As filed with the Securities and Exchange Commission on May 19, 1998
Registration No.
==============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------
CADIZ LAND COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0313235
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
(310) 899-4700
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Stanley E. Speer
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
(310) 899-4700
(Name, address, and telephone number of agent for service)
-----------------------------------
Copies of communications to:
HOWARD J. UNTERBERGER, ESQ.
J. BRAD WIGGINS, ESQ.
Miller & Holguin
1801 Century Park East, Seventh Floor
Los Angeles, California 90067
(310) 556-1990
----------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. / /
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant
to Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number
of the earlier effective registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. / /
==============================================================
Title of
each Proposed
class of maximum Proposed
securities offering maximum Amount of
to be Amount price aggregate registration
registered to be registered per unit offering price fee
- --------------------------------------------------------------------------
Common Stock,
par value 5,910,712 shares(1)(3) $13.00(2) $76,839,256.00 $22,667.58(3)
$.01 per
share
Warrants for
the purchase 500,000 warrants
of Common
Stock (the "Warrants")(3)(4)
- ---------------------------------------------------------------------------
(1) Of this total, 50,000 shares underlie the Options and
500,000 shares underlie the Warrants which are included in
this Registration Statement. Also registered hereunder are
an indeterminate number of additional shares of Common
Stock which may become issuable by virtue of anti-dilution
provisions of the Options and Warrants.
(2) Estimated solely for the purpose of calculating the
registration fee, and based, pursuant to Rule 457(c), on
the average of the high and low prices of the Registrant's
Common Stock as reported by Nasdaq for May 12, 1998, which
date is within 5 business days prior to the initial filing
date of this Registration Statement.
(3) A total of 5,110,712 shares and 75,000 Warrants which are
included within this Registration Statement were included
in the Registrant's Registration Statement on Form S-1 No.
333-19109, declared effective May 13, 1997. The Registrant
has previously paid registration fees totaling $7,285.70
with respect to such securities in connection with this
earlier Registration Statement. As permitted pursuant to
Rule 429 of Regulation C under the Securities Act, such
amount has been applied by Registrant against the total
registration fee set forth above. As a result, a total of
$15,381.88 is being paid by Registrant concurrently with
the filing of this Registration Statement.
(4) No fee for registration of the Warrants is required by
virtue of the last sentence of Rule 457(g).
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
==============================================================
PROSPECTUS
- ----------
CADIZ LAND COMPANY, INC.
5,910,712 SHARES OF COMMON STOCK
(INCLUDING 50,000 OPTION SHARES ISSUABLE UPON EXERCISE OF
OUTSTANDING OPTIONS AND 500,000 WARRANT SHARES ISSUABLE UPON
EXERCISE OF WARRANTS)
AND 500,000 WARRANTS FOR THE PURCHASE OF COMMON STOCK
This Prospectus relates to the offer by the security
holders named herein under the caption "Selling Security
Holders" (collectively, the "Selling Security Holders") for
sale to the public of 5,910,712 shares of the $.01 par value
common stock (the "Common Stock") of Cadiz Land Company, Inc.
(the "Company" or "Cadiz") (collectively, the "Shares"),
including (i) 5,360,712 outstanding Shares (the "Outstanding
Shares"); (ii) 50,000 shares of Common Stock (the "Option
Shares") which are issuable by the Company upon the exercise
of outstanding options (the "Options"); and (iii) 500,000
shares of Common Stock (the "Warrant Shares") which are
issuable by the Company upon the exercise of previously issued
warrants (the "Warrants"). In addition, this Prospectus
relates to the offer by one of the Selling Security Holders
for sale to the public of the Warrants for the purchase of the
Warrant Shares.
The Company will not receive any proceeds from the sale by
the Selling Security Holders of the Shares or the Warrants
offered hereunder. See "Plan of Distribution."
The 500,000 Warrant Shares covered by this Prospectus are
issuable upon exercise of previously issued Warrants held by
one of the Company's institutional lenders. Of these 500,000
Warrants, 75,000 Warrants are exercisable for five years
beginning on April 30, 1997 at an exercise price of $5.03 per
share, 75,000 Warrants are exercisable for five years
beginning on April 30, 1998 at an exercise price of $11.8125
per share, 200,000 Warrants are exercisable for seven years
beginning on November 25, 1997 at an exercise price of $7.00
per share, 112,500 Warrants are exercisable for seven years
beginning on April 13, 1998 at an exercise price of $7.00 per
share, and 37,500 Warrants are exercisable for seven years
beginning May 11, 1998 at an exercise price of $7.00 per
share. See "Description of Securities."
The Selling Security Holders have advised the Company that
they may sell, directly or through brokers, all or a portion
of the securities offered hereby in negotiated transactions or
in one or more transactions in the market at the price
prevailing at the time of sale. In connection with such
sales, the Selling Security Holders and any participating
broker may be deemed to be "underwriters" of the Shares within
the meaning of the Act. It is anticipated that usual and
customary brokerage fees will be paid by Selling Security
Holders in all open market transactions. The Company will pay
substantially all other expenses of the offering. See "Plan
of Distribution."
The Company has filed a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"),
covering the offer and sale of the Shares and the Warrants by
the Selling Security Holders. This registration is in
satisfaction of the terms of agreements by the Company with
certain Selling Security Holders to register their Shares and
Warrants for resale under the Securities Act.
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH
DEGREE OF RISK. SEE THE DISCUSSION OF"RISK FACTORS."
BEGINNING ON PAGE 3.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ___________, 1998
No dealer, salesman or other person has been authorized to
give any information or make any representations, other than
those contained in this Prospectus, in connection with the
offering hereby, and, if given or made, such information and
representations must not be relied upon as having been
authorized by the Company or the Selling Security Holders.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities to any person
in any State or other jurisdiction in which such offer or
solicitation is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no
change in the affairs of the Company or the facts herein set
forth since the date hereof.
This Prospectus includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"). All statements other than
statements of historical facts included in this Prospectus
including, without limitation, the statements regarding
industry prospects and the Company's financial position are
forward-looking statements. Although the Company believes
that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important
factors that could cause actual results to differ materially
from the Company's expectations ("Cautionary Statements") are
disclosed in the Prospectus including, without limitation, in
conjunction with the forward-looking statements included in
this Prospectus and under "Risk Factors." All subsequent
written and oral forward-looking statements attributable to
the Company, the Selling Security Holders or persons acting on
their behalf are expressly qualified in their entirety by the
Cautionary Statements.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the
"Registration Statement") under the Securities Act, with
respect to the securities offered by this Prospectus. This
Prospectus does not contain all of the information set forth
in the Registration Statement. For further information with
respect to the Company and the securities offered hereby,
reference is made to the Registration Statement and to the
schedules and exhibits filed therewith, which may be inspected
without charge at the principal office of the Commission, 450
5th Street, N.W., Washington, D.C. 20549, and copies of the
material contained therein may be obtained from the Commission
upon payment of applicable copying charges. Statements
contained in this Prospectus as to the contents of any
contract or other document referred to herein are not
necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
The Company is subject to the informational requirements of
the Exchange Act, and in accordance therewith files reports,
proxy and information statements and other information with
the Commission. Such reports and other information filed by
the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room
1024, 450 5th Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 7 World Trade Center, Suite
1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can be obtained from the Public Reference
Section of the Commission at 450 5th Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Commission also
maintains a Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other
information regarding the Company and other registrants that
file electronically with the Commission.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents previously filed with the
Commission by the Company (SEC File No. 0-12114) pursuant to
the Exchange Act are incorporated by reference in this
Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the
year ended December 31, 1997;
2. The Company's Proxy Statement furnished in
connection with its Annual Meeting of Stockholders on May 13,
1998, filed with the Commission on March 30, 1998;
3. The description of the Common Stock set forth in the
Company's Registration Statement filed with the Commission on
Form 8A under the Exchange Act on May 8, 1984, as amended by
reports on Form 8-K filed with the Commission on May 26, 1988
and June 2, 1992; and
4. The Company's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1998.
In addition, all reports and other documents subsequently
filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
The Company will provide without charge to any person to
whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents
which have been incorporated by reference in this Prospectus,
other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into the documents so
incorporated. Requests for such copies should be directed to
the Company at 100 Wilshire Boulevard, Suite 1600, Santa
Monica, California 90401, Attention: Stanley E. Speer, Chief
Financial Officer (telephone (310) 899-4700).
TABLE OF CONTENTS
Available Information
Incorporation of Certain Information by Reference
Prospectus Summary
Risk Factors
Selling Security Holders
Plan of Distribution
Description of Securities
Legal Matters
Experts
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY INFORMATION IS QUALIFIED IN ITS
ENTIRETY BY THE DETAILED INFORMATION AND CONSOLIDATED
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED
HEREIN BY REFERENCE AND, ACCORDINGLY, SHOULD BE READ IN
CONJUNCTION WITH THAT INFORMATION AND THOSE FINANCIAL
STATEMENTS AND NOTES.
THE COMPANY
The long-term strategy of Cadiz Land Company, Inc. (the
"Company") is to acquire and develop water-related land and
agricultural assets, as well as selected water-related
technologies. The Company has created an integrated and
complementary portfolio of landholdings, water resources, and
agricultural operations throughout central and southern
California which either possess sizable assured supplies of
water or can, in future years, utilize water supplied from
other Company properties. Management therefore believes that,
with both the increasing scarcity of water supplies in
California and the increasing demand for water, the Company's
access to water will provide it with a competitive advantage
both as a major agricultural concern and as a supplier of
water, which will lead to continued appreciation in the value
of the Company's portfolio.
In September 1996, the Company significantly enhanced
this portfolio through its acquisition of Sun World
International, Inc. ("Sun World"). The Sun World acquisition
has made the Company one of the largest fully integrated
agricultural companies in California by adding to the
Company's portfolio more than 17,200 acres of prime
agricultural land, packing facilities, marketing expertise,
proprietary agricultural products and the highly regarded Sun
World brand name. The acquisition of Sun World also added
valuable water rights to the Company's existing water resource
development operations.
In addition to its Sun World properties, the Company
holds more than 39,000 acres of land in eastern San Bernardino
County which are underlain by excellent groundwater resources
with demonstrated potential for future applications, including
water storage and supply programs, and agricultural,
municipal, recreational and industrial development. All of
the Company's properties are located in close proximity to
California's major aqueduct systems. The Company expects to
utilize its resources to participate in a broad variety of
water storage and supply programs, including the storage and
supply of surplus water for public agencies which require
supplemental sources of water. The Company has reached
agreement with the Metropolitan Water District of Southern
California ("MWD") on principles and terms for a long-term
agreement at its Cadiz, California property, subject to Board
approval of each party. The program (the "Cadiz/Fenner Water
Storage and Supply Program") will provide storage capacity of
approximately 500,000 acre-feet and a dry-year source of up to
100,000 acre-feet per year of high quality water.
The Company continually seeks to develop and manage its
land, water and agricultural resources for their highest and
best uses. Agricultural development enables the Company to
maximize the value of its landholdings while generating cash
flow. The Company also continues to evaluate acquisition
opportunities which are complementary to its current portfolio
of landholdings, water resources and agricultural operations.
The Company's principal offices are located at 100
Wilshire Boulevard, Suite 1600, Santa Monica, California
90401, and its telephone number is (310) 899-4700.
THE OFFERING
Total Shares Offered by the
Selling Security Holders...............5,910,712 Shares
Outstanding Shares...................5,360,712 Shares
Option Shares...........................50,000 Shares
Warrant Shares.........................500,000 Shares
Total Warrants Offered by the
Selling Security Holders.................500,000 Warrants
Risk Factors.............................This offering is speculative and
involves a high degree of risk.
See "Risk Factors."
Use of Proceeds..........................The Company will not receive
any proceeds from the sale of
Shares or the sale of Warrants
pursuant to this Prospectus.
Nasdaq National Market System Symbol.....CLCI
RISK FACTORS
The securities offered hereby involve a high degree of
risk. Prior to making an investment, prospective investors
should carefully consider the following risks affecting the
Company and this offering. This Prospectus and the documents
incorporated herein by reference contain trend analysis and
other forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act.
Actual results could differ materially from those projected in
the forward-looking statements throughout these documents as a
result of the factors described below.
HISTORICAL OPERATING LOSSES AND ACCUMULATED DEFICITS
The Company has a history of operating losses
(approximately $8.5 million for the fiscal year ended March
31, 1996, approximately $6.0 million for the nine months ended
December 31, 1996 and approximately $8.5 million for the
fiscal year ended December 31, 1997) and accumulated deficits
(approximately $54.4 million at March 31, 1996, approximately
$61.1 million at December 31, 1996 and approximately $70.8
million at December 31, 1997). Until such time, if ever, as
the Company generates significant revenues from the
development of its water resources (see "Risks of Water
Development Projects", below), the Company's consolidated
results of operations will be largely dependent upon the
results of operations of its Sun World subsidiary. The
Company cannot predict with any degree of accuracy what effect
the operations of Sun World will have on the Company's overall
business operations in the next several years. See also
"Risks Inherent in Agricultural Operations," below.
RISKS INHERENT IN AGRICULTURAL OPERATIONS
The Company is subject to risks associated with its
agricultural operations. Numerous factors can affect the
price, yield and marketability of the crops grown on the
Company's properties. Crop prices may vary greatly from year
to year as a result of the relationship between production and
market demand. For example, the production of a particular
crop in excess of demand in any particular year will depress
market prices, and inflationary factors and other
unforeseeable economic changes may also, at the same time,
increase operating costs with respect to such crops. In
addition, the agricultural industry in the United States is
highly competitive, and domestic growers and produce marketers
are facing increased competition from abroad, particularly
from Mexico. There are also a number of factors outside of
the Company's control that could, alone or in combination,
materially adversely affect the Company's agricultural
operations, such as adverse weather conditions, insects,
blight or other diseases, labor problems such as boycotts or
strikes and shortages of competent laborers. The Company's
operations may also be adversely affected by changes in
governmental policies, social and economic conditions, and
industry production levels. As a result, there can be no
assurance that the Company's agricultural operations will be
commercially profitable.
RISKS OF WATER DEVELOPMENT PROJECTS
The Company anticipates that it will continue to incur
operating losses from its non-Sun World operations until such
time as it is able to receive significant revenues from the
development of its water development projects, including water
storage and supply programs. Additional financing
specifically in connection with the Company's water projects
will be required. In addition to the risk of delays
associated with receiving all necessary regulatory approvals
and permits, the Company may also encounter unforeseen
technical difficulties which could result in construction
delays and cost increases with respect to the Company's water
development projects. The Company is continuing to negotiate
the specific terms of water storage and supply programs with
various California water agencies, including the MWD (with
which it has reached agreement on principles and terms for the
Cadiz/Fenner Water Storage and Supply Program, subject to
Board approval by each party). However, the outcome of other
negotiations cannot be predicted with any degree of certainty.
There can be no assurances as to the amount of water which
the Company will be able to deliver or store under such
arrangements, nor as to the price which the Company will be
able to obtain. Furthermore, the Company has no experience to
date in the commercial production and delivery of water in
large amounts on a long-term basis. There is, therefore, a
limited historical basis on which to evaluate future
performance of the Company's proposed operations in this area.
SIGNIFICANT LEVERAGE AND WORKING CAPITAL REQUIREMENTS
The consolidated Company's capital structure is
significantly leveraged. As of March 31, 1998 the Company had
approximately $9.8 million of direct indebtedness outstanding
under a term loan (the "Cadiz Term Loan") due April 30, 1999
(with provisions for extension, if required) and approximately
$5 million of direct indebtedness outstanding under a $15
million revolving credit facility with a final maturity date
of December 31, 2000 (the "Cadiz Revolver"), and Sun World had
$118 million of indebtedness outstanding (including $115
million of 11-1/4% First Mortgage Notes due April 15, 2004
(the "Sun World Notes")) and $9.8 million of indebtedness
outstanding under a one-year $30 million revolving credit facility
(the "Sun World Revolver"). The Cadiz Term Loan and Cadiz Revolver
are secured by substantially all of the Company's non-Sun
World assets. The Sun World Notes are secured by a first lien
on substantially all of the assets of Sun World and its
subsidiaries, other than the growing crops, crop inventories
and accounts receivable and proceeds thereof, which secure the
Sun World Revolver. The Sun World Notes are also secured by
the stock of Sun World held by the Company. Sun World will
depend on the Sun World Revolver to meet its significant
seasonal working capital needs. Management anticipates that
the credit available under the Sun World Revolver will be
sufficient to meet Sun World's current seasonal requirements,
although no assurances can be given. See "Seasonality,"
below."
The degree to which the Company's capital structure is
leveraged could impair both the Company's and Sun World's
access to additional financing in the future for working
capital, capital expenditures, acquisitions, and general or
other corporate purposes. The ability of the Company and Sun
World to generate sufficient working capital and cash flow
needed for ongoing debt service and working capital needs
depends on the future performance of the Company and Sun
World. If Sun World does not generate sufficient cash flow to
service its debt, or if Sun World or Cadiz fails to comply
with covenants in the indenture under which the Sun World
Notes were issued (the "Sun World Indenture"), they would face
a default on their obligations. Such a default could result
in the loss of all of the Company's investment in Sun World.
LIMITATIONS ON ACCESS TO SUN WORLD CASH FLOW AND DIVIDENDS
The Company's ability to receive distributions from Sun
World's cash flow is restricted by a series of covenants in
the Sun World Indenture that allow for the payment of
dividends subject to meeting certain tests and ratios.
POTENTIAL ADVERSE EFFECT OF RAIL-CYCLE PROJECT ON THE COMPANY
In November 1995 the San Bernardino County Board of
Supervisors certified the Environmental Impact
Report/Environmental Impact Statement ("EIR/EIS") for, and
approved a Conditional Use Permit for, the proposed
construction and operation of a landfill adjacent to the
Company's Cadiz properties (the "Rail-Cycle Project"). The
Company contends that the Rail-Cycle Project, as currently
designed, poses environmental risks to both the Company's
agricultural operations at Cadiz and to the groundwater basin
underlying the Cadiz property. The Company has vigorously
opposed the Rail-Cycle Project on a number of grounds and has
filed a lawsuit seeking, among other things, to set aside the
County's certification of the EIR/EIS and approval of the
proposed project. The Company has also filed lawsuits against
certain proponents and other parties in interest as to the
Rail-Cycle Project asserting claims for damages under federal
and state law. There can be no assurances as to the outcome
of the Company's lawsuits. Furthermore, the Board of
Supervisors decided to require a business license tax to be
levied against the Rail-Cycle Project which, prior to
adoption, must be approved by a majority vote in a general
election. The Company believes that the Rail-Cycle Project,
if constructed and operated as proposed, will have a
materially adverse impact upon the Company's business.
However, management is unable to predict the magnitude of such
impact, if any, at this time.
SEASONALITY
In connection with the water resource development
activities of the Company, revenues are not expected to be
seasonal in nature.
Sun World's agricultural operations are impacted by the
general seasonal trends that are characteristic of the
agricultural industry. Sun World has historically received
the majority of its net income during the months of June to
October following the harvest and sale of its table grape and
tree fruit crops. Due to this concentrated activity, Sun
World has, therefore, historically incurred a loss with
respect to its agricultural operations in the other months
during the year. See "Risk Factors - Significant Leverage and
Working Capital Requirements."
ENVIRONMENTAL MATTERS
In the normal course of its agricultural operations, the
Company handles, stores, transports and dispenses products
identified as hazardous materials which could subject the
Company to liability for the cleanup of such hazardous
substances or wastes or may adversely affect the value of the
Company's properties. Such matters could, in the future, have
a material adverse effect on the Company.
REGULATION
Certain areas of the Company's operations are subject to
varying degrees of federal, state and local laws and
regulations. The Company's agricultural operations are
subject to a broad range of evolving environmental laws and
regulations. These laws and regulations include the Clean Air
Act, the Clean Water Act, the Resource Conservation and
Recovery Act, the Federal Insecticide, Fungicide and
Rodenticide Act, and the Comprehensive Environmental Response,
Compensation and Liability Act. Environmental concerns are
inherent in most major agricultural operations, including
those conducted by the Company, and there can be no assurances
that the cost of compliance with environmental laws and
regulations in the future will not be material.
The Company's food operations are also subject to
regulations enforced by, among others, the U.S. Food and Drug
Administration and state, local and foreign equivalents and
to inspection by the U.S. Department of Agriculture and other
federal, state, local and foreign environmental and health
authorities. Among other things, the U.S. Food and Drug
Administration enforces statutory standards regarding the
safety of food products, establishes ingredients and
manufacturing procedures for certain foods, establishes
standards of identity for foods and determines the safety of
food substances in the United States. Similar functions are
performed by state, local and foreign governmental entities
with respect to food products produced or distributed in their
respective jurisdictions. In addition, there can be no
assurances as to the effect of any environmental regulations
which may be adopted in the future.
Water supplied by the Company may be subject to
regulation as to quality by the United States Environmental
Protection Agency (the "EPA") acting pursuant to the Federal
Safe Drinking Water Act (the "US Act"). In California, the
responsibility for enforcing the US Act is delegated to the
California Department of Health Services (the "Health
Department") and to the Resources Board acting pursuant to the
California Safe Drinking Water Act (the "Cal Act"). The US
Act provides for the establishment of uniform minimum national
water quality standards, as well as governmental authority to
specify the type of treatment processes to be used for public
drinking water. Moreover, the EPA has an ongoing directive to
issue regulations under the US Act and to require disinfection
of drinking water, specification of maximum contaminant levels
("MCLS") and filtration of surface water supplies. The Cal
Act and the mandate of the Health Department are similar to
the US Act and the mandate of the EPA, and in many instances
MCLS and other requirements of the Health Department are more
restrictive than those promulgated by the EPA.
Both the EPA and the Health Department have promulgated
regulations and other pronouncements which require various
testing and sampling of water and inspections by producers
which set MCLS for numerous contaminants. Since the Company
does not intend to supply water directly to consumers, these
standards only affect the water agencies that may buy or lease
water from the Company. While such environmental regulations
do not directly affect the Company, the regulations regarding
the quality of water distributed affects the Company's
intended customers and may, therefore, depending upon the
quality of the water supplied by the Company, impact the price
and terms upon which the Company may in the future sell its
surplus water or water rights.
REGULATORY APPROVALS
As the Company proceeds with the development of its
properties, including related infrastructure, the Company will
be required to satisfy various regulatory authorities that it
is in compliance with the laws, regulations and policies
enforced by such authorities. Groundwater development, and
the export of surplus groundwater for sale to single entities
such as public water agencies, are not subject to regulation
by existing statutes, other than general environmental
statutes applicable to all development projects. Management
cannot predict with certainty what requirements, if any, may
be imposed by regulators upon future development. In
addition, the time and costs associated with obtaining
regulatory approvals for resource development are significant,
and there can be no assurance that the Company will receive
desired approvals for future development plans.
COMPETITION
The agricultural business is highly competitive. The
Company's competitors include a limited number of large
international food companies, as well as a large number of
smaller independent growers and grower cooperatives. No
single competitor has a dominant market share in this industry
due to the regionalized nature of these businesses. Sun World
utilizes brand recognition, product quality, harvesting in
favorable product windows, competitive pricing, effective
customer service and consumer marketing programs to enhance
its position within the highly competitive fresh food
industry. Consumer and institutional recognition of the Sun
World trademark and related brands and the association of
these brands with high quality food products contribute
significantly to Sun World's ability to compete in the market
for fresh fruit and vegetables.
The Company faces competition for the acquisition,
development and sale of its properties from a number of
competitors, some of which have significantly greater
resources than the Company. The Company may also face
competition in the development of water resources associated
with its properties. Since California has scarce water
resources and an increasing demand for available water, the
Company believes that price and reliability of delivery are
the principal competitive factors affecting transfers of water
in California. In this regard, the ability of the Company to
price its water on a competitive basis will depend upon the
cost of constructing and maintaining delivery systems for its
surplus water.
YEAR 2000 RISKS
The Company has conducted a preliminary review of its
electronic data processing systems to assess what changes
might be needed for those systems to recognize the year 2000
and not to treat any date after December 31, 1999 as a date
during the twentieth century. Management believes that all
such changes can be implemented in an orderly and timely
manner and without material cost. The Company plans to try to
coordinate its response to these issues with those third
parties with whom the Company engages in electronic
transactions, both domestically and internationally, including
suppliers, customers, creditors and financial service
organizations, although the Company cannot effectively ensure
against all potential Year 2000 problems that might originate
with third parties. If the Company or any third party with
whom the Company does business were to have a Year 2000
problem, the Company's business could be seriously disrupted
and the Company's financial condition and results of
operations could be materially adversely affected.
AUTHORIZATION OF "BLANK CHECK" PREFERRED STOCK
The Company's Certificate of Incorporation, as amended,
authorizes the issuance of up to 100,000 shares of preferred
stock with such designations, rights and preferences as may be
determined from time to time by the Company's Board of
Directors. Accordingly, the Board of Directors is empowered,
without stockholder approval, to issue preferred stock in one
or more series, and to fix for any series the dividend rights,
dissolution or liquidation preferences, redemption prices,
conversion rights, voting rights, and other rights,
preferences or privileges for such preferred stock which could
adversely affect the voting power or other rights of the
holders of the Common Stock. To date the Board of Directors
has designated three series of Preferred Stock for issuance,
including (i) up to 60,000 shares of Series A Preferred, (ii)
up to 1,000 shares of 6% Convertible Series B Preferred Stock
(the "Series B Preferred"), and (iii) up to 365 shares of 6%
Convertible Series C Preferred Stock (the "Series C
Preferred"). No shares of Preferred Stock are currently
outstanding. See "Description of Securities." The Board of
Directors has no present plans or arrangements for the
issuance of additional shares of Preferred Stock, and the
Company's ability to issue additional Preferred Stock is
restricted by covenants in the Sun World Indenture. However,
there can be no assurance that the Company will not issue such
shares in the future. Such shares could, under certain
circumstances, be issued as a method of discouraging, delaying
or preventing a change in control of the Company. The
issuance of such shares could prevent holders of the Company's
Common Stock from receiving a premium for their shares from a
potential third-party acquiror.
DILUTION UPON CONVERSION AND EXERCISE OF SECURITIES
The issuance of Shares upon conversion and exercise of
outstanding Options and Warrants may have certain dilutive
effects, including dilution of the Company's earnings per
share.
MARKET RISKS FROM SUBSTANTIAL INCREASE IN NUMBER OF SHARES OF
COMMON STOCK ELIGIBLE FOR RESALE
The registration for resale hereunder of 5,360,712
Outstanding Shares, 50,000 Option Shares and 500,000 Warrant
Shares, for an aggregate total of 5,910,712 Shares,
significantly increases the number of outstanding shares of
Common Stock of the Company eligible for resale. See
"Description of Securities." The sale, or availability for
sale, of these Shares could cause downward pressure on, and
decreases in, the market price of the Company's Common Stock,
particularly in the event that a large number of Shares were
sold in the public market over a short period of time.
NO ASSURANCE OF DIVIDENDS ON COMMON STOCK
To date, the Company has never paid a cash dividend on
Common Stock, and the Company's ability to pay such dividends
is subject to certain covenants pursuant to agreements with
the Company's lenders.
SELLING SECURITY HOLDERS
The following table sets forth certain ownership
information with respect to the Selling Security Holders. The
information set forth below is based upon reports of
beneficial ownership filed with the Securities and Exchange
Commission and records of the Company and its transfer agent,
Continental Stock Transfer & Trust Company. If the Selling
Security Holders were to sell all of the Shares covered by
this Prospectus(1), each Selling Security Holder would have no
further beneficial interest in the Company's Common Stock
except as otherwise noted. Unless noted, the Selling Security
Holders have not had any position, office or other material
relationship with the Company or any of its affiliates within
the past three years.
Shares
Beneficially
Owned Prior
Name to Offering(2) Shares Offered (2)
- ------------------------------- -------------- -------------------
Lar Ze Company 25,000 25,000
Capital Group Companies, Inc. 1,915,000(7) 250,000(7)
MeesPierson Securities, Ltd. 1,014,563 1,014,563
Gamma Leasing Ltd. 69,998 69,998
BT Holdings (NY) Inc.
(Bankers Trust) 801,498 801,498
Morgan Stanley Asset
Management, Inc. 2,661,592(8) 755,997(8)
Heritable & General
Investment Bank Ltd. 307,996 307,996
Zaphiriou Zarifi Overseas
Equities, Inc. 419,998 419,998
Singer & Friedlander (IOM) Ltd. 419,998 419,998
Smith Barney Inc. (3) 491,959 491,959
The Weinress Group (4) 20,158 20,158
Henderson Crosthwaite Institutional
Brokers Ltd. (3) 14,558 14,558
Henry Ansbacher & Co. Limited(5) 30,000 30,000
ING Baring (U.S.) Capital
Corporation(5) 500,000(9) 500,000(9)
Hunter & Company(3) 50,000(10) 50,000(10)
Board of Trustees of the
Policemen & Firemen
Retirement System of
the City of Detroit 83,999 83,999
Irving B. Harris Revocable Trust 145,598 145,598
Roxanne H. Frank Trust 60,198 60,198
Harris Foundation 16,798 16,798
Couderay Partners 33,598 33,598
Jerome Kahn, Jr. Revocable Trust 23,798 23,798
Mark A. Liggett(6) 419,357 375,000
- -----------------------------
(1) The Selling Security Holders are not required to sell all
or any part of the Shares covered by this Prospectus;
therefore, the number and percentage of outstanding Shares
to be held by them after completion of the offering may
exceed that indicated herein.
(2) Includes Option Shares and Warrant Shares offered under
this Prospectus which have not yet been issued.
(3) Consultant to the Company.
(4) A consulting firm which is an affiliate of a former
Director of the Company.
(5) Lender or former lender to the Company.
(6) Employee of the Company.
(7) Assuming the sale of all Shares covered by this Prospectus,
Capital Group Companies, Inc. would continue to beneficially
own 1,665,000 shares of Common Stock, or 5.0% of the total
outstanding.
(8) Assuming the sale of all Shares covered by this Prospectus,
Morgan Stanley Asset Management, Inc. would continue to
beneficially own 1,905,595 shares of Common Stock, or 5.8%
of the total outstanding.
(9) Includes 75,000 Warrant Shares underlying Warrants which
are exercisable for five years beginning on April 30, 1997
at an exercise price of $5.03 per share, 75,000 Warrant
Shares underlying Warrants which are exercisable for five
years beginning on April 30, 1998 at an exercise price of
$11.8125 per share, 200,000 Warrant Shares underlying
Warrants which are exercisable for seven years beginning on
November 25, 1997 at an exercise price of $7.00 per share,
112,500 Warrant Shares underlying Warrants which are
exercisable for seven years beginning on April 13, 1998 at
an exercise price of $7.00 per share, and 37,500 Warrant
Shares underlying Warrants which are exercisable for seven
years beginning on May 11, 1998 at an exercise price of
$7.00 per share.
(10) Includes 50,000 Option Shares underlying Options
exercisable at $5.50 per share, which expire January 9,
2000.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Security
Holders that there are no underwriting arrangements with
respect to the sale of the Shares and Warrants, that the
Shares and Warrants will be sold from time to time (i) as to
the Shares only, in the over-the-counter market (through
Nasdaq) at then prevailing prices, or (ii) as to the Shares
and the Warrants, in private transactions at negotiated
prices, and that usual and customary brokerage fees may be
paid by the Selling Security Holders in connection therewith.
The Company will receive none of the proceeds from sales by
the Selling Security Holders of the Shares and Warrants.
In connection with such sales, the Selling Security
Holders and any participating broker may be deemed to be
"underwriters" of the Shares and Warrants, as such term is
defined in the Act, although the offering of the Shares and
Warrants will not be underwritten by a broker-dealer or
investment banking firm. Sales of the Shares may be made in
the over-the-counter market to broker-dealers making a market
in the Common Stock or to other broker-dealers, and such
broker-dealers, upon their resale of the Shares, may also be
deemed to be "underwriters" under the Act.
The Company has agreed to indemnify certain of the
Selling Security Holders against liabilities they may incur as
a result of any untrue statement of a material fact in the
Registration Statement of which this Prospectus forms a part,
or any omission herein or therein to state a material fact
necessary in order to make the statements made, in the light
of the circumstances under which they were made, not
misleading. Such indemnification includes liabilities that
such Selling Security Holders may incur under the Act. No
such indemnification must be given by the Company if the
untrue statement or omission was made in reliance upon and in
conformity with information furnished in writing to the
Company by the Selling Security Holder for use in the
Registration Statement.
The Company will bear all costs and expenses of the
registration of the Shares and Warrants under the Act and
certain state securities laws, other than fees of counsel (if
any) retained by the Selling Security Holders and any
discounts or commissions payable with respect to sales of the
Shares and Warrants.
The Company has advised the Selling Security Holders of
(i) the requirement for delivery of this Prospectus in
connection with any sale of the Shares or Warrants, and (ii)
the relevant cooling off period specified by Regulation M and
restrictions upon the Selling Security Holders' bidding for or
purchasing securities of the Company during the distribution
of Shares and Warrants.
DESCRIPTION OF SECURITIES
GENERAL
The Company is authorized to issue 45,000,000 shares of
Common Stock, par value $.01 per share, and 100,000 shares of
Preferred Stock, par value $.01 per share ("Preferred Stock").
COMMON STOCK
Holders of Common Stock are entitled to one vote, either
in person or by proxy, for each share held of record by them
on all matters submitted to a vote of stockholders. Except as
otherwise provided by law, action can be taken by a majority
of shares entitled to vote at a meeting. Holders of Common
Stock have no cumulative voting rights. Holders of Common
Stock are entitled to dividends when, as and if declared by
the Board of Directors out of funds legally available
therefor, subject to the prior rights of the holders of any
Preferred Stock. In the event of liquidation or dissolution
and winding up of the Company, holders of Common Stock are
entitled to share ratably in the assets of the Company
remaining after payment of liabilities and after provision has
been made for each class of stock, including any Preferred
Stock outstanding at that time, that has preference over the
Common Stock. Holders of Common Stock, as such, have no
conversion, preemptive or other subscription rights, and there
are no redemption or sinking fund provisions applicable to the
Common Stock. All of the outstanding shares of Common Stock
are, and, when issued, the Option Shares and Warrant Shares
offered under this Prospectus will be, fully paid and
nonassessable.
PREFERRED STOCK
Shares of Preferred Stock may be issued without
stockholder approval. The Board of Directors is authorized to
issue such shares in one or more series and to fix the rights,
preferences, powers, qualifications, limitations and
restrictions thereof, including dividend rights and rates,
conversion rights, voting rights, terms of redemption,
redemption prices, liquidation preferences and the number of
shares constituting any series or the designation of such
series, without any vote or action by the stockholders.
To date the Board of Directors has designated three
series of Preferred Stock for issuance, including (i) up to
60,000 shares of Series A Preferred, of which 27,631 shares
have been issued and no shares currently remain outstanding;
(ii) up to 1,000 shares of Series B Preferred, of which 1,000
shares have been issued and no shares currently remain
outstanding; and (iii) up to 365 shares of Series C Preferred,
of which 340 shares have been issued and no shares currently
remain outstanding.
The Series A Preferred is convertible into shares of
Common Stock, at the option of the holder, at a price of $3.75
per share. Holders thereof are entitled to cumulative
dividends payable at a rate of 6% per annum. The Series A
Preferred is also mandatorily convertible in full at the
option of the Company at any time prior to May 12, 1997
provided that, as a condition to such conversion, the Company
shall pay to holders one full year's worth of dividends (less
the amount of any dividends theretofore paid). The Company
exercised this right effective May 7, 1997, and the then
outstanding shares of Series A Preferred were converted into
7,314,917 shares of Common Stock. Both the Series B Preferred
and the Series C Preferred are convertible into shares of
Common Stock at a price equal to the lower of (a) $5.8125 per
share or (b) 85% of the average closing bid price over the ten
trading-day period ending on the day prior to the submission
of any conversion notice. All shares of Series B Preferred
and Series C Preferred issued to date have been converted to
Common Stock. Holders thereof are also entitled to cumulative
dividends at the rate of 6% per annum until conversion. The
Company reserves the right to redeem any convertible shares of
Preferred Stock for their full cash equivalent by giving the
investors five days' notice.
Subject to the rights of creditors, holders of Series A
Preferred are entitled, in the event of any voluntary or
involuntary liquidation of the Company, to an amount in cash
equal to $1,000 for each share outstanding and for each share
issuable with respect to all accrued and unpaid dividends.
Holders of Series B Preferred and Series C Preferred have
similar liquidation rights as to an amount in cash equal to
$10,000 for each share outstanding and for each share issuable
with respect to all accrued and unpaid dividends. In the
event of such a liquidation, the Series A Preferred, Series B
Preferred and Series C Preferred would rank equally with each
other and on a parity with any other class or series of
Preferred Stock of the Company, and would rank senior and
prior to the Company's Common Stock.
Except as provided by law, holders of Series A Preferred,
Series B Preferred and Series C Preferred shall not be
entitled to vote upon any matter submitted to a vote of the
Company's stockholders.
As of the date of this Prospectus, the Company has no
current plans for the issuance of any additional shares of
Preferred Stock. The Company's ability to issue additional
Preferred Stock is restricted by covenants in the Sun World
Indenture. However, any Preferred Stock that may be issued in
the future could rank prior to the Common Stock offered hereby
with respect to dividend rights and rights on liquidation.
The Board of Directors may, without stockholder approval,
issue Preferred Stock with voting and conversion rights that
could adversely affect the voting power of holders of the
Common Stock offered hereby or create impediments to persons
seeking to gain control of the Company, although there is no
present intention to do so. The issuance of such shares could
prevent holders of the Company's Common Stock from receiving a
premium for their shares from a potential third-party
acquiror. See "Risk Factors - Authorization of "Blank Check"
Preferred Stock."
WARRANTS
A total of 500,000 Warrants are offered for sale hereby
by an institutional lender to the Company. 75,000 Warrants
are exercisable until April 30, 2002 for the purchase of up to
75,000 Warrant Shares at an exercise price equal to $5.03 per
share, 75,000 Warrants are exercisable until April 30, 2003
for the purchase of up to 75,000 Warrant Shares at an exercise
price equal to $11.8125, 200,000 Warrants are exercisable
until November 25, 2004 for the purchase of up to 200,000
Warrant Shares at an exercise price equal to $7.00 per share,
112,500 Warrants are exercisable until April 13, 2005 for the
purchase of up to 112,500 Warrant Shares at an exercise price
equal to $7.00 per share, and up to 37,500 Warrants are
exercisable until May 11, 2005 for the purchase of up to
37,500 Warrant Shares at an exercise price equal to $7.00 per
share. The exercise price and the number and kind of
securities which can be purchased upon exercise of all of the
Warrants are subject to standard anti-dilution and other
adjustments to be made from time to time in the event of any
(i) dividend or distribution in shares of Common Stock, (ii)
subdivision, reclassification or combination of Common Stock,
(iii) issuance to all holders of Common Stock of rights or
warrants entitling them to purchase shares of Common Stock at
a price less than the current market price of the Common
Stock, (iv) issuance to all holders of Common Stock of
evidences of the Company's indebtedness or assets (excluding
cash dividends or distributions) or rights or warrants
(excluding those referred to in (iii) above), or (v) issuance
of shares of Common Stock, or securities convertible into or
exchangeable for shares of Common Stock, at a price less than
the current market price of the Common Stock.
TRANSFER AGENT
The transfer agent for the Company's Common Stock is
Continental Stock Transfer & Trust Company, New York, New
York.
LEGAL MATTERS
Certain legal matters in connection with the issuance of
the securities offered hereby will be passed upon for the
Company by Miller & Holguin, attorneys at law, Los Angeles,
California.
EXPERTS
The consolidated financial statements of the Company
contained in the Annual Report on Form 10-K of the Company for
the year ended December 31, 1997 and incorporated in this
Prospectus by reference, have been so included in reliance on
the reports of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in accounting
and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses in connection with
the distribution described in this Registration Statement will
be as shown below. All expenses incurred with respect to the
distribution will be paid by the Company. See "Plan of
Distribution."
SEC registration fee..........................$ 22,667.58
Printing expenses............................. 4,000.00
Accounting fees and expenses.................. 5,000.00
Legal fees and expenses....................... 7,000.00
Miscellaneous................................. 5,000.00
----------
Total $ 43,667.58
============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law
permits the Company's Board of Directors to indemnify any
person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with any threatened,
pending or completed action, suit or proceeding in which such
person is made a party by reason of his being or having been a
director, officer, employee or agent of the Company, in terms
sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement
for expenses incurred) arising under the Securities Act of
1933, as amended (the "Act"). The statute provides that
indemnification pursuant to its provisions is not exclusive of
other rights of indemnification to which a person may be
entitled under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
The Company's Bylaws provide for mandatory
indemnification of directors and officers of the Company, and
those serving at the request of the Company as directors,
officers, employees, or agents of other entities
(collectively, "Agents"), to the maximum extent permitted by
law. The Bylaws provide that such indemnification shall be a
contract right between each Agent and the Company.
In 1990, the Company entered into an Indemnity Agreement
with each of the individuals then serving as an executive
officer or director of the Company, including Keith Brackpool,
the current Chief Executive Officer of the Company. The
Indemnity Agreement as to Mr. Brackpool remains in effect; all
of the other executive officers and directors who executed an
Indemnity Agreement with the Company have since resigned from
their positions with the Company. The Indemnity Agreement
provides for the indemnification of the indemnified party with
respect to his activities as a director or officer of the
Company or an affiliate of the Company against expenses and
liabilities, of whatever nature, incurred in connection with
any claim made against him by reason of facts which include
his affiliation with the Company. Such indemnification is
provided to the maximum extent permitted by the Company's
charter documents, insurance policies and/or any applicable
law.
The Subscription Agreements between the Company and the
purchasers (the "Purchasers") of certain of the securities
registered for resale hereunder provide that the Company shall
indemnify the Purchasers under certain circumstances and the
Purchasers shall indemnify the Company and controlling persons
of the Company under certain circumstances, including
indemnification for liabilities arising under the Act. The
Warrants registered hereunder also include similar
indemnification provisions.
The Company's Certificate of Incorporation provides that
a director of the Company shall not be personally liable to
the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
The Company also has purchased a liability insurance policy
which insures its directors and officers against certain
liabilities, including liabilities under the Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
The following exhibits are filed or incorporated by reference
as part of this Registration Statement.
4.1 Specimen Form of Stock Certificate for the
Company's registered stock(1)
4.2 Certificate of Designations of 6% Convertible
Series A Preferred Stock(2)
4.3 Certificate of Designations of 6% Convertible
Series B Preferred Stock(3)
4.4 Certificate of Designations of 6% Convertible
Series C Preferred Stock(2)
4.5 Indenture dated as of April 16, 1997 among Sun
World as issuer, the Company and certain
subsidiaries of Sun World as guarantors, and IBJ
Schroder Bank & Trust Company as Trustee, for the
benefit of holders of 11-1/4% First Mortgage Notes
due 2004(4)
4.6 Warrant to purchase 75,000 shares of Common
Stock of the Company in favor of ING Baring (U.S.)
Capital Corporation dated as of March 31, 1997.
4.7 Warrant to purchase 75,000 shares of Common
Stock of the Company in favor of ING Baring (U.S.)
Capital Corporation dated as of March 31, 1997.
4.8 Warrant to purchase 200,000 shares of Common
Stock of the Company in favor of ING Baring (U.S.)
Capital Corporation dated as of November 25, 1997.
4.9 Warrant to purchase 150,000 shares of Common
Stock of the Company in favor of ING Baring (U.S.)
Capital Corporation dated as of November 25, 1997.
5.1 Opinion of Miller & Holguin as to certain
corporate law matters
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Miller & Holguin (included in
Exhibit 5.1)
27.1 Financial Data Schedule(5)(6)
- ------------------------------------
(1) Previously filed as Exhibit to the Company's Report on
Form 8-K dated May 6, 1992
(2) Previously filed as Exhibit to the Company's Report on
Form 8-K dated September 13, 1996
(3) Previously filed as Exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31,
1996
(4) Previously filed as Exhibit to Amendment No. 1 to the
Company's Form S-1 Registration Statement No. 333-19109
(5) Previously filed as Exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997
(6) Previously filed as Exhibit to the Company's Report on
Form 10-Q for the quarter ended March 31, 1997
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination
of the offering.
(h) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against
public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Monica, State of California,
on May 18, 1998.
CADIZ LAND COMPANY, INC.
By: /s/ Keith Brackpool
------------------------------
Keith Brackpool
Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ Dwight W. Makins Chairman of the Board May 18, 1998
- -------------------------- and Director
/s/ Keith Brackpool Chief Executive Officer May 18, 1998
- ------------------------- and Director
Keith Brackpool (Principal Executive Officer)
/s/ Russ Hammond Director May 18, 1998
- -------------------------
Russ Hammond
/s/ Murray Hutchison Director May 18, 1998
- -------------------------
Murray Hutchison
/s/ Mitt Parker Director May 18, 1998
- -------------------------
Mitt Parker
/s/ Stanley E. Speer Chief Financial Officer May 18, 1998
- ------------------------- and Secretary
Stanley E. Speer (Principal Financial
and Accounting Officer)
EXHIBITS INDEX
- ---------- -------------------------- -----------
4.1 Specimen Form of Stock Certificate for the
Company's registered stock(1) *
4.2 Certificate of Designations of 6% Convertible
Series A Preferred Stock(2) *
4.3 Certificate of Designations of 6% Convertible
Series B Preferred Stock(3) *
4.4 Certificate of Designations of 6% Convertible
Series C Preferred Stock(2) *
4.5 Indenture dated as of April 16, 1997 among Sun
World as issuer, the Company and certain
subsidiaries of Sun World as guarantors, and
IBJ Schroder Bank & Trust Company as Trustee,
for the benefit of holders of 11-1/4% First
Mortgage Notes due 2004( 4) *
4.6 Warrant to purchase 75,000 shares of Common
Stock of the Company in favor of ING Baring (U.S.)
Capital Corporation dated as of March 31, 1997 __
4.7 Warrant to purchase 75,000 shares of Common
Stock of the Company in favor of ING Baring
(U.S.) Capital Corporation dated as of
March 31, 1997 __
4.8 Warrant to purchase 200,000 shares of Common
Stock of the Company in favor of ING Baring
(U.S.) Capital Corporation dated as of
November 25, 1997 __
4.9 Warrant to purchase 150,000 shares of Common
Stock of the Company in favor of ING Baring
(U.S.) Capital Corporation dated as of
November 25, 1997 __
5.1 Opinion of Miller & Holguin as to certain
corporate law matters __
23.1 Consent of Price Waterhouse LLP __
23.2 Consent of Miller & Holguin (included in
Exhibit 5.1) __
27.1 Financial Data Schedule(5)(6) *
- -----------------------------------------
* Incorporated by reference
(1) Previously filed as Exhibit to the Company's Report on
Form 8-K dated May 6, 1992
(2) Previously filed as Exhibit to the Company's Report on
Form 8-K dated September 13, 1996
(3) Previously filed as Exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended March 31,
1996
(4) Previously filed as Exhibit to Amendment No. 1 to the
Company's Form S-1 Registration Statement No. 333-19109
(5) Previously filed as Exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997
(6) Previously filed as Exhibit to the Company's Report on
Form 10-Q for the quarter ended March 31, 1997
EXHIBIT 4.6
---------
THE WARRANTS AND WARRANT SHARES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
WARRANTS AND THE WARRANT SHARES MAY NOT BE SOLD UNLESS
THERE IS A REGISTRATION STATEMENT IN EFFECT COVERING THE
WARRANTS AND WARRANT SHARES OR THERE IS AVAILABLE AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933 AS AMENDED.
Void after 5:00 p.m. New York Time, on the Expiration Date.
Warrant to Purchase 75,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
CADIZ LAND COMPANY, INC.
This is to Certify that, FOR VALUE RECEIVED, ING Baring
(U.S.) Capital Corporation ("ING"), or assigns ("Holder"), is
entitled to purchase, subject to the provisions of this
Warrant, from Cadiz Land Company, Inc., a Delaware corporation
("Company"), 75,000 shares of Common Stock, $0.01 par value,
of the Company ("Common Stock") at a price per share equal to
the average daily closing price of the Common Stock
(determined in accordance with the second sentence of Section
(f)(8) below) over the ten trading day period ending on and
including April 29, 1997 at any time during the period from
the earlier of (a) April 30, 1997 (if the Extension (as
defined below) is exercised) or May 30, 1997 (the "Initial
Exercise Date") to the fifth anniversary of the Initial
Exercise Date (the "Expiration Date"), but not later than 5:00
p.m., New York Time, on the Expiration Date. The shares of
Common Stock (or other stock or securities) deliverable upon
such exercise are hereinafter sometimes referred to as
"Warrant Shares" and the exercise price of each share of
Common Stock (as such price may be adjusted from time to time
as provided herein) is hereinafter sometimes referred to as
the "Exercise Price".
Notwithstanding anything to the contrary set forth
herein, this Warrant shall not be exercisable by the Holder
unless and until (i) the Company has exercised its option to
extend the maturity date of the Borrowers' Obligations (as
defined in that certain Global Amendment Agreement by and
between the Company, its wholly owned subsidiary Cadiz Valley
Development Corp., and ING dated March 31, 1997) from April
30, 1997 to April 30, 1998 (the "Extension"), or (ii) if the
Company has not theretofore exercised the Extension, the
Borrowers' Obligations shall not have been repaid in full on
or before May 30, 1997. Should the Borrowers' Obligations be
repaid by the Company in full at any time on or prior to the
Initial Exercise Date, then this Warrant shall immediately
upon such repayment and without the requirement of notice be
canceled and shall be of no further force and effect.
(a) EXERCISE OF WARRANT. Subject to the provisions of
Section (k) hereof, this Warrant may be exercised in whole or
in part at any time or from time to time on or after the
Initial Exercise Date and until the Expiration Date, or if
either such day is a day on which banking institutions in the
State of New York are authorized by law to close, then on the
next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for
the number of Warrant Shares specified in such form. The
Holder may exercise this Warrant, in whole or in part, without
the payment of any cash or other property, by presentation and
surrender of this Warrant to the Company at its principal
office or at the office of its stock transfer agent, if any,
with the Purchase Form duly executed and accompanied by a
written request from the Holder instructing the Company to
issue to the Holder a number of Warrant Shares equal to the
product of (1) a fraction, (i) the numerator of which shall be
the excess of the current market price (as defined in Section
(f)(8) below) of the Common Stock on the date preceding the
date of such exercise of the Warrant over the then Exercise
Price per Warrant Share and (ii) the denominator of which
shall be the current market price (as defined in Section
(f)(8) below) of the Common Stock on such date, times (2) the
number of Warrant Shares as to which the Warrant is being
exercised. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable thereunder. Upon receipt by the
Company of this Warrant at its office, or by the stock
transfer agent of the Company at its office, in proper form
for exercise, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing
such shares of Common Stock shall not then be actually
delivered to the Holder. The Company shall pay all expenses,
transfer taxes and other charges payable in connection with
the preparation, issue and delivery of stock certificates
under this Section (a), except that, in case such stock
certificates shall be registered in a name or names other than
the name of the holder of this Warrant, all stock transfer
taxes which shall be payable upon the issuance of such stock
certificate or certificates shall be paid by the Holder at the
time of delivering the Purchase Form.
(b) RESERVATION OF SHARES. The Company hereby agrees
that at all times following the Initial Exercise Date there
shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of shares of its Common Stock (or
other stock or securities deliverable upon exercise of this
Warrant) as shall be required for issuance and delivery upon
exercise of this Warrant. All shares of Common Stock issuable
upon the exercise of this Warrant shall be duly authorized,
validly issued, fully paid and nonassessable and free and
clear of all liens and other encumbrances.
(c) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the
exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined
as follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on the
Nasdaq system, the current market value shall be the last
reported sale price of the Common Stock on such exchange
or system on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on
such day, the average closing bid and asked prices for
such day on such exchange or system; or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges, the current
market value shall be the mean of the last reported bid
and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date
of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked
prices are not so reported, the current market value
shall be an amount not less than the book value thereof
as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the
Warrant, determined in good faith and in such reasonable
manner as may be prescribed by the Board of Directors of
the Company, and reasonably acceptable to the Holder.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option
of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any,
for other warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. This Warrant is
transferable and may be assigned or hypothecated, in whole or
in part, at any time and from time to time from the date
hereof. Subject to the provisions of Section (k), upon
surrender of this Warrant to the Company at its principal
office or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto duly executed and
funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant registered
in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other warrants which
carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants
are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of
loss, theft or destruction, of reasonably satisfactory
indemnification and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a
new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or
not this Warrant so lost, stolen, destroyed, or mutilated
shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in
the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant and are
not enforceable against the Company except to the extent set
forth herein. Furthermore, the Holder by acceptance hereof,
consents to and agrees to be bound by and to comply with all
the provisions of this Warrant, including, without limitation,
all the obligations imposed upon the holder hereof by Section
(k). In addition, the holder of this Warrant, by accepting
the same, agrees that the Company and the transfer agent may
deem and treat the person in whose name this Warrant is
registered as the absolute, true and lawful owner for all
purposes whatsoever, and neither the Company nor the transfer
agent shall be affected by any notice to the contrary.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price and the
number and kind of securities purchasable upon the exercise of
this Warrant (the "Warrant Shares") shall be subject to
adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect
at any time and the Warrant Shares shall be subject to
adjustment as follows:
(1) In case the Company shall (i) pay a dividend or
make a distribution on its shares of Common Stock in
shares of Common Stock, (ii) subdivide or reclassify its
outstanding Common Stock in shares of Common Stock into a
greater number of shares, or (iii) combine or reclassify
its outstanding Common Stock into a smaller number of
shares, then
(x) if such event should occur prior to the
Initial Exercise Date, then the aggregate number and
kind of Warrant Shares shall be proportionately
adjusted so that the Holder of this Warrant exercised
after such date shall be entitled to receive the
aggregate number and kind of shares which, if this
Warrant had been exercised by such Holder immediately
prior to such date, such Holder would have owned upon
such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination or
reclassification. For example, if the Company
declares a 2 for 1 stock dividend or stock split and
the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such
event was 75,000, the adjusted number of shares of
Common Stock issuable upon exercise of this Warrant
immediately after such event would be 150,000;
(y) if such event should occur on or subsequent
to the Initial Exercise Date, then the Exercise Price
in effect at the time of the record date for such
dividend or distribution or of the effective date of
such subdivision, combination or reclassification
shall be adjusted so that such Exercise Price shall
equal the price determined by multiplying the
Exercise Price in effect immediately prior to such
record date or effective date by a fraction, the
numerator of which is the number of shares of Common
Stock outstanding on such record date or effective
date, and the denominator of which is the number of
shares of Common stock outstanding immediately after
such dividend, distribution, subdivision, combination
or reclassification. For example, if the Company
declares a 2 for 1 stock dividend or stock split and
the Exercise Price immediately prior to such event
was $10.00 per share, the adjusted Exercise Price
immediately after such event would be $5.00 per
share.
Such adjustment shall be made successively whenever
any event listed in this Subsection (1) shall occur.
(2) In case the Company shall hereafter issue rights
or warrants to all holders of its Common Stock entitling
them to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price
(or having a conversion price per share) less than the
current market price of the Common Stock (as defined in
Subsection (8) below) on the record date mentioned below,
then
(x) if such event should occur prior to the
Initial Exercise Date, the aggregate number and kind
of Warrant Shares shall be adjusted so that the same
shall equal the number determined by multiplying the
number of Warrant Shares in effect immediately prior
to the record date mentioned below by a fraction, the
numerator of which shall be the sum of the number of
shares of Common Stock outstanding on such record
date and the number of additional shares of Common
Stock offered for subscription or purchase (or into
which the convertible securities so offered are
convertible), and the denominator of which shall be
the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and
the number of additional shares of Common Stock which
the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so
offered) would purchase at such current market price
per share of the Common Stock. Such adjustment shall
be made successively whenever such rights or warrants
are issued and shall become effective immediately
after the record date for the determination of
shareholders entitled to receive such rights or
warrants; and to the extent that shares of Common
Stock are not delivered (or securities convertible
into Common Stock are not delivered) after the
expiration of such rights or warrants the number of
Warrant Shares shall be readjusted to the number of
Warrant Shares which would then be in effect had the
adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only
the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in
effect immediately prior to the record date mentioned
below by a fraction, the numerator of which shall be
the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and
the number of additional shares of Common Stock which
the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so
offered) would purchase at such current market price
per share of the Common Stock, and the denominator of
which shall be the sum of the number of shares of
Common Stock outstanding on such record date and the
number of additional shares of Common Stock offered
for subscription or purchase (or into which the
convertible securities so offered are convertible).
Such adjustment shall be made successively whenever
such rights or warrants are issued and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive
such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or
securities convertible into Common Stock are not
delivered) after the expiration of such rights or
warrants the Exercise Price shall be readjusted to
the Exercise Price which would then be in effect had
the adjustments made upon the issuance of such rights
or warrants been made upon the basis of delivery of
only the number of shares of Common Stock (or
securities convertible into Common Stock) actually
delivered.
(3) In case the Company shall hereafter distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding regular cash dividends
or distributions and dividends or distributions referred
to in Subsection (1) above) or subscription rights or
warrants (excluding those referred to in Subsection (2)
above), then
(x) if such event should occur prior to the
Initial Exercise Date, in each such case the
aggregate number and kind of Warrant Shares shall be
adjusted so that the same shall equal the number
determined by multiplying the number of Warrant
Shares in effect immediately prior thereto by a
fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding
multiplied by the current market price per share of
Common Stock (as defined in Subsection (8) below),
and the denominator of which shall be the total
number of shares of Common Stock outstanding
multiplied by such current market price per share of
Common Stock, less the aggregate fair market value
(as determined in good faith by the Company's Board
of Directors and reasonably acceptable to the Holder)
of said assets or evidences of indebtedness so
distributed or of such rights or warrants.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, in each such case the
Exercise Price in effect thereafter shall be
determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the total number of
shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as
defined in Subsection (8) below), less the aggregate
fair market value (as determined in good faith by the
Company's Board of Directors and reasonably
acceptable to the Holder ) of said assets or
evidences of indebtedness so distributed or of such
rights or warrants, and the denominator of which
shall be the total number of shares of Common Stock
outstanding multiplied by such current market price
per share of Common Stock.
Such adjustment shall be made successively whenever
any such distribution is made and shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(4) In case the Company shall issue shares of its
Common Stock [excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii) upon
exercise of options granted to the Company's employees
under a plan or plans adopted by the Company's Board of
Directors and approved by its shareholders, if such shares
would otherwise be included in this Subsection (4), (but
only to the extent that the aggregate number of shares
excluded hereby and issued after the date hereof, shall
not exceed 5% of the Company's Common Stock outstanding at
the time of any issuance), (iii) upon exercise of options
and warrants outstanding at the date hereof, and this
Warrant, (iv) upon the exercise of any convertible
security as to which the Exercise Price has already been
adjusted pursuant to Subsection (5) below, and (v) to
shareholders of any corporation which merges into the
Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such
merger, or issued in a bona fide public offering pursuant
to a firm commitment underwriting, but only if no
adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to
Subsection (9) below) with respect to the transaction
giving rise to such rights] for a consideration per share
less than the current market price per share defined in
Subsection (8) below, then on the date the Company fixes
the offering price of such additional shares:
(x) if such event should occur prior to the
Initial Exercise Date, in each such case the
aggregate number and kind of Warrant Shares shall be
adjusted immediately thereafter so that the same
shall equal the number determined by multiplying the
number of Warrant Shares in effect immediately prior
thereto by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional
shares, and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which
the aggregate consideration received [determined as
provided in Subsection (7) below] for the issuance of
such additional shares would purchase at such current
market price per share of Common Stock.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted immediately thereafter so that it
shall equal the price determined by multiplying the
Exercise Price in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which
the aggregate consideration received [determined as
provided in Subsection (7) below] for the issuance of
such additional shares would purchase at such current
market price per share of Common Stock, and the
denominator of which shall be the number of shares of
Common Stock outstanding immediately after the
issuance of such additional shares.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no such
adjustment shall be made unless, in such issuance, the
Company issues shares of Common Stock in an amount which,
when combined with all other issuances of Common Stock
after the date hereof and all other issuances of
securities convertible into or exchangeable for its Common
Stock after the date hereof, which securities are excluded
from Subsections (4) or (5) by operation of this proviso
or the proviso in the last section of Subsection (5),
would exceed 20% of the Company's Common Stock outstanding
immediately prior to the time of such issuance.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
[excluding securities issued in transactions described in
Subsections (2) and (3) above] for a consideration per
share of Common Stock initially deliverable upon
conversion or exchange of such securities [determined as
provided in Subsection (7) below] less than the current
market price per share [as defined in Subsection (8)
below] in effect immediately prior to the issuance of such
securities,, then
(x) if such event should occur prior to the
Initial Exercise Date, in each case the aggregate
number and kind of Warrant Shares shall be adjusted
immediately thereafter so that it shall equal the
number determined by multiplying the number of
Warrant Shares in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum
number of shares of Common Stock of the Company
deliverable upon conversion of or in exchange for
such securities at the initial conversion or exchange
price or rate, and the denominator of which shall be
the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock
which the aggregate consideration received
[determined as provided in Subsection (7) below] for
such securities would purchase at such current market
price per share of Common Stock.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted immediately thereafter so that it
shall equal the price determined by multiplying the
Exercise Price in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities
and the number of shares of Common Stock which the
aggregate consideration received [determined as
provided in Subsection (7) below] for such securities
would purchase at such current market price per share
of Common Stock, and the denominator of which shall
be the sum of the number of shares of Common Stock
outstanding immediately prior to such issuance and
the maximum number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange
for such securities at the initial conversion or
exchange price or rate.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no such
adjustment shall be made unless, in such issuance, the
Company issues securities convertible into or exchangeable
for a number of shares of its Common Stock in an amount
which, when combined with all other issuances of Common
Stock after the date hereof and all other issuances of
securities convertible into or exchangeable for its Common
Stock after the date hereof, which securities are excluded
from Subsections (4) or (5) by operation of this proviso
or the proviso in the last section of Subsection (4),
would exceed 20% of the Company's Common Stock outstanding
immediately prior to the time of such issuance.
(6) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to
Subsections (1), (2), (3), (4) and (5) above, the number
of Warrant Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment by the
Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the
Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith:
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof
as determined in good faith by the Board of Directors
of the Company (irrespective of the accounting
treatment thereof) and reasonably acceptable to the
Holder; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common
Stock, the aggregate consideration received therefor
shall be deemed to be the consideration received by
the Company for the issuance of such securities plus
the additional minimum consideration, if any, to be
received by the Company upon the conversion or
exchange thereof [the consideration in each case to
be determined in the same manner as provided in
clauses (A) and (B) of this Subsection (7)].
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current
market price per share of Common Stock at any date shall
be deemed to be the average of the daily closing prices
for 30 consecutive business days before such date. The
closing price for each day shall be the last sale price
regular way or, in case no such reported sale takes place
on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or
admitted to trading on such exchange, the average of the
last reported bid and asked prices as reported by Nasdaq,
or other similar organization if Nasdaq is no longer
reporting such information, of if not so available, the
fair market price as determined in good faith by the Board
of Directors and reasonably acceptable to the Holder.
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase
or decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments which by reason of
this Subsection (9) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment required to be made hereunder. All
calculations under this Section (f) shall be made to the
nearest cent or to the nearest one-hundredth of a share,
as the case may be. Anything in this Section (f) to the
contrary notwithstanding, the Company shall be entitled,
but shall not be required, to reduce the Exercise Price,
in addition to those changes required by this Section (f),
as it, in its sole discretion, shall determine to be
advisable in order that any dividend or distribution in
shares of Common Stock, subdivision, reclassification or
combination of Common Stock, issuance of warrants to
purchase Common Stock or distribution or evidences of
indebtedness or other assets (excluding cash dividends)
referred to hereinabove in this Section (f) hereafter made
by the Company to the holders of its Common Stock shall
not result in any tax to such holders of its Common Stock
or securities convertible into Common Stock.
(10) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the
Holder of this Warrant thereafter shall become entitled to
receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject
to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections (1)
to (9), inclusive above. The Company may retain a firm of
independent certified public accountants selected by the
Board of Directors (who may be the regular accountants
employed by the Company) to make any computation required
by Section (f), and a certificate signed by such firm
shall be conclusive evidence of the correctness of such
adjustment absent manifest error or negligence.
(11) Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon
exercise of this Warrant, Warrants theretofore or
thereafter issued may continue to express the same price
and number and kind of shares as are stated in this
Warrant.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price
or number of Warrant Shares shall be adjusted as required by
the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer
agent, if any, an officer's certificate showing the adjusted
Exercise Price or number of Warrant Shares determined as
herein provided, setting forth in reasonable detail the facts
requiring such adjustment, including a statement of the number
of additional shares of Common Stock, if any, and such other
facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times
for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Sections (a) and (d) and
the Company shall, forthwith after each such adjustment, mail
a copy by certified mail of such certificate to such Holder or
any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant
shall be outstanding, (i) if the Company shall pay any
dividend or make any distribution upon the Common Stock or
(ii) if the Company shall offer to the holders of Common Stock
for subscription or purchase by them any share of or class of
its capital stock or any other rights or (iii) if any capital
reorganization of the Company, reclassification of the capital
stock of the Company, consolidation or merger of the Company
with or into another entity, sale, lease, or transfer of all
or substantially all of the property and assets of the Company
to another entity, or voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be effected,
then in any such case, the Company shall cause to be mailed by
certified mail to the Holder, at least fifteen days prior the
record date specified in (x) or (y) below, as the case may be,
a notice containing a brief description of the proposed action
and stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or offer of rights,
or (y) such reclassification, reorganization, consolidation,
merger, conveyance, lease, transfer, sale dissolution,
liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or
other securities shall be entitled to receive cash or other
property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease,
transfer, sale, dissolution, liquidation or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case
of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company,
or in case of any consolidation or merger of the Company with
or into another entity (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and
which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or
in case of any sale, lease, or conveyance to another entity of
all or substantially all of the property and assets of the
Company, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that
such Holder shall have the right thereafter by exercising this
Warrant at any time prior to the expiration of the Warrant, to
purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification,
capital reorganization and other change, consolidation,
merger, sale, lease or conveyance by a holder of the number of
shares of Common Stock which might have been purchased upon
exercise of this Warrant immediately prior to such
reclassification, change, consolidation, merger, sale, lease
or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant.
The foregoing provisions of this Section (i) shall similarly
apply to successive reclassifications, capital
reorganizations, and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases or
conveyances. In the event that in connection with any such
capital reorganization or reclassification, consolidation,
merger, sale, lease or conveyance, additional shares of Common
Stock shall be issued in exchange, conversion, substitution,
or payment, in whole or in part, for a security of the Company
other than Common Stock, any such issue shall be treated as an
issue of Common Stock covered by the provisions of Subsection
(1) of Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written
notice at least four weeks prior to the filing of any new
registration statement under the Securities Act of 1933,
as amended, or the Rules and Regulations promulgated
thereunder (such Act and Rules and Regulations being
hereinafter referred to as the "Act") covering securities
of the Company and will for a period ending on the second
anniversary of the Initial Exercise Date and commencing as
of the date hereof, upon the request of any such holder,
include in any such registration statement such
information as may be required to permit a public offering
of the Warrants and the Warrant Shares. The Company shall
supply prospectuses, use its best efforts to cause the
registration statement to become effective and to qualify
the Warrants and/or the Warrant Shares for sale in such
states as any such holder designates and furnish
indemnification in the manner as set forth in Subsection
(2)(B) of this Section (j). Such holders shall furnish
information and indemnification as set forth in Subsection
(2)(B) of this Section (j).
(2) The following provision of this Section (j)
shall also be applicable:
(A) The Company shall bear the entire cost and
expense of any registration of securities initiated
by it under Subsection (1) of this Section (j)
notwithstanding that Warrants and/or Warrant Shares
subject to this Warrant may be included in any such
registration. Any holder whose Warrants and/or
Warrant Shares are included in any such registration
statement pursuant to this Section (j) shall,
however, bear the fees of such holder's own counsel
and any registration fees, transfer taxes or
underwriting discounts or commissions applicable to
the Warrant Shares sold by such holder pursuant
thereto.
(B) (i) The Company shall indemnify and hold
harmless each such holder and each underwriter,
within the meaning of the Act, who may purchase from
or sell for any such holder any Warrants and/or
Warrant Shares (in the case of indemnification of
such underwriter) from and against any and all
losses, claims, damages and liabilities ("Losses")
arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained
in any registration statement or any post-effective
amendment thereto under the Act or any prospectus
included therein required to be filed or furnished by
reason of this Section (j) or arising out of or based
upon any omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statements therein not
misleading, except insofar as such Losses arise out
of or are based upon any such untrue statement or
alleged untrue statement or omission or alleged
omission based upon information furnished or required
to be furnished in writing to the Company by such
holder, in the case of indemnification of such
holder, or underwriter, in the case of
indemnification of such underwriter, expressly for
use therein, which indemnification shall include each
person, if any, who controls any such holder or
underwriter within the meaning of such Act; provided,
however, that the Company shall not be obliged so to
indemnify any such holder or underwriter or
controlling person unless such holder or underwriter
shall at the same time indemnify, severally and not
jointly, the Company, its directors, each officer
signing the related registration statement and each
person, if any, who controls the Company within the
meaning of such Act, from and against any and all
Losses arising out of or based upon any untrue
statement or alleged untrue statement of a material
fact contained in any registration statement or any
prospectus required to be filed or furnished by
reason of this Section (j) or arising out of or based
upon any omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, insofar as
such Losses arise out of or are based upon any untrue
statement or alleged untrue statement or omission
made in conformity with information furnished in
writing to the Company by any such holder or
underwriter expressly for use therein.
(ii) If the indemnity obligation provided
for above is unavailable or insufficient to hold
harmless an indemnified party in respect of any
Losses, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified
party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the
indemnified party on the other hand in connection
with statements or omissions which resulted in such
Losses, 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 indemnifying party or the indemnified party
and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent
such untrue statement or omission. The parties agree
that it would not be just and equitable if
contributions pursuant to this paragraph were to be
determined by PRO RATA allocation or by any other
method of allocation which does not take account of
the equitable considerations referred to in the
previous sentence.
(C) Notwithstanding anything herein to the
contrary, the Holder hereof shall have no rights to
have the Warrants or Warrant Shares registered if in
the opinion of either counsel for the Company,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the Holder
hereof in the reasonable judgement of such Holder),
or counsel for the Holder hereof, knowledgeable and
experienced in Federal securities matters (said
counsel to be acceptable to the Company in the
Company's reasonable judgement), the Holder hereof
may lawfully sell publicly, at the time and in the
manner the Holder hereof proposes to sell the
Warrants or the Warrant Shares, all of the securities
proposed to be sold without registering the sale
under the Act, whether pursuant to an exemption from
registration available under Section 4(1) of the Act,
Rule 144 or Rule 144(k) under the Act, or otherwise.
(D) The Company will (a) file reports in
compliance with the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (b) comply with all
rules and regulations of the Securities and Exchange
Commission (the "Commission") applicable in
connection with the use of Rule 144 under the Act and
take such other actions and furnish the Holder with
such other information as such Holder may request in
order to avail itself of such rule or any other rule
or regulation of the Commission allowing such Holder
to sell any Warrants or Warrant Shares without
registration, and (c) at its expense, upon the
request of the Holder, deliver to such Holder a
certificate, signed by the Company's principal
financial officer, stating (i) the Company's name,
address and telephone number (including area code),
(ii) the Company's Internal Revenue Service
identification number, (iii) the Company's Commission
file number, (iv) the number of shares of each class
of stock outstanding as shown by the most recent
report or statement published by the Company, and (v)
whether the Company has filed the reports required to
be filed under the Exchange Act for a period of at
least ninety (90) days prior to the date of such
certificate and in addition has filed the most recent
annual report required to be filed thereunder. If at
any time the Company is not required to file reports
in compliance with either Section 13 or Section 15(d)
of the Exchange Act, the Company at its expense will,
upon the written request of the Holder, make
available adequate current public information with
respect to the Company within the meaning of
paragraph (c)(2) of Rule 144 under the Act.
(k) EXERCISE AND TRANSFER TO COMPLY WITH THE SECURITIES
ACT OF 1933. The Holder of this Warrant and any transferee
hereof, by their acceptance hereof, hereby agree that: (a)
the Warrants being acquired hereunder are being purchased for
investment purposes only and not with a view to distribution
and will not be transferred unless registered or unless there
is an exemption available from the registration requirements
of the Act, which exemption has been established to the
reasonable satisfaction of the Company; (b) no public
distribution of the Warrants or Warrant Shares will be made in
violation of the provisions of the Act or any applicable state
laws; and (c) during such period as delivery of a prospectus
with respect to the Warrants or Warrant Shares may be required
by the Act, no public distribution of the Warrants or Warrant
Shares will be made in a manner or on terms different from
those set forth in, or without delivery of, a prospectus then
meeting the requirements of Section 10 of the Act and in
compliance with all applicable state laws. The Holder of this
Warrant and any such transferee hereof further agree that if
any public distribution of any of the Warrants or Warrant
shares is proposed to be made by them otherwise than by
delivery of a prospectus meeting the requirements of Section
10 of the Act, which action shall be taken only after
submission to the Company of an opinion of counsel, reasonably
satisfactory in form and substance to the Company's counsel,
to the effect that the proposed distribution will not be in
violation of the Act or of applicable state law. Furthermore,
it shall be a condition to the transfer of the Warrants or
Warrant Shares that the transferee thereof deliver to the
Company such Holder's written agreement to accept and be bound
by all of the terms and conditions of this Warrant.
CADIZ LAND COMPANY, INC.
By: /s/ Stanley E. Speer
----------------------------
Its: Chief Financial Officer
Dated: ___________,_____
PURCHASE FORM
Dated:________________ ,_______
The undersigned hereby irrevocably elects to exercise the
within Warrant to the extent of purchasing _________shares of
Common Stock and hereby makes payment of __________in payment
of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
_____________________________________________________________
(Please typewrite or print in block letters)
Address_______________________________________________________
Signature_____________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________hereby sells,
assigns and transfers unto
Name
______________________________________________________________
(Please typewrite or print in block letters)
Address _____________________________________________________
the right to purchase Common Stock represented by this Warrant
to the extent of ___________shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
_______________Attorney, to transfer the same on the books of
the Company with full power of substitution in the premises.
Date _________________,_______
Signature _____________________________
EXHIBIT 4.7
------------
THE WARRANTS AND WARRANT SHARES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
WARRANTS AND THE WARRANT SHARES MAY NOT BE SOLD UNLESS
THERE IS A REGISTRATION STATEMENT IN EFFECT COVERING THE
WARRANTS AND WARRANT SHARES OR THERE IS AVAILABLE AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933 AS AMENDED.
Void after 5:00 p.m. New York Time, on the Expiration Date.
Warrant to Purchase 75,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
CADIZ LAND COMPANY, INC.
This is to Certify that, FOR VALUE RECEIVED, ING Baring
(U.S.) Capital Corporation ("ING"), or assigns ("Holder"), is
entitled to purchase, subject to the provisions of this
Warrant, from Cadiz Land Company, Inc., a Delaware corporation
("Company"), 75,000 shares of Common Stock, $0.01 par value,
of the Company ("Common Stock") at a price per share equal to
the average daily closing price of the Common Stock
(determined in accordance with the second sentence of Section
(f)(8) below, but subject to adjustment as provided in Section
(j)(3) below) over the ten trading day period ending on and
including April 29, 1998 at any time during the period from
the earlier of (a) April 30, 1998 (if the Extension (as
defined below) is exercised) or May 30, 1998 (the "Initial
Exercise Date") to the fifth anniversary of the Initial
Exercise Date (the "Expiration Date"), but not later than 5:00
p.m., New York Time, on the Expiration Date. The shares of
Common Stock (or other stock or securities) deliverable upon
such exercise are hereinafter sometimes referred to as
"Warrant Shares" and the exercise price of each share of
Common Stock (as such price may be adjusted from time to time
as provided herein) is hereinafter sometimes referred to as
the "Exercise Price".
Notwithstanding anything to the contrary set forth
herein, this Warrant shall not be exercisable by the Holder
unless and until (i) the Company has exercised its option to
extend the maturity date of the Borrowers' Obligations (as
defined in that certain Global Amendment Agreement by and
between the Company, its wholly owned subsidiary Cadiz Valley
Development Corp., and ING dated March 31, 1997) from April
30, 1998 to April 30, 1999 (the "Extension"), or (ii) if the
Company has not theretofore exercised the Extension, the
Borrowers' Obligations shall not have been repaid in full on
or before May 30, 1998. Should the Borrowers' Obligations be
repaid by the Company in full at any time on or prior to the
Initial Exercise Date, then this Warrant shall immediately
upon such repayment and without the requirement of notice be
canceled and shall be of no further force and effect.
(a) EXERCISE OF WARRANT. Subject to the provisions of
Section (k) hereof, this Warrant may be exercised in whole or
in part at any time or from time to time on or after the
Initial Exercise Date and until the Expiration Date, or if
either such day is a day on which banking institutions in the
State of New York are authorized by law to close, then on the
next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for
the number of Warrant Shares specified in such form. The
Holder may exercise this Warrant, in whole or in part, without
the payment of any cash or other property, by presentation and
surrender of this Warrant to the Company at its principal
office or at the office of its stock transfer agent, if any,
with the Purchase Form duly executed and accompanied by a
written request from the Holder instructing the Company to
issue to the Holder a number of Warrant Shares equal to the
product of (1) a fraction, (i) the numerator of which shall be
the excess of the current market price (as defined in Section
(f)(8) below) of the Common Stock on the date preceding the
date of such exercise of the Warrant over the then Exercise
Price per Warrant Share and (ii) the denominator of which
shall be the current market price (as defined in Section
(f)(8) below) of the Common Stock on such date, times (2) the
number of Warrant Shares as to which the Warrant is being
exercised. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable thereunder. Upon receipt by the
Company of this Warrant at its office, or by the stock
transfer agent of the Company at its office, in proper form
for exercise, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such
exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing
such shares of Common Stock shall not then be actually
delivered to the Holder. The Company shall pay all expenses,
transfer taxes and other charges payable in connection with
the preparation, issue and delivery of stock certificates
under this Section (a), except that, in case such stock
certificates shall be registered in a name or names other than
the name of the holder of this Warrant, all stock transfer
taxes which shall be payable upon the issuance of such stock
certificate or certificates shall be paid by the Holder at the
time of delivering the Purchase Form.
(b) RESERVATION OF SHARES. The Company hereby agrees
that at all times following the Initial Exercise Date there
shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of shares of its Common Stock (or
other stock or securities deliverable upon exercise of this
Warrant) as shall be required for issuance and delivery upon
exercise of this Warrant. All shares of Common Stock issuable
upon the exercise of this Warrant shall be duly authorized,
validly issued, fully paid and nonassessable and free and
clear of all liens and other encumbrances.
(c) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the
exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined
as follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on the
Nasdaq system, the current market value shall be the last
reported sale price of the Common Stock on such exchange
or system on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on
such day, the average closing bid and asked prices for
such day on such exchange or system; or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges, the current
market value shall be the mean of the last reported bid
and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date
of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked
prices are not so reported, the current market value
shall be an amount not less than the book value thereof
as at the end of the most recent fiscal year of the
Company ending prior to the date of the exercise of the
Warrant, determined in good faith and in such reasonable
manner as may be prescribed by the Board of Directors of
the Company, and reasonably acceptable to the Holder.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option
of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any,
for other warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. This Warrant is
transferable and may be assigned or hypothecated, in whole or
in part, at any time and from time to time from the date
hereof. Subject to the provisions of Section (k), upon
surrender of this Warrant to the Company at its principal
office or at the office of its stock transfer agent, if any,
with the Assignment Form annexed hereto duly executed and
funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant registered
in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other warrants which
carry the same rights upon presentation hereof at the
principal office of the Company or at the office of its stock
transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants
are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this
Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of
loss, theft or destruction, of reasonably satisfactory
indemnification and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a
new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or
not this Warrant so lost, stolen, destroyed, or mutilated
shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in
the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant and are
not enforceable against the Company except to the extent set
forth herein. Furthermore, the Holder by acceptance hereof,
consents to and agrees to be bound by and to comply with all
the provisions of this Warrant, including, without limitation,
all the obligations imposed upon the holder hereof by Section
(k). In addition, the holder of this Warrant, by accepting
the same, agrees that the Company and the transfer agent may
deem and treat the person in whose name this Warrant is
registered as the absolute, true and lawful owner for all
purposes whatsoever, and neither the Company nor the transfer
agent shall be affected by any notice to the contrary.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price and the
number and kind of securities purchasable upon the exercise of
this Warrant (the "Warrant Shares") shall be subject to
adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect
at any time and the Warrant Shares shall be subject to
adjustment as follows:
(1) In case the Company shall (i) pay a dividend or
make a distribution on its shares of Common Stock in
shares of Common Stock, (ii) subdivide or reclassify its
outstanding Common Stock in shares of Common Stock into a
greater number of shares, or (iii) combine or reclassify
its outstanding Common Stock into a smaller number of
shares, then
(x) if such event should occur prior to the
Initial Exercise Date, then the aggregate number and
kind of Warrant Shares shall be proportionately
adjusted so that the Holder of this Warrant exercised
after such date shall be entitled to receive the
aggregate number and kind of shares which, if this
Warrant had been exercised by such Holder immediately
prior to such date, such Holder would have owned upon
such exercise and been entitled to receive upon such
dividend, distribution, subdivision, combination or
reclassification. For example, if the Company
declares a 2 for 1 stock dividend or stock split and
the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such
event was 75,000, the adjusted number of shares of
Common Stock issuable upon exercise of this Warrant
immediately after such event would be 150,000;
(y) if such event should occur on or subsequent
to the Initial Exercise Date, then the Exercise Price
in effect at the time of the record date for such
dividend or distribution or of the effective date of
such subdivision, combination or reclassification
shall be adjusted so that such Exercise Price shall
equal the price determined by multiplying the
Exercise Price in effect immediately prior to such
record date or effective date by a fraction, the
numerator of which is the number of shares of Common
Stock outstanding on such record date or effective
date, and the denominator of which is the number of
shares of Common stock outstanding immediately after
such dividend, distribution, subdivision, combination
or reclassification. For example, if the Company
declares a 2 for 1 stock dividend or stock split and
the Exercise Price immediately prior to such event
was $10.00 per share, the adjusted Exercise Price
immediately after such event would be $5.00 per
share.
Such adjustment shall be made successively whenever
any event listed in this Subsection (1) shall occur.
(2) In case the Company shall hereafter issue rights
or warrants to all holders of its Common Stock entitling
them to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price
(or having a conversion price per share) less than the
current market price of the Common Stock (as defined in
Subsection (8) below) on the record date mentioned below,
then
(x) if such event should occur prior to the
Initial Exercise Date, the aggregate number and kind
of Warrant Shares shall be adjusted so that the same
shall equal the number determined by multiplying the
number of Warrant Shares in effect immediately prior
to the record date mentioned below by a fraction, the
numerator of which shall be the sum of the number of
shares of Common Stock outstanding on such record
date and the number of additional shares of Common
Stock offered for subscription or purchase (or into
which the convertible securities so offered are
convertible), and the denominator of which shall be
the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and
the number of additional shares of Common Stock which
the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so
offered) would purchase at such current market price
per share of the Common Stock. Such adjustment shall
be made successively whenever such rights or warrants
are issued and shall become effective immediately
after the record date for the determination of
shareholders entitled to receive such rights or
warrants; and to the extent that shares of Common
Stock are not delivered (or securities convertible
into Common Stock are not delivered) after the
expiration of such rights or warrants the number of
Warrant Shares shall be readjusted to the number of
Warrant Shares which would then be in effect had the
adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only
the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in
effect immediately prior to the record date mentioned
below by a fraction, the numerator of which shall be
the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and
the number of additional shares of Common Stock which
the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate
conversion price of the convertible securities so
offered) would purchase at such current market price
per share of the Common Stock, and the denominator of
which shall be the sum of the number of shares of
Common Stock outstanding on such record date and the
number of additional shares of Common Stock offered
for subscription or purchase (or into which the
convertible securities so offered are convertible).
Such adjustment shall be made successively whenever
such rights or warrants are issued and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive
such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or
securities convertible into Common Stock are not
delivered) after the expiration of such rights or
warrants the Exercise Price shall be readjusted to
the Exercise Price which would then be in effect had
the adjustments made upon the issuance of such rights
or warrants been made upon the basis of delivery of
only the number of shares of Common Stock (or
securities convertible into Common Stock) actually
delivered.
(3) In case the Company shall hereafter distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding regular cash dividends
or distributions and dividends or distributions referred
to in Subsection (1) above) or subscription rights or
warrants (excluding those referred to in Subsection (2)
above), then
(x) if such event should occur prior to the
Initial Exercise Date, in each such case the
aggregate number and kind of Warrant Shares shall be
adjusted so that the same shall equal the number
determined by multiplying the number of Warrant
Shares in effect immediately prior thereto by a
fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding
multiplied by the current market price per share of
Common Stock (as defined in Subsection (8) below),
and the denominator of which shall be the total
number of shares of Common Stock outstanding
multiplied by such current market price per share of
Common Stock, less the aggregate fair market value
(as determined in good faith by the Company's Board
of Directors and reasonably acceptable to the Holder)
of said assets or evidences of indebtedness so
distributed or of such rights or warrants.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, in each such case the
Exercise Price in effect thereafter shall be
determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the
numerator of which shall be the total number of
shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as
defined in Subsection (8) below), less the aggregate
fair market value (as determined in good faith by the
Company's Board of Directors and reasonably
acceptable to the Holder ) of said assets or
evidences of indebtedness so distributed or of such
rights or warrants, and the denominator of which
shall be the total number of shares of Common Stock
outstanding multiplied by such current market price
per share of Common Stock.
Such adjustment shall be made successively whenever
any such distribution is made and shall become effective
immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(4) In case the Company shall issue shares of its
Common Stock [excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii) upon
exercise of options granted to the Company's employees
under a plan or plans adopted by the Company's Board of
Directors and approved by its shareholders, if such shares
would otherwise be included in this Subsection (4), (but
only to the extent that the aggregate number of shares
excluded hereby and issued after the date hereof, shall
not exceed 5% of the Company's Common Stock outstanding at
the time of any issuance), (iii) upon exercise of options
and warrants outstanding at the date hereof, and this
Warrant, (iv) upon the exercise of any convertible
security as to which the Exercise Price has already been
adjusted pursuant to Subsection (5) below, and (v) to
shareholders of any corporation which merges into the
Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such
merger, or issued in a bona fide public offering pursuant
to a firm commitment underwriting, but only if no
adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to
Subsection (9) below) with respect to the transaction
giving rise to such rights] for a consideration per share
less than the current market price per share defined in
Subsection (8) below, then on the date the Company fixes
the offering price of such additional shares:
(x) if such event should occur prior to the
Initial Exercise Date, in each such case the
aggregate number and kind of Warrant Shares shall be
adjusted immediately thereafter so that the same
shall equal the number determined by multiplying the
number of Warrant Shares in effect immediately prior
thereto by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding
immediately after the issuance of such additional
shares, and the denominator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which
the aggregate consideration received [determined as
provided in Subsection (7) below] for the issuance of
such additional shares would purchase at such current
market price per share of Common Stock.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted immediately thereafter so that it
shall equal the price determined by multiplying the
Exercise Price in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which
the aggregate consideration received [determined as
provided in Subsection (7) below] for the issuance of
such additional shares would purchase at such current
market price per share of Common Stock, and the
denominator of which shall be the number of shares of
Common Stock outstanding immediately after the
issuance of such additional shares.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no such
adjustment shall be made unless, in such issuance, the
Company issues shares of Common Stock in an amount which,
when combined with all other issuances of Common Stock
after the date hereof and all other issuances of
securities convertible into or exchangeable for its Common
Stock after the date hereof, which securities are excluded
from Subsections (4) or (5) by operation of this proviso
or the proviso in the last section of Subsection (5),
would exceed 20% of the Company's Common Stock outstanding
immediately prior to the time of such issuance.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
[excluding securities issued in transactions described in
Subsections (2) and (3) above] for a consideration per
share of Common Stock initially deliverable upon
conversion or exchange of such securities [determined as
provided in Subsection (7) below] less than the current
market price per share [as defined in Subsection (8)
below] in effect immediately prior to the issuance of such
securities,, then
(x) if such event should occur prior to the
Initial Exercise Date, in each case the aggregate
number and kind of Warrant Shares shall be adjusted
immediately thereafter so that it shall equal the
number determined by multiplying the number of
Warrant Shares in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum
number of shares of Common Stock of the Company
deliverable upon conversion of or in exchange for
such securities at the initial conversion or exchange
price or rate, and the denominator of which shall be
the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock
which the aggregate consideration received
[determined as provided in Subsection (7) below] for
such securities would purchase at such current market
price per share of Common Stock.
(y) if such event should occur on or subsequent
to the Initial Exercise Date, the Exercise Price
shall be adjusted immediately thereafter so that it
shall equal the price determined by multiplying the
Exercise Price in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities
and the number of shares of Common Stock which the
aggregate consideration received [determined as
provided in Subsection (7) below] for such securities
would purchase at such current market price per share
of Common Stock, and the denominator of which shall
be the sum of the number of shares of Common Stock
outstanding immediately prior to such issuance and
the maximum number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange
for such securities at the initial conversion or
exchange price or rate.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no such
adjustment shall be made unless, in such issuance, the
Company issues securities convertible into or exchangeable
for a number of shares of its Common Stock in an amount
which, when combined with all other issuances of Common
Stock after the date hereof and all other issuances of
securities convertible into or exchangeable for its Common
Stock after the date hereof, which securities are excluded
from Subsections (4) or (5) by operation of this proviso
or the proviso in the last section of Subsection (4),
would exceed 20% of the Company's Common Stock outstanding
immediately prior to the time of such issuance.
(6) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to
Subsections (1), (2), (3), (4) and (5) above, the number
of Warrant Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment by the
Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the
Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and (5)
above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts
or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection
therewith:
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof
as determined in good faith by the Board of Directors
of the Company (irrespective of the accounting
treatment thereof) and reasonably acceptable to the
Holder; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common
Stock, the aggregate consideration received therefor
shall be deemed to be the consideration received by
the Company for the issuance of such securities plus
the additional minimum consideration, if any, to be
received by the Company upon the conversion or
exchange thereof [the consideration in each case to
be determined in the same manner as provided in
clauses (A) and (B) of this Subsection (7)].
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current
market price per share of Common Stock at any date shall
be deemed to be the average of the daily closing prices
for 30 consecutive business days before such date. The
closing price for each day shall be the last sale price
regular way or, in case no such reported sale takes place
on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or
admitted to trading on such exchange, the average of the
last reported bid and asked prices as reported by Nasdaq,
or other similar organization if Nasdaq is no longer
reporting such information, of if not so available, the
fair market price as determined in good faith by the Board
of Directors and reasonably acceptable to the Holder.
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase
or decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments which by reason of
this Subsection (9) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment required to be made hereunder. All
calculations under this Section (f) shall be made to the
nearest cent or to the nearest one-hundredth of a share,
as the case may be. Anything in this Section (f) to the
contrary notwithstanding, the Company shall be entitled,
but shall not be required, to reduce the Exercise Price,
in addition to those changes required by this Section (f),
as it, in its sole discretion, shall determine to be
advisable in order that any dividend or distribution in
shares of Common Stock, subdivision, reclassification or
combination of Common Stock, issuance of warrants to
purchase Common Stock or distribution or evidences of
indebtedness or other assets (excluding cash dividends)
referred to hereinabove in this Section (f) hereafter made
by the Company to the holders of its Common Stock shall
not result in any tax to such holders of its Common Stock
or securities convertible into Common Stock.
(10) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the
Holder of this Warrant thereafter shall become entitled to
receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject
to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Subsections (1)
to (9), inclusive above. The Company may retain a firm of
independent certified public accountants selected by the
Board of Directors (who may be the regular accountants
employed by the Company) to make any computation required
by Section (f), and a certificate signed by such firm
shall be conclusive evidence of the correctness of such
adjustment absent manifest error or negligence.
(11) Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon
exercise of this Warrant, Warrants theretofore or
thereafter issued may continue to express the same price
and number and kind of shares as are stated in this
Warrant.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price
or number of Warrant Shares shall be adjusted as required by
the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant
Secretary at its principal office and with its stock transfer
agent, if any, an officer's certificate showing the adjusted
Exercise Price or number of Warrant Shares determined as
herein provided, setting forth in reasonable detail the facts
requiring such adjustment, including a statement of the number
of additional shares of Common Stock, if any, and such other
facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's
certificate shall be made available at all reasonable times
for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Sections (a) and (d) and
the Company shall, forthwith after each such adjustment, mail
a copy by certified mail of such certificate to such Holder or
any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant
shall be outstanding, (i) if the Company shall pay any
dividend or make any distribution upon the Common Stock or
(ii) if the Company shall offer to the holders of Common Stock
for subscription or purchase by them any share of or class of
its capital stock or any other rights or (iii) if any capital
reorganization of the Company, reclassification of the capital
stock of the Company, consolidation or merger of the Company
with or into another entity, sale, lease, or transfer of all
or substantially all of the property and assets of the Company
to another entity, or voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be effected,
then in any such case, the Company shall cause to be mailed by
certified mail to the Holder, at least fifteen days prior the
record date specified in (x) or (y) below, as the case may be,
a notice containing a brief description of the proposed action
and stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or offer of rights,
or (y) such reclassification, reorganization, consolidation,
merger, conveyance, lease, transfer, sale dissolution,
liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or
other securities shall be entitled to receive cash or other
property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, lease,
transfer, sale, dissolution, liquidation or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case
of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company,
or in case of any consolidation or merger of the Company with
or into another entity (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and
which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or
in case of any sale, lease, or conveyance to another entity of
all or substantially all of the property and assets of the
Company, the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that
such Holder shall have the right thereafter by exercising this
Warrant at any time prior to the expiration of the Warrant, to
purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification,
capital reorganization and other change, consolidation,
merger, sale, lease or conveyance by a holder of the number of
shares of Common Stock which might have been purchased upon
exercise of this Warrant immediately prior to such
reclassification, change, consolidation, merger, sale, lease
or conveyance. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant.
The foregoing provisions of this Section (i) shall similarly
apply to successive reclassifications, capital
reorganizations, and changes of shares of Common Stock and to
successive consolidations, mergers, sales, leases or
conveyances. In the event that in connection with any such
capital reorganization or reclassification, consolidation,
merger, sale, lease or conveyance, additional shares of Common
Stock shall be issued in exchange, conversion, substitution,
or payment, in whole or in part, for a security of the Company
other than Common Stock, any such issue shall be treated as an
issue of Common Stock covered by the provisions of Subsection
(1) of Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written
notice at least four weeks prior to the filing of any new
registration statement under the Securities Act of 1933,
as amended, or the Rules and Regulations promulgated
thereunder (such Act and Rules and Regulations being
hereinafter referred to as the "Act") covering securities
of the Company and will for a period ending on the second
anniversary of the Initial Exercise Date and commencing as
of the date hereof, upon the request of any such holder,
include in any such registration statement such
information as may be required to permit a public offering
of the Warrants and the Warrant Shares. The Company shall
supply prospectuses, use its best efforts to cause the
registration statement to become effective and to qualify
the Warrants and/or the Warrant Shares for sale in such
states as any such holder designates and furnish
indemnification in the manner as set forth in Subsection
(2)(B) of this Section (j). Such holders shall furnish
information and indemnification as set forth in Subsection
(2)(B) of this Section (j).
(2) The following provision of this Section (j)
shall also be applicable:
(A) The Company shall bear the entire cost and
expense of any registration of securities initiated
by it under Subsection (1) of this Section (j)
notwithstanding that Warrants and/or Warrant Shares
subject to this Warrant may be included in any such
registration. Any holder whose Warrants and/or
Warrant Shares are included in any such registration
statement pursuant to this Section (j) shall,
however, bear the fees of such holder's own counsel
and any registration fees, transfer taxes or
underwriting discounts or commissions applicable to
the Warrant Shares sold by such holder pursuant
thereto.
(B) (i) The Company shall indemnify and hold
harmless each such holder and each underwriter,
within the meaning of the Act, who may purchase from
or sell for any such holder any Warrants and/or
Warrant Shares (in the case of indemnification of
such underwriter) from and against any and all
losses, claims, damages and liabilities ("Losses")
arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained
in any registration statement or any post-effective
amendment thereto under the Act or any prospectus
included therein required to be filed or furnished by
reason of this Section (j) or arising out of or based
upon any omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statements therein not
misleading, except insofar as such Losses arise out
of or are based upon any such untrue statement or
alleged untrue statement or omission or alleged
omission based upon information furnished or required
to be furnished in writing to the Company by such
holder, in the case of indemnification of such
holder, or underwriter, in the case of
indemnification of such underwriter, expressly for
use therein, which indemnification shall include each
person, if any, who controls any such holder or
underwriter within the meaning of such Act; provided,
however, that the Company shall not be obliged so to
indemnify any such holder or underwriter or
controlling person unless such holder or underwriter
shall at the same time indemnify, severally and not
jointly, the Company, its directors, each officer
signing the related registration statement and each
person, if any, who controls the Company within the
meaning of such Act, from and against any and all
Losses arising out of or based upon any untrue
statement or alleged untrue statement of a material
fact contained in any registration statement or any
prospectus required to be filed or furnished by
reason of this Section (j) or arising out of or based
upon any omission to state therein a material fact
required to be stated therein or necessary to make
the statements therein not misleading, insofar as
such Losses arise out of or are based upon any untrue
statement or alleged untrue statement or omission
made in conformity with information furnished in
writing to the Company by any such holder or
underwriter expressly for use therein.
(ii) If the indemnity obligation provided
for above is unavailable or insufficient to hold
harmless an indemnified party in respect of any
Losses, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified
party as a result of such Losses in such proportion
as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the
indemnified party on the other hand in connection
with statements or omissions which resulted in such
Losses, 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 indemnifying party or the indemnified party
and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent
such untrue statement or omission. The parties agree
that it would not be just and equitable if
contributions pursuant to this paragraph were to be
determined by pro rata allocation or by any other
method of allocation which does not take account of
the equitable considerations referred to in the
previous sentence.
(C) Notwithstanding anything herein to the
contrary, the Holder hereof shall have no rights to
have the Warrants or Warrant Shares registered if in
the opinion of either counsel for the Company,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the Holder
hereof in the reasonable judgement of such Holder),
or counsel for the Holder hereof, knowledgeable and
experienced in Federal securities matters (said
counsel to be acceptable to the Company in the
Company's reasonable judgement), the Holder hereof
may lawfully sell publicly, at the time and in the
manner the Holder hereof proposes to sell the
Warrants or the Warrant Shares, all of the securities
proposed to be sold without registering the sale
under the Act, whether pursuant to an exemption from
registration available under Section 4(1) of the Act,
Rule 144 or Rule 144(k) under the Act, or otherwise.
(D) The Company will (a) file reports in
compliance with the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (b) comply with all
rules and regulations of the Securities and Exchange
Commission (the "Commission") applicable in
connection with the use of Rule 144 under the Act and
take such other actions and furnish the Holder with
such other information as such Holder may request in
order to avail itself of such rule or any other rule
or regulation of the Commission allowing such Holder
to sell any Warrants or Warrant Shares without
registration, and (c) at its expense, upon the
request of the Holder, deliver to such Holder a
certificate, signed by the Company's principal
financial officer, stating (i) the Company's name,
address and telephone number (including area code),
(ii) the Company's Internal Revenue Service
identification number, (iii) the Company's Commission
file number, (iv) the number of shares of each class
of stock outstanding as shown by the most recent
report or statement published by the Company, and (v)
whether the Company has filed the reports required to
be filed under the Exchange Act for a period of at
least ninety (90) days prior to the date of such
certificate and in addition has filed the most recent
annual report required to be filed thereunder. If at
any time the Company is not required to file reports
in compliance with either Section 13 or Section 15(d)
of the Exchange Act, the Company at its expense will,
upon the written request of the Holder, make
available adequate current public information with
respect to the Company within the meaning of
paragraph (c)(2) of Rule 144 under the Act.
(3) In the event that, upon the Initial Exercise
Date, the Holder hereof may not lawfully sell publicly all
of the Warrants or the Warrant Shares, either (x) pursuant
to an effective registration statement or (y) without
registering the sale under the Act, whether pursuant to an
exemption from registration available under Section 4(1)
of the Act, Rule 144 or Rule 144(k) under the Act, or
otherwise, then, effective upon the Initial Exercise Date,
the Exercise Price shall immediately and without the need
for any further action on the part of the Holder be
reduced to equal 85% of the Exercise Price as would
otherwise have been in effect on the Initial Exercise Date
but for the application of this Section (j)(3).
(k) EXERCISE AND TRANSFER TO COMPLY WITH THE SECURITIES
ACT OF 1933. The Holder of this Warrant and any transferee
hereof, by their acceptance hereof, hereby agree that: (a)
the Warrants being acquired hereunder are being purchased for
investment purposes only and not with a view to distribution
and will not be transferred unless registered or unless there
is an exemption available from the registration requirements
of the Act, which exemption has been established to the
reasonable satisfaction of the Company; (b) no public
distribution of the Warrants or Warrant Shares will be made in
violation of the provisions of the Act or any applicable state
laws; and (c) during such period as delivery of a prospectus
with respect to the Warrants or Warrant Shares may be required
by the Act, no public distribution of the Warrants or Warrant
Shares will be made in a manner or on terms different from
those set forth in, or without delivery of, a prospectus then
meeting the requirements of Section 10 of the Act and in
compliance with all applicable state laws. The Holder of this
Warrant and any such transferee hereof further agree that if
any public distribution of any of the Warrants or Warrant
shares is proposed to be made by them otherwise than by
delivery of a prospectus meeting the requirements of Section
10 of the Act, which action shall be taken only after
submission to the Company of an opinion of counsel, reasonably
satisfactory in form and substance to the Company's counsel,
to the effect that the proposed distribution will not be in
violation of the Act or of applicable state law. Furthermore,
it shall be a condition to the transfer of the Warrants or
Warrant Shares that the transferee thereof deliver to the
Company such Holder's written agreement to accept and be bound
by all of the terms and conditions of this Warrant.
CADIZ LAND COMPANY, INC.
By: /s/ Stanley E. Speer
-----------------------------
Its: Chief Financial Officer
-----------------------------
Dated:-----------,-----
PURCHASE FORM
Dated:
--------------------
The undersigned hereby irrevocably elects to exercise the
within
Warrant to the extent of purchasing ________shares of
Common Stock and hereby makes payment of _________in payment
of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name________________________________________________________
(Please typewrite or print in block letters)
Address_____________________________________________________
Signature___________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________hereby sells,
assigns and transfers unto
Name________________________________________________________
(Please typewrite or print in block letters)
Address_____________________________________________________
the right to purchase Common Stock represented by this Warrant
to the extent of _________ shares as to which such right is
exercisable and does hereby irrevocably constitute and appoint
____________________Attorney, to transfer the same on the
books of the Company with full power of substitution in the
premises.
Date _____________________,__________
Signature _____________________________
EXHIBIT 4.8
--------
THE WARRANTS AND WARRANT SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE WARRANTS AND THE WARRANT SHARES MAY
NOT BE SOLD UNLESS THERE IS A REGISTRATION STATEMENT IN
EFFECT COVERING THE WARRANTS AND WARRANT SHARES OR
THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933 AS AMENDED.
Void after 5:00 p.m. New York Time, on the Expiration Date.
Warrant to Purchase 200,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
CADIZ LAND COMPANY, INC.
This is to Certify that, FOR VALUE RECEIVED, ING Baring
(U.S.) Capital Corporation ("ING"), or assigns ("Holder"),
is entitled to purchase, subject to the provisions of this
Warrant, from Cadiz Land Company, Inc., a Delaware
corporation ("Company"), 200,000 shares of Common Stock,
$0.01 par value, of the Company ("Common Stock") at the
exercise price of Seven Dollars ($7.00) per share commencing
on the date hereof (the "Initial Exercise Date") and ending
on the seventh anniversary of the Initial Exercise Date (the
"Expiration Date"), but not later than 5:00 p.m., New York
Time, on the Expiration Date. The shares of Common Stock
(or other stock or securities) deliverable upon such
exercise are hereinafter sometimes referred to as "Warrant
Shares" and the exercise price of each share of Common Stock
(as such price may be adjusted from time to time as provided
herein) is hereinafter sometimes referred to as the
"Exercise Price".
(a) EXERCISE OF WARRANT. Subject to the provisions of
Section (k) hereof, this Warrant may be exercised in whole
or in part at any time or from time to time on or after the
Initial Exercise Date and until the Expiration Date, or if
either such day is a day on which banking institutions in
the State of New York are authorized by law to close, then
on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price
for the number of Warrant Shares specified in such form.
The Holder may exercise this Warrant, in whole or in part,
without the payment of any cash or other property, by
presentation and surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer
agent, if any, with the Purchase Form duly executed and
accompanied by a written request from the Holder instructing
the Company to issue to the Holder a number of Warrant
Shares equal to the product of (1) a fraction, (i) the
numerator of which shall be the excess of the current market
price (as defined in Section (f)(8) below) of the Common
Stock on the date preceding the date of such exercise of the
Warrant over the then Exercise Price per Warrant Share and
(ii) the denominator of which shall be the current market
price (as defined in Section (f)(8) below) of the Common
Stock on such date, times (2) the number of Warrant Shares
as to which the Warrant is being exercised. If this Warrant
should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares
purchasable thereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the
Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered
to the Holder. The Company shall pay all expenses, transfer
taxes and other charges payable in connection with the
preparation, issue and delivery of stock certificates under
this Section (a), except that, in case such stock
certificates shall be registered in a name or names other
than the name of the holder of this Warrant, all stock
transfer taxes which shall be payable upon the issuance of
such stock certificate or certificates shall be paid by the
Holder at the time of delivering the Purchase Form.
(b) RESERVATION OF SHARES. The Company hereby agrees
that at all times following the Initial Exercise Date there
shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of shares of its Common Stock
(or other stock or securities deliverable upon exercise of
this Warrant) as shall be required for issuance and delivery
upon exercise of this Warrant. All shares of Common Stock
issuable upon the exercise of this Warrant shall be duly
authorized, validly issued, fully paid and nonassessable and
free and clear of all liens and other encumbrances.
(c) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the
exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share,
determined as follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on
the Nasdaq system, the current market value shall be
the last reported sale price of the Common Stock on
such exchange or system on the last business day prior
to the date of exercise of this Warrant or if no such
sale is made on such day, the average closing bid and
asked prices for such day on such exchange or system;
or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges, the current
market value shall be the mean of the last reported bid
and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date
of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and
asked prices are not so reported, the current market
value shall be an amount not less than the book value
thereof as at the end of the most recent fiscal year of
the Company ending prior to the date of the exercise of
the Warrant, determined in good faith and in such
reasonable manner as may be prescribed by the Board of
Directors of the Company, and reasonably acceptable to
the Holder.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option
of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if
any, for other warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same
number of shares of Common Stock purchasable hereunder.
This Warrant is transferable and may be assigned or
hypothecated, in whole or in part, at any time and from time
to time from the date hereof. Subject to the provisions of
Section (k), upon surrender of this Warrant to the Company
at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and
deliver a new Warrant registered in the name of the assignee
named in such instrument of assignment and this Warrant
shall promptly be canceled. This Warrant may be divided or
combined with other warrants which carry the same rights
upon presentation hereof at the principal office of the
Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and
signed by the Holder hereof. The term "Warrant" as used
herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and in the case of loss,
theft or destruction, of reasonably satisfactory
indemnification and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether
or not this Warrant so lost, stolen, destroyed, or mutilated
shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in
the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant and are
not enforceable against the Company except to the extent set
forth herein. Furthermore, the Holder by acceptance hereof,
consents to and agrees to be bound by and to comply with all
the provisions of this Warrant, including, without
limitation, all the obligations imposed upon the holder
hereof by Section (k). In addition, the holder of this
Warrant, by accepting the same, agrees that the Company and
the transfer agent may deem and treat the person in whose
name this Warrant is registered as the absolute, true and
lawful owner for all purposes whatsoever, and neither the
Company nor the transfer agent shall be affected by any
notice to the contrary.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price and
the number and kind of securities purchasable upon the
exercise of this Warrant (the "Warrant Shares") shall be
subject to adjustment from time to time upon the happening
of certain events as hereinafter provided. The Exercise
Price in effect at any time and the Warrant Shares shall be
subject to adjustment as follows:
(1) In case the Company shall (i) pay a dividend
or make a distribution on its shares of Common Stock in
shares of Common Stock, (ii) subdivide or reclassify its
outstanding Common Stock in shares of Common Stock into
a greater number of shares, or (iii) combine or
reclassify its outstanding Common Stock into a smaller
number of shares, then the Exercise Price in effect at
the time of the record date for such dividend or
distribution or of the effective date of such
subdivision, combination or reclassification shall be
adjusted so that such Exercise Price shall equal the
price determined by multiplying the Exercise Price in
effect immediately prior to such record date or
effective date by a fraction, the numerator of which is
the number of shares of Common Stock outstanding on such
record date or effective date, and the denominator of
which is the number of shares of Common stock
outstanding immediately after such dividend,
distribution, subdivision, combination or
reclassification. For example, if the Company declares
a 2 for 1 stock dividend or stock split and the Exercise
Price immediately prior to such event was $7.00 per
share, the adjusted Exercise Price immediately after
such event would be $3.50 per share.
Such adjustment shall be made successively whenever
any event listed in this Subsection (1) shall occur.
(2) In case the Company shall hereafter issue
rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible into Common
Stock) at a price (or having a conversion price per
share) less than the current market price of the Common
Stock (as defined in Subsection (8) below) on the record
date mentioned below, then the Exercise Price shall be
adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect
immediately prior to the record date mentioned below by
a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so
offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at
such current market price per share of the Common Stock,
and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding on such
record date and the number of additional shares of
Common Stock offered for subscription or purchase (or
into which the convertible securities so offered are
convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued
and shall become effective immediately after the record
date for the determination of shareholders entitled to
receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after
the expiration of such rights or warrants the Exercise
Price shall be readjusted to the Exercise Price which
would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon
the basis of delivery of only the number of shares of
Common Stock (or securities convertible into Common
Stock) actually delivered.
(3) In case the Company shall hereafter distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding regular cash dividends
or distributions and dividends or distributions referred
to in Subsection (1) above) or subscription rights or
warrants (excluding those referred to in Subsection (2)
above), then in each such case the Exercise Price in
effect thereafter shall be determined by multiplying the
Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock
(as defined in Subsection (8) below), less the aggregate
fair market value (as determined in good faith by the
Company's Board of Directors and reasonably acceptable
to the Holder ) of said assets or evidences of
indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding
multiplied by such current market price per share of
Common Stock.
Such adjustment shall be made successively
whenever any such distribution is made and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such
distribution.
(4) In case the Company shall issue shares of its
Common Stock [excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii)
upon exercise of options granted to the Company's
employees under a plan or plans adopted by the Company's
Board of Directors and approved by its shareholders, if
such shares would otherwise be included in this
Subsection (4), (but only to the extent that the
aggregate number of shares excluded hereby and issued
after the date hereof, shall not exceed 5% of the
Company's Common Stock outstanding at the time of any
issuance), (iii) upon exercise of options and warrants
outstanding at the date hereof, and this Warrant, (iv)
upon the exercise of any convertible security as to
which the Exercise Price has already been adjusted
pursuant to Subsection (5) below, and (v) to
shareholders of any corporation which merges into the
Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such
merger, or issued in a bona fide public offering
pursuant to a firm commitment underwriting, but only if
no adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to
Subsection (9) below) with respect to the transaction
giving rise to such rights] for a consideration per
share less than the current market price per share
defined in Subsection (8) below, then on the date the
Company fixes the offering price of such additional
shares, the Exercise Price shall be adjusted immediately
thereafter so that it shall equal the price determined
by multiplying the Exercise Price in effect immediately
prior thereto by a fraction, the numerator of which
shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common
Stock which the aggregate consideration received
[determined as provided in Subsection (7) below] for the
issuance of such additional shares would purchase at
such current market price per share of Common Stock, and
the denominator of which shall be the number of shares
of Common Stock outstanding immediately after the
issuance of such additional shares.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no
such adjustment shall be made unless, in such issuance,
the Company issues shares of Common Stock in an amount
which, when combined with all other issuances of Common
Stock after the date hereof and all other issuances of
securities convertible into or exchangeable for its
Common Stock after the date hereof, which securities are
excluded from Subsections (4) or (5) by operation of
this proviso or the proviso in the last section of
Subsection (5), would exceed 20% of the Company's Common
Stock outstanding immediately prior to the time of such
issuance.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
[excluding securities issued in transactions described
in Subsections (2) and (3) above] for a consideration
per share of Common Stock initially deliverable upon
conversion or exchange of such securities [determined as
provided in Subsection (7) below] less than the current
market price per share [as defined in Subsection (8)
below] in effect immediately prior to the issuance of
such securities, then the Exercise Price shall be
adjusted immediately thereafter so that it shall equal
the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to
the issuance of such securities and the number of shares
of Common Stock which the aggregate consideration
received [determined as provided in Subsection (7)
below] for such securities would purchase at such
current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to
such issuance and the maximum number of shares of Common
Stock of the Company deliverable upon conversion of or
in exchange for such securities at the initial
conversion or exchange price or rate.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no
such adjustment shall be made unless, in such issuance,
the Company issues securities convertible into or
exchangeable for a number of shares of its Common Stock
in an amount which, when combined with all other
issuances of Common Stock after the date hereof and all
other issuances of securities convertible into or
exchangeable for its Common Stock after the date hereof,
which securities are excluded from Subsections (4) or
(5) by operation of this proviso or the proviso in the
last section of Subsection (4), would exceed 20% of the
Company's Common Stock outstanding immediately prior to
the time of such issuance.
(6) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to
Subsections (1), (2), (3), (4) and (5) above, the number
of Warrant Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment by the
Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the
Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and
(5) above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be
the amount of such cash, provided that in no case
shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company
for any underwriting of the issue or otherwise in
connection therewith:
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in
part other than cash, the consideration other than
cash shall be deemed to be the fair market value
thereof as determined in good faith by the Board of
Directors of the Company (irrespective of the
accounting treatment thereof) and reasonably
acceptable to the Holder; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of
Common Stock, the aggregate consideration received
therefor shall be deemed to be the consideration
received by the Company for the issuance of such
securities plus the additional minimum
consideration, if any, to be received by the
Company upon the conversion or exchange thereof
[the consideration in each case to be determined in
the same manner as provided in clauses (A) and (B)
of this Subsection (7)].
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current
market price per share of Common Stock at any date shall
be deemed to be the average of the daily closing prices
for 30 consecutive business days before such date. The
closing price for each day shall be the last sale price
regular way or, in case no such reported sale takes
place on such day, the average of the last reported bid
and asked prices regular way, in either case on the
principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on such exchange, the
average of the last reported bid and asked prices as
reported by Nasdaq, or other similar organization if
Nasdaq is no longer reporting such information, of if
not so available, the fair market price as determined in
good faith by the Board of Directors and reasonably
acceptable to the Holder.
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an
increase or decrease of at least five cents ($0.05) in
such price; provided, however, that any adjustments
which by reason of this Subsection (9) are not required
to be made shall be carried forward and taken into
account in any subsequent adjustment required to be made
hereunder. All calculations under this Section (f)
shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. Anything
in this Section (f) to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to
reduce the Exercise Price, in addition to those changes
required by this Section (f), as it, in its sole
discretion, shall determine to be advisable in order
that any dividend or distribution in shares of Common
Stock, subdivision, reclassification or combination of
Common Stock, issuance of warrants to purchase Common
Stock or distribution or evidences of indebtedness or
other assets (excluding cash dividends) referred to
hereinabove in this Section (f) hereafter made by the
Company to the holders of its Common Stock shall not
result in any tax to such holders of its Common Stock or
securities convertible into Common Stock.
(10) In the event that at any time, as a result of
an adjustment made pursuant to Subsection (1) above, the
Holder of this Warrant thereafter shall become entitled
to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in
Subsections (1) to (9), inclusive above. The Company may
retain a firm of independent certified public
accountants selected by the Board of Directors (who may
be the regular accountants employed by the Company) to
make any computation required by Section (f), and a
certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment absent
manifest error or negligence.
(11) Irrespective of any adjustments in the
Exercise Price or the number or kind of shares
purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are
stated in this Warrant.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price
or number of Warrant Shares shall be adjusted as required by
the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an
Assistant Secretary at its principal office and with its
stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price or number of Warrant
Shares determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of
Common Stock, if any, and such other facts as shall be
necessary to show the reason for and the manner of computing
such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the
Holder or any holder of a Warrant executed and delivered
pursuant to Sections (a) and (d) and the Company shall,
forthwith after each such adjustment, mail a copy by
certified mail of such certificate to such Holder or any
such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this
Warrant shall be outstanding, (i) if the Company shall pay
any dividend or make any distribution upon the Common Stock
or (ii) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of or
class of its capital stock or any other rights or (iii) if
any capital reorganization of the Company, reclassification
of the capital stock of the Company, consolidation or merger
of the Company with or into another entity, sale, lease, or
transfer of all or substantially all of the property and
assets of the Company to another entity, or voluntary or
involuntary dissolution, liquidation or winding up of the
Company shall be effected, then in any such case, the
Company shall cause to be mailed by certified mail to the
Holder, at least fifteen days prior the record date
specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and
stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or offer of
rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, transfer, sale
dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of
Common Stock or other securities shall be entitled to
receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger,
conveyance, lease, transfer, sale, dissolution, liquidation
or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In
case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock of the
Company, or in case of any consolidation or merger of the
Company with or into another entity (other than a merger
with a subsidiary in which merger the Company is the
continuing corporation and which does not result in any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable
upon exercise of this Warrant) or in case of any sale,
lease, or conveyance to another entity of all or
substantially all of the property and assets of the Company,
the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that
such Holder shall have the right thereafter by exercising
this Warrant at any time prior to the expiration of the
Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such
reclassification, capital reorganization and other change,
consolidation, merger, sale, lease or conveyance by a holder
of the number of shares of Common Stock which might have
been purchased upon exercise of this Warrant immediately
prior to such reclassification, change, consolidation,
merger, sale, lease or conveyance. Any such provision shall
include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive
reclassifications, capital reorganizations, and changes of
shares of Common Stock and to successive consolidations,
mergers, sales, leases or conveyances. In the event that in
connection with any such capital reorganization or
reclassification, consolidation, merger, sale, lease or
conveyance, additional shares of Common Stock shall be
issued in exchange, conversion, substitution, or payment, in
whole or in part, for a security of the Company other than
Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written
notice at least four weeks prior to the filing of any
new registration statement under the Securities Act of
1933, as amended, or the Rules and Regulations
promulgated thereunder (such Act and Rules and
Regulations being hereinafter referred to as the "Act")
covering securities of the Company and will for a period
ending on the second anniversary of the Initial Exercise
Date and commencing as of the date hereof, upon the
request of any such holder, include in any such
registration statement such information as may be
required to permit a public offering of the Warrants and
the Warrant Shares. The Company shall supply
prospectuses, use its best efforts to cause the
registration statement to become effective and to
qualify the Warrants and/or the Warrant Shares for sale
in such states as any such holder designates and furnish
indemnification in the manner as set forth in Subsection
(2)(B) of this Section (j). Such holders shall furnish
information and indemnification as set forth in
Subsection (2)(B) of this Section (j).
(2) The following provision of this Section (j)
shall also be applicable:
(A) The Company shall bear the entire cost
and expense of any registration of securities
initiated by it under Subsection (1) of this
Section (j) notwithstanding that Warrants and/or
Warrant Shares subject to this Warrant may be
included in any such registration. Any holder
whose Warrants and/or Warrant Shares are included
in any such registration statement pursuant to this
Section (j) shall, however, bear the fees of such
holder's own counsel and any registration fees,
transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold
by such holder pursuant thereto.
(B) (i) The Company shall indemnify and hold
harmless each such holder and each underwriter,
within the meaning of the Act, who may purchase
from or sell for any such holder any Warrants
and/or Warrant Shares (in the case of
indemnification of such underwriter) from and
against any and all losses, claims, damages and
liabilities ("Losses") arising out of or based upon
any untrue statement or alleged untrue statement of
a material fact contained in any registration
statement or any post-effective amendment thereto
under the Act or any prospectus included therein
required to be filed or furnished by reason of this
Section (j) or arising out of or based upon any
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, except insofar as such Losses arise out
of or are based upon any such untrue statement or
alleged untrue statement or omission or alleged
omission based upon information furnished or
required to be furnished in writing to the Company
by such holder, in the case of indemnification of
such holder, or underwriter, in the case of
indemnification of such underwriter, expressly for
use therein, which indemnification shall include
each person, if any, who controls any such holder
or underwriter within the meaning of such Act;
provided, however, that the Company shall not be
obliged so to indemnify any such holder or
underwriter or controlling person unless such
holder or underwriter shall at the same time
indemnify, severally and not jointly, the Company,
its directors, each officer signing the related
registration statement and each person, if any, who
controls the Company within the meaning of such
Act, from and against any and all Losses arising
out of or based upon any untrue statement or
alleged untrue statement of a material fact
contained in any registration statement or any
prospectus required to be filed or furnished by
reason of this Section (j) or arising out of or
based upon any omission to state therein a material
fact required to be stated therein or necessary to
make the statements therein not misleading, insofar
as such Losses arise out of or are based upon any
untrue statement or alleged untrue statement or
omission made in conformity with information
furnished in writing to the Company by any such
holder or underwriter expressly for use therein.
(ii) If the indemnity obligation
provided for above is unavailable or insufficient
to hold harmless an indemnified party in respect of
any Losses, then the indemnifying party shall
contribute to the amount paid or payable by the
indemnified party as a result of such Losses in
such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one
hand and the indemnified party on the other hand in
connection with statements or omissions which
resulted in such Losses, 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 indemnifying party
or the indemnified party and the parties' relative
intent, knowledge, access to information and
opportunity to correct or prevent such untrue
statement or omission. The parties agree that it
would not be just and equitable if contributions
pursuant to this paragraph were to be determined by
pro rata allocation or by any other method of
allocation which does not take account of the
equitable considerations referred to in the
previous sentence.
(C) Notwithstanding anything herein to the
contrary, the Holder hereof shall have no rights to
have the Warrants or Warrant Shares registered if
in the opinion of either counsel for the Company,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the
Holder hereof in the reasonable judgement of such
Holder), or counsel for the Holder hereof,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the
Company in the Company's reasonable judgement), the
Holder hereof may lawfully sell publicly, at the
time and in the manner the Holder hereof proposes
to sell the Warrants or the Warrant Shares, all of
the securities proposed to be sold without
registering the sale under the Act, whether
pursuant to an exemption from registration
available under Section 4(1) of the Act, Rule 144
or Rule 144(k) under the Act, or otherwise.
(D) The Company will (a) file reports in
compliance with the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (b) comply
with all rules and regulations of the Securities
and Exchange Commission (the "Commission")
applicable in connection with the use of Rule 144
under the Act and take such other actions and
furnish the Holder with such other information as
such Holder may request in order to avail itself of
such rule or any other rule or regulation of the
Commission allowing such Holder to sell any
Warrants or Warrant Shares without registration,
and (c) at its expense, upon the request of the
Holder, deliver to such Holder a certificate,
signed by the Company's principal financial
officer, stating (i) the Company's name, address
and telephone number (including area code), (ii)
the Company's Internal Revenue Service
identification number, (iii) the Company's
Commission file number, (iv) the number of shares
of each class of stock outstanding as shown by the
most recent report or statement published by the
Company, and (v) whether the Company has filed the
reports required to be filed under the Exchange Act
for a period of at least ninety (90) days prior to
the date of such certificate and in addition has
filed the most recent annual report required to be
filed thereunder. If at any time the Company is
not required to file reports in compliance with
either Section 13 or Section 15(d) of the Exchange
Act, the Company at its expense will, upon the
written request of the Holder, make available
adequate current public information with respect to
the Company within the meaning of paragraph (c)(2)
of Rule 144 under the Act.
(k) EXERCISE AND TRANSFER TO COMPLY WITH THE SECURITIES
ACT OF 1933. The Holder of this Warrant and any transferee
hereof, by their acceptance hereof, hereby agree that: (a)
the Warrants being acquired hereunder are being purchased
for investment purposes only and not with a view to
distribution and will not be transferred unless registered
or unless there is an exemption available from the
registration requirements of the Act, which exemption has
been established to the reasonable satisfaction of the
Company; (b) no public distribution of the Warrants or
Warrant Shares will be made in violation of the provisions
of the Act or any applicable state laws; and (c) during such
period as delivery of a prospectus with respect to the
Warrants or Warrant Shares may be required by the Act, no
public distribution of the Warrants or Warrant Shares will
be made in a manner or on terms different from those set
forth in, or without delivery of, a prospectus then meeting
the requirements of Section 10 of the Act and in compliance
with all applicable state laws. The Holder of this Warrant
and any such transferee hereof further agree that if any
public distribution of any of the Warrants or Warrant shares
is proposed to be made by them otherwise than by delivery of
a prospectus meeting the requirements of Section 10 of the
Act, which action shall be taken only after submission to
the Company of an opinion of counsel, reasonably
satisfactory in form and substance to the Company's counsel,
to the effect that the proposed distribution will not be in
violation of the Act or of applicable state law.
Furthermore, it shall be a condition to the transfer of the
Warrants or Warrant Shares that the transferee thereof
deliver to the Company such Holder's written agreement to
accept and be bound by all of the terms and conditions of
this Warrant.
CADIZ LAND COMPANY, INC.
By: /s/ Stanley E. Speer
--------------------------
Its: Chief Financial Officer
Dated:____________, ______
PURCHASE FORM
Dated:________________,
The undersigned hereby irrevocably elects to exercise
the within Warrant to the extent of purchasing _______shares
of Common Stock and hereby makes payment of _________in
payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name________________________________________________________
(Please typewrite or print in block letters)
Address ____________________________________________________
Signature___________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED,________________________________hereby sells,
assigns and transfers unto
Name____________________________________________________________
(Please typewrite or print in block letters)
Address____________________________________________________________
the right to purchase Common Stock represented by this
Warrant to the extent of __________shares as to which such
right is exercisable and does hereby irrevocably constitute
and appoint ________________Attorney, to transfer the same
on the books of the Company with full power of substitution
in the premises.
Date__________________, ________
Signature __________________________________
EXHIBIT 4.9
------------
THE WARRANTS AND WARRANT SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE WARRANTS AND THE WARRANT SHARES MAY
NOT BE SOLD UNLESS THERE IS A REGISTRATION STATEMENT IN
EFFECT COVERING THE WARRANTS AND WARRANT SHARES OR
THERE IS AVAILABLE AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933 AS AMENDED.
Void after 5:00 p.m. New York Time, on the Expiration Date.
Warrant to Purchase 150,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
CADIZ LAND COMPANY, INC.
This is to Certify that, FOR VALUE RECEIVED, ING Baring
(U.S.) Capital Corporation ("ING"), or assigns ("Holder"),
is entitled to purchase, subject to the provisions of this
Warrant, from Cadiz Land Company, Inc., a Delaware
corporation ("Company"), 150,000 shares of Common Stock,
$0.01 par value, of the Company ("Common Stock") at the
exercise price of Seven Dollars ($7.00) per share commencing
on the "Initial Exercise Date", as defined below, and, with
respect to any Vested Warrant Share (as defined below),
ending on the seventh anniversary of the Initial Exercise
Date of such Vested Warrant Share (the "Expiration Date"),
but not later than 5:00 p.m., New York Time, on the
Expiration Date. The shares of Common Stock (or other stock
or securities) deliverable upon such exercise are
hereinafter sometimes referred to as "Warrant Shares" and
the exercise price of each share of Common Stock (as such
price may be adjusted from time to time as provided herein)
is hereinafter sometimes referred to as the "Exercise
Price".
Notwithstanding anything to the contrary set forth
herein, this Warrant shall not be exercisable by the Holder
unless and until the Company has exercised its right under
that certain Credit Agreement dated as of November 25, 1997
to which the Company and ING are parties (the "Credit
Agreement") to make a Borrowing other than the Initial
Borrowing (as such terms are defined in the Credit
Agreement) (an "Additional Borrowing"), and then shall be
exercisable only as to the number of Warrant Shares as are
equal to the product of (1) a fraction, (i) the numerator of
which shall be the amount of the Additional Borrowing and
(ii) the denominator of which shall be $10 million, times
(2) 150,000. The foregoing calculation shall be performed
with respect to each Additional Borrowing made prior to the
Maturity Date (as defined in the Credit Agreement) until
such time, if any, as the aggregate amount of all Additional
Borrowings equals or exceeds $10 million. Any Warrant
Shares as to which this Warrant may become exercisable from
time to time pursuant to the foregoing provision shall be
referred to herein as "Vested Warrant Shares", and the
"Initial Exercise Date" shall, with respect to any Vested
Warrant Share, be the date of the Additional Borrowing as a
result of which such Warrant Share becomes a Vested Warrant
Share.
Upon the Maturity Date, this Warrant shall (only as to
such Warrant Shares, if any, which have not become Vested
Warrant Shares) immediately and without the requirement of
notice be canceled and shall be of no further force and
effect. The cancellation of this Warrant as of the Maturity
Date as to any Warrant Shares which have not become Vested
Warrant Shares shall have no effect whatsoever upon the
validity and binding effect of this Warrant as to any Vested
Warrant Shares.
By way of example only, in the event that the Company
requests an Additional Borrowing of $2.5 million on April 1,
1999 and another Additional Borrowing of $5 million on April
1, 2000, then this Warrant will become exercisable as to (a)
37,500 Vested Warrant Shares with an Initial Exercise Date
of April 1, 1999 and an Expiration Date of April 1, 2006 and
(b) 75,000 Vested Warrant Shares with an Initial Exercise
Date of April 1, 2000 and an Expiration Date of April 1,
2007. If no further Additional Borrowings are made by the
Company prior to the Maturity Date, then, as of the Maturity
Date, this Warrant shall be canceled as to the remaining
37,500 Warrant Shares only, but not as to the 112,500 Vested
Warrant Shares.
(a) EXERCISE OF WARRANT. Subject to the provisions of
Section (k) hereof, this Warrant may be exercised in whole
or in part as to any Vested Warrant Shares at any time or
from time to time on or after the applicable Initial
Exercise Date and until the applicable Expiration Date, or
if either such day is a day on which banking institutions in
the State of New York are authorized by law to close, then
on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company at its
principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price
for the number of Warrant Shares specified in such form.
The Holder may exercise this Warrant, in whole or in part,
without the payment of any cash or other property, by
presentation and surrender of this Warrant to the Company at
its principal office or at the office of its stock transfer
agent, if any, with the Purchase Form duly executed and
accompanied by a written request from the Holder instructing
the Company to issue to the Holder a number of Warrant
Shares equal to the product of (1) a fraction, (i) the
numerator of which shall be the excess of the current market
price (as defined in Section (f)(8) below) of the Common
Stock on the date preceding the date of such exercise of the
Warrant over the then Exercise Price per Warrant Share and
(ii) the denominator of which shall be the current market
price (as defined in Section (f)(8) below) of the Common
Stock on such date, times (2) the number of Warrant Shares
as to which the Warrant is being exercised. If this Warrant
should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares
purchasable thereunder. Upon receipt by the Company of this
Warrant at its office, or by the stock transfer agent of the
Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered
to the Holder. The Company shall pay all expenses, transfer
taxes and other charges payable in connection with the
preparation, issue and delivery of stock certificates under
this Section (a), except that, in case such stock
certificates shall be registered in a name or names other
than the name of the holder of this Warrant, all stock
transfer taxes which shall be payable upon the issuance of
such stock certificate or certificates shall be paid by the
Holder at the time of delivering the Purchase Form.
(b) RESERVATION OF SHARES. The Company hereby agrees
that at all times following the Initial Exercise Date there
shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of shares of its Common Stock
(or other stock or securities deliverable upon exercise of
this Warrant) as shall be required for issuance and delivery
upon exercise of this Warrant. All shares of Common Stock
issuable upon the exercise of this Warrant shall be duly
authorized, validly issued, fully paid and nonassessable and
free and clear of all liens and other encumbrances.
(c) FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the
exercise of this Warrant. With respect to any fraction of a
share called for upon any exercise hereof, the Company shall
pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share,
determined as follows:
(1) If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on
the Nasdaq system, the current market value shall be
the last reported sale price of the Common Stock on
such exchange or system on the last business day prior
to the date of exercise of this Warrant or if no such
sale is made on such day, the average closing bid and
asked prices for such day on such exchange or system;
or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges, the current
market value shall be the mean of the last reported bid
and asked prices reported by the National Quotation
Bureau, Inc. on the last business day prior to the date
of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and
asked prices are not so reported, the current market
value shall be an amount not less than the book value
thereof as at the end of the most recent fiscal year of
the Company ending prior to the date of the exercise of
the Warrant, determined in good faith and in such
reasonable manner as may be prescribed by the Board of
Directors of the Company, and reasonably acceptable to
the Holder.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
This Warrant is exchangeable, without expense, at the option
of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if
any, for other warrants of different denominations entitling
the holder thereof to purchase in the aggregate the same
number of shares of Common Stock purchasable hereunder.
This Warrant is transferable and may be assigned or
hypothecated, in whole or in part, at any time and from time
to time from the date hereof. Subject to the provisions of
Section (k), upon surrender of this Warrant to the Company
at its principal office or at the office of its stock
transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and
deliver a new Warrant registered in the name of the assignee
named in such instrument of assignment and this Warrant
shall promptly be canceled. This Warrant may be divided or
combined with other warrants which carry the same rights
upon presentation hereof at the principal office of the
Company or at the office of its stock transfer agent, if
any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and
signed by the Holder hereof. The term "Warrant" as used
herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction
or mutilation of this Warrant, and in the case of loss,
theft or destruction, of reasonably satisfactory
indemnification and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether
or not this Warrant so lost, stolen, destroyed, or mutilated
shall be at any time enforceable by anyone.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by
virtue hereof, be entitled to any rights of a shareholder in
the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in the Warrant and are
not enforceable against the Company except to the extent set
forth herein. Furthermore, the Holder by acceptance hereof,
consents to and agrees to be bound by and to comply with all
the provisions of this Warrant, including, without
limitation, all the obligations imposed upon the holder
hereof by Section (k). In addition, the holder of this
Warrant, by accepting the same, agrees that the Company and
the transfer agent may deem and treat the person in whose
name this Warrant is registered as the absolute, true and
lawful owner for all purposes whatsoever, and neither the
Company nor the transfer agent shall be affected by any
notice to the contrary.
(f) ANTI-DILUTION PROVISIONS. The Exercise Price and
the number and kind of securities purchasable upon the
exercise of this Warrant (the "Warrant Shares") shall be
subject to adjustment from time to time upon the happening
of certain events as hereinafter provided. The Exercise
Price in effect at any time and the Warrant Shares shall be
subject to adjustment as follows:
(1) In case the Company shall (i) pay a dividend
or make a distribution on its shares of Common Stock in
shares of Common Stock, (ii) subdivide or reclassify its
outstanding Common Stock in shares of Common Stock into
a greater number of shares, or (iii) combine or
reclassify its outstanding Common Stock into a smaller
number of shares, then the Exercise Price in effect at
the time of the record date for such dividend or
distribution or of the effective date of such
subdivision, combination or reclassification shall be
adjusted so that such Exercise Price shall equal the
price determined by multiplying the Exercise Price in
effect immediately prior to such record date or
effective date by a fraction, the numerator of which is
the number of shares of Common Stock outstanding on such
record date or effective date, and the denominator of
which is the number of shares of Common stock
outstanding immediately after such dividend,
distribution, subdivision, combination or
reclassification. For example, if the Company declares
a 2 for 1 stock dividend or stock split and the Exercise
Price immediately prior to such event was $7.00 per
share, the adjusted Exercise Price immediately after
such event would be $3.50 per share.
Such adjustment shall be made successively whenever
any event listed in this Subsection (1) shall occur.
(2) In case the Company shall hereafter issue
rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible into Common
Stock) at a price (or having a conversion price per
share) less than the current market price of the Common
Stock (as defined in Subsection (8) below) on the record
date mentioned below, then the Exercise Price shall be
adjusted so that the same shall equal the price
determined by multiplying the Exercise Price in effect
immediately prior to the record date mentioned below by
a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional
shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so
offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at
such current market price per share of the Common Stock,
and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding on such
record date and the number of additional shares of
Common Stock offered for subscription or purchase (or
into which the convertible securities so offered are
convertible). Such adjustment shall be made
successively whenever such rights or warrants are issued
and shall become effective immediately after the record
date for the determination of shareholders entitled to
receive such rights or warrants; and to the extent that
shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after
the expiration of such rights or warrants the Exercise
Price shall be readjusted to the Exercise Price which
would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon
the basis of delivery of only the number of shares of
Common Stock (or securities convertible into Common
Stock) actually delivered.
(3) In case the Company shall hereafter distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding regular cash dividends
or distributions and dividends or distributions referred
to in Subsection (1) above) or subscription rights or
warrants (excluding those referred to in Subsection (2)
above), then in each such case the Exercise Price in
effect thereafter shall be determined by multiplying the
Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding multiplied
by the current market price per share of Common Stock
(as defined in Subsection (8) below), less the aggregate
fair market value (as determined in good faith by the
Company's Board of Directors and reasonably acceptable
to the Holder ) of said assets or evidences of
indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding
multiplied by such current market price per share of
Common Stock.
Such adjustment shall be made successively
whenever any such distribution is made and shall become
effective immediately after the record date for the
determination of shareholders entitled to receive such
distribution.
(4) In case the Company shall issue shares of its
Common Stock [excluding shares issued (i) in any of the
transactions described in Subsection (1) above, (ii)
upon exercise of options granted to the Company's
employees under a plan or plans adopted by the Company's
Board of Directors and approved by its shareholders, if
such shares would otherwise be included in this
Subsection (4), (but only to the extent that the
aggregate number of shares excluded hereby and issued
after the date hereof, shall not exceed 5% of the
Company's Common Stock outstanding at the time of any
issuance), (iii) upon exercise of options and warrants
outstanding at the date hereof, and this Warrant, (iv)
upon the exercise of any convertible security as to
which the Exercise Price has already been adjusted
pursuant to Subsection (5) below, and (v) to
shareholders of any corporation which merges into the
Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such
merger, or issued in a bona fide public offering
pursuant to a firm commitment underwriting, but only if
no adjustment is required pursuant to any other specific
subsection of this Section (f) (without regard to
Subsection (9) below) with respect to the transaction
giving rise to such rights] for a consideration per
share less than the current market price per share
defined in Subsection (8) below, then on the date the
Company fixes the offering price of such additional
shares, the Exercise Price shall be adjusted immediately
thereafter so that it shall equal the price determined
by multiplying the Exercise Price in effect immediately
prior thereto by a fraction, the numerator of which
shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common
Stock which the aggregate consideration received
[determined as provided in Subsection (7) below] for the
issuance of such additional shares would purchase at
such current market price per share of Common Stock, and
the denominator of which shall be the number of shares
of Common Stock outstanding immediately after the
issuance of such additional shares.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no
such adjustment shall be made unless, in such issuance,
the Company issues shares of Common Stock in an amount
which, when combined with all other issuances of Common
Stock after the date hereof and all other issuances of
securities convertible into or exchangeable for its
Common Stock after the date hereof, which securities are
excluded from Subsections (4) or (5) by operation of
this proviso or the proviso in the last section of
Subsection (5), would exceed 20% of the Company's Common
Stock outstanding immediately prior to the time of such
issuance.
(5) In case the Company shall issue any securities
convertible into or exchangeable for its Common Stock
[excluding securities issued in transactions described
in Subsections (2) and (3) above] for a consideration
per share of Common Stock initially deliverable upon
conversion or exchange of such securities [determined as
provided in Subsection (7) below] less than the current
market price per share [as defined in Subsection (8)
below] in effect immediately prior to the issuance of
such securities, then the Exercise Price shall be
adjusted immediately thereafter so that it shall equal
the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to
the issuance of such securities and the number of shares
of Common Stock which the aggregate consideration
received [determined as provided in Subsection (7)
below] for such securities would purchase at such
current market price per share of Common Stock, and the
denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to
such issuance and the maximum number of shares of Common
Stock of the Company deliverable upon conversion of or
in exchange for such securities at the initial
conversion or exchange price or rate.
Such adjustment shall be made successively whenever
such an issuance is made; provided, however, that no
such adjustment shall be made unless, in such issuance,
the Company issues securities convertible into or
exchangeable for a number of shares of its Common Stock
in an amount which, when combined with all other
issuances of Common Stock after the date hereof and all
other issuances of securities convertible into or
exchangeable for its Common Stock after the date hereof,
which securities are excluded from Subsections (4) or
(5) by operation of this proviso or the proviso in the
last section of Subsection (4), would exceed 20% of the
Company's Common Stock outstanding immediately prior to
the time of such issuance.
(6) Whenever the Exercise Price payable upon
exercise of each Warrant is adjusted pursuant to
Subsections (1), (2), (3), (4) and (5) above, the number
of Warrant Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying
the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment by the
Exercise Price in effect immediately prior to such
adjustment and dividing the product so obtained by the
Exercise Price, as adjusted.
(7) For purposes of any computation respecting
consideration received pursuant to Subsections (4) and
(5) above, the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be
the amount of such cash, provided that in no case
shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company
for any underwriting of the issue or otherwise in
connection therewith:
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in
part other than cash, the consideration other than
cash shall be deemed to be the fair market value
thereof as determined in good faith by the Board of
Directors of the Company (irrespective of the
accounting treatment thereof) and reasonably
acceptable to the Holder; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of
Common Stock, the aggregate consideration received
therefor shall be deemed to be the consideration
received by the Company for the issuance of such
securities plus the additional minimum
consideration, if any, to be received by the
Company upon the conversion or exchange thereof
[the consideration in each case to be determined in
the same manner as provided in clauses (A) and (B)
of this Subsection (7)].
(8) For the purpose of any computation under
Subsections (2), (3), (4) and (5) above, the current
market price per share of Common Stock at any date shall
be deemed to be the average of the daily closing prices
for 30 consecutive business days before such date. The
closing price for each day shall be the last sale price
regular way or, in case no such reported sale takes
place on such day, the average of the last reported bid
and asked prices regular way, in either case on the
principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not
listed or admitted to trading on such exchange, the
average of the last reported bid and asked prices as
reported by Nasdaq, or other similar organization if
Nasdaq is no longer reporting such information, of if
not so available, the fair market price as determined in
good faith by the Board of Directors and reasonably
acceptable to the Holder.
(9) No adjustment in the Exercise Price shall be
required unless such adjustment would require an
increase or decrease of at least five cents ($0.05) in
such price; provided, however, that any adjustments
which by reason of this Subsection (9) are not required
to be made shall be carried forward and taken into
account in any subsequent adjustment required to be made
hereunder. All calculations under this Section (f)
shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. Anything
in this Section (f) to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to
reduce the Exercise Price, in addition to those changes
required by this Section (f), as it, in its sole
discretion, shall determine to be advisable in order
that any dividend or distribution in shares of Common
Stock, subdivision, reclassification or combination of
Common Stock, issuance of warrants to purchase Common
Stock or distribution or evidences of indebtedness or
other assets (excluding cash dividends) referred to
hereinabove in this Section (f) hereafter made by the
Company to the holders of its Common Stock shall not
result in any tax to such holders of its Common Stock or
securities convertible into Common Stock.
(10) In the event that at any time, as a result of
an adjustment made pursuant to Subsection (1) above, the
Holder of this Warrant thereafter shall become entitled
to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in
Subsections (1) to (9), inclusive above. The Company may
retain a firm of independent certified public
accountants selected by the Board of Directors (who may
be the regular accountants employed by the Company) to
make any computation required by Section (f), and a
certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment absent
manifest error or negligence.
(11) Irrespective of any adjustments in the
Exercise Price or the number or kind of shares
purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are
stated in this Warrant.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price
or number of Warrant Shares shall be adjusted as required by
the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an
Assistant Secretary at its principal office and with its
stock transfer agent, if any, an officer's certificate
showing the adjusted Exercise Price or number of Warrant
Shares determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of
Common Stock, if any, and such other facts as shall be
necessary to show the reason for and the manner of computing
such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the
Holder or any holder of a Warrant executed and delivered
pursuant to Sections (a) and (d) and the Company shall,
forthwith after each such adjustment, mail a copy by
certified mail of such certificate to such Holder or any
such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this
Warrant shall be outstanding, (i) if the Company shall pay
any dividend or make any distribution upon the Common Stock
or (ii) if the Company shall offer to the holders of Common
Stock for subscription or purchase by them any share of or
class of its capital stock or any other rights or (iii) if
any capital reorganization of the Company, reclassification
of the capital stock of the Company, consolidation or merger
of the Company with or into another entity, sale, lease, or
transfer of all or substantially all of the property and
assets of the Company to another entity, or voluntary or
involuntary dissolution, liquidation or winding up of the
Company shall be effected, then in any such case, the
Company shall cause to be mailed by certified mail to the
Holder, at least fifteen days prior the record date
specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and
stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or offer of
rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, transfer, sale
dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of
Common Stock or other securities shall be entitled to
receive cash or other property deliverable upon such
reclassification, reorganization, consolidation, merger,
conveyance, lease, transfer, sale, dissolution, liquidation
or winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In
case of any reclassification, capital reorganization or
other change of outstanding shares of Common Stock of the
Company, or in case of any consolidation or merger of the
Company with or into another entity (other than a merger
with a subsidiary in which merger the Company is the
continuing corporation and which does not result in any
reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable
upon exercise of this Warrant) or in case of any sale,
lease, or conveyance to another entity of all or
substantially all of the property and assets of the Company,
the Company shall, as a condition precedent to such
transaction, cause effective provisions to be made so that
such Holder shall have the right thereafter by exercising
this Warrant at any time prior to the expiration of the
Warrant, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such
reclassification, capital reorganization and other change,
consolidation, merger, sale, lease or conveyance by a holder
of the number of shares of Common Stock which might have
been purchased upon exercise of this Warrant immediately
prior to such reclassification, change, consolidation,
merger, sale, lease or conveyance. Any such provision shall
include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive
reclassifications, capital reorganizations, and changes of
shares of Common Stock and to successive consolidations,
mergers, sales, leases or conveyances. In the event that in
connection with any such capital reorganization or
reclassification, consolidation, merger, sale, lease or
conveyance, additional shares of Common Stock shall be
issued in exchange, conversion, substitution, or payment, in
whole or in part, for a security of the Company other than
Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Subsection (1) of
Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company shall advise the Holder of this
Warrant or of the Warrant Shares or any then holder of
Warrants or Warrant Shares (such persons being
collectively referred to herein as "holders") by written
notice at least four weeks prior to the filing of any
new registration statement under the Securities Act of
1933, as amended, or the Rules and Regulations
promulgated thereunder (such Act and Rules and
Regulations being hereinafter referred to as the AAct@)
covering securities of the Company and will for a period
ending on the second anniversary of the Initial Exercise
Date and commencing as of the date hereof, upon the
request of any such holder, include in any such
registration statement such information as may be
required to permit a public offering of the Warrants and
the Warrant Shares. The Company shall supply
prospectuses, use its best efforts to cause the
registration statement to become effective and to
qualify the Warrants and/or the Warrant Shares for sale
in such states as any such holder designates and furnish
indemnification in the manner as set forth in Subsection
(2)(B) of this Section (j). Such holders shall furnish
information and indemnification as set forth in
Subsection (2)(B) of this Section (j).
(2) The following provision of this Section (j)
shall also be applicable:
(A) The Company shall bear the entire cost
and expense of any registration of securities
initiated by it under Subsection (1) of this
Section (j) notwithstanding that Warrants and/or
Warrant Shares subject to this Warrant may be
included in any such registration. Any holder
whose Warrants and/or Warrant Shares are included
in any such registration statement pursuant to this
Section (j) shall, however, bear the fees of such
holder=s own counsel and any registration fees,
transfer taxes or underwriting discounts or
commissions applicable to the Warrant Shares sold
by such holder pursuant thereto.
(B) (i) The Company shall indemnify and hold
harmless each such holder and each underwriter,
within the meaning of the Act, who may purchase
from or sell for any such holder any Warrants
and/or Warrant Shares (in the case of
indemnification of such underwriter) from and
against any and all losses, claims, damages and
liabilities (ALosses@) arising out of or based upon
any untrue statement or alleged untrue statement of
a material fact contained in any registration
statement or any post-effective amendment thereto
under the Act or any prospectus included therein
required to be filed or furnished by reason of this
Section (j) or arising out of or based upon any
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, except insofar as such Losses arise out
of or are based upon any such untrue statement or
alleged untrue statement or omission or alleged
omission based upon information furnished or
required to be furnished in writing to the Company
by such holder, in the case of indemnification of
such holder, or underwriter, in the case of
indemnification of such underwriter, expressly for
use therein, which indemnification shall include
each person, if any, who controls any such holder
or underwriter within the meaning of such Act;
provided, however, that the Company shall not be
obliged so to indemnify any such holder or
underwriter or controlling person unless such
holder or underwriter shall at the same time
indemnify, severally and not jointly, the Company,
its directors, each officer signing the related
registration statement and each person, if any, who
controls the Company within the meaning of such
Act, from and against any and all Losses arising
out of or based upon any untrue statement or
alleged untrue statement of a material fact
contained in any registration statement or any
prospectus required to be filed or furnished by
reason of this Section (j) or arising out of or
based upon any omission to state therein a material
fact required to be stated therein or necessary to
make the statements therein not misleading, insofar
as such Losses arise out of or are based upon any
untrue statement or alleged untrue statement or
omission made in conformity with information
furnished in writing to the Company by any such
holder or underwriter expressly for use therein.
(ii) If the indemnity obligation
provided for above is unavailable or insufficient
to hold harmless an indemnified party in respect of
any Losses, then the indemnifying party shall
contribute to the amount paid or payable by the
indemnified party as a result of such Losses in
such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one
hand and the indemnified party on the other hand in
connection with statements or omissions which
resulted in such Losses, 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 indemnifying party
or the indemnified party and the parties= relative
intent, knowledge, access to information and
opportunity to correct or prevent such untrue
statement or omission. The parties agree that it
would not be just and equitable if contributions
pursuant to this paragraph were to be determined by
pro rata allocation or by any other method of
allocation which does not take account of the
equitable considerations referred to in the
previous sentence.
(C) Notwithstanding anything herein to the
contrary, the Holder hereof shall have no rights to
have the Warrants or Warrant Shares registered if
in the opinion of either counsel for the Company,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the
Holder hereof in the reasonable judgement of such
Holder), or counsel for the Holder hereof,
knowledgeable and experienced in Federal securities
matters (said counsel to be acceptable to the
Company in the Company's reasonable judgement), the
Holder hereof may lawfully sell publicly, at the
time and in the manner the Holder hereof proposes
to sell the Warrants or the Warrant Shares, all of
the securities proposed to be sold without
registering the sale under the Act, whether
pursuant to an exemption from registration
available under Section 4(1) of the Act, Rule 144
or Rule 144(k) under the Act, or otherwise.
(D) The Company will (a) file reports in
compliance with the Securities Exchange Act of
1934, as amended (the AExchange Act@), (b) comply
with all rules and regulations of the Securities
and Exchange Commission (the ACommission@)
applicable in connection with the use of Rule 144
under the Act and take such other actions and
furnish the Holder with such other information as
such Holder may request in order to avail itself of
such rule or any other rule or regulation of the
Commission allowing such Holder to sell any
Warrants or Warrant Shares without registration,
and (c) at its expense, upon the request of the
Holder, deliver to such Holder a certificate,
signed by the Company=s principal financial
officer, stating (i) the Company=s name, address
and telephone number (including area code), (ii)
the Company=s Internal Revenue Service
identification number, (iii) the Company=s
Commission file number, (iv) the number of shares
of each class of stock outstanding as shown by the
most recent report or statement published by the
Company, and (v) whether the Company has filed the
reports required to be filed under the Exchange Act
for a period of at least ninety (90) days prior to
the date of such certificate and in addition has
filed the most recent annual report required to be
filed thereunder. If at any time the Company is
not required to file reports in compliance with
either Section 13 or Section 15(d) of the Exchange
Act, the Company at its expense will, upon the
written request of the Holder, make available
adequate current public information with respect to
the Company within the meaning of paragraph (c)(2)
of Rule 144 under the Act.
(k) EXERCISE AND TRANSFER TO COMPLY WITH THE SECURITIES
ACT OF 1933. The Holder of this Warrant and any transferee
hereof, by their acceptance hereof, hereby agree that: (a)
the Warrants being acquired hereunder are being purchased
for investment purposes only and not with a view to
distribution and will not be transferred unless registered
or unless there is an exemption available from the
registration requirements of the Act, which exemption has
been established to the reasonable satisfaction of the
Company; (b) no public distribution of the Warrants or
Warrant Shares will be made in violation of the provisions
of the Act or any applicable state laws; and (c) during such
period as delivery of a prospectus with respect to the
Warrants or Warrant Shares may be required by the Act, no
public distribution of the Warrants or Warrant Shares will
be made in a manner or on terms different from those set
forth in, or without delivery of, a prospectus then meeting
the requirements of Section 10 of the Act and in compliance
with all applicable state laws. The Holder of this Warrant
and any such transferee hereof further agree that if any
public distribution of any of the Warrants or Warrant shares
is proposed to be made by them otherwise than by delivery of
a prospectus meeting the requirements of Section 10 of the
Act, which action shall be taken only after submission to
the Company of an opinion of counsel, reasonably
satisfactory in form and substance to the Company's counsel,
to the effect that the proposed distribution will not be in
violation of the Act or of applicable state law.
Furthermore, it shall be a condition to the transfer of the
Warrants or Warrant Shares that the transferee thereof
deliver to the Company such Holder=s written agreement to
accept and be bound by all of the terms and conditions of
this Warrant.
CADIZ LAND COMPANY, INC.
By:_/s/ Stanley E. Speer
________________________
Its: Chief Financial Officer
Dated: _______________, ________
PURCHASE FORM
Dated: __________,______
The undersigned hereby irrevocably elects to exercise
the within Warrant to the extent of purchasing _______shares
of Common Stock and hereby makes payment of ________in
payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_________________________________________________________
(Please typewrite or print in block letters)
Address______________________________________________________
Signature ___________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _____________________hereby sells,
assigns and transfers unto
Name__________________________________________________________
(Please typewrite or print in block letters)
Address_______________________________________________________
the right to purchase Common Stock represented by this
Warrant to the extent of _________shares as to which such
right is exercisable and does hereby irrevocably constitute
and appoint _________________Attorney, to transfer the same
on the books of the Company with full power of substitution
in the premises.
Date _________________, ______
Signature ___________________________
EXHIBIT 5-1
------------
May 18, 1998
Cadiz Land Company, Inc.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
Our opinion has been requested in connection with the
Registration Statement to which this opinion is filed as an
exhibit and under which the following securities are being
registered: (i) a total of 5,910,712 Shares of Common Stock,
consisting of 5,360,712 Outstanding Shares, 50,000 Option
Shares and 500,000 Warrant Shares, and (ii) 500,000 Warrants
(as such terms are defined in the Registration Statement).
We have examined the Registration Statement and have
examined, and have relied as to matters of fact upon, the
originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents
and other instruments and such certificates or comparable
documents of public officials and of officers and
representatives of the Company, and have made such other and
further investigations, as we have deemed relevant and
necessary as a basis for the opinion hereinafter set forth.
Based on and subject to the above, it is our opinion that the
5,360,712 Outstanding Shares and the 500,000 Warrants are duly
authorized, legally issued, fully paid and non-assessable, and
that the 50,000 Option Shares, when issued as contemplated
under the terms of the Options governing their issuance, and
the 500,000 Warrant Shares, when issued as contemplated under
the terms of the Warrants governing their issuance, will be
duly authorized, legally issued, fully paid and non-
assessable.
We are members of the Bar of the State of California and
we do not express any opinion herein concerning any law other
than the law of the State of California, the General
Corporation Law of the State of Delaware and the federal law
of the United States.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our
name under the heading "Legal Matters" in the prospectus
forming a part of the Registration Statement.
Very truly yours,
/s/ Miller & Holguin
-------------------------
MILLER & HOLGUIN
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement
on Form S-3 of our report dated February 13, 1998 appearing
on page 28 of Cadiz Land Company, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1997. We also
consent to the reference to us under the heading "Experts"
in such Prospectus.
/s/ Price Waterhouse LLP
- -------------------------
PRICE WATERHOUSE LLP
Los Angeles, California
May 15, 1998
