<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
F O R M 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 1, 1998
-------------------------------
TRIDENT ROWAN GROUP, INC.
-------------------------------------------------------
(Exact name of registrant as specified in charter)
Maryland 0-2642 52-0466460
---------- -------- ------------
(State or Other Jurisdiction (Commission) (IRS Employer
of Incorporation) File Number) Identification No.)
Two Worlds Fair Drive, Somerset, New Jersey 08873
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (732) 868-9000
----------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
Effective October 1, 1998, Tamarix Investors, LDC, the
controlling shareholder of TRG, loaned to TRG the principal amount of $2,000,000
to enable TRG to, among other things, repay its obligations to holders of
outstanding TRG indebtedness due October 23, 1998 in the aggregate principal
amount of $1,863,401. The loan by Tamarix accrues interest at the rate of 10%
per annum and is due and payable at the earliest of (i) May 1, 1999, (ii) the
closing of the Agreement and Plan of Merger and Reorganization dated August 18,
1998 among TRG, Moto Guzzi Corp., a Delaware corporation ("Moto Guzzi") and
North Atlantic Acquisition Corp., a Delaware corporation (the "NAAC Merger"), or
(iii) the date on which Moto Guzzi determines that it, on a consolidated basis,
has cash flow or has obtained alternative financing, sufficient in either case
to repay such indebtedness.
The loan is unconditionally guaranteed by TRG's O.A.M. S.p.A.
subsidiary and the guarantee is secured by the pledge by OAM of 500,000 shares
of common stock, $1.00 par value per share, of Moto Guzzi.
TRG has agreed to pay to Tamarix an origination fee of
$20,000. In connection with the loan from Tamarix, and the contemporaneous loan
from Mr. Gianni Bulgari to O.A.M. of Lit. 3 billion on terms comparable to the
Tamarix loan, TRG also amended and reissued to Centaurus Management LDC, Ixion
LDC and Azzura, Inc., all affiliates of Tamarix, the warrants to acquire an
aggregate of 1,250,000 shares of TRG common stock, initially issued by TRG on
May 2, 1997. The amendments to the warrants extended the terms thereof to May 1,
2002 and reduced the exercise price thereof to $5.50 per share. Mr. Bulgari is a
principal of Centaurus Management.
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<TABLE>
<CAPTION>
Item 7. Exhibit Description
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<S> <C> <C>
4.1 Loan Agreement between Tamarix Investors, LCD and
Registrant, dated as of October 1, 1998.
4.2 Warrant Agreement relating to Warrant to purchase
250,000 shares of the Registrant's Common Stock issued
to Centaurus Management, LDC.
4.3 Warrant Agreement relating to Warrant to purchase
500,000 shares of the Registrant's Common Stock issued
to Azzura, Inc.
4.4 Warrant Agreement relating to Warrant to purchase
500,000 shares of the Registrant's Common Stock issued
to Ixion, LDC.
</TABLE>
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<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: November 17, 1998
TRIDENT ROWAN GROUP, INC.
By: Mark S. Hauser
--------------------------------------
Mark S. Hauser
President
By: Howard E. Chase
--------------------------------------
Howard E. Chase
Secretary/Treasurer
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LOAN AGREEMENT
Agreement made as of the 1st day of October, 1998 by and
between TAMARIX INVESTORS, LDC ("Tamarix"), a Cayman Islands limited duration
company and TRIDENT ROWAN GROUP, INC. ("TRG"), a Maryland corporation.
WHEREAS, TRG wishes to borrow from Tamarix the sum of $2
million and Tamarix wishes to lend such amount on the terms and conditions set
forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. The Loan. (a) On the date hereof, Tamarix shall lend to TRG the sum
of Two Million Dollars ($2,000,000) (the "Tamarix Loan"), which sum shall be
wire transferred by Tamarix to TRG to such account as TRG shall designate. TRG
shall issue to Tamarix TRG's Promissory Note in the principal amount of Two
Million Dollars ($2,000,000), which Note shall bear interest at the rate of ten
percent (10%) per annum, shall have a maturity date of the earliest of (i) May
1, 1999, (ii) the closing of the Agreement and Plan of Merger and Reorganization
dated August 18, 1998 among TRG, Moto Guzzi Corp., a Delaware corporation ("Moto
Guzzi") and North Atlantic Acquisition Corp., a Delaware corporation (the "NAAC
Merger"), or (iii) the date on which Moto Guzzi determines that it, on a
consolidated basis, has cash flow or has obtained alternative financing,
sufficient in either case to repay such indebtedness. The form of such
Promissory Note is attached hereto as Exhibit A.
(b) Upon the making of the Tamarix Loan, TRG shall pay to
Tamarix an origination fee of $20,000.
(c) TRG covenants and agrees that the funds represented by the
Tamarix Loan shall be used only for (i) funding of TRG's obligations under its
promissory notes in the aggregate principal amount of $1,863,401 due October 23,
1998, (ii) providing funds to O.A.M. S.p.A. ("OAM") an Italian corporation
principally owned indirectly by TRG, which funds shall be advanced by OAM to
Moto Guzzi, which corporation is controlled by TRG and OAM, and used for general
working capital purposes by Moto Guzzi's wholly-owned subsidiary, Moto Guzzi
S.p.A. and (iii) for TRG's general working capital purposes.
2. Security. Repayment of the principal amount of the Tamarix Loan and
interest thereon shall be unconditionally guaranteed by OAM pursuant to a
Guarantee, the form of which is attached hereto as Exhibit B, which Guarantee
shall be secured by the pledge by OAM of 500,000 shares of Common Stock, $1.00
par value per share, of Moto Guzzi, the form of which Pledge Agreement is
attached hereto as Exhibit C. If the Tamarix Loan is not paid in full in
accordance with the terms thereof, then TRG covenants and agrees that upon
demand of Tamarix, TRG will cause to be elected to the Board of Directors of its
subsidiary, Trident Rowan Servizi, S.p.A. ("Servizi"), an Italian corporation,
designees of Tamarix so that such designees shall constitute a majority of the
Board of Directors of Servizi.
<PAGE>
3. Warrant Amendment. Tamarix and TRG acknowledge that on May 2, 1997
TRG issued to Centaurus Management, LDC ("Centaurus"), a Cayman Islands limited
duration company which is the manager of Tamarix, a Warrant to purchase
1,250,000 shares (the "Warrant") of Common Stock of TRG, which Warrant was
transferred, with respect to 500,000 shares, to each of Azurra, Inc. and Ixion,
LDC. Tamarix has heretofore advised TRG that Giovanni Bulgari ("Bulgari") is a
principal of Centaurus and TRG has advised Tamarix that on or about the date
hereof Bulgari has made a loan of 3 billion Lire to OAM (the "Bulgari Loan"),
which loan will have similar repayment terms and be secured by similar
collateral, as the Tamarix Loan. As additional consideration for the making of
the Tamarix Loan and as an inducement for the making of the Bulgari Loan, TRG
hereby agrees that the Warrants shall be and hereby are amended by (x) reducing
the Exercise Price described therein from $6.00 per share to $5.50 per share and
(y) extending the period during which such Warrants are exercisable by two (2)
years, to May 1, 2002.
4. Representations and Warranties. Each of Tamarix and TRG hereby
represents and warrants to the other that:
(a) it has full power and authority to execute, deliver, and
perform this Loan Agreement, pursuant to the laws of the jurisdiction where it
is organized;
(b) the execution, delivery, and performance of this Loan
Agreement, and the consummation of the transactions contemplated hereby will not
violate any provision of, or constitute a material breach of or default under
any term, condition, or provision of any agreement, indenture or other
instrument to which it is a party, or by which it or its properties or assets is
bound, or of any order, judgment, or decree against or binding upon it; and
(c) all acts and conditions required by law of it to authorize
the execution and consummation by it of this Loan Agreement have been duly
performed and obtained, and this Loan Agreement constitutes a legal, valid and
binding obligation of it enforceable against it in accordance with its terms,
subject to(i) the laws of bankruptcy and the laws affecting creditors' rights
generally, and (ii) the availability of equitable remedies.
5. Survival of Warranties. The warranties and representations contained
herein or made pursuant to this Loan Agreement will survive the execution and
delivery of this Loan Agreement and the closing thereof.
6. Law. This Loan Agreement is governed by the internal laws of the
State of New York, without giving effect to any laws or principles that would
apply the laws of any other jurisdiction.
7. Successors and Assigns. The terms and conditions of this Loan
Agreement will inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Loan Agreement, express
or implied, is intended to confer upon any party other than the
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<PAGE>
parties hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Loan Agreement, except as
expressly provided in this Loan Agreement.
8. Counterparts: Delivery by Facsimile. This Loan Agreement may be
signed in counterparts, any one of which will be deemed to be an original and
all of which, when taken together, will constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Loan Agreement
by telephone facsimile transmission will be effective as delivery of a manually
executed counterpart of this Loan Agreement.
9. Title and Subtitles. The titles and subtitles used in this Loan
Agreement are for convenience only and are not to be considered in construing or
interpreting this Loan Agreement.
10. Notices. All notices and other communications called for or
required by this Loan Agreement shall be in writing to TRG at Two Worlds Fair
Drive, Somerset, New Jersey 08873 or to Tamarix at 444 Madison Avenue, New York,
New York, 10022, or to such other address as a party may subsequently specify
and shall be deemed to have been received (i) upon delivery in person, (ii) upon
the passage of seventy-two (72) hours following post by first class registered
or certified mail, return receipt requested, with postage prepaid, (iii) upon
the passage of twenty-four (24) hours following post by overnight receipted
courier service, or (iv) upon transmittal by facsimile transmission with
confirmation that the original was set by facsimile including the date of its
transmittal.
11. Finder's Fees. Each party represents that it neither is, nor will
be, obligated for a finder's fee or commission in connection with this
transaction.
12. Expenses. TRG shall pay all reasonable costs and expenses incurred
by Tamarix, including attorney's fees, in connection with the enforcement,
attempted enforcement or preservation of any rights or remedies arising
hereunder or under the Promissory Note, Guarantee or Pledge Agreement, referred
to herein.
13. Amendment and Waivers. Any amendment or waiver of any provision of
this Loan Agreement, and any consent to any departure by TRG therefrom, will not
be effective unless the same is in writing and signed by TRG and Tamarix.
14. Severability. If one or more provisions of this Loan Agreement are
held to be unenforceable under applicable law, such provision will be excluded
from this Loan Agreement and the balance of this Loan Agreement will be
interpreted as if such provision were excluded and will be enforceable in
accordance with its terms.
15. Entire Agreement. This Loan Agreement and the other documents
contemplated hereby constitute the full and entire understanding and agreement
between the parties with respect to the subject matter hereof and supersede all
prior agreements with respect to the subject matter hereof.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Loan Agreement as of the date first above written.
TAMARIX INVESTORS LDC
By:
--------------------------------
Mark Hauser,
-------------------
TRIDENT ROWAN GROUP, INC.
By:
--------------------------------
Howard E. Chase, Chairman
4
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------------------------------------------------------------
TRIDENT ROWAN GROUP, INC.
and
CENTAURUS MANAGEMENT, LDC
-----------------------
WARRANT AGREEMENT
Dated as of October 1, 1998
------------------------------------------------------------
<PAGE>
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of October 1, 1998
is made and entered into by and between TRIDENT ROWAN GROUP, INC., a Maryland
corporation (the "Company") and CENTAURUS MANAGEMENT, LDC (the "Warrantholder").
Pursuant to an agreement dated as of May 2, 1997 (the "Original
Agreement"), the Company issued warrants, as hereinafter described (the
"Warrants"), to purchase up to an aggregate of 1,250,000 shares (the "Shares")
of the Company's Common Stock, $0.01 value (the "Common Stock"). Subsequent
thereto, the Warrantholder transferred warrants to purchase 500,000 shares of
Common Stock to each of Ixion, LDC and Azzurra, Inc. The Company and the
Warrantholder agree to amend and restate the Original Agreement in its entirety
as follows:
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
Section 1. Transferability and Form of Warrants.
1.1 Registration. The Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2 Transfer. The Warrants shall be transferable only on the books
of the Company maintained at its principal office in Somerset, New Jersey, or
wherever its principal office may then be located, upon delivery thereof duly
endorsed by the Warrantholder or by its duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver new Warrants to the person entitled thereto.
1.3 Limitations on Transfer of the Warrants. Subject to the
provisions of Section 11, the Warrants shall not be sold, transferred, assigned
or hypothecated by the Warrantholder except to (i) one or more persons, each of
whom on the date of transfer is a member of the transferring Warrantholder; (ii)
a shareholder, officer or employee of Warrantholder or of any member of
Warrantholder or a member of the immediate family of, or a trust formed for the
benefit of, any of such persons, (iii) Tamarix Investors, LDC, a Cayman Islands
limited duration company and any member thereof, and (iv) such other transferees
as shall be consented to by the Company, which consent shall not be unreasonably
withheld. The Warrants may be divided or combined, upon request to the Company
by the Warrantholder, into a certificate or certificates representing the right
to purchase the same aggregate number of Shares. Unless the context indicates
otherwise, the terms "Warrantholder" shall include any transferee or transferees
of the Warrants pursuant to this subsection 1.3, and the term "Warrants" shall
include any and all warrants outstanding pursuant to this Agreement, including
those evidenced by a certificate or certificates issued upon division, exchange,
substitution or transfer pursuant to this Agreement.
1.4 Form of Warrants. The text of the Warrants and of the form of
election to purchase Shares shall be substantially as set forth in Exhibit A
attached hereto. The number of Shares issuable upon exercise of the Warrants is
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company by its
President or by a Vice President, attested to by its Secretary or an Assistant
Secretary. A Warrant bearing the signature of an individual who was at any time
the proper officer of the Company shall bind the Company, notwithstanding that
such individual shall have ceased to hold such office prior to the delivery of
such Warrant or did not hold such office on the date of this Agreement.
The Warrants shall be dated as of the date of signature thereof by
the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
<PAGE>
1.5 Legend on Shares. Each certificate for Shares initially issued
upon exercise of the Warrants shall bear a legend restricting their transfer
until December 5, 1998, and the following legend, unless, at the time of
exercise, such Shares are subject to a currently effective Registration
Statement under the Securities Act of 1933, as amended (the "Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN
ANY MANNER EXCEPT IN COMPLIANCE WITH SECTION 11 OF THE AGREEMENT
PURSUANT TO WHICH THEY WERE ISSUED."
Any certificate issued at any time in exchange or substitution for
any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act, of the securities represented thereby) shall also bear the above legend
unless, in the opinion of the Company's counsel, the securities represented
thereby need no longer be subject to such restrictions.
Section 2. Exchange of Warrant Certificate. Any Warrant certificate may be
exchanged for another certificate or certificates entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitled such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, with
signatures guaranteed, the certificate evidencing the Warrant to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate as so requested.
Section 3. Term of Warrants; Exercise of Warrants.
3.1 Subject to the terms of this Agreement, the Warrantholder shall
have the right, at any time during the period commencing at 9:00 a.m., New York
Time, on October 1, 1998 and ending at 5:00 p.m., New York Time, on May 1, 2002
(the "Termination Date"), to purchase from the Company up to the number of fully
paid and nonassessable Shares to which the Warrantholder may at the time be
entitled to purchase pursuant to this Agreement, upon surrender to the Company,
at its principal office, of the certificate evidencing the Warrants to be
exercised, together with the purchase form on the reverse thereof duly filled in
and signed, with signatures guaranteed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
this section 3 and sections 7 and 8 hereof), for the number of Shares in respect
of which such Warrants are then exercised, but in no event for less than 100
Shares (unless less than an aggregate of 100 Shares are then purchasable under
all outstanding Warrants held by a Warrantholder).
3.2 Payment of the aggregate Warrant Price shall be made in cash,
by wire transfer, by certified or official bank check, pursuant to the cashless
exercise procedures described in Section 3.3 hereof, or any combination
thereof. Upon such surrender of the Warrants and payment of such Warrant Price
as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Warrantholder and in the
name or names of the Warrantholder or, subject to compliance with the provisions
of Section 11.1, in such name or names as the Warrantholder may designate, a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrant, together with cash, as provided in Section 9 hereof, in
respect of any fractional Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such securities as of the date of surrender of the Warrants and
payment of the Warrant Price, as aforesaid, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
The Warrants shall be exercisable, at the election of the Warrantholder, either
in full or from time to time in part and, in the event that a certificate
evidencing the Warrants is exercised in respect of less than all of the Shares
specified therein at any time prior to the Termination Date, a new certificate
evidencing the remaining portion of the Warrants will be issued by the Company.
2
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3.3 The Company shall establish procedures whereby the
Warrantholder, subject to the requirements of Regulation T, federal income tax
laws and other federal, state and local tax and securities laws, can exercise
the Warrant or a portion thereof without making a direct payment of the Warrant
Price to the Company. The Company shall determine such administrative procedures
and policies as it deems appropriate and such procedures and policies shall be
binding on any Warrantholder wishing to use the cashless exercise program.
Section 4. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of the Warrants or the securities
comprising the Shares; provided, however, the Company shall not be required to
pay any tax which may be payable in respect of any secondary transfer of the
Warrants or the securities comprising the Shares.
Section 5. Mutilated or Missing Warrants. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of such Warrant and a bond of indemnity, if
requested, also satisfactory in form and amount at the applicant's cost.
Applicants for such substitute Warrants certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
Section 6. Reservation of Shares. There has been reserved, and the Company shall
at all times keep reserved so long as the Warrants remain outstanding, out of
its authorized Common Stock, such number of shares of Common Stock as shall be
subject to purchase under the Warrants. The Company will supply every transfer
agent for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants with duly executed stock and other certificates, as
appropriate, for such purpose and will provide or otherwise make available any
cash which may be payable as provided in Section 9 hereof.
Section 7. Warrant Price. The price per Share at which Shares shall be
purchasable upon the exercise of the Warrants (the "Warrant Price") shall be
$5.50.
Section 8. Adjustment of Number of Shares. The number and kind of securities
purchasable upon the exercise of the Warrants and the Warrant Price shall be
subject to adjustment from time to time upon the happening of certain events, as
follows:
8.1 Adjustments. The number of Shares purchasable upon the exercise
of the Warrants shall be subject to adjustment as follows: In case the Company
shall (i) pay a dividend in Common Stock or make a distribution in Common Stock,
(ii) subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock other securities of the Company, the
Warrant Price and the number of Shares purchasable upon exercise of the Warrants
immediately prior thereto shall be proportionately adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Shares or
other securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Warrants been exercised at the Warrant Price
immediately prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this subsection 8.1 shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
For the purpose of this subsection 8.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement, 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.
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8.2 No Adjustment for Dividends. Except as provided in subsection
8.1, no adjustment in respect of any dividends or distributions out of earnings
shall be made during the term of the Warrants or upon the exercise of the
Warrants.
8.3 Certificate of Adjustment. Whenever the number of Shares
purchasable upon the exercise of the Warrants is adjusted as herein provided,
the Company shall cause to be promptly mailed to the Warrantholder by first
class mail, postage prepaid, notice of such adjustment and a certificate of the
chief financial officer of the Company setting forth the number of Shares
purchasable upon the exercise of the Warrants after such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
8.4 Preservation of Purchase Rights upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement that the Warrantholder shall have the right thereafter upon payment
of the Warrant Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had the Warrants been exercised immediately prior to such action. In the event
of a merger described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, in which the Company is the surviving corporation, the right to purchase
Shares under the Warrants shall terminate on the date of such merger and
thereupon the Warrants shall become null and void, but only if the controlling
corporation shall agree to substitute for the Warrants its warrant which
entitles the holder thereof to purchase upon its exercise the kind and amount of
shares and other securities and property which it would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this subsection 8.4 shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8 hereof. The provisions of this subsection
8.4 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
8.5 Par Value of Shares of Common Stock. Before taking any action
which would cause an adjustment effectively reducing the portion of the Warrant
Price allocable to each Share below the then par value per share of the Common
Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Stock upon exercise of the Warrants.
8.6 Independent Public Accountants. The Company may retain a firm
of independent public accountants of recognized national standing (which may be
any such firm regularly employed by the Company) to make any computation
required under this Section 8, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 8.
8.7 Statement on Warrant Certificates. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof; and any Warrant certificate thereafter issued,
whether upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.
Section 9. Fractional Interests; Current Market Price. The Company shall not be
required to issue fractional Shares on the exercise of the Warrants. If any
fraction of a Share would, except for the provisions of this Section 9, be
issuable on the exercise of the Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the then Current Market Price per
share of Common Stock multiplied by such fraction.
4
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For purposes of this Agreement, the term "Current Market Price"
shall mean (i) if the Common Stock is in the over-the-counter market and not in
The Nasdaq National Market nor on any national securities exchange, the average
of the per share closing bid price on the 30 consecutive trading days
immediately preceding the date in question, as reported by The Nasdaq Small Cap
Market (or an equivalent generally accepted reporting service if quotations are
not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is
traded in The Nasdaq National Market or on a national securities exchange, the
average for the 30 consecutive trading days immediately preceding the date in
question of the daily per share closing prices in The Nasdaq National Market or
on the principal stock exchange on which it is listed, as the case may be. For
purposes of clause (i) above, if trading in the Common Stock is not reported by
The Nasdaq Small Cap Market, the applicable bid price referred to in said clause
shall be the lowest bid price as reported in The Nasdaq Electronic Bulletin
Board or, if not reported thereon, as reported in the "pink sheets" published by
National Quotation Bureau, Incorporated, and, if such securities are not so
reported, shall be the price of a share of Common Stock determined by the
Company's Board of Directors in good faith. The closing price referred to in
clause (ii) above shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case in The Nasdaq National Market or on the
national securities exchange on which the Common Stock is then listed.
Section 10. No Rights as Shareholder; Notices to Warrantholder. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or its transferees any rights as a shareholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any
one or more of the following events shall occur:
10.1 any action which would require an adjustment pursuant to
Section 8.1; or
10.2 a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of its property, assets
and business as an entirety or substantially as an entirety) shall be proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
shareholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive such notice
or any defect therein shall not affect the validity of any action taken with
respect thereto.
Section 11. Restrictions on Transfer; Registration Rights.
11.1 The Warrantholder agrees that prior to making any disposition
of the Warrants or the Shares, including without limitation, to persons or
entities identified in clauses (i) through (iv), inclusive, of Section 1.3 other
than pursuant to a registration statement or other notification or
post-effective amendment thereto (hereinafter collectively a "Registration
Statement") filed by the Company with, and declared effective, by, the
Securities and Exchange Commission (the "Commission"), including the
Registration Statement referred to in Section 11.2 below, the Warrantholder
shall give written notice to the Company describing briefly the manner in which
any such proposed disposition is to be made and shall provide such other
information as may reasonably be required by the Company and counsel familiar
with securities matter to conclude that no Registration Statement under the Act
is required with respect to such disposition, and no such disposition shall be
made if the Company has notified the Warrantholder that in the opinion of
counsel reasonably satisfactory to the Warrantholder a Registration Statement
under the Act is required with respect to such disposition and no such
Registration Statement has been filed by the Company with, and declared
effective, if necessary, by, the Commission.
11.2 The Company and the Warrantholder acknowledge that the Company
has included the Shares in Registration Statement No. 333-21595 which was
declared effective by the SEC on June 5, 1997.
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11.3 All fees, disbursements and out-of-pocket expenses (other than
Warrantholder's and holders' of Shares brokerage fees and commissions and legal
fees of counsel to the Warrantholder and holders of Shares, if any) in
connection with the filing of any Registration Statement or amendments to
supplements thereto (or obtaining the opinion of counsel and any no-action
position of the Commission with respect to sales under Rule 144) and in
complying with applicable securities and Blue Sky laws shall be borne by the
Company. The Company at its expense will supply any Warrantholder and any holder
of Shares with copies of such Registration Statement and the prospectus included
therein and other related documents any opinions and no-action letters in such
quantities as may be reasonably requested by the Warrantholder or holder of
Shares.
11.4 The Company shall be required to use its best efforts to
maintain the effectiveness of Registration Statement No. 33-21595 or any
subsequently filed Registration Statement hereafter declared effective unless,
in the opinion of counsel for the Warrantholder and holders of Shares and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for such holders and
the Company), the proposed public offering or other transfer of the Shares is
exempt from applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities," as defined in Rule 144 under the Act.
11.5 The provisions of this Section 11 and Section 12 hereof shall
apply to the extent as provided herein if the Company chooses to file an
Offering Statement under Regulation A promulgated under the Act.
11.6 The Company agrees that until all Shares have been sold under
a Registration Statement or pursuant to Rule 144 under the Act, it will use its
best efforts to keep current in filing all materials required to be filed with
the Commission in order to permit the holders of such securities to sell the
same under Rule 144.
Section 12. Indemnification.
12.1 In the event of the filing of any Registration Statement with
respect to the Shares pursuant to Section 11 hereof, the Company agrees to
indemnify and hold harmless the Warrantholder or any holder of such Shares and
each person, if any, who controls the Warrantholder or any holder of such Shares
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
reasonable attorneys' fees), to which the Warrantholder or any holder of such
Shares or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, or amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Warrantholder or the holder
of such Shares or any person who controls the Warrantholder or any holder of
such Shares within the meaning of the Act specifically for use in the
preparation thereof. This indemnity will be in addition to any liability which
the Company may otherwise have.
12.2 The Warrantholder and the holders of the Shares agree that
they will indemnify and hold harmless the Company, each other person referred to
in subparts (1), (2) and (3) of Section 11(a) of the Act in respect of the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include but not be limited to,
all costs of defense and investigation and all attorneys' fees) to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any
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material fact contained in such Registration Statement, or any related
preliminary prospectus, final prospectus or amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by the Warrantholder or such holder
of Shares specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which the Warrantholder or such
holder of Shares may otherwise have.
12.3 Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 12, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 12. In case any such action is brought against
any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 12 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 12.1 or 12.2 hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any
action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnification
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
Section 13. Contribution. In order to provide for just and equitable
contribution under the Act in any case in which (i) a Warrantholder or any
holder of the Shares or controlling person makes a claim for indemnification
pursuant to Section 12 hereof but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of Section 12 hereof provide for indemnification in such
case or (ii) contribution under the Act may be required on the part of any
Warrantholder or any holder of the Shares or controlling person, then the
Company and any Warrantholder or any such holder of the Shares or controlling
person shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or a Warrantholder or holder of Shares
or controlling person
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on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and such holders of such securities and such controlling persons agree that it
would not be just and equitable if contribution pursuant to this Section 13 were
determined by pro rata allocation or by any other method which does not take
account of the equitable considerations referred to in this Section 13. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 13 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 14. Notices. Any notice pursuant to this Agreement by the Company or by
a Warrantholder or a holder of Shares shall be in writing and shall be deemed to
have been duly given if delivered or mailed by certified mail, return receipt
requested:
14.1 to a Warrantholder or a holder of Shares addressed to
Centaurus Management, LDC, c/o Tamarix Capital Corporation, 350 Park Avenue,
14th Floor, New York, New York 10022.
14.2 to the Company addressed to it at 2 Worlds Fair Drive,
Franklin Township, Somerset, New Jersey 08873, Attention: President.
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
Section 15. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company, the Warrantholder, or the holders of Shares
shall bind and inure to the benefit of their respective successors and permitted
assigns hereunder.
Section 16. Merger or Consolidation of the Company. The Company will not merge
or consolidate with or into any other corporation or sell all or substantially
all of its property to another corporation, unless the provisions of Section 8.4
are complied with.
Section 17. Survival of Representations and Warranties. All statements contained
in any schedule, exhibit, certificate or other instrument delivered by or on
behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
Section 18. Applicable Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State.
Section 19. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrantholder and the holders of Shares any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Warrantholder and the holders of Shares.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
TRIDENT ROWAN GROUP, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
CENTAURUS MANAGEMENT, LDC
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
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------------------------------------------------------------
TRIDENT ROWAN GROUP, INC.
and
AZZURRA, INC.
-----------------------
WARRANT AGREEMENT
Dated as of October 1, 1998
------------------------------------------------------------
<PAGE>
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of October 1,1998 is
made and entered into by and between TRIDENT ROWAN GROUP, INC., a Maryland
corporation (the "Company") and AZZURRA, INC. (the "Warrantholder").
Pursuant to an agreement dated as of May 2, 1997 (the "Original
Agreement"), the Company issued warrants, as hereinafter described (the
"Warrants"), to purchase up to an aggregate of 1,250,000 shares (the "Shares")
of the Company's Common Stock, $0.01 value (the "Common Stock") to Centaurus
Management, LDC ("Centaurus"). Subsequent thereto, Centaurus transferred
warrants to purchase 500,000 shares of Common Stock to the Warrantholder as a
result of which the Warrantholder became bound by and subject to the Original
Agreement. The Company and the Warrantholder agree to modify the Original
Agreement by substituting the following in lieu thereof:
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
Section 1. Transferability and Form of Warrants.
1.1 Registration. The Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2 Transfer. The Warrants shall be transferable only on the books
of the Company maintained at its principal office in Somerset, New Jersey, or
wherever its principal office may then be located, upon delivery thereof duly
endorsed by the Warrantholder or by its duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver new Warrants to the person entitled thereto.
1.3 Limitations on Transfer of the Warrants. Subject to the
provisions of Section 11, the Warrants shall not be sold, transferred, assigned
or hypothecated by the Warrantholder except to (i) one or more persons, each of
whom on the date of transfer is a member of the transferring Warrantholder; (ii)
a shareholder, officer or employee of Warrantholder or of any member of
Warrantholder or a member of the immediate family of, or a trust formed for the
benefit of, any of such persons, (iii) Tamarix Investors, LDC, a Cayman Islands
limited duration company and any member thereof, and (iv) such other transferees
as shall be consented to by the Company, which consent shall not be unreasonably
withheld. The Warrants may be divided or combined, upon request to the Company
by the Warrantholder, into a certificate or certificates representing the right
to purchase the same aggregate number of Shares. Unless the context indicates
otherwise, the terms "Warrantholder" shall include any transferee or transferees
of the Warrants pursuant to this subsection 1.3, and the term "Warrants" shall
include any and all warrants outstanding pursuant to this Agreement, including
those evidenced by a certificate or certificates issued upon division, exchange,
substitution or transfer pursuant to this Agreement.
1.4 Form of Warrants. The text of the Warrants and of the form of
election to purchase Shares shall be substantially as set forth in Exhibit A
attached hereto. The number of Shares issuable upon exercise of the Warrants is
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company by its
President or by a Vice President, attested to by its Secretary or an Assistant
Secretary. A Warrant bearing the signature of an individual who was at any time
the proper officer of the Company shall bind the Company, notwithstanding that
such individual shall have ceased to hold such office prior to the delivery of
such Warrant or did not hold such office on the date of this Agreement.
The Warrants shall be dated as of the date of signature thereof by
the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
<PAGE>
1.5 Legend on Shares. Each certificate for Shares initially issued
upon exercise of the Warrants shall bear a legend restricting their transfer
until December 5, 1998, and the following legend, unless, at the time of
exercise, such Shares are subject to a currently effective Registration
Statement under the Securities Act of 1933, as amended (the "Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN
ANY MANNER EXCEPT IN COMPLIANCE WITH SECTION 11 OF THE AGREEMENT
PURSUANT TO WHICH THEY WERE ISSUED."
Any certificate issued at any time in exchange or substitution for
any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act, of the securities represented thereby) shall also bear the above legend
unless, in the opinion of the Company's counsel, the securities represented
thereby need no longer be subject to such restrictions.
Section 2. Exchange of Warrant Certificate. Any Warrant certificate
may be exchanged for another certificate or certificates entitling the
Warrantholder to purchase a like aggregate number of Shares as the
certificate or certificates surrendered then entitled such Warrantholder to
purchase. Any Warrantholder desiring to exchange a Warrant certificate shall
make such request in writing delivered to the Company, and shall surrender,
properly endorsed, with signatures guaranteed, the certificate evidencing the
Warrant to be so exchanged. Thereupon, the Company shall execute and deliver
to the person entitled thereto a new Warrant certificate as so requested.
Section 3. Term of Warrants; Exercise of Warrants.
3.1 Subject to the terms of this Agreement, the Warrantholder shall
have the right, at any time during the period commencing at 9:00 a.m., New York
Time, on October 1, 1998 and ending at 5:00 p.m., New York Time, on May 1, 2002
(the "Termination Date"), to purchase from the Company up to the number of fully
paid and nonassessable Shares to which the Warrantholder may at the time be
entitled to purchase pursuant to this Agreement, upon surrender to the Company,
at its principal office, of the certificate evidencing the Warrants to be
exercised, together with the purchase form on the reverse thereof duly filled in
and signed, with signatures guaranteed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
this section 3 and sections 7 and 8 hereof), for the number of Shares in respect
of which such Warrants are then exercised, but in no event for less than 100
Shares (unless less than an aggregate of 100 Shares are then purchasable under
all outstanding Warrants held by a Warrantholder).
3.2 Payment of the aggregate Warrant Price shall be made in cash,
by wire transfer, by certified or official bank check, pursuant to the cashless
exercise procedures described in Section 3.3 hereof, or any combination
thereof. Upon such surrender of the Warrants and payment of such Warrant Price
as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Warrantholder and in the
name or names of the Warrantholder or, subject to compliance with the provisions
of Section 11.1, in such name or names as the Warrantholder may designate, a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrant, together with cash, as provided in Section 9 hereof, in
respect of any fractional Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such securities as of the date of surrender of the Warrants and
payment of the Warrant Price, as aforesaid, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
The Warrants shall be exercisable, at the election of the Warrantholder, either
in full or from time to time in part and, in the event that a certificate
evidencing the Warrants is exercised in respect of less than all of the Shares
specified therein at any time prior to the Termination Date, a new certificate
evidencing the remaining portion of the Warrants will be issued by the Company.
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3.3 The Company shall establish procedures whereby the
Warrantholder, subject to the requirements of Regulation T, federal income tax
laws and other federal, state and local tax and securities laws, can exercise
the Warrant or a portion thereof without making a direct payment of the Warrant
Price to the Company. The Company shall determine such administrative procedures
and policies as it deems appropriate and such procedures and policies shall be
binding on any Warrantholder wishing to use the cashless exercise program.
Section 4. Payment of Taxes. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of the Warrants or
the securities comprising the Shares; provided, however, the Company shall
not be required to pay any tax which may be payable in respect of any
secondary transfer of the Warrants or the securities comprising the Shares.
Section 5. Mutilated or Missing Warrants. In case the certificate
or certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Warrant
certificate or certificates of like tenor and representing an equivalent
right or interest, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction of such Warrant and a bond
of indemnity, if requested, also satisfactory in form and amount at the
applicant's cost. Applicants for such substitute Warrants certificate shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe.
Section 6. Reservation of Shares. There has been reserved, and the
Company shall at all times keep reserved so long as the Warrants remain
outstanding, out of its authorized Common Stock, such number of shares of
Common Stock as shall be subject to purchase under the Warrants. The Company
will supply every transfer agent for the Common Stock and other securities of
the Company issuable upon the exercise of the Warrants with duly executed
stock and other certificates, as appropriate, for such purpose and will
provide or otherwise make available any cash which may be payable as provided
in Section 9 hereof.
Section 7. Warrant Price. The price per Share at which Shares shall
be purchasable upon the exercise of the Warrants (the "Warrant Price") shall
be $5.50.
Section 8. Adjustment of Number of Shares. The number and kind of
securities purchasable upon the exercise of the Warrants and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
8.1 Adjustments. The number of Shares purchasable upon the exercise
of the Warrants shall be subject to adjustment as follows: In case the Company
shall (i) pay a dividend in Common Stock or make a distribution in Common Stock,
(ii) subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock other securities of the Company, the
Warrant Price and the number of Shares purchasable upon exercise of the Warrants
immediately prior thereto shall be proportionately adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Shares or
other securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Warrants been exercised at the Warrant Price
immediately prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this subsection 8.1 shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
For the purpose of this subsection 8.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement, 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.
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8.2 No Adjustment for Dividends. Except as provided in subsection
8.1, no adjustment in respect of any dividends or distributions out of earnings
shall be made during the term of the Warrants or upon the exercise of the
Warrants.
8.3 Certificate of Adjustment. Whenever the number of Shares
purchasable upon the exercise of the Warrants is adjusted as herein provided,
the Company shall cause to be promptly mailed to the Warrantholder by first
class mail, postage prepaid, notice of such adjustment and a certificate of the
chief financial officer of the Company setting forth the number of Shares
purchasable upon the exercise of the Warrants after such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
8.4 Preservation of Purchase Rights upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement that the Warrantholder shall have the right thereafter upon payment
of the Warrant Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had the Warrants been exercised immediately prior to such action. In the event
of a merger described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, in which the Company is the surviving corporation, the right to purchase
Shares under the Warrants shall terminate on the date of such merger and
thereupon the Warrants shall become null and void, but only if the controlling
corporation shall agree to substitute for the Warrants its warrant which
entitles the holder thereof to purchase upon its exercise the kind and amount of
shares and other securities and property which it would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this subsection 8.4 shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8 hereof. The provisions of this subsection
8.4 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
8.5 Par Value of Shares of Common Stock. Before taking any action
which would cause an adjustment effectively reducing the portion of the Warrant
Price allocable to each Share below the then par value per share of the Common
Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Stock upon exercise of the Warrants.
8.6 Independent Public Accountants. The Company may retain a firm
of independent public accountants of recognized national standing (which may be
any such firm regularly employed by the Company) to make any computation
required under this Section 8, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 8.
8.7 Statement on Warrant Certificates. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof; and any Warrant certificate thereafter issued,
whether upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.
Section 9. Fractional Interests; Current Market Price. The Company
shall not be required to issue fractional Shares on the exercise of the
Warrants. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of the Warrants (or specified portion
thereof), the Company shall pay an amount in cash equal to the then Current
Market Price per share of Common Stock multiplied by such fraction.
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For purposes of this Agreement, the term "Current Market Price"
shall mean (i) if the Common Stock is in the over-the-counter market and not in
The Nasdaq National Market nor on any national securities exchange, the average
of the per share closing bid price on the 30 consecutive trading days
immediately preceding the date in question, as reported by The Nasdaq Small Cap
Market (or an equivalent generally accepted reporting service if quotations are
not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is
traded in The Nasdaq National Market or on a national securities exchange, the
average for the 30 consecutive trading days immediately preceding the date in
question of the daily per share closing prices in The Nasdaq National Market or
on the principal stock exchange on which it is listed, as the case may be. For
purposes of clause (i) above, if trading in the Common Stock is not reported by
The Nasdaq Small Cap Market, the applicable bid price referred to in said clause
shall be the lowest bid price as reported in The Nasdaq Electronic Bulletin
Board or, if not reported thereon, as reported in the "pink sheets" published by
National Quotation Bureau, Incorporated, and, if such securities are not so
reported, shall be the price of a share of Common Stock determined by the
Company's Board of Directors in good faith. The closing price referred to in
clause (ii) above shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case in The Nasdaq National Market or on the
national securities exchange on which the Common Stock is then listed.
Section 10. No Rights as Shareholder; Notices to Warrantholder.
Nothing contained in this Agreement or in the Warrants shall be construed as
conferring upon the Warrantholder or its transferees any rights as a
shareholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or any other
matter. If, however, at any time prior to the expiration of the Warrants and
prior to their exercise, any one or more of the following events shall occur:
10.1 any action which would require an adjustment pursuant to
Section 8.1; or
10.2 a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of its property, assets
and business as an entirety or substantially as an entirety) shall be proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
shareholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive such notice
or any defect therein shall not affect the validity of any action taken with
respect thereto.
Section 11. Restrictions on Transfer; Registration Rights.
11.1 The Warrantholder agrees that prior to making any disposition
of the Warrants or the Shares, including without limitation, to persons or
entities identified in clauses (i) through (iv), inclusive, of Section 1.3 other
than pursuant to a registration statement or other notification or
post-effective amendment thereto (hereinafter collectively a "Registration
Statement") filed by the Company with, and declared effective, by, the
Securities and Exchange Commission (the "Commission"), the Warrantholder shall
give written notice to the Company describing briefly the manner in which any
such proposed disposition is to be made and shall provide such other information
as may reasonably be required by the Company and counsel familiar with
securities matter to conclude that no Registration Statement under the Act is
required with respect to such disposition, and no such disposition shall be made
if the Company has notified the Warrantholder that in the opinion of counsel
reasonably satisfactory to the Warrantholder a Registration Statement under the
Act is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if
necessary, by, the Commission.
11.2 The Company and the Warrantholder acknowledge that the Company
has included the Shares in Registration Statement No. 333-21595 declared
effective by the SEC on June 5, 1997.
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11.3 All fees, disbursements and out-of-pocket expenses (other than
Warrantholder's and holders' of Shares brokerage fees and commissions and legal
fees of counsel to the Warrantholder and holders of Shares, if any) in
connection with the filing of any Registration Statement or amendments to
supplements thereto (or obtaining the opinion of counsel and any no-action
position of the Commission with respect to sales under Rule 144) and in
complying with applicable securities and Blue Sky laws shall be borne by the
Company. The Company at its expense will supply any Warrantholder and any holder
of Shares with copies of such Registration Statement and the prospectus included
therein and other related documents any opinions and no-action letters in such
quantities as may be reasonably requested by the Warrantholder or holder of
Shares.
11.4 The Company shall be required to use its best efforts to
maintain the effectiveness of Registration Statement No. 33-21595 or any
subsequently filed Registration Statement hereafter declared effective unless,
in the opinion of counsel for the Warrantholder and holders of Shares and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for such holders and
the Company), the proposed public offering or other transfer of the Shares is
exempt from applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities," as defined in Rule 144 under the Act.
11.5 The provisions of this Section 11 and Section 12 hereof shall
apply to the extent as provided herein if the Company chooses to file an
Offering Statement under Regulation A promulgated under the Act.
11.6 The Company agrees that until all Shares have been sold under
a Registration Statement or pursuant to Rule 144 under the Act, it will use its
best efforts to keep current in filing all materials required to be filed with
the Commission in order to permit the holders of such securities to sell the
same under Rule 144.
Section 12. Indemnification.
12.1 In the event of the filing of any Registration Statement with
respect to the Shares pursuant to Section 11 hereof, the Company agrees to
indemnify and hold harmless the Warrantholder or any holder of such Shares and
each person, if any, who controls the Warrantholder or any holder of such Shares
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
reasonable attorneys' fees), to which the Warrantholder or any holder of such
Shares or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, or amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Warrantholder or the holder
of such Shares or any person who controls the Warrantholder or any holder of
such Shares within the meaning of the Act specifically for use in the
preparation thereof. This indemnity will be in addition to any liability which
the Company may otherwise have.
12.2 The Warrantholder and the holders of the Shares agree that
they will indemnify and hold harmless the Company, each other person referred to
in subparts (1), (2) and (3) of Section 11(a) of the Act in respect of the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include but not be limited to,
all costs of defense and investigation and all attorneys' fees) to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or any related preliminary prospectus, final
prospectus or
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amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission was made in such Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Warrantholder or such holder of Shares specifically for use in
the preparation thereof. This indemnity agreement will be in addition to any
liability which the Warrantholder or such holder of Shares may otherwise have.
12.3 Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 12, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 12. In case any such action is brought against
any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 12 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 12.1 or 12.2 hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any
action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnification
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
Section 13. Contribution. In order to provide for just and equitable
contribution under the Act in any case in which (i) a Warrantholder or any
holder of the Shares or controlling person makes a claim for indemnification
pursuant to Section 12 hereof but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of Section 12 hereof provide for indemnification in such
case or (ii) contribution under the Act may be required on the part of any
Warrantholder or any holder of the Shares or controlling person, then the
Company and any Warrantholder or any such holder of the Shares or controlling
person shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or a Warrantholder or holder of Shares
or controlling person on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
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statement or omission. The Company and such holders of such securities and such
controlling persons agree that it would not be just and equitable if
contribution pursuant to this Section 13 were determined by pro rata allocation
or by any other method which does not take account of the equitable
considerations referred to in this Section 13. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 13 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Section 14. Notices. Any notice pursuant to this Agreement by the
Company or by a Warrantholder or a holder of Shares shall be in writing and
shall be deemed to have been duly given if delivered or mailed by certified
mail, return receipt requested:
14.1 to a Warrantholder or a holder of Shares addressed to Azzurra,
Inc., c/o Tamarix Capital Corporation, 350 Park Avenue, 14th Floor, New York,
New York 10022.
14.2 to the Company addressed to it at 2 Worlds Fair Drive,
Franklin Township, Somerset, New Jersey 08873, Attention: President.
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
Section 15. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrantholder, or the
holders of Shares shall bind and inure to the benefit of their respective
successors and permitted assigns hereunder.
Section 16. Merger or Consolidation of the Company. The Company will
not merge or consolidate with or into any other corporation or sell all or
substantially all of its property to another corporation, unless the
provisions of Section 8.4 are complied with.
Section 17. Survival of Representations and Warranties. All
statements contained in any schedule, exhibit, certificate or other
instrument delivered by or on behalf of the parties hereto, or in connection
with the transactions contemplated by this Agreement, shall be deemed to be
representations and warranties hereunder. Notwithstanding any investigations
made by or on behalf of the parties to this Agreement, all representations,
warranties and agreements made by the parties to this Agreement or pursuant
hereto shall survive.
Section 18. Applicable Law. This Agreement shall be deemed to be a
contract made under the laws of the State of New York and for all purposes
shall be construed in accordance with the laws of said State.
Section 19. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Warrantholder and the holders of Shares any legal or equitable
right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of the Company, the Warrantholder and the holders
of Shares.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
TRIDENT ROWAN GROUP, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
AZZURRA, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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Exhibit 4.4
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TRIDENT ROWAN GROUP, INC.
and
IXION, LDC
-----------------------
WARRANT AGREEMENT
Dated as of October 1, 1998
------------------------------------------------------------
<PAGE>
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of October 1, 1998
is made and entered into by and between TRIDENT ROWAN GROUP, INC., a Maryland
corporation (the "Company") and IXION, LDC (the "Warrantholder").
Pursuant to an agreement dated as of May 2, 1997 (the "Original
Agreement"), the Company issued warrants, as hereinafter described (the
"Warrants"), to purchase up to an aggregate of 1,250,000 shares (the "Shares")
of the Company's Common Stock, $0.01 value (the "Common Stock")to Centaurus
Management, LDC ("Centaurus"). Subsequent thereto, Centaurus transferred
warrants to purchase 500,000 shares of Common Stock to the Warrantholder as a
result of which the Warrantholder became bound by and subject to the Original
Agreement. The Company and the Warrantholder agree to modify the Original
Agreement by substituting the following in lieu thereof:
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder, the Company and the Warrantholder, for value received, hereby agree
as follows:
Section 1. Transferability and Form of Warrants.
1.1 Registration. The Warrants shall be numbered and shall be
registered on the books of the Company when issued.
1.2 Transfer. The Warrants shall be transferable only on the books
of the Company maintained at its principal office in Somerset, New Jersey, or
wherever its principal office may then be located, upon delivery thereof duly
endorsed by the Warrantholder or by its duly authorized attorney or
representative, accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver new Warrants to the person entitled thereto.
1.3 Limitations on Transfer of the Warrants. Subject to the
provisions of Section 11, the Warrants shall not be sold, transferred, assigned
or hypothecated by the Warrantholder except to (i) one or more persons, each of
whom on the date of transfer is a member of the transferring Warrantholder; (ii)
a shareholder, officer or employee of Warrantholder or of any member of
Warrantholder or a member of the immediate family of, or a trust formed for the
benefit of, any of such persons, (iii) Tamarix Investors, LDC, a Cayman Islands
limited duration company and any member thereof, and (iv) such other transferees
as shall be consented to by the Company, which consent shall not be unreasonably
withheld. The Warrants may be divided or combined, upon request to the Company
by the Warrantholder, into a certificate or certificates representing the right
to purchase the same aggregate number of Shares. Unless the context indicates
otherwise, the terms "Warrantholder" shall include any transferee or transferees
of the Warrants pursuant to this subsection 1.3, and the term "Warrants" shall
include any and all warrants outstanding pursuant to this Agreement, including
those evidenced by a certificate or certificates issued upon division, exchange,
substitution or transfer pursuant to this Agreement.
1.4 Form of Warrants. The text of the Warrants and of the form of
election to purchase Shares shall be substantially as set forth in Exhibit A
attached hereto. The number of Shares issuable upon exercise of the Warrants is
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company by its
President or by a Vice President, attested to by its Secretary or an Assistant
Secretary. A Warrant bearing the signature of an individual who was at any time
the proper officer of the Company shall bind the Company, notwithstanding that
such individual shall have ceased to hold such office prior to the delivery of
such Warrant or did not hold such office on the date of this Agreement.
The Warrants shall be dated as of the date of signature thereof by
the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
<PAGE>
1.5 Legend on Shares. Each certificate for Shares initially issued
upon exercise of the Warrants shall bear a legend restricting their transfer
until December 5, 1998, and the following legend, unless, at the time of
exercise, such Shares are subject to a currently effective Registration
Statement under the Securities Act of 1933, as amended (the "Act"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN
ANY MANNER EXCEPT IN COMPLIANCE WITH SECTION 11 OF THE AGREEMENT
PURSUANT TO WHICH THEY WERE ISSUED."
Any certificate issued at any time in exchange or substitution for
any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Act, of the securities represented thereby) shall also bear the above legend
unless, in the opinion of the Company's counsel, the securities represented
thereby need no longer be subject to such restrictions.
Section 2. Exchange of Warrant Certificate. Any Warrant certificate may be
exchanged for another certificate or certificates entitling the Warrantholder to
purchase a like aggregate number of Shares as the certificate or certificates
surrendered then entitled such Warrantholder to purchase. Any Warrantholder
desiring to exchange a Warrant certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, with
signatures guaranteed, the certificate evidencing the Warrant to be so
exchanged. Thereupon, the Company shall execute and deliver to the person
entitled thereto a new Warrant certificate as so requested.
Section 3. Term of Warrants; Exercise of Warrants.
3.1 Subject to the terms of this Agreement, the Warrantholder shall
have the right, at any time during the period commencing at 9:00 a.m., New York
Time, on October 1, 1998 and ending at 5:00 p.m., New York Time, on May 1, 2002
(the "Termination Date"), to purchase from the Company up to the number of fully
paid and nonassessable Shares to which the Warrantholder may at the time be
entitled to purchase pursuant to this Agreement, upon surrender to the Company,
at its principal office, of the certificate evidencing the Warrants to be
exercised, together with the purchase form on the reverse thereof duly filled in
and signed, with signatures guaranteed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the provisions of
this section 3 and sections 7 and 8 hereof), for the number of Shares in respect
of which such Warrants are then exercised, but in no event for less than 100
Shares (unless less than an aggregate of 100 Shares are then purchasable under
all outstanding Warrants held by a Warrantholder).
3.2 Payment of the aggregate Warrant Price shall be made in cash,
by wire transfer, by certified or official bank check, pursuant to the cashless
exercise procedures described in Section 3.3 hereof, or any combination
thereof. Upon such surrender of the Warrants and payment of such Warrant Price
as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the Warrantholder and in the
name or names of the Warrantholder or, subject to compliance with the provisions
of Section 11.1, in such name or names as the Warrantholder may designate, a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrant, together with cash, as provided in Section 9 hereof, in
respect of any fractional Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such securities as of the date of surrender of the Warrants and
payment of the Warrant Price, as aforesaid, notwithstanding that the certificate
or certificates representing such securities shall not actually have been
delivered or that the stock transfer books of the Company shall then be closed.
The Warrants shall be exercisable, at the election of the Warrantholder, either
in full or from time to time in part and, in the event that a certificate
evidencing the Warrants is exercised in respect of less than all of the Shares
specified therein at any time prior to the Termination Date, a new certificate
evidencing the remaining portion of the Warrants will be issued by the Company.
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3.3 The Company shall establish procedures whereby the
Warrantholder, subject to the requirements of Regulation T, federal income tax
laws and other federal, state and local tax and securities laws, can exercise
the Warrant or a portion thereof without making a direct payment of the Warrant
Price to the Company. The Company shall determine such administrative procedures
and policies as it deems appropriate and such procedures and policies shall be
binding on any Warrantholder wishing to use the cashless exercise program.
Section 4. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of the Warrants or the securities
comprising the Shares; provided, however, the Company shall not be required to
pay any tax which may be payable in respect of any secondary transfer of the
Warrants or the securities comprising the Shares.
Section 5. Mutilated or Missing Warrants. In case the certificate or
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company shall, at the request of the Warrantholder, issue and
deliver in exchange and substitution for and upon cancellation of the mutilated
certificate or certificates, or in lieu of and substitution for the certificate
or certificates lost, stolen or destroyed, a new Warrant certificate or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of such Warrant and a bond of indemnity, if
requested, also satisfactory in form and amount at the applicant's cost.
Applicants for such substitute Warrants certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
Section 6. Reservation of Shares. There has been reserved, and the Company shall
at all times keep reserved so long as the Warrants remain outstanding, out of
its authorized Common Stock, such number of shares of Common Stock as shall be
subject to purchase under the Warrants. The Company will supply every transfer
agent for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants with duly executed stock and other certificates, as
appropriate, for such purpose and will provide or otherwise make available any
cash which may be payable as provided in Section 9 hereof.
Section 7. Warrant Price. The price per Share at which Shares shall be
purchasable upon the exercise of the Warrants (the "Warrant Price") shall be
$5.50.
Section 8. Adjustment of Number of Shares. The number and kind of securities
purchasable upon the exercise of the Warrants and the Warrant Price shall be
subject to adjustment from time to time upon the happening of certain events, as
follows:
8.1 Adjustments. The number of Shares purchasable upon the exercise
of the Warrants shall be subject to adjustment as follows: In case the Company
shall (i) pay a dividend in Common Stock or make a distribution in Common Stock,
(ii) subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock other securities of the Company, the
Warrant Price and the number of Shares purchasable upon exercise of the Warrants
immediately prior thereto shall be proportionately adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Shares or
other securities of the Company which it would have owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Warrants been exercised at the Warrant Price
immediately prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this subsection 8.1 shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
For the purpose of this subsection 8.1, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the Company
at the date of this Agreement, 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.
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8.2 No Adjustment for Dividends. Except as provided in subsection
8.1, no adjustment in respect of any dividends or distributions out of earnings
shall be made during the term of the Warrants or upon the exercise of the
Warrants.
8.3 Certificate of Adjustment. Whenever the number of Shares
purchasable upon the exercise of the Warrants is adjusted as herein provided,
the Company shall cause to be promptly mailed to the Warrantholder by first
class mail, postage prepaid, notice of such adjustment and a certificate of the
chief financial officer of the Company setting forth the number of Shares
purchasable upon the exercise of the Warrants after such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
8.4 Preservation of Purchase Rights upon Reclassification,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property, assets or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Warrantholder
an agreement that the Warrantholder shall have the right thereafter upon payment
of the Warrant Price in effect immediately prior to such action to purchase,
upon exercise of the Warrants, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had the Warrants been exercised immediately prior to such action. In the event
of a merger described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, in which the Company is the surviving corporation, the right to purchase
Shares under the Warrants shall terminate on the date of such merger and
thereupon the Warrants shall become null and void, but only if the controlling
corporation shall agree to substitute for the Warrants its warrant which
entitles the holder thereof to purchase upon its exercise the kind and amount of
shares and other securities and property which it would have owned or been
entitled to receive had the Warrants been exercised immediately prior to such
merger. Any such agreements referred to in this subsection 8.4 shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8 hereof. The provisions of this subsection
8.4 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
8.5 Par Value of Shares of Common Stock. Before taking any action
which would cause an adjustment effectively reducing the portion of the Warrant
Price allocable to each Share below the then par value per share of the Common
Stock issuable upon exercise of the Warrants, the Company will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common Stock upon exercise of the Warrants.
8.6 Independent Public Accountants. The Company may retain a firm
of independent public accountants of recognized national standing (which may be
any such firm regularly employed by the Company) to make any computation
required under this Section 8, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section 8.
8.7 Statement on Warrant Certificates. Irrespective of any
adjustments in the number of securities issuable upon exercise of Warrants,
Warrant certificates theretofore or thereafter issued may continue to express
the same number of securities as are stated in the similar Warrant certificates
initially issuable pursuant to this Agreement. However, the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof; and any Warrant certificate thereafter issued,
whether upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate, may be in the form so changed.
Section 9. Fractional Interests; Current Market Price. The Company shall not be
required to issue fractional Shares on the exercise of the Warrants. If any
fraction of a Share would, except for the provisions of this Section 9, be
issuable on the exercise of the Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the then Current Market Price per
share of Common Stock multiplied by such fraction.
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For purposes of this Agreement, the term "Current Market Price"
shall mean (i) if the Common Stock is in the over-the-counter market and not in
The Nasdaq National Market nor on any national securities exchange, the average
of the per share closing bid price on the 30 consecutive trading days
immediately preceding the date in question, as reported by The Nasdaq Small Cap
Market (or an equivalent generally accepted reporting service if quotations are
not reported on The Nasdaq Small Cap Market), or (ii) if the Common Stock is
traded in The Nasdaq National Market or on a national securities exchange, the
average for the 30 consecutive trading days immediately preceding the date in
question of the daily per share closing prices in The Nasdaq National Market or
on the principal stock exchange on which it is listed, as the case may be. For
purposes of clause (i) above, if trading in the Common Stock is not reported by
The Nasdaq Small Cap Market, the applicable bid price referred to in said clause
shall be the lowest bid price as reported in The Nasdaq Electronic Bulletin
Board or, if not reported thereon, as reported in the "pink sheets" published by
National Quotation Bureau, Incorporated, and, if such securities are not so
reported, shall be the price of a share of Common Stock determined by the
Company's Board of Directors in good faith. The closing price referred to in
clause (ii) above shall be the last reported sale price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case in The Nasdaq National Market or on the
national securities exchange on which the Common Stock is then listed.
Section 10. No Rights as Shareholder; Notices to Warrantholder. Nothing
contained in this Agreement or in the Warrants shall be construed as conferring
upon the Warrantholder or its transferees any rights as a shareholder of the
Company, including the right to vote, receive dividends, consent or receive
notices as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter. If, however, at any
time prior to the expiration of the Warrants and prior to their exercise, any
one or more of the following events shall occur:
10.1 any action which would require an adjustment pursuant to
Section 8.1; or
10.2 a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of its property, assets
and business as an entirety or substantially as an entirety) shall be proposed;
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section 14 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
shareholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive such notice
or any defect therein shall not affect the validity of any action taken with
respect thereto.
Section 11. Restrictions on Transfer; Registration Rights.
11.1 The Warrantholder agrees that prior to making any disposition
of the Warrants or the Shares, including without limitation, to persons or
entities identified in clauses (i) through (iv), inclusive, of Section 1.3 other
than pursuant to a registration statement or other notification or
post-effective amendment thereto (hereinafter collectively a "Registration
Statement") filed by the Company with, and declared effective, by, the
Securities and Exchange Commission (the "Commission"), the Warrantholder shall
give written notice to the Company describing briefly the manner in which any
such proposed disposition is to be made and shall provide such other information
as may reasonably be required by the Company and counsel familiar with
securities matter to conclude that no Registration Statement under the Act is
required with respect to such disposition, and no such disposition shall be made
if the Company has notified the Warrantholder that in the opinion of counsel
reasonably satisfactory to the Warrantholder a Registration Statement under the
Act is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if
necessary, by, the Commission.
11.2 The Company and the Warrantholder acknowledge that the Company
has included the Shares in Registration Statement No. 333-21595 declared
effective by the SEC on June 5, 1997.
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11.3 All fees, disbursements and out-of-pocket expenses (other than
Warrantholder's and holders' of Shares brokerage fees and commissions and legal
fees of counsel to the Warrantholder and holders of Shares, if any) in
connection with the filing of any Registration Statement or amendments to
supplements thereto (or obtaining the opinion of counsel and any no-action
position of the Commission with respect to sales under Rule 144) and in
complying with applicable securities and Blue Sky laws shall be borne by the
Company. The Company at its expense will supply any Warrantholder and any holder
of Shares with copies of such Registration Statement and the prospectus included
therein and other related documents any opinions and no-action letters in such
quantities as may be reasonably requested by the Warrantholder or holder of
Shares.
11.4 The Company shall be required to use its best efforts to
maintain the effectiveness of Registration Statement No. 33-21595 or any
subsequently filed Registration Statement hereafter declared effective unless,
in the opinion of counsel for the Warrantholder and holders of Shares and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for such holders and
the Company), the proposed public offering or other transfer of the Shares is
exempt from applicable federal and state securities laws and would result in all
purchasers or transferees obtaining securities which are not "restricted
securities," as defined in Rule 144 under the Act.
11.5 The provisions of this Section 11 and Section 12 hereof shall
apply to the extent as provided herein if the Company chooses to file an
Offering Statement under Regulation A promulgated under the Act.
11.6 The Company agrees that until all Shares have been sold under
a Registration Statement or pursuant to Rule 144 under the Act, it will use its
best efforts to keep current in filing all materials required to be filed with
the Commission in order to permit the holders of such securities to sell the
same under Rule 144.
Section 12. Indemnification.
12.1 In the event of the filing of any Registration Statement with
respect to the Shares pursuant to Section 11 hereof, the Company agrees to
indemnify and hold harmless the Warrantholder or any holder of such Shares and
each person, if any, who controls the Warrantholder or any holder of such Shares
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
reasonable attorneys' fees), to which the Warrantholder or any holder of such
Shares or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such Registration
Statement, or any related preliminary prospectus, final prospectus, or amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus or
amendment or supplement thereto in reliance upon, and in conformity with,
written information furnished to the Company by such Warrantholder or the holder
of such Shares or any person who controls the Warrantholder or any holder of
such Shares within the meaning of the Act specifically for use in the
preparation thereof. This indemnity will be in addition to any liability which
the Company may otherwise have.
12.2 The Warrantholder and the holders of the Shares agree that
they will indemnify and hold harmless the Company, each other person referred to
in subparts (1), (2) and (3) of Section 11(a) of the Act in respect of the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include but not be limited to,
all costs of defense and investigation and all attorneys' fees) to which the
Company or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
such Registration Statement, or any related preliminary prospectus, final
prospectus or
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amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission was made in such Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to the
Company by the Warrantholder or such holder of Shares specifically for use in
the preparation thereof. This indemnity agreement will be in addition to any
liability which the Warrantholder or such holder of Shares may otherwise have.
12.3 Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 12, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 12. In case any such action is brought against
any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it shall elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 12 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 12.1 or 12.2 hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any
action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnification
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
Section 13. Contribution. In order to provide for just and equitable
contribution under the Act in any case in which (i) a Warrantholder or any
holder of the Shares or controlling person makes a claim for indemnification
pursuant to Section 12 hereof but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of Section 12 hereof provide for indemnification in such
case or (ii) contribution under the Act may be required on the part of any
Warrantholder or any holder of the Shares or controlling person, then the
Company and any Warrantholder or any such holder of the Shares or controlling
person shall contribute to the aggregate losses, claims, damages or liabilities
to which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or a Warrantholder or holder of Shares
or controlling person on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
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statement or omission. The Company and such holders of such securities and such
controlling persons agree that it would not be just and equitable if
contribution pursuant to this Section 13 were determined by pro rata allocation
or by any other method which does not take account of the equitable
considerations referred to in this Section 13. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 13 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Section 14. Notices. Any notice pursuant to this Agreement by the Company or by
a Warrantholder or a holder of Shares shall be in writing and shall be deemed to
have been duly given if delivered or mailed by certified mail, return receipt
requested:
14.1 to a Warrantholder or a holder of Shares addressed to Ixion,
LDC, c/o Tamarix Capital Corporation, 350 Park Avenue, 14th Floor, New York, New
York 10022.
14.2 to the Company addressed to it at 2 Worlds Fair Drive,
Franklin Township, Somerset, New Jersey 08873, Attention: President.
Each party may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
Section 15. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company, the Warrantholder, or the holders of Shares
shall bind and inure to the benefit of their respective successors and permitted
assigns hereunder.
Section 16. Merger or Consolidation of the Company. The Company will not merge
or consolidate with or into any other corporation or sell all or substantially
all of its property to another corporation, unless the provisions of Section 8.4
are complied with.
Section 17. Survival of Representations and Warranties. All statements contained
in any schedule, exhibit, certificate or other instrument delivered by or on
behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
Section 18. Applicable Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State.
Section 19. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrantholder and the holders of Shares any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Warrantholder and the holders of Shares.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
TRIDENT ROWAN GROUP, INC.
By:
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Name:
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Title:
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IXION, LDC
By:
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Name:
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Title:
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