorized and unissued
equity securities, solely for the purpose of issue upon exercise of the Class A
Warrants, such number of shares of equity securities of the Company as shall
then be issuable upon the exercise of all outstanding Class A Warrants ("Equity
Securities"). The Company covenants that all Equity Securities which shall be so
issuable shall, upon such issue, be duly authorized, validly issued, fully paid
and non-assessable.
The Company covenants that if any equity securities, required to
be reserved for the purpose of issue upon exercise of the Class A Warrants
hereunder, require registration with or approval of any governmental authority
under any federal or state law before such shares may be issued upon exercise of
Class A Warrants, the Company will use all commercially reasonable efforts to
cause such securities to be duly registered, or approved, as the case may be,
and, to the extent practicable, take all such action in anticipation of and
prior to the exercise of the Class A Warrants, including, without limitation,
filing any and all post-effective amendments to the Company's Registration
Statement on Form S-4 (Registration No. pending) necessary to permit a public
offering of the securities underlying the Class A Warrants at any and all times
during the term of this Agreement, provided, however, that in no event shall
such securities be issued, and the Company is authorized to refuse to honor the
exercise of any Class A Warrant, if such exercise would result in the opinion of
the Company's Board of Directors, upon advice of counsel, in the violation of
any law; and provided further that, in the case of a Class A Warrant exercisable
solely for securities listed on a securities exchange or for which there are at
least two independent market makers, in lieu of obtaining such registration or
approval, the Company may elect to redeem Class A Warrants submitted to the
Warrant Agent for exercise for a price equal to the difference between the
aggregate low asked price, or closing price, as the case may be, of the
securities for which such Class A Warrant is exercisable on the date of such
submission and the Exercise Price of such Class A Warrants; in the event of such
redemption, the Company will
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<PAGE>
pay to the holder of such Class A Warrants the above-described redemption price
in cash within 10 business days after receipt of notice from the Warrant Agent
that such Class A Warrants have been submitted for exercise.
Section 10. REDUCTION OF CONVERSION PRICE BELOW PAR VALUE
Before taking any action that would cause an adjustment pursuant
to Section 6 hereof reducing the portion of the Exercise Price required to
purchase one share of capital stock below the then par value (if any) of a share
of such capital stock, the Company will use its best efforts to take any
corporate action which, in the opinion of its counsel, may be necessary in order
that the Company may validly and legally issue fully paid and non-assessable
shares of such capital stock.
Section 11. PAYMENT OF TAXES
The Company covenants and agrees that it will pay when due and payable
any and all federal and state documentary stamp and other original issue taxes
which may be payable in respect of the original issuance of the Class A Warrant
Certificates, or any shares of Common Stock or other securities upon the
exercise of Class A Warrants. The Company shall not, however, be required (i) to
pay any tax which may be payable in respect of any transfer involved in the
transfer and delivery of Class A Warrant Certificates or the issuance or
delivery of certificates for Common Stock or other securities in a name other
than that of the registered holder of the Class A Warrant Certificate
surrendered for purchase or (ii) to issue or deliver any certificate for shares
of Common Stock or other securities upon the exercise of any Class A Warrant
Certificate until any such tax shall have been paid, all such tax being payable
by the holder of such Class A Warrant Certificate at the time of surrender.
Section 12. NOTICE OF CERTAIN CORPORATE ACTION
In case the Company after the date hereof shall propose (i) to offer
to the holders of Common Stock, generally, rights to subscribe to or purchase
any additional shares of any class of its capital stock, any evidences of its
indebtedness or assets, or any other rights or options or (ii) to effect any
reclassification of Common Stock (other than a reclassification involving merely
the subdivision or combination of outstanding shares of Common Stock) or any
capital reorganization, or any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is required, or
any sale, transfer or other disposition of its property and assets substantially
as an entirety, or the liquidation, voluntary or involuntary dissolution or
winding-up of the Company, then, in each such case, the Company shall file with
the Warrant Agent and the Company, or the Warrant Agent on its behalf, shall
mail (by first-class, postage prepaid mail) to all registered holders of the
Class A Warrant Certificates notice of such proposed action, which notice shall
specify the date on which the books of the Company shall close or a record be
taken for such offer of rights or options, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer, other
disposition, liquidation, voluntary or involuntary dissolution or winding-up
shall take place or commence, as the case may be, and which shall also specify
any record date for determination of holders of Common Stock entitled to vote
thereon or participate therein and shall set forth such facts with respect
thereto as shall be reasonably necessary to indicate any adjustments in the
Exercise Price and the number or kind of shares or other
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securities purchasable upon exercise of Class A Warrants which will be required
as a result of such action. Such notice shall be filed and mailed in the case of
any action covered by clause (i) above, at least ten days prior to the record
date for determining holders of the Common Stock for purposes of such action or,
if a record is not to be taken, the date as of which the holders of shares of
Common Stock of record are to be entitled to such offering; and, in the case of
any action covered by clause (ii) above, at least 20 days prior to the earlier
of the date on which such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up is expected to become effective and the date on which
it is expected that holders of shares of Common Stock of record on such date
shall be entitled to exchange their shares for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
sale, transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up.
Failure to give any such notice or any defect therein shall not affect
the legality or validity of any transaction listed in this Section 12.
Section 13. DISPOSITION OF PROCEEDS ON EXERCISE OF CLASS A WARRANT
CERTIFICATES, ETC.
The Warrant Agent shall account promptly to the Company with respect
to Class A Warrants exercised and concurrently pay to the Company all moneys
received by the Warrant Agent for the purchase of securities or other property
through the exercise of such Class A Warrants.
The Warrant Agent shall keep copies of this Agreement available for
inspection by Class A Warrantholders during normal business hours at its stock
transfer office. Copies of this Agreement may be obtained upon written request
addressed to the Warrant Agent at its stock transfer office in Freeport, New
York.
Section 14. CLASS A WARRANTHOLDER NOT DEEMED A STOCKHOLDER
No Class A Warrantholder, as such, shall be entitled to vote, receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Class A
Warrants represented thereby for any purpose whatever, nor shall anything
contained herein or in any Class A Warrant Certificate be construed to confer
upon any Class A Warrantholder, 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, issuance of
stock, reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger, conveyance or otherwise), or to receive notice
of meetings or other actions affecting stockholders (except as provided in
Section 12 hereof), or to receive dividend or subscription rights, or otherwise,
until such Class A Warrant Certificate shall have been exercised in accordance
with the provisions hereof and the receipt of the Exercise Price and any other
amounts payable upon such exercise by the Warrant Agent.
Section 15. RIGHT OF ACTION
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All rights of action in respect to this Agreement are vested in the
respective registered holders of the Class A Warrant Certificates; and any
registered holder of any Class A Warrant Certificate, without the consent of the
Warrant Agent or of any other holder of a Class A Warrant Certificate, may, in
his own behalf for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or otherwise
in respect of, his right to exercise the Class A Warrants evidenced by such
Class A Warrant Certificate, for the purchase of shares of the Common Stock in
the manner provided in the Class A Warrant Certificate and in this Agreement.
Section 16. AGREEMENT OF HOLDERS OF CLASS A WARRANT CERTIFICATES
Every holder of a Class A Warrant Certificate by accepting the same
consents and agrees with the Company, the Warrant Agent and with every other
holder of a Class A Warrant Certificate that:
A. The Class A Warrant Certificates are transferable on the registry
books of the Warrant Agent only upon the terms and conditions set forth in this
Agreement; and
B. The Company and the Warrant Agent may deem and treat the person in
whose name the Class A Warrant Certificate is registered as the absolute owner
of the Class A Warrant (notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Company or the Warrant Agent) for
all purposes whatever and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
Section 17. CANCELLATION OF CLASS A WARRANT CERTIFICATES
In the event that the Company shall purchase or otherwise acquire any
Class A Warrant Certificate or Certificates after the issuance thereof, such
Class A Warrant Certificate or Certificates shall thereupon be delivered to the
Warrant Agent and be canceled by it and retired. The Warrant Agent shall also
cancel any Class A Warrant Certificate delivered to it for exercise, in whole or
in part, or delivered to it for transfer, split-up, combination or exchange.
Class A Warrant Certificates so canceled shall be delivered by the Warrant Agent
to the Company from time to time, or disposed of in accordance with the
instructions of the Company.
Section 18. CONCERNING THE WARRANT AGENT
The Company agrees to pay to the Warrant Agent from time to time, on
demand of the Warrant Agent, reasonable compensation for all services rendered
by it hereunder and also its reasonable expenses, including counsel fees, and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Warrant Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Warrant Agent, arising out of or in
connection with the acceptance and administration of this Agreement.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT
AGENT
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Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 21 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, any of
the Class A Warrant Certificates shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Class A Warrant
Certificates so countersigned; and in case at that time any of the Class A
Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Class A Warrant Certificates either in the
name of the predecessor Warrant Agent or in the name of the successor Warrant
Agent; and in all such cases such Class A Warrant Certificates shall have the
full force provided in the Class A Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Class A Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Class A Warrant Certificates
so countersigned; and in case at that time any of the Class A Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Class A Warrant Certificates either in its prior name or in its
changed name; and in all such cases such Class A Warrant Certificates shall have
the full force provided in the Class A Warrant Certificates and in this
Agreement.
Section 20. DUTIES OF WARRANT AGENT
The Warrant Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Class A Warrant Certificates, by their acceptance
thereof, shall be bound:
A. The Warrant Agent may consult with counsel satisfactory to it (who
may be counsel for the Company or the Warrant Agent's in-house counsel), and the
opinion of such counsel shall be full and complete authorization and protection
to the Warrant Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion; provided, however, that the Warrant
Agent shall have exercised reasonable care in the selection of such counsel.
Fees and expenses of such counsel, to the extent reasonable, shall be paid by
the Company.
B. Whenever in the performance of its duties under this Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a Chairman or co-Chairman of the Board or
the President or a Vice President or the Secretary of the Company and delivered
to the Warrant Agent; and such certificate shall be full authorization to the
Warrant
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Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
C. The Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
D. The Warrant Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Class A
Warrant Certificates (except its countersignature on the Class A Warrant
Certificates and such statements or recitals as describe the Warrant Agent or
action taken or to be taken by it) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.
E. The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Warrant Agent) or in respect of the validity or
execution of any Class A Warrant Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Class A Warrant
Certificate; nor shall it be responsible for the making of any change in the
number of shares of Common Stock for which a Class A Warrant is exercisable
required under the provisions of Section 6 or responsible for the manner, method
or amount of any such change or the ascertaining of the existence of facts that
would require any such adjustment or change (except with respect to the exercise
of Class A Warrant Certificates after actual notice of any adjustment of the
Exercise Price); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Class A Warrant
Certificate or as to whether any shares of Common Stock will, when issued, be
validly issued, fully paid and non-assessable.
F. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or take any other action likely to involve
expense unless the Company or one or more registered holders of Class A Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred. All rights of action
under this Agreement or under any of the Class A Warrants may be enforced by the
Warrant Agent without the possession of any of the Class A Warrants or the
production thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the registered holders of the Class A Warrant Certificates,
as their respective rights or interests may appear.
G. The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Class A
Warrants or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
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H. The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from a
Chairman or co-Chairman of the Board or President or a Vice President or the
Secretary or the Controller of the Company, and to apply to such officers for
advice or instructions in connection with the Warrant Agent's duties, and it
shall not be liable for any action taken or suffered or omitted by it in good
faith in accordance with instructions of any such officer.
I. The Warrant Agent will not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Class A Warrant Certificates to be complied with by the Company.
J. The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees or for any loss to the Company resulting
from such neglect or misconduct; provided, however, that reasonable care shall
have been exercised in the selection and continued employment of such attorneys,
agents and employees.
K. The Warrant Agent will not incur any liability or responsibility to
the Company or to any holder of any Class A Warrant Certificate for any action
taken, or any failure to take action, in reliance on any notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
reasonably believed by the Warrant Agent to be genuine and to have been signed,
sent or presented by the proper party or parties.
L. The Warrant Agent will act hereunder solely as agent of the Company
in a ministerial capacity, and its duties will be determined solely by the
provisions hereof. The Warrant Agent will not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence, bad faith or willful conduct.
Section 21. CHANGE OF WARRANT AGENT
The Warrant Agent may resign and be discharged from its duties under
this Agreement upon 30 days' prior notice in writing mailed, by registered or
certified mail, to the Company. The Company may remove the Warrant Agent or any
successor warrant agent upon 30 days' prior notice in writing, mailed to the
Warrant Agent or successor warrant agent, as the case may be, by registered or
certified mail. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Warrant Agent and shall, within 15 days following such appointment, give
notice thereof in writing to each registered holder of the Class A Warrant
Certificates. If the Company shall fail to make such appointment within a period
of 15 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent, then the Company agrees to perform the duties of the Warrant
Agent hereunder until a successor Warrant Agent is appointed. After appointment
and execution of a copy of this Agreement in effect at that time, the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent, within a reasonable
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<PAGE>
time, any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section, however, or any defect therein
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be.
Section 22. ISSUANCE OF NEW CLASS A WARRANT CERTIFICATES
Notwithstanding any of the provisions of this Agreement or the several
Class A Warrant Certificates to the contrary, the Company may, at its option,
issue new Class A Warrant Certificates in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Exercise Price or
the number or kind of shares purchasable under the several Class A Warrant
Certificates made in accordance with the provisions of this Agreement.
Section 23. NOTICES
Notice or demand pursuant to this Agreement to be given or made on the
Company by the Warrant Agent or by the registered holder of any Class A Warrant
Certificate shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows:
iCrown Corporation
4400 PGA Boulevard, Suite 505
Palm Beach Gardens, Florida 33410
Subject to the provisions of Section 21, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Class A
Warrant Certificate to or on the Warrant Agent shall be sufficiently given or
made if sent by first-class or registered mail, postage prepaid, addressed
(until another address is filed in writing by the Warrant Agent with the
Company) as follows:
North American Transfer Co.
147 West Merrick Road
Freeport, New York 11520
Any notice or demand authorized to be given or made to the registered
holder of any Class A Warrant Certificate under this Agreement shall be
sufficiently given or made if sent by first-class or registered mail, postage
prepaid, to the last address of such holder as it shall appear on the registers
maintained by the Warrant Agent.
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Section 24. MODIFICATION OF AGREEMENT
The Warrant Agent may, without the consent or concurrence of the Class
A Warrantholders, by supplemental agreement or otherwise, concur with the
Company in making any changes or corrections in this Agreement that the Warrant
Agent shall have been advised by counsel (who may be counsel for the Company)
are necessary or desirable to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein
contained, or to make any other provisions in regard to matters or questions
arising hereunder and which shall not be inconsistent with the provisions of the
Class A Warrant Certificates and which shall not adversely affect the interests
of the Class A Warrantholders. As of the date hereof, this Agreement contains
the entire and only agreement, understanding, representation, condition,
warranty or covenant between the parties hereto with respect to the matters
herein, supersedes any and all other agreements between the parties hereto
relating to such matters, and may be modified or amended only by a written
agreement signed by both parties hereto pursuant to the authority granted by the
first sentence of this Section.
Section 25. SUCCESSORS
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 26. FLORIDA CONTRACT
This Agreement and each Class A Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Florida and
for all purposes shall be construed in accordance with the laws of said State.
Section 27. TERMINATION
This Agreement shall terminate as of the close of business on the
Expiration Date, or such earlier date upon which all Class A Warrants shall have
been exercised or redeemed, except that the Warrant Agent shall account to the
Company as to all Class A Warrants outstanding and all cash held by it as of the
close of business on the Expiration Date.
Section 28. BENEFITS OF THIS AGREEMENT
Nothing in this Agreement or in the Class A Warrant Certificates shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent, and their respective successors and assigns hereunder and the
registered holders of the Class A Warrant Certificates any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent, their respective
successors and assigns hereunder and the registered holders of the Class A
Warrant Certificates.
Section 29. DESCRIPTIVE HEADINGS
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The descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 30. Dispute Resolution
The parties shall attempt amicably to resolve disagreements by
negotiating with each other. In the event that the matter is not amicably
resolved through negotiation, any controversy, dispute or disagreement arising
out of or relating to this agreement (a "controversy") shall be submitted to a
nationally recognized arbitration association, such as the American Arbitration
Association, for final binding arbitration, which shall be conducted by a single
arbitrator (the "arbitrator") in West Palm Beach, Florida, pursuant to the
American Arbitration Association Rules (the "rules"). Notwithstanding anything
to the contrary contained in the Rules, the Arbitrator shall not award
consequential, exemplary, incidental, punitive or special damages.
If any part shall desire relief of any nature whatsoever from any
other party as a result of any Controversy, such party will initiate such
arbitration proceedings within a reasonable time, but in no event more than one
(1) year after the facts underlying said Controvery first arise or become known
to the party seeking relief (whichever is later). The failure of such party to
institute such proceedings within said period shall be deemed a full waiver of
any claim for such relief. Arbitrator may award the prevailing party its costs
for the arbitration proceeding; including its reasonable attorneys' fees and
costs. The parties agree that the decision and award of the Arbitrator shall be
taken, but such award or decision may be entered as a judgment and enforced in
any court having jurisdiction over the party against whom enforcement is sought.
Any equitable relief awarded under this paragraph shall be dissolved upon
issuance of the Arbitrator's decision and order.
Notwithstanding the provisions for dispute resolution, in the event of
a breach or threatened breach by any party to this agreement, either party shall
be entitled in order to maintain the status quo and pending the outcome of any
arbitration pursuant to this agreement, seek an injunction or similar equitable
relief restraining either party, as the case may be, from commiting or
continuing any such breach or threatened breach or granting specific performance
of any act required to be performed without the necessity of showing that money
damages would not afford an adequate remedy and without the necessity of posting
any bond or other security. The parties hereto hereby consent to the
jurisdiction of the Federal district courts for the Southern District of
Florida, and the Florida state courts located in 15th Circuit Court for any
proceedings under this paragraph. The parties agree that the availability of
arbitration in the agreement shall not be used by any party as grounds for the
dismissal of an injunctive action instituted by the other party.
Section 31. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
iCrown Corporation
By:_________________________________________
Title:______________________________________
North American Transfer Co.
By:________________________________________
Title:______________________________________
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EXHIBIT A
VOID AFTER 5 P.M. EASTERN TIME ON DECEMBER __, 2001
----------
CLASS A WARRANTS TO PURCHASE COMMON STOCK
- --------------------------------------------------------------------------------
THIS CERTIFIES THAT
or registered assigns, is the registered holder of the number of Class A
Warrants ("Class A Warrants") set forth above. Each Class A Warrant entitles the
holder thereof to purchase from iCrown, a Corporation incorporated under the
laws of the State of Florida ("Company"), subject to the terms and conditions
set forth hereinafter and in the Class A Warrant Agreement hereinafter more
fully described (the "Class A Warrant Agreement") referred to, at any time on or
before the close of business on December 1, 2001 or, if such Class A Warrant is
redeemed as provided in the Class A Warrant Agreement, at any time prior to the
effective time of such redemption (the "Expiration Date"), one fully paid and
non-assessable share of Common Stock of the Company ("Common Stock") upon
presentation and surrender of this Class A Warrant Certificate, with the
instructions for the registration and delivery of Common Stock filled in, at the
stock transfer office in Freeport, New York, of North American Transfer Co.,
Warrant Agent of the Company ("Warrant Agent") or of its successor warrant agent
or, if there be no successor warrant agent, at the corporate offices of the
Company, and upon payment of the Exercise Price (as defined in the Class A
Warrant Agreement) and any applicable taxes paid either in cash, or by certified
or official bank check, payable in lawful money of the United States of America
to the order of the Company. Each Class A Warrant initially entitles the holder
to purchase one share of Common Stock for $15.00 until after 9 months after the
date of the initial sales prospectus, and $20.00 thereafter. The number and kind
of securities or other property for which the Class A Warrants are exercisable
are subject to further adjustment in certain events, such as mergers, splits,
stock dividends, recapitalizations and the like, to prevent dilution. The
Company may redeem any or all outstanding and unexercised Class A Warrants at
any time if the Daily Price has exceeded $12.00 for ten consecutive trading days
immediately preceeding the date of notice of such redemption, upon 30 days
notice, at a price equal to $.25 per Class A Warrant. For the purpose of the
foregoing sentence, the term "Daily Price" shall mean, for any relevant day, the
closing bid price on that day as reported by the principal exchange or quotation
system on which prices for the Common Stock are reported. All Class A Warrants
not theretofore exercised or redeemed will expire on December ___, 2001.
This Class A Warrant Certificate is subject to all of the terms,
provisions and conditions of the Class A Warrant Agreement, dated as of November
30, 1999 ("Class A Warrant Agreement"), between the Company and the Warrant
Agent, to all of which terms, provisions and conditions the registered holder of
this Class A Warrant Certificate consents by acceptance hereof. The Class A
Warrant Agreement is incorporated herein by reference and made a part hereof and
reference is made to the Class A Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the
<PAGE>
Warrant Agent, the Company and the holders of the Class A Warrant Certificates.
Copies of the Class A Warrant Agreement are available for inspection at the
stock transfer office of the Warrant Agent or may be obtained upon written
request addressed to the Company at 4400 PGA Boulevard, Suite 505, Palm Beach
Gardens, Florida 33410.
The Company shall not be required upon the exercise of the warrants
evidenced by this Class A Warrant Certificate to issue fractions of Class A
Warrants, Common Stock or other securities, but shall make adjustment therefor
in cash on the basis of the current market value of any fractional interest as
provided in the Class A Warrant Agreement.
In certain cases, the sale of securities by the Company upon exercise
of Class A Warrants would violate the securities laws of the United States,
certain states thereof or other jurisdictions. The Company has agreed to use all
commercially reasonable efforts to cause a registration statement to continue to
be effective during the term of the Class A Warrants with respect to such sales
under the Securities Act of 1933, and to take such action under the laws of
various states as may be required to cause the sale of securities upon exercise
to be lawful. However, the Company will not be required to honor the exercise of
Class A Warrants if, in the opinion of the Board of Directors, upon advice of
counsel, the sale of securities upon such exercise would be unlawful. In certain
cases, the Company may, but is not required to, purchase Class A Warrants
submitted for exercise for a cash price equal to the difference between the
market price of the securities obtainable upon such exercise and the exercise
price of such Class A Warrants.
This Class A Warrant Certificate, with or without other Certificates,
upon surrender to the Warrant Agent, any successor warrant agent or, in the
absence of any successor warrant agent, at the corporate offices of the Company,
may be exchanged for another Class A Warrant Certificate or Certificates
evidencing in the aggregate the same number of Class A Warrants as the Class A
Warrant Certificate or Certificates so surrendered. If the Class A Warrants
evidenced by this Class A Warrant Certificate shall be exercised in part, the
holder hereof shall be entitled to receive upon surrender hereof another Class A
Warrant Certificate or Certificates evidencing the number of Class A Warrants
not so exercised.
No holder of this Class A Warrant Certificate, as such, shall be
entitled to vote, receive dividends or be deemed the holder of Common Stock or
any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose whatever, nor shall anything contained in the
Class A Warrant Agreement or herein be construed to confer upon the holder of
this Class A Warrant Certificate, 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 give or withhold
consent to any corporate action (whether upon any matter submitted to
stockholders at any meeting thereof, or give or withhold consent to any merger,
recapitalization, issuance of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, conveyance or
otherwise) or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Class A Warrant Agreement) or to receive
dividends or subscription rights or otherwise until the Class A Warrants
evidenced by this Class A Warrant Certificate shall have been exercised and the
Common Stock purchasable upon the exercise thereof shall have become deliverable
as provided in the Class A Warrant Agreement.
2
<PAGE>
If this Class A Warrant Certificate shall be surrendered for exercise
within any period during which the transfer books for the Company's Common Stock
or other class of stock purchasable upon the exercise of the Class A Warrants
evidenced by this Class A Warrant Certificate are closed for any purpose, the
Company shall not be required to make delivery of certificates for shares
purchasable upon such transfer until the date of the reopening of said transfer
books.
Every holder of this Class A Warrant Certificate by accepting the same
consents and agrees with the Company, the Warrant Agent, and with every other
holder of a Class A Warrant Certificate that:
(a) this Class A Warrant Certificate is transferable on the registry
books of the Warrant Agent only upon the terms and conditions set forth in the
Class A Warrant Agreement, and
(b) the Company and the Warrant Agent may deem and treat the person in
whose name this Class A Warrant Certificate is registered as the absolute owner
hereof (notwithstanding any notation of ownership or other writing thereon made
by anyone other than the Company or the Warrant Agent) for all purposes whatever
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
The Company shall not be required to issue or deliver any certificate
for shares of Common Stock or other securities upon the exercise of Class A
Warrants evidenced by this Class A Warrant Certificate until any tax which may
be payable in respect thereof by the holder of this Class A Warrant Certificate
pursuant to the Class A Warrant Agreement shall have been paid, such tax being
payable by the holder of this Class A Warrant Certificate at the time of
surrender.
This Class A Warrant Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated:
iCrown Corporation
By:__________________________________
Chief Executive Officer
Attest:
By:__________________________________
Secretary
3
iCROWN CORPORATION
and
North American Transfer Co.
as Warrants Agent
Warrants Agreement
Dated as of November 30, 1999
WARRANTS AGREEMENT
This Warrants Agreement (the "Agreement") dated as of November 30, 1999,
is between iCrown Corporation, a Florida corporation (the"Company") and North
American Transfer Co., as Warrants Agent (the"Warrants Agent").
W I T N E S S E T H:
WHEREAS, on November 30, 1999, the Board of Directors of the Company
(the "Board") authorized the issuance of Warrants (collectively, the "
Warrants," and individually a " Warrant"), each Warrant being a right to
purchase, on the terms and subject to the provisions of this Agreement, one
share of the Company's Common Stock; and
WHEREAS, on November 30, 1999, (the "Declaration Date") the Board (a)
authorized and declared a dividend distribution of one Warrant for every share
of Common Stock of the Company outstanding at the Close of Business on December
30, 1999, (the "Dividend Record Date"), and (b) authorized the issuance of, and
agreed to issue, one Warrant (as such number may be adjusted in accordance with
Section 11(i) or 11(p) hereof) for every share of Common Stock of the Company
issued between the Dividend Record Date and the Distribution Date (as
hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
<PAGE>
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, (iv) any Person organized,
appointed, or established by the Company or a Subsidiary of the Company pursuant
to the terms of any plan described in clause (iii) above or (v) any such Person
who has reported or is required to report such ownership on Schedule 13G under
the Exchange Act (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which Schedule
13D does not state any intention to or reserve the Warrant to control or
influence the management or policies of the Company or engage in any of the
actions specified in Item 4 of such Schedule (other than the disposition of the
Common Stock) and, within 10 Business Days of being requested by the Company to
advise it regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without knowledge of
the terms of the Warrants and who, together with all of such Person's
Affiliates, thereafter does not acquire additional shares of Common Stock while
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, provided, however, that if the Person requested to so certify fails
to do so within 10 Business Days, then such Person shall become an Acquiring
Person immediately after such 10 Business Day Period.
(b) "Act" shall mean the Securities Act of 1933 (or any successor act),
as amended and as may from time to time be in effect and the Rules and
Regulations promulgated by the Securities and Exchange Commission thereunder.
(c) "Affiliate," with respect to any Person, shall mean any other Person
who is, or who would be deemed to be, an "affiliate" or an "associate" of such
Person within the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date; provided, that no Person shall be deemed an
affiliate of another Person solely as a result of such Persons' status as
directors of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" or have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates has
"beneficial ownership" of within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date;
(ii) which such Person or any of such Person's Affiliates has,
<PAGE>
directly or indirectly, the Warrant to acquire (whether such Warrant is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion, exchange or other Warrants, or options,
or otherwise;
(iii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security for
purposes of this Section 1(d)(iii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act or (B) is made
in connection with, or is to otherwise participate in, a proxy or
consent solicitation made, or to be made, pursuant to, and in accordance
with, the applicable proxy solicitation rules and regulations
promulgated under the Exchange Act, in either case described in clause
(A) or (B) above, whether or not such agreement, arrangement or
understanding is also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate thereof with which such Person or any of
such Person's Affiliates has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or in connection with a
proxy or consent solicitation described in clause (A) or (B) of the
proviso to Section 1(d)(iii) hereof) or disposing of any securities of
the Company;
provided, however, that for purposes of this Section 1(d) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of Warrants at any
time prior to the occurrence of a Common Stock Event, or (C) securities issuable
upon exercise of Warrants which were held by a Person or its Affiliates prior to
the Distribution Date as long as such Person is not responsible for the
occurrence of the Common Stock Event giving rise to the Distribution Date; and
provided, further, however, that nothing in this Section 1(d) shall cause a
Person engaged in business as an underwriter of securities to
<PAGE>
be the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such acquisition.
(e) "Board" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Florida or the city in which
the principal office of the Warrants Agent is located are authorized or
obligated by law or executive order to close.
(g) " Common Stock" shall mean the Common Stock, par value $.0001 per
share, of the Company.
(h) " Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) " Warrants" shall have the meaning set forth in the preamble to this
Agreement.
(j) " Warrant Certificates" shall have the meaning set forth in Section
3(a) hereof.
(k) "Class A Warrants Agreement" shall mean the Class A Warrants
Agreement dated as of November 30, 1999, between the Company and North American
Transfer Co., as Warrants Agent.
(l) "Close of Business" on any given date shall mean 5:00 p.m., West
Palm Beach, Florida time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., West Palm Beach, Florida time, on
the next succeeding Business Day.
(m) "Closing Price" shall have the meaning set forth in Section 11(d)
hereof.
(n) "Common Stock" shall mean collectively, the Common Stock, except
that "Common Stock" when used with respect to any Person other than the Company
shall mean either (i) the common stock (or other capital stock or shares of
beneficial interest) of such Person with the greatest voting power, or (ii) the
equity securities or other equity interests having power to control or direct
the management and affairs of such Person, or (iii) if such Person is a
Subsidiary of another Person, the Person (A) who ultimately controls such Person
that is the Subsidiary and (B) which has outstanding such common stock (or such
other capital stock, equity securities or interests).
<PAGE>
(o) "Common Stock Event" shall mean the occurrence of any event
described in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or (c) of the
first sentence of Section 13 hereof.
(p) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(q) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(r) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(s) "Declaration Date" shall have the meaning set forth in the preamble
to this Agreement.
(t) "Directors" shall mean the members of the Board.
(u) "Disqualified Transferee" shall mean any Person who is a direct or
indirect transferee of any Warrant from an Acquiring Person or an Affiliate of
an Acquiring Person and became such a transferee (x) after the occurrence of a
Common Stock Event or (y) prior to or concurrently with the Acquiring Person
becoming such and received such Warrant pursuant to a transfer (whether or not
for value) (A) from the Acquiring Person to holders of its Common Stock or other
equity securities or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement, or understanding (whether or not in writing)
regarding the transferred Warrant, or (B) which a majority of the Board then in
office reasonably determines is part of a plan, arrangement, or understanding
(whether or not in writing) which has as a primary purpose or effect, the
avoidance of Section 7(e) hereof.
(v) "Distribution Date" shall mean the date which is the later of (A)
the earlier of (x) the 10th Business Day following the Stock Acquisition Date or
(y) the 10th Business Day following the Offer Commencement Date or (B) such
specified or unspecified date thereafter which is on or after the Dividend
Record Date, as may be determined by a majority of the Board then in office.
(w) "Dividend Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(x) "Excess Amount" shall have the meaning set forth in Section
11(a)(iii) hereof.
(y) "Exchange Act" shall mean the Securities Exchange Act of 1934 (or
<PAGE>
any successor act), as in effect on the Declaration Date and the Rules and
Regulations promulgated thereunder by the Securities and Exchange Commission.
(z) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(aa) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(bb) "Offer Commencement Date" shall mean the date of the commencement
by any Person, other than (i) the Company, (ii) a Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company or (iv) any Person organized, appointed, or established by the Company
or such Subsidiary pursuant to the terms of any such plan, of a tender or
exchange offer (including when such offer is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act) if upon consummation thereof the Person and Affiliates thereof
would be the Beneficial Owner of 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of this Agreement
and prior to the issuance of the Warrants on the Dividend Record Date or
thereafter).
(cc) "Officers' Certificate" has the meaning set forth in Section 20(b)
hereof.
(dd) "Other Consideration" has the meaning set forth in Section 6(a)
hereof.
(ee) "Permitted Transferee" shall have the meaning set forth in
paragraph 4 of Section A of the Company's Articles of Incorporation.
(ff) "Person" shall mean a corporation, association, partnership, joint
venture, trust, limited liability company, estate, organization, business,
entity or individual.
(gg) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(hh) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(ii) "Warrants" shall have the meaning set forth in the preamble to
this Agreement.
(jj) "Warrants Agent" shall have the meaning set forth in the preamble
to
<PAGE>
this Agreement subject to the appointment of a successor Warrants Agent pursuant
to Section 21 hereof.
(kk) "Stock Acquisition Date" shall mean the later of (i) the date of
the first public announcement by an Acquiring Person or the Company that an
Acquiring Person has become such (including the first date on which any filing
with any governmental authority disclosing that an Acquiring Person has become
such becomes available to the public), or (ii) the date on which an executive
officer of the Company has actual knowledge that an Acquiring Person has become
such.
(ll) "Subsidiary" shall mean, as of any date, any Person of which the
Company (or other specified parent) owns directly, or indirectly through a
Subsidiary or Subsidiaries, at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally, or holds
directly, or indirectly through a Subsidiary or Subsidiaries, at least a
majority of partnership or similar interests, or is a general partner or of
which the Company (or other specified parent) owns voting securities sufficient
to elect at least a majority of the directors of such Person.
(mm) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(nn) "Summary of Warrants" shall have the meaning set forth in Section
3(b) hereof.
(oo) "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is
open for the transaction of business or, if such security is not listed or
admitted to trading on any national securities exchange, a day which is a
Business Day.
Section 2. Appointment of Warrants Agent.
The Company hereby appoints the Warrants Agent to act as agent for the
Company and the holders of the Warrants (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the Common
Stock) in accordance with the terms and conditions hereof, and the Warrants
Agent hereby accepts such appointment. The Company may from time to time, upon
prior written notice to the Warrants Agent, appoint such Co-Warrants Agents as
it may deem necessary or desirable and the respective duties of the Warrants
Agent and the Co-Warrants Agent shall be as the Company shall determine.
Section 3. Issuance of Warrant Certificates.
<PAGE>
(a) Until the Distribution Date, (i) the Warrants will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates
representing shares of Common Stock registered in the names of the holders of
the Common Stock (which certificates shall be deemed also to be certificates for
the associated Warrants) and not by separate Warrants certificates, and (ii) the
Warrants will be transferable only in connection with the transfer of the
associated shares of Common Stock. As soon as practicable after the Distribution
Date, the Warrants Agent will send by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the Close of Business on
the Distribution Date, at the address of such holder shown on the stock transfer
records of the Company, one or more Warrant Certificates, in substantially the
form of Exhibit A hereto (the "Warrant Certificates"), evidencing in the
aggregate that number of Warrants to which such holder is entitled in accordance
with the provisions of this Agreement. As of and after the Distribution Date,
the Warrants will be evidenced solely by such Warrant Certificates. The Warrants
are exercisable only in accordance with the provisions of Section 7 thereof and
are redeemable only in accordance with Section 23 hereof.
(b) As soon as practicable after the Dividend Record Date, the Company
will cause a copy of a Summary of Warrants, in substantially the form attached
hereto as Exhibit B (the "Summary of Warrants"), to be sent by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Dividend Record Date, at the address of such holder shown on
the stock transfer records of the Company. With respect to certificates for the
Common Stock outstanding as of the Dividend Record Date, until the Distribution
Date, the Warrants associated with the shares of Common Stock represented by
such certificates will be evidenced by such certificates for the Common Stock
and the registered holders of the Common Stock shall also be the registered
holders of the associated Warrants. Until the Distribution Date (or the earlier
redemption, expiration or termination of the Warrants), the surrender for
transfer of any of the certificates representing shares of the Common Stock
outstanding on the Dividend Record Date, with or without a copy of the Summary
of Warrants, shall also constitute the transfer of the Warrants associated with
the Common Stock represented by such certificate.
(c) Warrants shall be issued in respect of all shares of Common Stock
issued (whether originally issued or delivered from the Company's treasury)
after the Dividend Record Date but prior to the earliest of (i) the Distribution
Date, (ii) the Expiration Date, or (iii) the redemption of the Warrants,
including in respect of all shares of Common Stock issued upon conversion of
Class A Warrants to buy Common Stock. Certificates representing such shares of
Common Stock and certificates issued on transfer of such shares of Common Stock,
with or without a copy of the Summary of Warrants, prior to the Distribution
Date (or
<PAGE>
earlier expiration or redemption of the Warrants) shall be deemed also to be
certificates for the associated Warrants, and commencing as soon as reasonably
practicable following the Dividend Record Date shall bear the following legend
(or a legend substantially in the form thereof):
This certificate also evidences and entitles the holder to Warrants set
forth in a Warrants Agreement between the issuer and North American
Transfer Co., as Warrants Agent (the "Warrants Agent"), dated as of
November 30, 1999, (the " Warrants Agreement"), the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal offices of both the issuer and the Warrants Agent. The
Warrants Agent will mail to the registered holder of this certificate a
copy of the Warrants Agreement, as in effect on the date of mailing,
without charge upon written request. Under certain circumstances set
forth in the Warrants Agreement, such Warrants will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Under certain circumstances set forth in the Warrants
Agreement, Warrants issued to, or held by any Person who is, was or
becomes, or acquires shares from, an Acquiring Person or any Affiliate
of an Acquiring Person (as each such term is defined in the Warrants
Agreement and generally relating to the ownership or purchase of large
shareholdings), whether currently held by or on behalf of such Person
or Affiliate or by certain subsequent holders, may become null and
void.
Until the Distribution Date or the earlier redemption, expiration or termination
of the Warrants, the Warrants associated with the Common Stock shall be
evidenced by the Common Stock certificates alone and the registered holders of
Common Stock shall also be the registered holders of the associated Warrants,
and the surrender for transfer of any of such certificates shall also constitute
the transfer of the Warrants associated with the Common Stock represented by
such certificate. Warrants shall be issued to the extent provided in Section 22
hereof after the Distribution Date and prior to the Expiration Date.
Section 4. Form of Warrant Certificates.
(a) The Warrant Certificates (and the form of assignment and the form of
exercise notice and certificate to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit A hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants
<PAGE>
may from time to time be listed or traded, or to conform to usage. Subject to
the provisions of Sections 11 and 22 hereof, the Warrant Certificates, whenever
distributed, shall be dated as of the Dividend Record Date (or, if the shares
pursuant to which the Warrants are attached are issued thereafter, such date of
issuance), shall include the date of countersignature and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock as
shall be set forth therein at the Purchase Price (as hereinafter defined), but
the amount and type of securities issuable upon the exercise of each Warrant and
the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Warrant Certificate issued pursuant to Section 3(a) or 22 hereof
that represents Warrants beneficially owned by (i) any Acquiring Person or any
Affiliate of an Acquiring Person, or (ii) any Disqualified Transferee, and any
other Warrant Certificate issued pursuant to Section 6 or 11 hereof upon the
transfer, exchange, replacement, or adjustment of any such Warrant Certificate
shall contain (to the extent feasible) the following legend:
The Warrants represented by this Warrant Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate (which includes both affiliates and associates) of an
Acquiring Person (as each such term is defined in the Warrants Agreement
between the issuer and NORTH AMERICAN TRANSFER CO. as Warrants Agent,
dated as of November 30, 1999, (the "Warrants Agreement")). Accordingly,
this Warrant Certificate and the Class A Warrants represented hereby may
become null and void in the circumstances specified in Section 7(e) of
the Warrants Agreement. The Warrants Agent will mail to the registered
holder of this certificate a copy of the Warrants Agreement, as in
effect on the date of such mailing, without charge upon written request.
Section 5. Countersignature and Registration.
The Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President, or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the Company's seal or
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Warrant
Certificates shall be countersigned, either manually or by facsimile signature,
by the Warrants Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrants Agent and issuance and
<PAGE>
delivery by the Company, such Warrant Certificates, nevertheless, may be
countersigned by the Warrants Agent, issued, and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company. Any Warrant Certificate may be signed
on behalf of the Company by any person who, at the actual date of the execution
of such Warrant Certificate, shall be a proper officer of the Company to sign
such Warrant Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
Following the Distribution Date, the Warrants Agent shall keep or cause
to be kept, at the office of the Warrants Agent designated for such purpose,
books for registration and transfer of the Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Warrant Certificates, the number of Warrants evidenced on its
face by each of the Warrant Certificates, and the date of countersignature
thereof by the Warrants Agent.
Section 6. Transfer, Split Up, Combination and Exchange of Warrants
Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e), and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the earlier of the Close of Business on the Expiration Date or the redemption
of the Warrants, any Warrant Certificate may be transferred, split up, combined
or exchanged for another Warrant Certificate or Warrant Certificates, entitling
the registered holder to purchase a like number of shares of Common Stock (or,
following a Common Stock Event, Common Stock and/or such other securities, cash,
or other assets as shall be issuable in respect of the Warrants in accordance
with the terms of this Agreement (such other securities, cash or other assets
being referred to herein as "Other Consideration")) as the Warrant Certificate
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Warrant Certificate shall make such request in writing
delivered to the Warrants Agent, and shall surrender the Class A Warrant
Certificate to be transferred, split up, combined, or exchanged at the office of
the Warrants Agent designated for such purpose, accompanied by a signature
guarantee and such other documentation as the Warrants Agent may reasonably
request. Neither the Warrants Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Warrant Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Warrant Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner from whom the Warrants evidenced by such
Warrant Certificate are to be transferred (or the Beneficial Owner to whom such
Warrants are to be transferred) or
<PAGE>
Affiliates thereof as the Company shall reasonably request. Thereupon, subject
to Sections 4(b), 7(e) and 14 hereof, the Company shall execute and the Warrants
Agent shall countersign and deliver to the Person entitled thereto a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested. The
Company may require payment by the holders of Warrants of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Warrant Certificates which the
Company is not required to pay in accordance with Section 9(d) hereof.
(b) Upon receipt by the Company and the Warrants Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate, and, in case of loss, theft or destruction, the receipt
of indemnity or security satisfactory to them, and upon reimbursement to the
Company and the Warrants Agent of all reasonable expenses incidental thereto,
and upon surrender to the Warrants Agent and cancellation of the Warrant
Certificate, if mutilated, accompanied by a signature guarantee and such other
documentation as the Warrants Agent may reasonably request, the Company will
execute and deliver a new Warrant Certificate of like tenor to the Warrants
Agent for countersignature and delivery to the registered owner in lieu of the
Warrant Certificate so lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Warrants; Purchase Price; Expiration Date of Class
A Warrants.
(a) Except as otherwise provided herein, the registered holder of any
Warrant Certificate may exercise the Warrants evidenced thereby in whole or in
part at any time from and after the Distribution Date and at or prior to the
Close of Business on December 30, 2009, (the "Expiration Date") or the earlier
redemption of the Warrants. Immediately upon the Close of Business on the
Expiration Date (or the earlier redemption of Warrants), all Warrants shall be
extinguished and all Warrant Certificates shall become null and void. To
exercise Warrants, the registered holder of the Warrant Certificate evidencing
such Warrants shall surrender such Warrant Certificate, with the form of
election to purchase on the reverse side thereof and the certificate contained
therein duly executed, to the Warrants Agent at the office of the Warrants Agent
designated for such purpose, accompanied by a signature guarantee and such other
documentation as the Warrants Agent may reasonably request, together with
payment in cash, only by electronic or wire transfer, or by certified check or
bank check, of the Purchase Price with respect to the total number of shares of
Common Stock (or, after a Common Stock Event, shares or similar units of Common
Stock and/or Other Consideration) as to which the Warrants are exercised (which
payment shall include any additional amount payable by such Person in accordance
with Section 9(d) hereof). The Warrants Agent shall promptly deliver to the
Company all payments of the Purchase Price received in respect of Warrants
<PAGE>
Certificates accepted for exercise.
(b) The purchase price for each share of Common Stock issuable pursuant
to the exercise of a Warrant (the "Purchase Price") shall initially be $.10,
shall be subject to adjustment as provided in Section 11 hereof, and shall be
payable in lawful money of the United States of America.
(c) Upon receipt of a Warrant Certificate representing the Warrants,
with the form of election to purchase set forth on the reverse side thereof and
the certificate contained therein duly executed, accompanied by payment of the
Purchase Price, with respect to each Warrant so exercised, the Warrants Agent,
subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall thereupon promptly
(i) requisition from any transfer agent of the Common Stock (or from the Company
if there shall be no such transfer agent, or make available if the Warrants
Agent is such transfer agent) certificates for the total number of shares of
Common Stock to be purchased and the Company hereby irrevocably authorizes such
transfer agent to comply with any such request, (ii) after receipt of such
certificates, cause the same to be delivered to or upon the order of the
registered holder of such Warrant Certificate, registered in such name or names
as may be designated in writing by such holder, and (iii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of a fractional share in accordance with Section 14 hereof and after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Warrant Certificate. After the occurrence of a Common Stock Event, the Company
shall make all necessary arrangements so that any Other Consideration then
deliverable in respect of the Warrants is available for distribution by the
Warrants Agent. For purposes of this Section 7, the Warrants Agent shall be
entitled to rely, and shall be protected in relying, on an Officers' Certificate
from the Company to the effect that the Distribution Date has occurred.
(d) Subject to Sections 4(b), 7(e) and 14 hereof, in case the registered
holder of any Warrant Certificate shall exercise less than all the Class A
Warrants evidenced thereby, a new Warrant Certificate evidencing Warrants
equivalent to the Warrants remaining unexercised shall be executed and delivered
by the Company to the Warrants Agent and countersigned and delivered by the
Warrants Agent to the registered holder of such Warrant Certificate or to such
holder's duly authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Common Stock Event, any Warrants beneficially
owned by (i) an Acquiring Person or an Affiliate of an Acquiring Person, or (ii)
a Disqualified Transferee shall become null and void without any further action,
and no holder of such Warrants shall have any Warrants whatsoever with respect
to such Warrants, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to
<PAGE>
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but the Company shall have no liability to any holder of Warrant
Certificates or other Person and none of the terms of this Agreement or the
Warrants shall be deemed to be waived with respect to such holder or other
Person as a result of any failure by the Company to make any determinations with
respect to an Acquiring Person or any Affiliate of an Acquiring Person or
Disqualified Transferees hereunder or any failure to have a legend placed on any
Warrant Certificate in accordance with Section 4(b) hereof or on any Common
Stock certificate in accordance with Section 3(c) hereof.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Warrants Agent nor the Company shall be obligated to undertake any action
with respect to a holder of any Warrant Certificate upon the occurrence of any
purported exercise thereof unless such holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Warrant Certificate surrendered for such exercise,
and (ii) provided such additional evidence of the identity of the Beneficial
Owner from whom the Warrants evidenced by such Warrants Certificate are to be
transferred (or the Beneficial Owner to whom such Warrants are to be
transferred) or Affiliates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Warrant Certificates.
All Warrant Certificates surrendered for the purpose of and accepted for
exercise, or surrendered for the purpose of redemption, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents (other than the Warrants Agent), be delivered to the Warrants Agent for
cancellation or in canceled form, or, if surrendered to the Warrants Agent,
shall be canceled by it, and no Warrant Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Warrants Agent for cancellation and
retirement, and the Warrants Agent shall so cancel and retire, any other Warrant
Certificates purchased or retired by the Company otherwise than upon the
exercise thereof. The Warrants Agent shall deliver all canceled Warrants
Certificates to the Company, or may, at the written request of the Company, but
shall not be required to, destroy such canceled Warrant Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock; Other
Covenants.
(a) The Company covenants and agrees that on and after the Distribution
Date, it shall use reasonable efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Common Stock (or, following
<PAGE>
the occurrence of a Common Stock Event, out of its authorized and unissued
shares of Common Stock and/or Other Consideration, or out of its authorized and
issued shares held in its treasury), the number of shares of Common Stock (or,
following a Common Stock Event, shares and/or similar units of Common Stock
and/or Other Consideration) that, except as provided in Section 11(a)(iii)
hereof, would then be sufficient to permit the exercise in full of all
outstanding Warrants; provided, that the reservation of such shares, however,
shall be subject and subordinate to any other reservation of such shares made by
the Company at any time for any lawful purpose; provided, further, however, that
in no event shall such failure to so reserve shares affect the Warrants of any
holder of Warrants hereunder.
(b) The Company covenants and agrees that on and after the Distribution
Date so long as the Common Stock (or, following a Common Stock Event, shares
and/or similar units of Common Stock and/or Other Consideration) issuable upon
the exercise of Warrants may be listed on any national securities exchange, the
Company shall use its best efforts to cause all shares (or similar units)
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that each share of Common Stock (or, following a
Common Stock Event, each share and/or similar unit of Common Stock and/or Other
Consideration) delivered upon exercise of Warrants shall, at the time of
delivery of the certificates for such shares (or units), subject to payment in
full of the Purchase Price, be duly and validly authorized and issued and fully
paid and nonassessable.
(d) The Company covenants and agrees that it shall pay when due and
payable any and all federal and state transfer taxes and similar charges which
may be payable in respect of the issuance or delivery of the Warrants
Certificates or of any shares of Common Stock (or, following the occurrence of a
Common Stock Event, each share and/or similar unit of Common Stock and/or Other
Consideration) upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Warrant
Certificates or in the issuance or delivery of certificates for any shares of
Common Stock (or, following the occurrence of a Common Stock Event, each share
and/or similar unit of Common Stock and/or Other Consideration) in a name other
than that of the registered holder of the Warrant Certificate evidencing
Warrants surrendered for exercise or to issue or deliver any certificates for
any shares of Common Stock (and, following the occurrence of a Common Stock
Event, any shares and/or similar units of Common Stock and/or Other
Consideration) upon the exercise of any Warrants until any such tax shall
<PAGE>
have been paid (any such tax being payable by the holder of such Warrants
Certificate at the time of surrender thereof) or until it has been established
to the Company's satisfaction that no such tax is due.
(e) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Common
Stock Event on which the consideration to be delivered by the Company upon
exercise of the Warrants has been determined in accordance with this Agreement,
or as soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Act, with respect to the securities
issuable upon exercise of the Warrants on an appropriate form, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Warrants are no longer exercisable for
such securities, or (B) the Expiration Date or earlier redemption of the
Warrants. The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities or "blue sky" laws of the various
states of the United States in connection with the exercisability of the
Warrants. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(e), the exercisability of the Class A Warrants in
order to prepare and file such registration statement or to permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Warrants has been
temporarily suspended. The Company shall thereafter issue a public announcement
at such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Warrants shall not be
exercisable in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.
Section 10. Common Stock Record Date; Etc.
Each Person in whose name any certificate for any shares of Common Stock
(or, following the occurrence of a Common Stock Event, shares and/or similar
units of Common Stock and/or Other Consideration) is issued upon the exercise of
Warrants shall for all purposes be deemed to have become the holder of record of
such shares of Common Stock (or such shares and/or similar units of Common Stock
and/or Other Consideration, as the case may be) represented thereby, and such
certificate shall be dated the date which is the later of (i) the date upon
which the Warrants Certificate evidencing such Warrants was duly surrendered, or
(ii) the date upon which payment of the Purchase Price (and any applicable
transfer taxes) in respect thereof was made; provided, however, that if such
date is a date upon which the relevant transfer books of the Company are closed,
such
<PAGE>
Person shall be deemed to have become the record holder of such shares (or Other
Consideration) on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open; provided,
further, that the Company covenants and agrees that it shall not close such
transfer books for a period exceeding ten consecutive days. Prior to the
exercise of the Warrants evidenced thereby (which shall be deemed to have
occurred on the date such certificate for shares and/or similar units of Common
Stock or Other Consideration shall be dated in accordance with this Section 10),
the holder of a Warrant Certificate, as such, shall not be entitled to any
Warrants of a security holder of the Company with respect to the shares of
Common Stock (and/or such shares or similar units of Common Stock or Other
Consideration) for which the Warrants shall be exercisable, including, without
limitation, the Warrant to vote, to receive dividends or other distributions, or
to exercise any preemptive Warrants, and shall not be entitled to receive any
notice of any proceedings of the Company, except as expressly provided herein.
Section 11. Antidilution Adjustments.
The Purchase Price and the number and kind of securities covered by each
Warrant and the number of Warrants outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number of
shares, or (D) issue, change, or alter any of its shares of capital
stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving Person), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, then, and in
each such case, the Purchase Price in effect at the time of the record
date for such dividend or the effective time of such subdivision,
combination, reclassification or recapitalization, and the number and
kind of shares of capital stock issuable upon exercise of the Warrants
at such time, shall be proportionately adjusted so that the holder of
any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares of Common Stock or other capital
stock which, if such Warrant had been exercised immediately prior to
such time at the Purchase Price then in effect and at a time when the
transfer books for the Common Stock (or other capital stock) of the
Company were open, such holder would have owned upon such exercise and
been entitled to receive by
<PAGE>
virtue of such dividend, subdivision, combination, reclassification or
recapitalization. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) In the event
(A) any Person shall at any time after the Declaration
Date become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any Acquiring
Person, at any time after the Declaration Date, directly or
indirectly, shall (1) merge into the Company or otherwise combine
with the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and the Class
A Common Stock of the Company shall remain outstanding and no
shares thereof shall be changed or otherwise transformed into
stock or other securities of any other Person or the Company or
cash or any other property, (2) in one or more transactions,
transfer any assets to the Company in exchange (in whole or in
part) for shares of any class of its equity securities or for
securities exercisable for or convertible into shares of any such
class or otherwise obtain from the Company, with or without
consideration, any additional shares of any such class or
securities exercisable for or convertible into shares of any such
class (other than as part of a pro rata distribution to all
holders of such class), (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions) to, from or with the
Company or any of the Company's Subsidiaries, assets with an
aggregate fair market value in excess of 25% of the assets of the
Company and its Subsidiaries determined on a consolidated basis
on terms and conditions less favorable to the Company than the
Company would be able to obtain through arm's-length negotiation
with an unaffiliated third party, (4) receive any compensation
from the Company or any of the Company's Subsidiaries other than
compensation as a director of the Company or for full-time
employment as a regular employee at rates in accordance with the
Company's (or such Subsidiary's) past practices, (5) receive the
benefit (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance
provided by the Company or any of its Subsidiaries on terms and
<PAGE>
conditions less favorable to the Company (or such Subsidiary)
than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party or (6) commence a
tender or exchange offer for securities of the Company; or
(C) during such time as there is an Acquiring Person at
any time after the Declaration Date, there shall be any
reclassification of securities (including any combination
thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate of an Acquiring Person), or any
repurchase by the Company or any of its Subsidiaries of shares of
the Common Stock of the Company, or any other class or series of
securities issued by the Company, which reclassification,
recapitalization, merger, consolidation or repurchase is effected
at a time when a majority of the Board consists of persons who
are the Acquiring Person or its Affiliates, or nominees or
designees of any thereof, which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share
of the outstanding shares of any class of equity securities or
securities exercisable for or convertible into any class of
equity securities of the Company or any of its Subsidiaries which
is directly or indirectly owned by an Acquiring Person or any
Affiliate of an Acquiring Person,
then, in each such case, upon the Close of Business 10 Business Days
after the occurrence of such event, proper provision shall be made so
that each holder of a Warrant, except as provided in Section 7(e)
hereof, shall thereafter have the Warrant to receive, upon exercise
thereof at the Purchase Price in effect at the time of exercise in
accordance with the terms of this Agreement, in lieu of one share of
Common Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying an amount equal to
the then current Purchase Price by an amount equal to the number of
shares of Common Stock for which a Warrant was or would have been
exercisable immediately prior to the first occurrence of any such event
whether or not such Warrant was then exercisable, and (y) dividing that
product by 1% of the Current Market Price per share of the Common Stock
of the Company (as defined in Section 11(d) hereof) determined as of the
date of such first occurrence.
(iii) In lieu of issuing whole or fractional shares of Common
Stock in accordance with Section 7(c) hereof, the Company shall
<PAGE>
(i) in the event that the number of shares of Common Stock which are
authorized by the Company's charter but not outstanding or reserved for
issuance for purposes other than upon exercise of the Warrants are not
sufficient to permit the exercise in full of the Warrants in accordance
with Section 7(c) hereof, or (ii) if a majority of the Board then in
office determines that it would be appropriate and not contrary to the
interests of the holders of Warrants (other than any Acquiring Person or
Disqualified Transferee or any Affiliate of the Acquiring Person or
Disqualified Transferee), (A) determine an amount, if any, (the "Excess
Amount") equal to the excess of (1) the value (the "Current Value") of
the whole or fractional shares of Common Stock issuable upon the
exercise of a Warrant in accordance with Section 7(c) hereof, over (2)
the Purchase Price, and (B) with respect to each Warrant, (subject to
Section 7(e) hereof) make adequate provision to substitute for such
whole or fractional shares of Common Stock, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Class B Common Stock or other equity securities of the
Company (including, without limitation, shares or units of preferred
stock which the Board has deemed in good faith to have the same value as
a share of Common Stock (such shares of equity securities being referred
to herein as " Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing
(which would include the additional consideration provided to any holder
by reducing the Purchase Price) having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board; provided, however, subject to the provisions of Section 9(e),
that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the Close of
Business 10 Business Days after the first occurrence of a Common Stock
Event described in Section 11(a)(ii) hereof, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Warrant and
without requiring payment of the Purchase Price, whole or fractional
shares of Common Stock (to the extent available) and then, if necessary,
cash, securities, and/or assets which in the aggregate are equal to the
Excess Amount. If the Board shall determine in good faith that it is
likely that sufficient additional shares of Common Stock or Common Stock
Equivalents could be authorized for issuance upon exercise in full of
the Warrants, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days following the Close of
Business 10 Business Days after the first occurrence of such a Common
Stock Event (such 30 day period) as it may be extended to 90 days, is
referred to herein as the "Substitution Period"). To the extent that the
Company determines that some action is to be taken
<PAGE>
pursuant to the preceding provisions of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that (except
as to the form of consideration which shall be determined as appropriate
by a majority of the Board then in office) such action shall apply
uniformly to all outstanding Warrants which shall not have become null
and void, and (y) may suspend the exercisability of the Warrants until
the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such provisions and to determine
the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Warrants has been temporarily suspended. The Company shall thereafter
issue a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock issuable upon exercise of a Warrant in accordance with
Section 7(c) hereof shall be the Current Market Price per share of the
Common Stock (as determined pursuant to Section 11(d) hereof) on the
Close of Business 10 Business Days after the date of the first
occurrence of such a Common Stock Event and the value of any Common
Stock Equivalent shall be deemed to be equal to the Current Market Price
per share of the Common Stock on such date.
(b) In the event the Company shall, after the Dividend Record Date, fix
a record date for the issuance of any options, warrants, or other Warrants to
all holders of Common Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase (i) Common
Stock or (ii) Common Stock Equivalents or (iii) securities convertible into
Common Stock or Common Stock Equivalents at a price per share of Common Stock or
Common Stock Equivalents (or having a conversion price per share of Common
Stock, if a security is convertible into Common Stock or Common Stock
Equivalents) less than the Current Market Price per share of Common Stock
(determined in accordance with Section 11(d) hereof) determined as of such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date plus the number of shares of
Common Stock and/or Common Stock Equivalents which the aggregate minimum
offering price of the total number of shares of Common Stock and/or Common Stock
Equivalents so to be offered (and/or the aggregate minimum conversion price of
such convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the maximum number of
additional shares of Common Stock and/or
<PAGE>
Common Stock Equivalents to be offered for subscription or purchase (or the
maximum number of shares into which such convertible securities so to be offered
are convertible). In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, for
purposes of this Section 11(b) the value of such consideration shall be the fair
market value thereof as determined in good faith by the Board (which
determination shall be described in an Officers' Certificate filed with the
Warrants Agent). Shares of Common Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed;
and in the event that such options, warrants or other Warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed (subject,
however, to such other adjustments as are provided herein).
(c) In the event that the Company shall, after the Dividend Record Date,
fix a record date for the making of a distribution to all holders of Common
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the surviving or continuing Person) of
evidences of indebtedness, cash (other than cash dividends paid out of the
earnings or retained earnings of the Company and its Subsidiaries determined on
a consolidated basis in accordance with generally accepted accounting principles
consistently applied), other property (other than a dividend payable in a number
of shares of Common Stock, but including any dividend payable in capital stock
other than Common Stock), or subscription Warrants or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, of which the numerator
shall be (i) the Current Market Price per share of Common Stock (as defined in
Section 11(d) hereof) determined as of such record date, less (ii) the sum of
(A) that portion of cash plus (B) the fair market value, as determined in good
faith by the Board (which determination shall be described in an Officers'
Certificate filed with the Warrants Agent) of that portion of such evidences of
indebtedness, such other property, and/or such subscription Warrants or warrants
applicable to one share of
Common Stock and of which the denominator shall be such Current Market Price
per share of the Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event such distribution is not
so made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed (subject,
however, to such other adjustments as are provided herein).
(d) For purposes of any computation pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share (or unit) of any security on any
date shall be deemed to be the average of the daily Closing Price of such
<PAGE>
security for the 10 consecutive Trading Days immediately after such date, and
for the purpose of any other computation hereunder, the "Current Market Price"
per share (or unit) of any security on any date shall be deemed to be the
average of the daily Closing Price of such security for the 20 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Market Price per share of such security is determined
during a period following the announcement by the issuer of such security of (i)
a dividend or distribution on such security payable in shares (or units) of such
security or securities convertible into shares (or units) of such security, or
(ii) any subdivision, combination or reclassification of such security, and
prior to the expiration of such 10 Trading Days or 20 Trading Days after (A) the
ex-dividend date for such dividend or distribution, or (B) the record date for
such subdivision, combination or reclassification, as the case may be, then, and
in each such case, the "Current Market Price" shall be the Closing Price of such
security on the last day of such respective 10 Trading Day or 20 Trading Day
period. For purposes of this Agreement, the "Closing Price" of any security on
any day shall be the last sale price, regular way, with respect to shares (or
units) of such security, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, with respect to such
security, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange; or, if such security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if such security is not so listed or admitted to
trading, the last quoted sale price with respect to shares (or units) of such
security, or, if not so quoted, as the average of the high bid and low asked
prices in the over-the-counter market with respect to shares (or units) of such
security, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other similar system then in use; or, if on
any such date such security is not quoted by any such organization, the average
of the closing bid and asked prices with respect to shares (or units) of such
security, as furnished by a professional market maker making a market in such
security selected by the Board; or, if no such market maker is available, the
fair market value of shares (or units) of such security as of such day as
determined in good faith by the Board (which determination shall be described in
an Officers' Certificate filed with the Warrants Agent).
(e) No adjustment in the Purchase Price shall be required unless
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share (or similar
<PAGE>
unit) of Common Stock or other securities. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction which
mandates the adjustment or (ii) the Expiration Date. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those required by this Section
11, as it in its discretion shall determine to be advisable in order that any
dividends, subdivision of shares, distribution of Warrants to purchase shares of
beneficial interest or other stock or securities, or distribution of securities
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made in
respect of a Common Stock Event, the holder of any Warrant thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Warrant and the Purchase Price thereof 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 such other shares
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m) and (p)
hereof, and the provisions of Sections 7, 9, 10, 11(d), 13 and 14 hereof with
respect to the shares of Common Stock shall apply on like terms to any such
other shares.
(g) All Warrants originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the Warrant to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Warrants
represented thereby, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made pursuant to Sections 11(b) and 11(c) hereof, each Warrant
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the Warrant to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth of a share)
obtained by (i) multiplying (x) the number of shares of Common Stock covered by
a Warrant immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) Assuming that no other adjustment pursuant to this Section 11 has
<PAGE>
been made, the Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Warrants in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Warrant. Each of the Warrants outstanding after such adjustment of the
number of Warrants shall be exercisable for the number of shares of Common Stock
for which a Warrant was exercisable immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants shall
become that number of Warrants (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price by the Purchase Price in effect immediately
after such adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Warrants, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Warrant Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Warrant Certificates have been issued, upon each adjustment of
the number of Warrants pursuant to this Section 11(i) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Warrants Certificates on such record date Warrant Certificates evidencing,
subject to Section 14 hereof, the additional Warrants to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Warrant Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to which such holders shall be
entitled after such adjustment. Warrant Certificates so to be distributed shall
be issued, executed, and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Warrant Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of whole or fractional shares of Common Stock issuable upon exercise
of such Warrants, the Warrant Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares of
Common Stock which were expressed in the initial Warrant Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of shares of
Common Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may, in the opinion of its counsel, be
<PAGE>
necessary in order that the Company may validly and legally issue such number of
fully paid and nonassessable shares of Common Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Warrant exercised after such record date
of the number of shares of Common Stock or other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common Stock or other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
Warrant to receive such additional securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, by means of a resolution of the Board acting in good faith,
shall determine to be advisable in order that any consolidation or subdivision
of the Common Stock, issuance wholly for cash of any Common Stock at less than
the Current Market Price thereof, issuance wholly for cash of Common Stock (or
other securities which by their terms are convertible into or exchangeable for
Common Stock), dividends payable in shares of Common Stock or other capital
stock or shares of beneficial interest, or issuance of Warrants, options, or
warrants referred to hereinabove in this Section 11, hereafter made or declared
by the Company to the holders of its Common Stock, shall not be taxable to such
holders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, more than 25% of (A) the assets
(taken at net asset value as stated on the books of the Company and determined
on a consolidated basis in accordance with generally accepted accounting
principles consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any other Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or
<PAGE>
immediately after such consolidation, merger or sale, there are any Warrants,
warrants or other instruments or securities outstanding or agreements (whether
or not in writing) in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Warrants or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of such other Person shall have received a distribution of Warrants
previously owned by such Person or any of its Affiliates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Warrants.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Dividend Declaration Date and
prior to the Distribution Date (i) declare or pay a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision, combination or consolidation of the outstanding Class A Common
Stock (by reclassification or otherwise than by payment of dividends in shares
of Common Stock) into a greater or smaller number of shares, then in any such
case, (i) the number of shares of Common Stock purchasable after such event upon
proper exercise of each Warrant shall be determined by multiplying the number of
shares of Common Stock so purchasable immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event; and (ii) each
share of Common Stock outstanding immediately after such event shall have issued
with respect to it that number of Warrants which each share of Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjustments.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall (a) promptly prepare an Officers' Certificate setting forth
such adjustment, including any adjustment in Purchase Price, the number of
shares or Other Consideration payable, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Warrants Agent and
with the transfer agent for the Common Stock a copy of such Officers'
Certificate, and (c) mail a brief summary thereof to each registered
<PAGE>
holder of a Warrant Certificate in accordance with Section 26 hereof. The
Warrants Agent shall be fully protected in relying on any such Officers'
Certificate and on any adjustment therein contained, and shall not be deemed to
have knowledge of any such adjustment unless and until it shall have received
such an Officers' Certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving Person of such consolidation or merger, (b) any Person (other than
a Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with and into, the Company, the Company
shall be the continuing or surviving Person of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the Common Stock
of the Company shall be changed or otherwise transformed into other stock or
other securities of any other Person or the Company or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, more than 25% of (A) the assets (taken at net
asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any Person (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof) then, from and after such event,
proper provision shall be made so that (i) each holder of a Warrant, except as
provided in Section 7(e) hereof, shall thereafter have the Warrant to receive,
upon the exercise thereof at the Purchase Price in effect at the time of such
exercise in accordance with the terms of this Agreement, such number of whole or
fractional shares of validly authorized and issued, fully paid, non-assessable,
and freely tradeable Common Stock of such other Person (or in the case of a
transaction or series of transactions described in clause (c) above, the Person
receiving the greatest amount of the assets or earning power of the Company, or
if the Common Stock of such other Person is not and has not been continuously
registered under Section 12 of the Exchange Act for the preceding 12-month
period and such Person is a direct or indirect Subsidiary of another Person,
that other Person, or if such other Person is a direct or indirect Subsidiary of
more than one other Person, the Common Stock of two or more of which are and
have been so registered, such other Person whose outstanding Common Stock has
the greatest aggregate value), free and clear of
<PAGE>
any liens, encumbrances, Warrants of first refusal, or other adverse claims, as
shall be equal to the result obtained by (x) multiplying the Purchase Price in
effect immediately prior to the first occurrence of any Common Stock Event
described in this Section 13 by the number of shares of Common Stock for which a
Warrant is exercisable immediately prior to such first occurrence (and without
taking into account any prior adjustment made pursuant to 11(a)(ii)) and (y)
dividing that product by 1% of the Current Market Price per share (as defined in
Section 11(d) hereof) of the Common Stock of such other Person determined as of
the date of consummation of such consolidation, merger, sale, or transfer; (ii)
the issuer of such Common Stock shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale, or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed, for all purposes of this Agreement, to
refer to such issuer, it being specifically intended that the provisions of
Section 11 hereof (other than Section 11(a)(ii) hereof) shall apply only to such
issuer following the first occurrence of a Common Stock Event described in this
Section 13; (iv) such issuer shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the whole or fractional shares of its Common Stock thereafter
deliverable upon the exercise of the Warrants; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
Common Stock Event described in clauses (a), (b) or (c) of this Section 13. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless (i) such issuer shall have a sufficient number of authorized shares of
its Common Stock which have not been issued or reserved for issuance as will
permit the exercise in full of the Warrants in accordance with this Section 13,
and (ii) prior thereto the Company and such issuer shall have executed and
delivered to the Warrants Agent a supplemental agreement so providing and
further providing that as soon as practicable after the date of any Common Stock
Event described above in this Section 13 such issuer shall (A) prepare and file
a registration statement under the Act, with respect to the Warrants and the
securities purchasable upon exercise of the Warrants on an appropriate form, and
will use its best efforts to cause such registration statement to (I) become
effective as soon as practicable after such filing and (II) remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
Expiration Date, and (B) will deliver to holders of the Warrants historical
financial statements of such issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act. Furthermore, in case the Person which is to be party to a
transaction referred to in this Section 13 has any provision in any of its
authorized securities or in its charter or by-laws or other agreement or
instrument governing its affairs, which provision would have the effect of
causing such Person to issue, in connection with, or as a consequence of, the
<PAGE>
consummation of a Common Stock Event described in clauses (a), (b), or (c) of
this Section 13, whole or fractional shares of Common Stock of such Person at
less than the then Current Market Price per share thereof (as defined in Section
11(d) hereof), or to issue securities exercisable for, or convertible into,
Common Stock of such Person at less than such then Current Market Price, then,
in such event, the Company hereby agrees with each holder of the Warrants that
it shall not consummate any such transaction unless prior thereto the Company
and such Person shall have executed and delivered to the Warrants Agent a
supplemental agreement providing that such provision in question shall have been
canceled, waived, or amended so that it will have no effect in connection with,
or as a consequence of, the consummation of the proposed transaction. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Common Stock
Event described in this Section 13 shall occur at any time after the occurrence
of a Common Stock Event described in Section 11(a)(ii) hereof, the Warrants
which have not theretofore been exercised shall thereafter become exercisable,
except as provided in Section 7(e) hereof, in the manner described in this
Section 13.
Section 14. Fractional Warrants and Fractional Shares.
(a) The Company shall not be required to issue fractions of Warrants or
to distribute fractions of Warrants, except prior to the Distribution Date as
provided in Section 11(i) hereof, or to distribute Warrant Certificates which
evidence fractional Warrants. In lieu of issuing such fractional Warrants, at
the election of the Company, there shall be paid to the registered holders of
the Warrants with regard to which such fractional Warrants would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Warrant. For the purposes of this Section 14(a), the current
market value of a whole Warrant shall be the Closing Price of the Warrants for
the Trading Day immediately prior to the date on which such fractional Warrants
would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
its capital stock upon exercise of the Warrants or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, at the election
of the Company, there shall be paid to the registered holders of Warrants at the
time such Warrants are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of a share of such capital stock.
For purposes of this Section 14(b), the current market value of a share of such
capital stock shall be the Closing Price of such capital stock for the Trading
Day immediately prior to the date of such exercise.
(c) The holder of a Warrant, by the acceptance of the
<PAGE>
Warrant, expressly waives such holder's Warrant to receive any fractional
Warrants or (except as provided in Section 14(b) hereof) any fractional share
upon exercise of a Warrant.
Section 15. Warrants of Action.
Excepting the Warrants of action given the Warrants Agent under Section
18 hereof and except as set forth in Section 20(l) hereof, all Warrants of
action in respect of this Agreement are vested in the registered holder of each
Warrant; and any registered holder of any Warrant, without the consent of the
Warrants Agent or of the holder of any other Warrant, may, in its own behalf and
for its own benefit, enforce, and may institute and maintain any suit, action,
or proceeding against the Company to enforce, or otherwise act in respect of,
such registered holder's Warrant to exercise the Warrants evidenced by such
Warrant in the manner provided in such Warrant Certificate and in this
Agreement, and the Company hereby agrees to reimburse such registered holder for
all expenses (including reasonable attorneys' fees) incurred by such registered
holder in connection therewith. Without limiting the foregoing or any remedies
available to the holders of Warrants, it is specifically acknowledged that the
holders of Warrants would not have an adequate remedy at law for any breach of
the obligations hereunder, and shall be entitled to injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Warrants Holders.
Every holder of a Warrant by accepting the same consents and agrees with
the Company and the Warrants Agent and with every other holder of a Warrant
that:
(a) prior to the Distribution Date, the Warrants will be transferable
only in connection with the transfer of Common Stock;
(b) from and after the Distribution Date, the Warrants Certificates are
transferable only on the registry books of the Warrants Agent if surrendered at
the principal office of the Warrants Agent, duly endorsed or accompanied by a
proper instrument of transfer with a form of assignment and certificate set
forth on the reverse side thereof duly executed, accompanied by a signature
guarantee and such other documentation as the Warrants Agent may reasonably
request;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Warrants Agent may deem and treat the person in whose name a Warrant Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the
<PAGE>
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificate or, prior to the Distribution Date, the
associated Common Stock certificate, made by anyone other than the Company or
the Warrants Agent) for all purposes whatsoever, and neither the Company nor the
Warrants Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Warrants Agent shall have any liability to any holder of a
Warrant or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company agrees to use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Warrant Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Warrant Certificate shall be entitled to
vote, receive dividends, or otherwise be deemed for any purpose the holder of
any securities of the Company which may be issuable on the exercise of the Class
A Warrants represented thereby, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon the holder of any Warrant
Certificate, as such, any of the Warrants of a stockholder of the Company or any
Warrant to vote in the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
action by the Company, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or preemptive Warrants, or otherwise, until the time specified in
Section 10 hereof.
Section 18. Concerning the Warrants Agent.
The Company agrees to pay to the Warrants Agent such reasonable
compensation as shall be agreed to in writing between the Company and the
Warrants Agent for all services rendered by it hereunder and, from time to time,
on demand of the Warrants Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Warrants Agent for, and to
hold it harmless against, any and all loss, liability, damages, claims or
expense, incurred without gross negligence, bad faith or willful misconduct on
<PAGE>
the part of the Warrants Agent, for anything done or omitted by the Warrants
Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses (including reasonable attorneys' fees and
expenses) of defending against any claim of liability for any of the foregoing.
The Warrants Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered, or omitted by it in connection with
its administration of this Agreement in reliance upon any Warrants Certificate
or certificate for any number of shares of Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed and executed by the proper Person or Persons, and verified or
acknowledged as required by this Agreement.
Section 19. Merger or Consolidation or Change of Name of Warrants Agent.
Any corporation into which the Warrants Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrants Agent shall be a party, or any corporation
succeeding to the shareholder services business of the Warrants Agent, shall be
the successor to the Warrants Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be eligible for
appointment as a successor Warrants Agent under the provisions of Section 21
hereof. In case at the time such successor Warrants Agent shall succeed to the
agency created by this Agreement and any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor Warrants Agent may
adopt the countersignature of the predecessor Warrants Agent and deliver such
Warrant Certificates so countersigned; and in case at that time any of the
Warrant Certificates shall not have been countersigned, any successor Warrants
Agent may countersign such Warrant Certificates either in the name of the
predecessor Warrants Agent or in the name of the successor Warrants Agent; and
in all such cases such Warrant Certificates shall have the full force provided
in the Warrant Certificates and in this Agreement.
In case at any time the name of the Warrants Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrants Agent may adopt the countersignature under its prior
name and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the
Warrants Agent may countersign such Warrant Certificates either in its prior
name or in its changed name; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in this
Agreement.
<PAGE>
Section 20. Duties of Warrants Agent.
The Warrants Agent undertakes only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Warrants Agent. The Warrants Agent shall
perform its duties and obligations hereunder upon the following terms and
conditions:
(a) The Warrants Agent may consult with legal counsel of its selection
(who may be legal counsel to the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Warrants Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Warrants Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate (an "Officers' Certificate") signed by a person believed by the
Warrants Agent to be the Chairman of the Board, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company and delivered to the Warrants Agent; and
such Officers' Certificate shall be full authorization to the Warrants Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such Officers' Certificate.
(c) The Warrants Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Warrants Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Warrant
Certificates (except its countersignature on such Warrants Certificate) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Warrants Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Warrants Agent) or in respect of the validity or
execution of any Warrant Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrants
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or be responsible for the manner, method
<PAGE>
or amount of any such adjustment or procedures or the ascertaining of the
existence of facts that would require any such adjustment or procedure (except
with respect to the exercise of Warrants evidenced by Warrants Certificates
after receipt of a certificate delivered pursuant to Section 12 hereof,
describing any such adjustment or procedures); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Stock or other securities to be issued pursuant to
this Agreement or any Warrant Certificate or as to whether any shares of Common
Stock, or any shares or similar units of other securities, will, when issued, be
validly authorized and issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrants Agent for the carrying out or performing by the
Warrants Agent of the provisions of this Agreement.
(g) The Warrants Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Warrants Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. Any application by the
Warrants Agent for written instructions from the Company may, at the option of
the Warrants Agent, set forth in writing any action proposed to be taken or
omitted by the Warrants Agent with respect to its duties or obligations under
this Agreement and the date on and/or after which such action shall be taken or
omitted and the Warrants Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall not be less than three
Business Days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Warrants
Agent has received written instructions from the Company in response to such
application specifying the action to be taken or omitted.
(h) The Warrants Agent and any stockholder, director, officer, or
employee of the Warrants Agent may buy, sell, or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Warrants Agent under this Agreement. Nothing herein shall preclude the Warrants
Agent from acting in any other capacity for the Company or for any other entity.
<PAGE>
(i) The Warrants Agent may execute and exercise any of the Warrants or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Warrants Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Warrants Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its Warrants if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Warrant Certificate surrendered to the
Warrants Agent for exercise or transfer, the certification appearing on the
reverse side thereof following the form of election to purchase has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Warrants Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
(l) The provisions of this Section 20 are solely for the benefit of the
Warrants Agent or the Company and any failure or omission under this Section 20
shall not affect the Warrants of the Company under this Agreement and neither
the Warrants Agent nor the Company shall have any liability to any holder of
Warrants or other Person on account of such failure or omission.
Section 21. Change of Warrants Agent.
The Warrants Agent or any successor Warrants Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to the transfer agent of the Common Stock by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Warrant Certificates by first-class mail. The Company may remove
the Warrants Agent or any successor Warrants Agent upon 30 days' notice in
writing, mailed to the Warrants Agent, to the transfer agent of the Common Stock
by registered or certified mail, and, subsequent to the Distribution Date, to
the holders of the Warrant Certificates by first-class mail. If the Warrants
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrants Agent. If the Company
shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Warrants Agent or by
<PAGE>
the holder of a Warrant Certificate (who shall, with such notice, submit such
holder's Warrant Certificate for inspection by the Company), then the registered
holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrants Agent. Any successor Warrants
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States,
the State of New York or the State of Florida (or of any other State of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York or the State of Florida, in good
standing, having an office designated for such purpose in the State of New York
or the State of Florida, which is authorized under such laws to exercise
corporate trust and/or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Warrants Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Warrants Agent shall be vested
with the same powers, Warrants, duties and responsibilities as if it had been
originally named as Warrants Agent without further act or deed; but the
predecessor Warrants Agent shall deliver and transfer to the successor Warrants
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose; and,
except as the context herein otherwise requires, such successor Warrants Agent
shall be deemed to be the "Warrants Agent" for all purposes of this Agreement.
Not later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Warrants Agent and the transfer
agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Warrant Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrants
Agent or the appointment of the successor Warrants Agent, as the case may be.
Section 22. Issuance of New Warrant Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Warrants to the contrary, the Company may, at its option, issue new Warrant
Certificates evidencing Warrants in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Warrant Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale by the Company
of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Warrants, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Warrant Certificates representing the appropriate number of Warrants in
connection
<PAGE>
with such issuance or sale; provided, however, that (i) no such Warrants
evidenced by a Warrant Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Warrants would be issued, and (ii) no such Warrant
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
The Company, may, at its option, upon the affirmative vote or written
consent of not less than a majority of the Board then in office, at any time
prior to the earlier of (i) the Distribution Date or (ii) the Close of Business
on the Expiration Date, redeem all (but not less than all) of the then
outstanding Warrants at a redemption price of $.01 per Warrant, appropriately
adjusted to reflect any stock split, stock dividend, combination of shares, or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The Company may, at its
option, pay the Redemption Price in cash, Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the majority of the Board then in office.
Immediately upon the taking of such action ordering the redemption of all of the
Warrants, evidence of which shall have been filed with the Warrants Agent, and
without any further action and without any notice, the Warrant to exercise the
Warrants so redeemed will terminate and the only Warrant thereafter of the
holders of such Warrants so redeemed shall be to receive the Redemption Price
(without the payment of any interest thereon). Within 10 days after such action
ordering the redemption of all of the Warrants, the Company shall give notice of
such redemption to the holders of the then outstanding Warrants by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Warrants Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price shall be made.
Section 24. Exchange.
(a) The Board, by majority vote of the Directors then in office, may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Warrants for shares of
Common Stock at an exchange ratio of one share of Common Stock per Warrant,
appropriately adjusted to reflect any stock split, stock
<PAGE>
dividend or similar transaction occurring after the date hereof (such exchange
ratio, as the same may be adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other than
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any such Subsidiary, or (iv) any entity holding Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Warrants pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the Warrant to exercise such Warrants
shall terminate and the only Warrant thereafter of a holder of such Warrants
shall be to receive that number of shares of Common Stock equal to the number of
such Warrants held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Warrants at their last addresses as they appear
upon the registry books of the Warrants Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange shall state the method by which the
exchange of the Common Stock for Warrants shall be effected and, in the event of
any partial exchange, the number of Warrants which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Warrants
(other than Warrants which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Warrants.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Common Stock Equivalents for shares of Common
Stock exchangeable for Warrants.
(d) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Warrants as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Stock for issuance upon exchange of the Warrants.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to each registered holder of a Warrant
<PAGE>
Certificate with regard to which a fractional share of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph (e), the current market value of a whole share of Common Stock shall
be the Closing Price of a share of Common Stock (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
In case the Company shall after the Distribution Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Common Stock or
to make any other distribution to the holders of its Common Stock (other than a
cash dividend out of earnings or the retained earnings of the Company), or (b)
to offer to the holders of its Common Stock Warrants or warrants to subscribe
for or to purchase any additional shares of Common Stock or shares of stock of
any other class or any other securities, Warrants, or options, or (c) to effect
any reclassification of the Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock), or (d) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions, of more
than 25% of (i) the assets of the Company and its Subsidiaries (taken at net
asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (ii) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any other Person or
Persons, or (e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to the Warrants Agent
and each holder of a Warrant, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of Warrants or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (a) or
(b) above at least twenty days prior to the record date for determining holders
of the Common Stock for purposes of such action, and in the case of any such
other action, at least twenty days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of Common
Stock whichever shall be the earlier. The failure to give notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
<PAGE>
In case any Common Stock Event described in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Warrants Agent and each holder of a Warrants Certificate,
in accordance with Section 26 hereof, a notice of the occurrence of such Common
Stock Event, which shall specify such event and the consequences of the event to
holders of Warrants under Section 11(a)(ii) hereof.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Warrants, for purposes of this Agreement and no
other notice need be given.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Warrants Agent or by the holder of any Warrant Certificate to the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Warrants
Agent) as follows:
iCrown Corporation
4400 PGA Boulevard, Suite 307
Palm Beach Gardens, FL 33410
ATTN: Donald Miller
Copy to:
Joel McTague
Hackney Miller, P.A.
4400 PGA Boulevard, Suite 505
Palm Beach Gardens, FL 33410
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Warrant Certificate to or on the Warrants Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
NORTH AMERICAN TRANSFER CO.
147 W. Merrick Road
Freeport, NY 11520
(iCrown Corporation Warrants Agreement)
<PAGE>
Notices or demands authorized by this Agreement to be given or made by
the Company or the Warrants Agent to the holder of any Warrant Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
Prior to the Distribution Date, the Board, upon the vote of a majority
of the Board then in office, may from time to time supplement or amend this
Agreement without the approval of any holders of the Warrants. From and after
the Distribution Date, the Board may, upon the vote of a majority of the Board
then in office, from time to time amend this Agreement without the approval of
any holders of the Warrants in order (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to change any time period
governing redemption of the Warrants or any other time period or (iv) to make
any other provisions in regard to matters or questions arising hereunder which
the Board, upon the vote of a majority of the Board then in office, may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of the Warrants (other than any Acquiring Person or Disqualified
Transferee or any Affiliate of an Acquiring Person or Disqualified Transferee).
The Warrants Agent shall join with the Company in the execution and delivery of
any such supplement or amendment, unless such supplement or amendment affects
any of the Warrants, duties, or obligations of the Warrants Agent hereunder, in
which case the Warrants Agent may, but shall not be required to, join in such
execution and delivery.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Warrants Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board; etc.
The Board shall have the exclusive power and authority to administer
this Agreement and to exercise all Warrants and powers specifically granted to
the Board, or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the Warrant and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below all omissions with respect to the
foregoing) which are done or made by the Board in good faith and with the
<PAGE>
concurrence of a majority of the Board then in office shall (x) be final,
conclusive and binding on the Company, the Warrants Agent, the holders of the
Warrants and all other parties and (y) not subject any Director to any liability
to the holders of the Warrants.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Warrants Agent, and the registered holders of the Warrants
(and, prior to the Distribution Date, the associated shares of Common Stock) any
legal or equitable Warrant, remedy, or claim under this Agreement or the
Warrants; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrants Agent, and the registered holders of the Warrants (and,
prior to the Distribution Date, the associated Class A Common Stock).
Section 31. Severability.
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the Warrant of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination by
the Board.
Section 32. Governing Law.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Florida and for all
purposes shall be governed by and construed in accordance with the laws of said
State applicable to contracts to be made and performed entirely within said
State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
<PAGE>
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and set their respective hands and seals, all as of the day and
year first above written.
iCrown Corporation
By:_______________________________
Title: President
Attest:
By:______________________________
Title:
NORTH AMERICAN TRANSFER CO.
By:______________________________
Title:
Attest:
By:_______________________________
Title:
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
Certificate No. W- _______ Warrants
NOT EXERCISABLE AFTER DECEMBER 30, 2009, OR EARLIER IF ORDER OF REDEMPTION IS
GIVEN. THE WARRANTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER WARRANT ON THE TERMS SET FORTH IN THE WARRANT AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, WARRANTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE (WHICH INCLUDES AFFILIATES AND ASSOCIATES) OF AN ACQUIRING PERSON (AS
EACH SUCH TERM IS DEFINED IN THE WARRANTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH WARRANTS MAY BECOME NULL AND VOID. THE WARRANTS SHALL NOT BE
EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION
WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE WARRANTS IN SUCH JURISDICTION SHALL NOT HAVE
BEEN OBTAINED OR BE OBTAINABLE. [THE WARRANTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE (WHICH INCLUDES AFFILIATES ANDASSOCIATES) OF AN ACQUIRING PERSON
(AS EACH SUCH TERM IS DEFINED IN THE WARRANTS AGREEMENT). ACCORDINGLY, THIS
WARRANT CERTIFICATE AND THE WARRANTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE WARRANT AGREEMENT.]1
Warrant Certificate
iCrown Corporation
This certifies that , or registered assigns,
is the registered owner of the number of Warrants set forth above, each of which
entitles the owner thereof, subject to the terms, provisions, and conditions of
the Warrants Agreement dated as of November 30, 1999, (the " Warrants
Agreement") between iCrown Corporation (the "Company"), and NORTH AMERICAN
TRANSFER CO. (the "Warrants Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Warrants Agreement)
and prior to 5:00 p.m. (West Palm Beach, Florida time) on December 30, 2009,
(the
- ---------------------
1 The portion of the legend in brackets shall be inserted only if
applicable.
<PAGE>
"Expiration Date") at the office of the Warrants Agent designated for such
purpose, or its successors as Warrants Agent, one share of Common Stock, with a
par value of $.0001 per share (" Common Stock"), of the Company per each Warrant
represented hereby, at a purchase price of $.10 per share (the "Purchase Price")
upon presentation and surrender of this Warrant Certificate with the Form of
Election to Purchase set forth on the reverse side hereof and the certificate
contained therein duly completed and executed, accompanied by a signature
guarantee and such other documentation as the Warrants Agent may reasonably
request. 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 Purchase Price per share set forth above, are the number and Purchase
Price as of December 30, 1999, based on the shares of Common Stock of the
Company as constituted at such date.
As more fully set forth in the Warrants Agreement, upon the occurrence
of a Common Stock Event (as such term is defined in the Warrants Agreement), if
the Warrants evidenced by this Warrants Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate of an Acquiring Person (as each such
term is defined in the Warrants Agreement) or (ii) a Disqualified Transferee (as
defined in the Warrants Agreement), such Warrants shall automatically become
null and void and no holder hereof shall have any Warrant with respect to such
Warrants from and after the occurrence of such Common Stock Event.
The Warrants evidenced by this Warrant Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Warrants in such jurisdiction shall not have
been obtained or be obtainable.
As provided in the Warrants Agreement, the Purchase Price, and the
number and type of securities which may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are subject to modification and
adjustment upon the happening of certain events.
In the circumstances described in Section 13 of the Warrants Agreement,
the securities issuable upon the exercise of the Warrants evidenced hereby shall
be the common stock or similar equity securities or equity interests of an
entity other than the Company.
This Warrant Certificate is subject to all of the terms, provisions, and
conditions of the Warrants Agreement, which terms, provisions, and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Warrants Agreement reference is hereby made for a full description of the
Warrants, limitations of Warrants, obligations, duties, and
<PAGE>
immunities hereunder of the Warrants Agent, the Company, and the holders of the
Warrant Certificates, which limitations of Warrants include the temporary
suspension of the exercisability of such Warrants under the specific
circumstances set forth in the Warrants Agreement. Copies of the Warrants
Agreement are on file at the office of the Warrants Agent designated for such
purpose and may be obtained by the holder of any Warrants upon written request
to the Warrants Agent.
This Warrant Certificate, with or without other Warrants Certificates,
upon surrender at the office of the Warrants Agent designated for such purpose,
accompanied by a signature guarantee and such other documentation as the
Warrants Agent designated for such purpose may reasonably request, 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 shares of Common Stock (or other consideration, as the case may be) as
the Warrants evidenced by the Warrant Certificate or Warrant Certificates
surrendered shall have entitled such holder to purchase. If this Warrant
Certificate shall be exercised in part, the holder shall be entitled to receive,
upon surrender hereof, another Warrant Certificate or Warrant Certificates for
the number of whole Warrants not exercised.
Subject to the provisions of the Warrants Agreement, the Warrants
evidenced by this Warrant Certificate may be redeemed by the Company by a
majority vote of the Board (as defined in the Warrants Agreement) then in office
at any time prior to the earlier of the Distribution Date or the Expiration
Date, at a redemption price of $.01 per Warrant (which amount is subject to
adjustment as provided in the Warrants Agreement). In addition, in certain
circumstances, the Warrants may be exchanged, in whole or in part, for shares of
Common Stock. Immediately upon the action of the Board ordering the exchange of
any Warrants and without any further action and without any notice, the Warrant
to exercise such Warrants will terminate and the only Warrant thereafter of a
holder of such Warrants will be to receive that number of shares of Common Stock
issuable upon the exchange.
The Company is not obligated to issue whole or fractional shares of
Common Stock (or other securities) upon the exercise of any Warrant or Warrants
evidenced hereby, but in lieu thereof a cash payment may be made at the election
of the Company, as provided in the Warrants Agreement.
No holder of this Warrant Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Warrants
Agreement or herein be construed to confer upon the holder hereof, as
<PAGE>
such, any of the Warrants of a stockholder of the Company or any Warrant 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 action by the
Company, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Warrants Agreement), or to receive
dividends or subscription Warrants, or otherwise, until the Warrant evidenced by
this Warrant Certificate shall have been exercised as provided in the Warrants
Agreement.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrants Agent.
WITNESS the facsimile signature of the proper officers and the seal of
the Company. Dated as of November 30, 1999.
iCrown Corporation
By_____________________________
Title:
ATTEST:
_____________________________
Title:
Countersigned:
_____________________________
NORTH AMERICAN TRANSFER CO.
By_____________________________
Authorized Signatory
Date of Countersignature:
<PAGE>
[Form of Reverse Side of Warrant Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED ___________________________________ hereby sells, assigns and
transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________ whose social
security or tax identification number is: ______________ the Warrants evidenced
by this Warrant Certificate, together with all Warrant, title and interest
herein, and does hereby irrevocably constitute and appoint ____________________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________________, ____.
_____________________________
Signature
Signature Guaranteed:*
- - --------
* Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantees medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Warrants evidenced by this Warrant Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate of an Acquiring Person (as each such
term is defined in the Warrants Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Warrants evidenced by this Warrants Certificate
after the occurrence of a Common Stock Event from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate of an Acquiring Person.
Dated:____________________ ______________________________________
Signature
Signature Guaranteed:*
_____________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Warrants Certificate in
every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate)
iCrown Corporation
The undersigned hereby irrevocably elects to exercise _________________
Warrants represented by this Warrant Certificate to purchase the number of
shares of Common Stock (or other securities) 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
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 Class
A Warrant Certificate)
Signature Guaranteed:**
- - --------
** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Warrants evidenced by this Warrant Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate of any such Acquiring Person (as each such term
is defined in the Warrants Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Warrants evidenced by this Warrants Certificate
after the occurrence of a Common Stock Event (as such term is defined in the
Warrants Agreement) from any Person who is, was, or subsequently became an
Acquiring Person or an Affiliate of an Acquiring Person.
Dated: _________________, ____ _________________________
Signature
Signature Guaranteed:***
_____________________________
- - --------
*** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
<PAGE>
EXHIBIT B
iCrown Corporation
SUMMARY OF PURCHASE WARRANTS
On November 30, 1999, the Board of Directors (the "Board") of iCrown
Corporation (the "Company") declared a dividend of one purchase Warrant (a
"Warrant") for every outstanding share of the Company's Common Stock, $.10 par
value per share (the " Common Stock"). The Warrants will be distributed on
December 30, 1999, to stockholders of record as of the close of business on
December 30, 1999, (the "Dividend Record Date"). The terms of the Warrants are
set forth in a Warrants Agreement dated as of November 30, 1999, (the "Warrants
Agreement") between the Company and American Stock Transfer Trust Company (the
"Warrants Agent"). The Warrants Agreement provides for the issuance of one
Warrant for every share of Common Stock issued and outstanding on the Dividend
Record Date and for each share of Common Stock which is issued or sold after
that date and prior to the "Distribution Date" (as defined below).
Each Warrant entitles the holder to purchase from the Company one share
of Common Stock at a price of $.10 per share, subject to adjustment. The
Warrants will expire on December 30, 2009 (the "Expiration Date"), or upon the
earlier redemption of the Warrants, and are not exercisable until the
Distribution Date.
No separate certificates representing the Warrants will be issued at the
present time. Until the Distribution Date (or earlier redemption or expiration
of the Warrants), (i) the Warrants will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Dividend
Record Date upon transfer or new issuance of the Company's Common Stock will
contain a notation incorporating the Warrants Agreement by reference and (iii)
the surrender for transfer of any of the Company's Common Stock certificates
will also constitute the transfer of the Warrants associated with the Common
Stock represented by such certificate.
The Warrants will separate from the Common Stock and certificates
representing the Warrants will be issued on the Distribution Date. Unless
otherwise determined by a majority of the Board then in office, the Distribution
Date will occur on the earlier of (i) the tenth business day following the later
of (A) the date of a public announcement that a person, including affiliates or
associates of such person (an "Acquiring Person"), except as described below,
has acquired or obtained the Warrant to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock or (B) the date on which an
executive officer of the Company has actual knowledge that
<PAGE>
an Acquiring Person became such (the later being, the "Stock Acquisition Date")
or (ii) the tenth business day following commencement of a tender offer or
exchange offer that would result in any person, together with its affiliates and
associates owning 15% or more of the Company's outstanding Common Stock. In any
event, the Board of Directors may delay the distribution of the certificates.
After the Distribution Date, separate certificates evidencing the Warrants ("
Warrant Certificates") will be mailed to holders of record of the Company's
Class A Common Stock as of the close of business on the Distribution Date and
thereafter, such separate Warrant Certificates alone will evidence the Warrants.
If, at any time after the Board declares the Warrants dividend, any
person or group of affiliated or associated persons (other than the Company and
its affiliates) shall become an Acquiring Person, each holder of a Warrant will
have the Warrant to receive shares of the Company's Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a
market value of two times the exercise price of the Warrant. For example, if the
exercise price is $.10, the holder of each Warrant would be entitled to receive
$10.00 in market value of the Company's Common Stock for $.10. Also, in the
event that at any time after the Stock Acquisition Date, the Company was
acquired in a merger or other business combination, or if more than 25% of its
assets or earning power was sold, each holder of a Warrant would have the
Warrant to exercise such Warrant and thereby receive common stock of the
acquiring company with a market value of two times the exercise price of the
Warrant. Thus, if the exercise price is $.10, the holder of each Warrant would
be entitled to receive $10.00 in market value of the acquiring company's common
stock upon payment of the $.10. Following the occurrence of any of the events
described in this paragraph, any Warrants that are, or (under certain
circumstances specified in the Warrants Agreement) were, beneficially owned by
any Acquiring Person or Disqualified Transferee shall immediately become null
and void.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Warrants for shares of Common Stock (or, other securities of the Company
equivalent in value to such shares of Common Stock) at an exchange ratio of one
share of Common Stock (or other such consideration) per Warrant, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of declaration of the Warrants dividend (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). The Board,
however, may not effect an exchange at any time after any person (other than (i)
the Company, (ii) any subsidiary of the Company, (iii) any employee benefit plan
of the Company or any such subsidiary or any entity holding Common Stock for or
<PAGE>
pursuant to the terms of any such plan), together with all affiliates of such
person, becomes the beneficial owner of 50% or more of the Common Stock then
outstanding. Immediately upon the action of the Board ordering the exchange of
any Warrants and without any further action and without any notice, the Warrant
to exercise such Warrants will terminate and the only Warrant thereafter of a
holder of such Warrants will be to receive that number of shares of Common Stock
equal to the number of such Warrants held by the holder multiplied by the
Exchange Ratio.
The exercise price of the Warrants, and the number of shares of Common
Stock or other consideration issuable upon exercise of the Class A Warrants, are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
Warrants or warrants to subscribe for shares of the Common Stock or convertible
securities at less than the current market price of the Common Stock or (iii)
upon the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding cash dividends paid out of the earnings or
retained earnings of the Company and certain other distributions) or of
subscription Warrants or warrants (other than those referred to above).
With certain exceptions, no adjustments in the exercise price of the
Warrants will be required until cumulative adjustments equal at least 1% in such
price.
At any time prior to the earlier of (i) the Distribution Date or (ii)
the close of business ten years after the Warrants Agreement becomes effective
(the "Expiration Date"), the Company, by a majority vote of the Board then in
office, may redeem the Warrants at a redemption price of $.01 per Warrant (the
"Redemption Price"), as described in the Warrants Agreement. Immediately upon
the action of the Board electing to redeem the Class A Warrants, the Warrant to
exercise the Warrants will terminate and the only Warrant of the holders of
Warrants will be to receive the Redemption Price.
Until a Warrant is exercised, the holder thereof, as such, will have no
Warrants as a stockholder of the Company, including, without limitation, the
Warrant to vote or to receive dividends.
Neither the distribution of the Warrants nor the subsequent separation
of the Warrants on the Distribution Date will be a taxable event for the Company
or its stockholders. Holders of Warrants may, depending upon the circumstances,
recognize taxable income upon the occurrence of certain Warrants triggering
events including a tender offer for 15% or more of the Common Stock or a person
or group attaining beneficial ownership of
<PAGE>
15% or more of the Common Stock (collectively, "Common Stock Events"). In
addition, holders of Warrants may have taxable income as a result of (i) an
exchange by the Company of shares of Common Stock for Warrants as described
above or (ii) certain anti-dilution adjustments made to the terms of the
Warrants after the Distribution Date. A redemption of the Warrants would be a
taxable event to holders.
The Warrants Agreement may be amended by the Board at any time prior to
the Distribution Date without the approval of the holders of the Warrants. From
and after the Distribution Date, the Warrants Agreement may be amended by the
Board without the approval of the holders of the Warrants in order to cure any
ambiguity, to correct any defective or inconsistent provisions, to change any
time period for redemption or any other time period under the Warrants Agreement
or to make any other changes that do not adversely affect the interests of the
holders of the Warrants (other than any Acquiring Person or its affiliates or
associates or their transferees).
A copy of the Warrants Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to the Company's Form 8-A registration
statement with respect to the Warrants. A copy of the Warrants Agreement is
available free of charge from the Warrants Agent, at the following address:
NORTH AMERICAN TRANSFER CO.
147 W. Merrick Road
Freeport, NY 11520
(ICrown Corporation Warrants Agreement)
This summary description of the Warrants does not purport to be complete and is
qualified in its entirety by reference to the Warrants Agreement, which is
incorporated herein by reference.
EXHIBIT 5.0
Registration Statement Form S-4
December 13, 1999
iCrown Corporation
4400 PGA Blvd.
Palm Beach Gardens, FL
33410
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
We are counsel for iCrown Corporation, a Florida corporation (the
"Company") in connection with its proposed public offering under the Securities
Act of 1933, as amended, of up to 2,000,000 Units of its securities, each Unit
consisting of one share of $.0001 par value Common Stock ("Common Stock") and
one Class A Common Stock Purchase Warrant ("Class A Warrant") through a
Registration Statement on Form S-4 ("Registration Statement") as to which this
opinion is a part, to be filed with the Securities and Exchange Commission (the
"Commission").
In connection with rendering our opinion as set forth below, we have
reviewed and examined originals or copies identified to our satisfaction of the
following:
(1) Articles of Incorporation, and amendment thereto, of the Company as
filed with the Secretary of State of the State of Florida.
(2) Corporate minutes containing the written deliberations and resolutions
of the Board of Directors and shareholders of the Company.
(3) The Registration Statement and the Preliminary Prospectus contained
within the Registration Statement.
(4) The other exhibits to the Registration Statement.
We have examined such other documents and records, instruments and
certificates of public officials, officers and representatives of the Company,
and have made such other investigations as we have deemed necessary or
appropriate under the circumstances.
Based upon the foregoing and in reliance thereon, it is our opinion that
the Units, Common Stock, Warrants and Common Stock issuable upon exercise of the
Warrants offered under the Registration Statement will, upon the purchase,
receipt of full payment, issuance and delivery in
<PAGE>
accordance with the terms of the offering described in the Registration
Statement, be fully and validly authorized, legally issued fully paid and
non-assessable.
We hereby consent to the use of this opinion, as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus constituting a part thereof.
Very truly yours,
Hackney & Miller, P.A.
EXHIBIT 10.0
SUBLEASE AGREEMENT
THIS AGREEMENT, made this ______ day of December, 1999 between Hackney
& Miller, P.A., f/k/a Wheeler, Hackney & Miller, P.A., a Florida corporation,
having an office at 505 PGA Blvd., Suite 505, Palm Beach Gardens, FL 33410
(hereinafter referred to as Sublessor) and iCrown Corporation, a Florida
corporation, having an office at 4400 PGA Blvd., Suite 307, Palm Beach Gardens,
FL 33410 (hereinafter referred to as Sublessee).
W I T N E S S E T H :
WHEREAS, pursuant to Lease dated October 1, 1997 between Palm Beach
Florida Hotel and Office Building Limited Partnership, a Florida limited
partnership, as landlord, and Wheeler, Hackney & Miller, P.A., as tenant, a copy
of which lease is attached hereto as Exhibit A (hereinafter referred to as the
Lease), covering a portion of the third floor of the building known as Admiralty
Tower Two (hereinafter referred to as the Leasehold); and
WHEREAS, Sublessee desires to sublease from Sublessor and Sublessor
desires to sublease unto Sublessee the portion of the Leasehold indicated in red
on Exhibit B containing approximately 1100 square feet (hereinafter referred to
as the Premises); and,
NOW, THEREFORE, in consideration of the Premises and the mutual
undertakings, covenants, promises, and agreements of the parties, IT IS AGREED
AS FOLLOWS:
1. Providing all of the terms and conditions contained within this
Agreement are fulfilled, Sublessor shall sublease unto Sublessee and Sublessee
shall accept the sublease of, the Premises from the date hereof through November
30, 2000, subject to the rents, terms, covenants, conditions, and provisions set
forth in the Lease.
2. The Commencement Date is conditioned upon the completion of all of
the following conditions:
(a) This Agreement is executed by the Sublessor and Sublessee;
and
(b) The Landlord has approved the Sublease, in writing.
3. This Agreement shall automatically terminate on November 30, 2000,
or such earlier date as provided herein.
4. Sublessee represents and warrants that it has read the Lease and
agrees that:
(a) The terms, covenants, promises, and conditions of the
Lease are incorporated herein; and
(b) Sublessee shall comply with and be bound by all of the
terms, covenants, promises, and conditions of the Lease;
<PAGE>
(c) Sublessee shall comply (without delay) with all reasonable
requirements of the Landlord's consent to this Sublease.
5. Sublessor shall duly observe and perform those obligations imposed
upon the Tenant under the Lease to the extent that such obligations are not
provided in this Sublease to be observed or performed by Sublessee, except with
respect to any failure in such observance or performance which results from any
default by Sublessee.
6. Sublessor warrants and represents to Sublessee that on the
Commencement Date:
(a) The Lease is valid and existing, there are no existing
defaults on the part of the Landlord or the Tenant with respect thereto, and the
Landlord does not hold any claim against the Tenant;
(b) There are and will be no contracts for services or
otherwise on account of maintenance or repairs which expressly or impliedly are
or will be binding upon Sublessee or upon the Premises.
7. In consideration for this Sublease, Sublessee shall pay Sublessor an
annual rental for the Premises of Twenty Four Thousand One Hundred Sixty Eight
Dollars ($ 24,168.00 ) to be paid in equal monthly payments in advance on the
first day of each and every month of Two Thousand Fourteen Dollars ($ 2014.00 ).
Simultaneously with the execution of this Sublease, Sublessee shall pay a
security deposit equal to one month's rent and the first month's rent in
advance. Commencing December 1, 2000, the annual rent shall be increased or
decreased by one-third of any adjustments to Sublessor's rent paid to Landlord.
8. Any notices shall be in writing and shall be sent by registered or
certified mail, return receipt requested, addressed to the parties at the
addresses indicated on page one hereof, or such other address as such party has
been advised of in writing.
9. This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the Premises, and there are no other
terms, covenants, obligations, or representations, oral or written, of any kind
whatsoever.
10. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto, their respective heirs, executors,
administrators, successors, and assigns, and may not be revoked or amended,
except by instrument, in writing, subscribed by the party sought to be charged
therewith.
11. For value received and in consideration for, and as an inducement
to, Sublessor's making this Sublease, Crown Holdings Corporation, a Florida
corporation guarantees to Sublessor and Sublessor's successors and assigns, the
full performance and observance of all the covenant's, conditions, and
agreements herein provided to be performed by Sublessee, without requiring any
notice of non-payment, non-performance, or non-observance, or proof, or notice
or demand, all of which the guarantor waives and expressly agrees that the
validity of this guaranty and the obligations of the guarantor hereunder shall
in nowise be terminated, affected, or impaired by reason of the assertion by
Sublessor against Sublessee of any of the rights or remedies reserved to
2
<PAGE>
Sublessor under the Sublease.
12. This Agreement shall be interpreted and governed by the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date, month, and year first above written.
AS TO SUBLESSEE:
iCrown Corporation, a Florida corporation
By:________________________________
Donald W. Miller, President
AS TO SUBLESSOR:
Hackney & Miller, P.A., a Florida
professional association
By:________________________________
Robert C. Hackney, Director
AS TO GUARANTOR:
Crown Capital Holdings Corp., a Florida
corporation
By:________________________________
Donald W. Miller, Chairman
3
EXHIBIT 10.1
FINANCIAL ADVISORY AND
INVESTMENT ADVISING AGREEMENT
This Agreement is made and entered into as this ____ day of __________,
1999 by and between Crown Capital Advisors, Inc. ("the Investment Adviser") and
iCrown Corporation ("the Company"), for the purpose of defining and
acknowledging the terms of this Agreement.
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EXCLUSIVITY. The Company hereby engages the Investment Adviser on an
exclusive basis for the term specified in Paragraph Two (2) hereof to
render services to the Company as its corporate finance consultant,
financial advisor and investment adviser upon the terms and conditions
set forth herein.
2. TERM. This Agreement shall be effective for a period of one year,
commencing upon the date this contract is executed by both parties and
may be extended as the parties shall mutually agree in writing, subject
to the establishment of arrangements for additional compensation and
other appropriate terms for such extension.
3. SERVICES TO BE PROVIDED. During the term of this Agreement, the
Investment Adviser shall provide the Company with such regular and
customary consulting advice as is reasonably requested by the Company,
provided that the Investment Adviser shall not be requested to
undertake duties not reasonably within the scope of the financial
advisory or investment advising services contemplated by this
agreement. It is understood and acknowledged by the parties that the
value of Investment Adviser's advice is not readily quantifiable, and
that Investment Adviser shall be obligated to render advice upon the
request of the Company, in good faith, and shall use its best efforts
to perform the contemplated duties as set forth herein. Investment
Adviser's duties may include, but will not necessarily be limited to,
providing recommendations and assisting in the following:
1. disseminating information about the Company to the investment
community at large;
2. rendering advice and assistance in connection with the
preparation of annual and interim reports and press releases;
3. assisting in the company's financial public relations;
4. arranging, on behalf of the Company, at appropriate times,
meetings with securities analysts of investment banking firms;
Page 1
<PAGE>
5. rendering advice with regard to internal operations, including, but not
limited to:
1. the formation of corporate goals and their implementation;
2. the Company's financial structure and its divisions or
subsidiaries;
3. securing, when and if necessary and possible, additional
financing through banks, insurance companies or other
institutions; and
4. corporate organization and personnel;
6. rendering advice with regard to any of the following corporate finance
matters:
1. changes in the capitalization of the Company;
2. changes in the corporate structure;
3. redistribution of shareholdings of the Company's stock;
4. sales of securities in public or private transactions and the
structuring thereof;
5. alternative uses of corporate assets; and
6. structure and use of debt;
7. rendering advice or assistance with regard to any of the following
merger or acquisition activities:
1. the acquisition and/or merger of or with other companies;
2. divestiture or any other similar transaction; and
3. the sale of the Company itself (or any significant percentage,
assets, subsidiaries or affiliates thereof);
8. rendering advice and/or assistance with regard to bank financing or any
other financing from financial institutions or individuals (including
but not limited to revolving credit facilities, lines of credits, term
loans, rediscounted credit facilities, senior and junior loans, whether
collateralized or unsecured, etc.);
Page 2
<PAGE>
9. acting as an information agent and electronic media agent in connection
with any tender offers or share exchange offers;
10. it is understood by both parties that Investment Advisor will not act
as an underwriter or placement agent for the Company's securities.
4. UNDERTAKINGS OF THE COMPANY. In order to facilitate financing, the
Company shall afford to the Investment Adviser and its representatives
full and complete access to all of its properties and records and the
full cooperation of management in the prompt preparation of a
confidential placement memorandum containing all of the information the
Investment Adviser may deem necessary to effect the successful
placement of the transaction.
5. COMPENSATION. In consideration for the services rendered by Investment
Advisers to the Company pursuant to this agreement (and in addition to
the expenses provided for in Paragraph Seven hereof), the Company shall
compensate the Investment Adviser as follows:
1. INITIAL RETAINER. None.
2. INITIAL WARRANTS. At closing of the first transaction, credit
facility or equity financing transaction, as contemplated
herein, the Company shall issue to the Investment Adviser
and/or its designees Warrants to purchase two percent (2%) of
the Company's fully diluted common stock at a nominal purchase
price (the "Warrant Option"). All Warrants shall expire five
(5) years from the date of issuance and shall have "piggy
back" and demand registration rights and anti-dilution
provisions acceptable to the Investment Adviser.
1. CASHLESS EXERCISE . In lieu of paying the shares
purchase price in cash, the Investment Adviser may,
at its option, deliver to the Company for
cancellation shares of common stock or other
outstanding securities of the Company convertible
into the Company's common stock (including rights
represented by this Warrant) that have a value equal
to the shares purchase price. The determination of
value shall be made by agreement between the Holder
and the Company, but, failing such agreement, by
reference to the trading price of the Company's
common stock on the date of exercise.
3. MERGER AND ACQUISITION FEE. If any transaction (as hereinafter
defined) is consummated during the Term of this Agreement with
any parties, whether introduced or contacted by the Company or
Investment Advisers during the term of this agreement, the
Company shall pay at the closing of each such transaction a
cash fee equal to the sum of:
Page 3
<PAGE>
1. Five percent (5%) of the first ten million dollars
($10,000,000) of the aggregate consideration (as herein
defined) of a transaction;
2. Four percent (4%) of the second ten million dollars
($10,000,000) of the aggregate consideration of a transaction;
3. Three percent (3%) of the third ten million dollars
($10,000,000) of the aggregate consideration of a transaction;
and
4. Two percent (2%) of the aggregate consideration over thirty
million dollars ($30,000,000).
4. AGGREGATE CONSIDERATION is defined and computed as follows:
1. The total sale proceeds and other consideration received
(which shall be deemed to include amounts paid into escrow) by
the Company and/or its shareholders or by a target and/or its
shareholders upon the consummation of the transaction
(including payments made in installments), inclusive of cash,
securities, notes, consulting agreements and agreements not to
compete, plus the total value of liabilities assumed.
2. If a portion of such consideration includes contingency
payments (whether or not related to future earnings or
operations), aggregate consideration will include 75% of the
face value of such payment without regard to whether the
conditions for the payment of such contingent amounts have
been or may be satisfied.
3. If the aggregate consideration for the transaction consists in
whole or in part of securities, for the purposes of
calculating the amount of aggregate consideration, the value
of such securities will be the value thereof on the day
preceding the consummation of the transaction as the company
and investment adviser agree; provided, in the case of
securities for which there is a public trading market,
however, the value will be determined by the average last
sales price for such securities for the last twenty (20) days
prior to such consummation as determined by Investment Adviser
and communicated by Investment Adviser to the Company. If
there is no public trading market for such securities but
securities have been sold in a private placement within the
past twenty-four (24) months, the fair market value shall be
based upon the gross sales price in the last such private
placement. For other property received or receivable as a part
of the aggregate
Page 4
<PAGE>
consideration and the parties are unable to agree, then each
of Investment Adviser and the Company will select an
investment banking firm respected in the merger and
acquisition field to determine a value and the midpoint
between the two values established by the two independent
experts will be the fair market value for the purpose hereof.
4. For purposes of this agreement, any of the following
transactions shall constitute a "transaction":
(1) the sale, outside of the ordinary course of business,
of the Company or any of its assets, securities, or
business by means of a merger, consolidation, joint
venture, exchange offer or purchase or sale of stock
or assets, or any transaction resulting in any change
of control of the Company or its assets or business;
or
(2) the purchase by the Company, outside of the ordinary
course of business, or another company or any of its
assets, securities or business by means of a merger,
consolidation, joint venture, exchange offer, tender
offer or purchase or sale of stock or assets.
(3) Notwithstanding the above, the proposed initial
transaction involving the public offering of the
Company's Securities as described by the Form S-4
filed by Hackney & Miller, P.A., shall be aggregated
as a single transaction.
5. THIRD-PARTY DEBT PLACEMENTS. In the event Investment Adviser
is involved in originating a debt facility, inclusive of
revolving credit facilities, lines of credits, term loans,
rediscounted credit facilities, senior and junior loans,
whether collateralized or unsecured, etc., (the "credit
facility") with a bank or other institutional lender (the
"lending source"), the Company will pay Investment Adviser a
fee of two percent (2%) of the maximum amount of the Credit
Facility. In the event Investment Adviser is involved in
arranging an increase in a Credit Facility, the Company will
pay Investment Adviser a fee of two percent (2%) of the
increase from the maximum amount of the existing Credit
Facility to the maximum amount of the new Credit Facility.
6. STRATEGIC ALLIANCES AND PARTNERSHIPS. In the event Investment
Adviser introduces the Company to a joint venture partner or
customer and sales develop as a result of the introduction,
the Company agrees to pay a fee of two percent (2%) of total
sales generated directly from this introduction during the
first two (2) years following the date of the first sale.
Total sales shall mean cash receipts less any applicable
refunds,
Page 5
<PAGE>
returns, allowances, credits and shipping charges and monies
paid by the Company by way of settlement or judgment arising
out of claims made or threatened against the Company.
Commission payments shall be paid on the 15th day of each
month following the receipt of customers' payment. In the
event any adjustments are made to the total sales after the
commission has been paid, the Company shall be entitled to an
appropriate refund or credit against future payments due under
this Agreement.
7. FAIRNESS OPINIONS, VALUATIONS AND OTHER SERVICES. Fees and
expenses payable to Investment Adviser with regard to fairness
opinions, valuations, and services not specifically set forth
herein will be determined by mutual agreement in writing at
such time as the nature and terms of such transactions are
determined.
6. PAYMENT OF FEES. All fees to be paid pursuant to this Agreement are due
and payable to the Investment Adviser in cash at the closing or
closings of any transaction as specified in Paragraph Three hereof. The
Company hereby irrevocably authorizes and instructs third party funding
sources, including Lending Sources and private equity groups, (the
"Funding Sources"), to pay directly to Investment Adviser cash sums
provided for in Paragraph Five above and further authorizes Investment
Adviser to notify the Funding Sources of this provision and the terms
of this agreement for purposes of this provision and payment of the
sums due under Paragraph Five of this Agreement. The Company agrees
that Investment Adviser is a direct beneficiary of any eventual
financing agreement between the Company and the Funding Sources. The
Company hereby expressly agrees that in the event any dispute or
disagreement arises with respect to the payment to Investment Adviser
under this agreement, that the Financing Sources shall immediately
place all disputed sums in an interest bearing Escrow account pending
resolution of the dispute. The Company hereby irrevocably authorizes
and instructs the Funding Sources to escrow such disputed sums. The
Company further agrees that any sums due under this agreement which are
not in dispute shall not be escrowed, but shall be paid upon closing to
Investment Adviser by the Funding Sources as provided for under the
terms of this Agreement.
7. CONTINUING OBLIGATION. In the event that this agreement shall not be
renewed or if terminated for any reason notwithstanding any such
renewal or termination, Investment Adviser shall be entitled to a full
fee as provided under Paragraph Five hereof, for any transaction for
which the discussions were initiated during the term of this agreement
and which is consummated within a period of twelve (12) months after
non-renewal or termination of this agreement.
8. EXPENSE REIMBURSEMENT. In addition to the compensation payable
hereunder, and regardless whether any transaction set forth in
Paragraph Three or Five hereof is proposed or consummated, the Company
shall reimburse Investment Adviser for all fees and disbursements of
Investment Adviser's counsel, travel and out of pocket expenses
incurred
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in connection with the services performed by Investment Adviser
pursuant to this Agreement, including without limitation, hotel, food
and associated expenses, telephone calls and legal expenses. Any
travel, accommodations or consultant fees in excess of $2,000 shall be
approved in advance by the Company.
9. CONFIDENTIALITY. The Company acknowledges that all opinions and advice
(written or oral) given by the Investment Adviser to the Company in
connection with Investment Adviser's engagement are intended solely for
the benefit and use of the Company in considering the transaction to
which they relate, and the Company agrees that no person or entity
other than the Company shall be entitled to make use of or rely upon
the advice of the Investment Adviser to be given hereunder, and no such
opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for
any purpose, nor may the Company make any public references to
Investment Adviser, or use Investment Adviser's name in any annual
reports or any other reports or releases of the Company without
Investment Adviser's prior written consent.
10. INDEPENDENT CONTRACTOR. The Company acknowledges that the Investment
Adviser is in the business of providing financial services and
consulting advice to others. Nothing herein contained shall be
construed to limit or restrict Investment Adviser in conducting such
business with respect to others, or in rendering such advice to others.
Investment Adviser shall perform its services hereunder as an
independent contractor and not as an employee of the Company or an
affiliate thereof. It is expressly understood and agreed to by the
parties hereto that the Investment Adviser shall have no authority to
act for, represent or bind the Company or any affiliate thereof in any
manner, except as may be agreed to expressly by the Company in writing
from time to time.
11. RELIANCE. The Company recognizes and confirms that, in advising the
Company and in fulfilling its engagement hereunder, the Investment
Adviser will use and rely on data, material and other information
furnished to Investment Adviser by the Company. The Company
acknowledges and agrees that in performing its services under this
engagement, Investment Adviser may rely upon the data, material and
other information supplied by the Company without independently
verifying the accuracy, completeness or veracity of same.
12. NOTICES. Any notice or communication permitted or required hereunder
shall be in writing and shall be deemed sufficiently given if
hand-delivered or sent (i) postage prepaid by registered mail, or (ii)
by facsimile, to the respective parties as set forth below, or to such
other address as either party may notify the other of in writing:
- ----------------------------------- -------------------------------------------
iCrown Corporation Crown Capital Advisors, Inc.
Admiralty Tower Two Admiralty Tower Two
- ----------------------------------- -------------------------------------------
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<PAGE>
- ----------------------------------- -------------------------------------------
4400 PGA Boulevard 4400 PGA Boulevard
Suite 505 Suite 307
Palm Beach Gardens, FL 33410 Palm Beach Gardens, FL 33410
- ----------------------------------- -------------------------------------------
13. INDEMNIFICATION. Investment Adviser and the Company have entered into a
separate letter agreement dated the date hereof ("the indemnity
letter") proving for the indemnification of Investment Adviser by the
Company in connection with Investment Adviser's engagement hereunder.
14. COUNTERPARTS. This agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same
original document.
15. ASSIGNABILITY AND MODIFICATION. This agreement is not assignable and
cannot be modified or changed, nor can any of its provisions be waived,
except by the mutual agreement in writing of all parties.
16. GOVERNING LAW. This agreement shall be governed by the laws of the
State of Florida.
17. SEVERABILITY. Each paragraph, term or provision of this agreement shall
be considered severable and if, for any reason, any paragraph, term or
provision is determined to be invalid or contrary to any existing or
future law or regulation, such will not impair the operation, or effect
the remaining portions, of this agreement.
18. DISPUTE RESOLUTION. The parties shall attempt amicably to resolve
disagreements by negotiating with each other. In the event that the
matter is not amicably resolved through negotiation, any controversy,
dispute or disagreement arising out of or relating to this agreement (a
"controversy") shall be submitted to a nationally recognized
arbitration association, such as the American Arbitration Association,
for final binding arbitration, which shall be conducted by a single
arbitrator (the "arbitrator") in West Palm Beach, Florida, pursuant to
the American Arbitration Association Rules ("the rules").
Notwithstanding anything to the contrary contained in the Rules, the
Arbitrator shall not award consequential, exemplary, incidental,
punitive or special damages.
If any part shall desire relief of any nature whatsoever from any other
party as a result of any Controversy, such party will initiate such
arbitration proceedings within a reasonable time, but in no event more
than one (1) year after the facts underlying said Controversy first
arise or become known to the party seeking relief (whichever is later).
The failure of such party to institute such proceedings within said
period shall be deemed a full waiver of any claim for such relief.
Arbitrator may award the prevailing party its costs for the arbitration
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<PAGE>
proceeding; including its reasonable attorneys' fees and costs. The
parties agree that the decision and award of the Arbitrator shall be
taken, but that such award or decision may be entered as a judgement
and enforced in any court having jurisdiction over the party against
whom enforcement is sought. Any equitable relief awarded under this
paragraph shall be dissolved upon issuance of the Arbitrator's decision
and order.
Notwithstanding the provisions for dispute resolution, in the event of
a breach or threatened breach by any party to this agreement, either
party shall be entitled in order to maintain the status quo and pending
the outcome of any arbitration pursuant to this agreement, seek an
injunction or similar equitable relief restraining either party, as the
case may be, from committing or continuing any such breach or
threatened breach or granting specific performance of any act required
to be performed without the necessity of showing that money damages
would not afford an adequate remedy and without the necessity of
posting any bond or other security. The parties hereto hereby consent
to the jurisdiction of the Federal district courts for the Southern
District of Florida, and the Florida state courts located in 15th
Circuit Court for any proceedings under this paragraph. The parties
agree that the availability of arbitration in the agreement shall not
be used by any party as grounds for the dismissal of an injunctive
action instituted by the other party.
Agreed to and accepted by:
- -------------------------------- -----------------------------------
For iCrown Corporation For Crown Capital Advisors, Inc.
- --------/----------/---------- --------/----------/----------
Date Date
Page 9
EXHIBIT 10.2
ICROWN CORPORATION
1999 EQUITY INCENTIVE PLAN
SECTION 1.
PURPOSE.
The purposes of the iCrown Corporation 1999 Equity Incentive Plan (the "Plan")
are to promote the interests of iCrown Corporation (the "Company") and its
shareholders by (i) attracting and retaining key employees, consultants and
non-employee directors of the Company and its Affiliates; (ii) motivating such
individuals by means of performance-related incentives to achieve long-range
performance goals; (iii) enabling such individuals to participate in the
long-term growth and financial success of the Company; and (iv) linking
compensation to the long-term interests of shareholders. With respect to any
awards granted under the Plan that are intended to comply with the requirements
of "performance-based compensation" under Section 162(m) of the Code (as defined
below), the Plan shall be interpreted in a manner consistent with such
requirements.
SECTION 2.
DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any entity that, directly or indirectly, is
controlled by the Company, (ii) any entity in which the Company has a
significant equity interest and (iii) an affiliate of the Company, as defined in
Rule 12b-2 promulgated under Section 12 of the Exchange Act, in each case as
determined by the Committee.
"Award" shall mean any Option, Restricted Stock Award, Restricted
Stock Unit, Other Stock-Based Award or Performance Award.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean, unless otherwise defined in the applicable Award
Agreement, (i) the engaging by the Participant in willful misconduct that is
injurious to the Company or its Affiliates, (ii) the embezzlement or
misappropriation of funds or property of the Company or its Affiliates by the
Participant, or (iii) the willful failure or refusal by the Participant to
substantially perform his or her duties or responsibilities that continues after
being brought to the attention of the Participant (other than any such failure
resulting from the Participant's incapacity due to Disability). For
<PAGE>
purposes of this paragraph, no act, or failure to act, on the Participant's part
shall be considered "willful" unless done, or omitted to be done, by him or her
not in good faith and without reasonable belief that his or her action or
omission was in the best interest of the Company. Any determination of Cause
shall be made by the Committee in its sole discretion. Any such determination
shall be final and binding on a Participant.
"Change in Control" shall mean, unless otherwise defined in the
applicable Award Agreement, a change in control of the Company, which will be
deemed to have occurred if:
(i) any "Person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than (A) the Company, (B) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, and (C) any
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of Shares), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company (not including any
securities acquired directly from the Company or its Affiliates) representing
25% or more of the combined voting power of the Company's then outstanding
voting securities;
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
effective date (as defined in Section 16(a) of the Plan), constitute the Board
and any new director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest, including but
not limited to a consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or nomination for
election by the Company's shareholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors on the effective date of the Plan or whose appointment, election or
nomination for election was previously so approved or recommended;
(iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than (A) a merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) more than 60% of the combined
voting power of the voting securities of the Company or such surviving or parent
entity outstanding immediately after such merger or consolidation or (B) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as defined above), directly or
indirectly, acquired 40% or more of the combined voting power of the Company's
then outstanding securities (not including any securities acquired directly from
the Company or its Affiliates); or
(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets
(or any transaction having a similar effect), other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an entity,
at least 60% of the combined voting power of the voting securities of which are
owned by
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shareholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean a committee of the Board (which may include the
entire Board) designated by the Board to administer the Plan. The Committee
shall be the Compensation Committee or a sub-committee thereof, unless the Board
shall appoint another committee to administer the Plan. Notwithstanding the
foregoing, for purposes of discretionary awards granted to Non-Employee
Directors pursuant to Section 10 of the Plan, references to the Committee shall
be deemed to be references to the Board.
"Covered Officer" shall mean at any date (i) any individual who, with
respect to the previous taxable year of the Company, was a "covered employee" of
the Company within the meaning of Section 162(m); provided, however, that the
term "Covered Officer" shall not include any such individual who is designated
by the Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected not to be such a "covered employee" with
respect to the current taxable year of the Company and (ii) any individual who
is designated by the Committee, in its discretion, at the time of any Award or
at any subsequent time, as reasonably expected to be such a "covered employee"
with respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be paid.
"Disability" shall mean, unless otherwise defined in the applicable
Award Agreement, a disability that would qualify as such under the Company's
then current long-term disability plan.
"Employee" shall mean an employee of the Company or of any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" with respect to the Shares, as of any date, shall
mean (i) the closing sales price of the Shares on Nasdaq, or any other such
exchange on which the shares are traded, on such date, or in the absence of
reported sales on such date, the closing sales price on the immediately
preceding date on which sales were reported or (ii) in the event there is no
public market for the Shares, the fair market value as determined, in good
faith, by the Committee in its sole discretion.
"Incentive Stock Option" shall mean an option to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" shall mean an option to purchase Shares
from the Company that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.
"Non-Employee Director" shall mean a member of the Board who is not an
employee of the Company or any of its Affiliates.
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"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean any award granted under Section 9
of the Plan.
"Participant" shall mean any Employee, Non-Employee Director or
consultant who receives an Award under the Plan.
"Performance Award" shall mean any right granted under Section 8 of
the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
"Restricted Stock" shall mean any Share granted under Section 7 of the
Plan.
"Restricted Stock Unit" shall mean any unit granted under Section 7 of
the Plan.
"Retirement" shall mean, unless otherwise defined in the applicable
Award Agreement, retirement of a Participant from the employ or service of the
Company and any of its Affiliates in accordance with the terms of the applicable
Company retirement plan or, if a Participant is not covered by any such plan,
retirement on or after such Participant's 65th birthday.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Section 16" shall mean Section 16 of the Exchange Act and the rules
promulgated thereunder and any successor provision thereto as in effect from
time to time.
"Section 162(m) shall mean Section 162(m) of the Code and the rules
promulgated thereunder or any successor provision thereto as in effect from time
to time.
"Shares" shall mean shares of the Common Stock, $0..0001 par value, of
the Company, or such other securities of the Company as may be designated by the
Committee from time to time.
"Substitute Awards" shall mean Awards granted solely in assumption of,
or in substitution for, outstanding awards previously granted by a company
acquired by the Company or with which the Company combines.
SECTION 3.
ADMINISTRATION.
(a) Authority of Committee. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii)
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determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled, or
exercised in cash, Shares, other securities, other Awards or other property, or
canceled, forfeited, or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee; (vii) interpret and administer the Plan and
any instrument or agreement relating to, or Award made under, the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
(b) Committee Discretion Binding. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive, and binding upon all Persons, including the Company, any Affiliate,
any Participant, any holder or beneficiary of any Award, any Employee, any
Non-Employee Director and any consultant.
(c) Delegation. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or any
Affiliate, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify or waive rights with respect to, or to alter,
discontinue, suspend, or terminate Awards held by, Participants who are not
officers or directors of the Company for purposes of Section 16 or who are
otherwise not subject to such Section.
(d) No Liability. No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with respect to the Plan or
any Award granted hereunder.
SECTION 4.
SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section 4(b),
the number of Shares with respect to which Awards may be granted under the Plan
shall be 2,000,000 and the number of Shares with respect to which Awards (other
than Options) may be granted under the Plan shall be 1,000,000. If, after the
effective date of the Plan, any Shares covered by an Award granted under the
Plan, or to which such an Award relates, are forfeited, or if such an Award is
settled for cash or otherwise terminates or is canceled without the delivery of
Shares, then the Shares covered by such Award, or to which such Award relates,
or the number of Shares otherwise counted against the aggregate number of Shares
with respect to which Awards may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall again become Shares
with respect to which Awards may be granted. In the event that any Option or
other Award granted hereunder is exercised through the delivery of Shares or in
the event that withholding tax liabilities arising from
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such Award are satisfied by the withholding of Shares by the Company, the number
of Shares available for Awards under the Plan shall be increased by the number
of Shares so surrendered or withheld. Notwithstanding the foregoing and subject
to adjustment as provided in Section 4(b), no Participant may receive Options
under the Plan in any calendar year that relate to more than 50,000 Shares;
provided, however, a Participant may receive Options that relate to up to
100,000 Shares during the initial year of the Plan or in the calendar year in
which the Participant's employment with the Company begins.
(b) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the Company,
or other similar corporate transaction or event affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable: (i) adjust any or all of (1) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted, (2) the maximum number of Shares
subject to Awards granted to a Participant pursuant to Sections 4(a) and 11(b)
of the Plan, (3) the number of Shares or other securities of the Company (or
number and kind of other securities or property) subject to outstanding Awards
and (4) the grant or exercise price with respect to any Award; (ii) if deemed
appropriate, provide for an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect; or (iii) if deemed appropriate, make provision for a
cash payment to the holder of an outstanding Award; provided, in each case, that
(A) with respect to Awards of Incentive Stock Options no such adjustment shall
be authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended and (B) with respect
to any Award no such adjustment shall be authorized to the extent that such
authority would be inconsistent with the Plan's meeting the requirements of
Section 162(m), unless otherwise determined by the Committee.
(c) Substitute Awards. Any Shares underlying Substitute Awards shall not,
unless required by Section 16, be counted against the Shares available for
Awards under the Plan.
(d) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5.
ELIGIBILITY.
Any Employee (including any officer or employee-director of the Company or any
Affiliate who is not a member of the Committee), Non-Employee Director or
consultant shall be eligible to be designated a Participant; provided that
Non-Employee Directors shall only be eligible to receive Awards granted pursuant
to Section 10.
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SECTION 6.
STOCK OPTIONS.
(a) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Participants to whom Options shall
be granted, the number of Shares to be covered by each Option, the option price
and the conditions and limitations applicable to the exercise of the Option. The
Committee shall have the authority to grant Incentive Stock Options, or to grant
NonQualified Stock Options, or to grant both types of options. In the case of
Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with such rules as may be prescribed by Section 422 of the
Code, as from time to time amended, and any regulations implementing such
statute.
(b) Exercise Price. The Committee in its sole discretion shall establish
the exercise price at the time each Option is granted. Except in the case of
Substitute Awards, the exercise price of an Option may not be less than the Fair
Market Value on the date of grant of such Option.
(c) Exercise. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Committee may, in its sole discretion, specify
in the applicable Award Agreement or thereafter. The Committee may impose such
conditions with respect to the exercise of options, including without
limitation, any relating to the application of federal, state or foreign
securities laws or the Code, as it may deem necessary or advisable.
Notwithstanding the foregoing, an Option shall not be exercisable after the
expiration of ten years from the date such Option was granted.
(d) Payment. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the option price is received by the Company.
Such payment may be made in cash, or its equivalent, or by exchanging Shares
owned by the Participant for at least six months (which are not the subject of
any pledge or other security interest), or by a combination of the foregoing,
provided that the combined value of all cash and cash equivalents and the Fair
Market Value of any such Shares so tendered to the Company as of the date of
such tender is at least equal to such option price. A Participant may elect to
pay all or any portion of the aggregate exercise price by having Shares with a
Fair Market Value on the date of exercise equal to the aggregate exercise price
withheld by the Company or sold by a broker-dealer.
SECTION 7.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
(a) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Participants to whom Shares of
Restricted Stock and Restricted Stock Units shall be granted, the number of
Shares of Restricted Stock and/or the number of Restricted Stock Units to be
granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Stock and Restricted Stock Units may be
forfeited to the Company, and the other terms and conditions of such Awards.
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(b) Transfer Restrictions. Shares of Restricted Stock and Restricted Stock
Units may not be sold, assigned, transferred, pledged or otherwise encumbered,
except, in the case of Restricted Stock, as provided in the Plan or the
applicable Award Agreements. Certificates issued in respect of Shares of
Restricted Stock shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company. Upon the lapse of the restrictions applicable to such Shares
of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
(c) Payment. Each Restricted Stock Unit shall have a value equal to the
Fair Market Value of a Share. Restricted Stock Units shall be paid in cash,
Shares, other securities or other property, as determined in the sole discretion
of the Committee, upon the lapse of the restrictions applicable thereto, or
otherwise in accordance with the applicable Award Agreement.
(d) Dividends and Distributions. Dividends and other distributions paid on
or in respect of Restricted Stock or Restricted Stock Units may be paid directly
to the Participant, or may be reinvested in additional Shares of Restricted
Stock or in additional Restricted Stock Units, as determined by the Committee in
its sole discretion.
SECTION 8.
PERFORMANCE AWARDS.
(a) Grant. The Committee shall have sole and complete authority to
determine the Participants who shall receive a "Performance Award," which shall
consist of a right that is (i) denominated in cash or Shares, (ii) valued, as
determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be paid in a lump
sum or in installments following the close of the performance period or, in
accordance with procedures established by the Committee, on a deferred basis.
SECTION 9.
OTHER STOCK-BASED AWARDS.
The Committee shall have authority to grant to Participants an "Other
Stock-Based Award," which shall consist of any right that is (i) not an Award
described in Sections 6 through 8 above and (ii) an Award of Shares or an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation,
securities convertible
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into Shares), as deemed by the Committee to be consistent with the purposes of
the Plan. Subject to the terms of the Plan and any applicable Award Agreement,
the Committee shall determine the terms and conditions of any such Other
Stock-Based Award.
SECTION 10.
NON-EMPLOYEE DIRECTOR AWARDS.
The Committee may provide that all or a portion of a Non-Employee Director's
annual retainer and/or meeting fees be payable (either automatically or at the
election of a Non-Employee Director) in the form of Nonqualified Stock Options,
Restricted Stock and/or Other Stock-Based Awards, including unrestricted Shares.
Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of any such Awards. In
addition, the Committee may, in its sole discretion, grant awards of Restricted
Stock to Non-Employee Directors pursuant to such terms and conditions as it may
deem advisable, so long as such terms and conditions are not inconsistent with
any other terms of the Plan.
SECTION 11.
PROVISIONS APPLICABLE TO COVERED OFFICERS AND PERFORMANCE-BASED AWARDS.
Notwithstanding anything in the Plan to the contrary, unless the Committee
determines otherwise, all performance-based Restricted Stock Awards, Restricted
Stock Units, Performance Awards, or other Stock-Based Awards shall be subject to
the terms and provisions of this Section 11.
(a) The Committee may grant Restricted Stock Awards, Restricted Stock
Units, Performance Awards and Other Stock-Based Awards to Covered Officers that
vest or become exercisable upon the attainment of performance targets related to
one or more performance goals selected by the Committee from among the goals
specified below. For the purposes of this Section 11, performance goals shall be
limited to one or more of the following Company, subsidiary, operating unit or
division financial performance measures:
(i) earnings before interest, taxes, depreciation and/or
amortization
(ii) operating income or profit
(iii) return on equity, assets, capital, capital employed, or
investment
(iv) after tax operating income
(v) net income
(vi) earnings or book value per share
(vii) cash flow(s)
(viii) total sales or revenues or sales or revenues per employee
(ix) production (separative work units or SWUs)
(x) stock price or total shareholder return
(xi) dividends
(xii) strategic business objectives, consisting of one or more
objectives based on
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meeting specified cost targets, business expansion goals, and
goals relating to acquisitions or divestitures
(xiii) except in the case of Section 162(m) awards to Covered
Officers, any other performance criteria established by the
Committee
or any combination thereof. Each goal may be expressed on an absolute and/or
relative basis, may be based on or otherwise employ comparisons based on
internal targets, the past performance of the Company and/or the past or current
performance of other companies, and in the case of earnings-based measures, may
use or employ comparisons relating to capital, shareholders' equity and/or
shares outstanding, or to assets or net assets.
(b) With respect to any Participant, the maximum annual number of shares in
respect of which Restricted Stock Awards, Performance Awards and Other
Stock-Based Awards may be granted under the Plan is 100,000 and the maximum
annual amount of any Award settled in cash is $1,000,000.
(c) To the extent necessary to comply with Section 162(m), with respect to
Restricted Stock Awards, Restricted Stock Units, Performance Awards and Other
Stock-Based Awards, no later than 90 days following the commencement of each
performance period (or such other time as may be required or permitted by
Section 162(m) of the Code), the Committee shall, in writing, (A) select the
performance goal or goals applicable to the performance period, (B) establish
the various targets and bonus amounts which may be earned for such performance
period and (C) specify the relationship between performance goals and targets
and the amounts to be earned by each Covered Officer for such performance
period. Following the completion of each performance period, the Committee shall
certify in writing whether the applicable performance targets have been achieved
and the amounts, if any, payable to Covered Officers for such performance
period. In determining the amount earned by a Covered Officer for a given
performance period, subject to any applicable Award Agreement, the Committee
shall have the right to reduce (but not increase) the amount payable at a given
level of performance to take into account additional factors that the Committee
may deem relevant to the assessment of individual or corporate performance for
the performance period.
SECTION 12.
TERMINATION OF EMPLOYMENT/SERVICE.
The Committee shall have the full power and authority to determine the terms and
conditions that shall apply to any Award upon a termination of
employment/service, including a termination by the Company without Cause, by a
Participant voluntarily, or by reason of death, Disability or Retirement.
SECTION 13.
CHANGE IN CONTROL.
Upon a Change in Control, all outstanding Awards shall vest, become immediately
exercisable or payable or have all restrictions lifted.
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SECTION 14.
AMENDMENT AND TERMINATION.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement for which or with which the Board
deems it necessary or desirable to comply.
(b) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted, prospectively or retroactively; provided that any
such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of any Participant or any
holder or beneficiary of any Award theretofore granted shall not to that extent
be effective without the consent of the affected Participant, holder, or
beneficiary; and provided further that the Committee shall not have the power to
amend the terms of previously granted Awards to reduce, or cancel such Awards
and grant substitute Awards which would have the effect of reducing the exercise
price except pursuant to paragraph (c) below.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements of Section 162(m), unless otherwise determined by the Committee.
SECTION 15.
GENERAL PROVISIONS.
(a) Dividend Equivalents. In the sole and complete discretion of the
Committee, an Award may provide the Participant with dividends or dividend
equivalents, payable in cash, Shares, other securities or other property on a
current or deferred basis.
(b) Transferability. Except as provided below, no Award shall be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant, except by will or the laws of descent and distribution.
Notwithstanding the foregoing, a Participant may transfer any vested Award,
other than an Incentive Stock Option, to members of his or her immediate family
(defined as his or her spouse, children or grandchildren) or to one or more
trusts for the exclusive benefit of such immediate family members or
partnerships in which such immediate family members are the only partners if the
Award Agreement so provides, the transfer is approved by the Committee and the
Participant does not receive any consideration for the transfer. Any such
transferred Award
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shall continue to be subject to the same terms and conditions that were
applicable to such Award immediately prior to its transfer (except that such
transferred Award shall not be further transferable by the transferee).
(c) No Rights to Awards. No Person shall have any claim to be granted any
Award, and there is no obligation for uniformity of treatment of Employees,
Non-Employee Directors, consultants, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(d) Share Certificates. All certificates for Shares or other securities of
the Company or any Affiliate delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any applicable Federal or
state laws, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(e) Withholding. A participant may be required to pay to the Company or any
Affiliate and the Company or any Affiliate shall have the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing
to a Participant the amount (in cash, Shares, other securities, other Awards or
other property) of any applicable withholding or other taxes in respect of an
Award, its exercise, or any payment or transfer under an Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from the grant, vesting, exercise, or payments of any Award.
(f) Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement that shall be delivered to the Participant and shall specify the terms
and conditions of the Award and any rules applicable thereto. In the event of a
conflict between the terms of the Plan and any Award Agreement, the terms of the
Award Agreement shall prevail.
(g) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Affiliate from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the
grant of options, restricted stock, Shares and other types of Awards provided
for hereunder (subject to shareholder approval if such approval is required),
and such arrangements may be either generally applicable or applicable only in
specific cases.
(h) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
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(i) No Rights as Shareholder. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a shareholder with respect to any Shares to be distributed under the
Plan until he or she has become the holder of such Shares. Notwithstanding the
foregoing, in connection with each grant of Restricted Stock hereunder, the
applicable Award shall specify if and to what extent the Participant shall not
be entitled to the rights of a shareholder in respect of such Restricted Stock.
(j) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Florida without giving
effect to the conflict of law principles thereof.
(k) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation (including
applicable non-U.S. laws or regulations) or entitle the Company to recover the
same under Section 16(b), and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the exercise of such
Award shall be promptly refunded to the relevant Participant, holder, or
beneficiary. Without limiting the generality of the foregoing, no Award granted
hereunder shall be construed as an offer to sell securities of the Company, and
no such offer shall be outstanding, unless and until the Committee in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the U.S. federal or non-U.S. securities laws
and any other laws to which such offer, if made, would be subject.
(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(n) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
(o) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
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SECTION 16.
TERM OF THE PLAN.
(a) Effective Date. The Plan shall be effective as of November 30, 1999,
provided it has been approved by the Company's shareholders.
(b) Expiration Date. No new Awards shall be granted under the Plan after
the tenth anniversary of the Effective Date. Unless otherwise expressly provided
in the Plan or in an applicable Award Agreement, any Award granted hereunder
may, and the authority of the Board or the Committee to amend, alter, adjust,
suspend, discontinue, or terminate any such Award or to waive any conditions or
rights under any such Award shall, continue after the authority for grant of new
Awards hereunder has been exhausted.
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EXHIBIT 23.1
December 9, 1999
Board of Directors
iCrown Corporation
4400 PGA Boulevard, Suite 505
Palm Beach Gardens, Florida 33410
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use of our audit report dated December 1, 1999
(and all references to our firm) included in iCrown Corporation's Form S-4 for
the period ended November 30, 1999, which is incorporated by reference in Form
S-4's report for the period ended November 30, 1999.
/s/ Sweeney, Gates & Co.
------------------------------
Sweeney, Gates & Co.
West Palm Beach, Florida
December 9, 1999
