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UNITED STATES Expires: October 31, 1997
SECURITIES AND EXCHANGE COMMISSION Estimated average burden
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _)*
INFINITY, INC.
(Name of Issuer)
Common Stock, $.0001 par value
(Title Class of Securities)
4566-32-304
(CUSIP Number)
David Alan Miller, Esq.
Graubard Mollen & Miller
600 Third Avenue, New York, New York 10016-2097
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 1, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 19 pages.
The Exhibit Index is on page 7
<PAGE>
SCHEDULE 13D
- --------------------------- ---------------------------
CUSIP No. 4566-32-304 Page 2 of 19 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gaines, Berland Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|_|
(b)|_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
| 7 SOLE VOTING POWER
|
| 900,000
NUMBER OF |-----------------------------------------------------------
SHARES | 8 SHARED VOTING POWER
BENEFICIALLY |
OWNED BY | -0-
EACH |-----------------------------------------------------------
REPORTING | 9 SOLE DISPOSITIVE POWER
PERSON |
WITH | 900,000
|-----------------------------------------------------------
| 10 SHARED DISPOSITIVE POWER
|
| -0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
900,000 shares
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Item 5(a) and (b)) |X|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1 %
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, BD
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Item 1. Security and Issuer.
This statement relates to common stock, $.0001 par value
("Common Stock"), of Infinity, Inc. ("Issuer"), a Colorado corporation, whose
principal executive office is located at 211 West 14th Street, Chanute, Kansas
66720.
Item 2. Identity and Background.
(a) Name: This statement is filed on behalf of Gaines, Berland Inc.
("GBI").
(b) Business Address: GBI's business address is 1055 Stewart Avenue,
Bethpage, New York 11714.
(c) Principal Business: GBI is a broker dealer and investment banker.
(d) During the last five years, GBI has not been convicted in any criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, GBI has not been a party to any civil
proceeding of a judicial or administrative body of competent jurisdiction
resulting in any judgment, decree or final order against it enjoining it from
engaging in future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
The identity and background of each of the executive officers,
directors and/or controlling persons of GBI ("Executives") is discussed directly
below. The names of the Executives are Joseph Berland, Alan Gaines, Richard
Rosenstock, Mark Zeitchick, and Vincent Mangone. The business address of each of
the foregoing persons is Gaines, Berland Inc., 1055 Stewart Avenue, Bethpage,
New York 11714.
The present principal occupation of each of the Executives are
set forth below:
Name Present Principal Occupation
- ---- ----------------------------------
Joseph Berland Broker dealer, investment banker
Alan Gaines Analyst
Richard Rosenstock Broker dealer
Mark Zeitchick Broker dealer
Vincent Mangone Broker dealer
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<PAGE>
Each of the Executives are employed by GBI, an investment
banker, broker dealer, located at 1055 Stewart Avenue, Bethpage, New York 11714.
During the last five years, none of the Executives has been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors).
During the last five years, none of the Executives has been a
party to any civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in any judgment, decree or final order against him
enjoining him from engaging in future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
of such laws.
Each of the Executives is a citizen of the United States.
Item 3. Source and Amount of Funds or other Consideration.
GBI has not paid any money or other consideration to exercise
its warrant to purchase 900,000 shares of the Issuer's Common Stock, which GBI
is currently deemed to beneficially own as described below in Item 5(c).
Item 4. Purpose of Transactions.
The securities referenced in Section 5(c) below represent
shares of Common Stock of the Issuer underlying warrants earned by GBI. GBI has
acquired the securities specified in Item 5(c) in order to obtain an equity
position in the Issuer for investment purposes. GBI may acquire or dispose of
additional shares of the Issuer, dependent upon market conditions. GBI is a
broker dealer registered under Section 15 of the Securities Exchange Act of
1934, and is currently a market maker of the Issuer's Common Stock. Accordingly,
as broker dealer, for its own account, or for the account of others, GBI may
purchase and sell securities of the Issuer, dependent upon market conditions.
GBI, however, has no present plans with respect to the securities specified in
Item 5(c) which relate to or would result in: an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries; a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries; any change in the present board
of directors or management of the Issuer, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
board; any material change in the present capitalization or dividend policy of
the Issuer; any other material change in the Issuer's business or corporate
structure; changes in the Issuer's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person; causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association; causing a class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Securities and Exchange Act of 1934; or any action similar to the above.
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<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) As of the date of this Schedule 13D, GBI beneficially owns 900,000
shares of Common Stock (all of which are subject to a warrant issued to GBI
exercisable at $0.875 per share until July 31, 2001 ("Private Warrant")), or
approximately 8.1% of the outstanding shares (based on 11,060,939 shares of
Common Stock which would be outstanding upon exercise of the currently
exercisable Private Warrant owned by GBI). As reported in the Issuer's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 1997, the Company had
10,160,939 shares of Common Stock outstanding as of June 18, 1997. In addition,
as of the date of this Schedule 13D, Alan Gaines ("Gaines"), an executive
officer of GBI, owns 100,000 shares of Common Stock, or less than 1% of the
outstanding shares of Common Stock.
(b) GBI has sole voting and dispositive powers with respect to the 900,000
shares of Common Stock which it is deemed to beneficially own as of the date of
this Schedule 13D. Gaines has sole voting and dispositive powers with respect to
the 100,000 shares of Common Stock beneficially owned by him. Neither GBI or
Gaines believes either party is controlled by or controlling of the other party.
Gaines disclaims beneficial ownership of the shares of Common Stock beneficially
owned by GBI and GBI disclaims beneficial ownership of the shares of Common
Stock beneficially owned by Gaines.
(c) On August 1, 1996, the Issuer issued to GBI, Private Warrants to
purchase an aggregate of 900,000 shares of Common Stock. The Private Warrants
are all currently exercisable, at $0.875 per share until July 31, 2001. The
Private Warrants were issued as compensation for financial advisory services
rendered by GBI to the Issuer. The Private Warrants recently became exercisable,
which resulted in GBI beneficially owning 900,000 shares of Common Stock (or
8.1%) of the Issuer, which exceeds the five (5%) percent reporting threshold,
thereby requiring GBI to file this Schedule 13D.
Item 6. Contracts, Agreements, Understandings or
Relationships with Respect to Securities of Issuer.
The Private Warrants were issued by the Issuer to GBI pursuant
to a Warrant Agreement, dated August 1, 1996, between the Issuer and GBI.
Item 7. Materials to be Filed as Exhibits.
Exhibit 1 ...................Warrant Agreement, dated August 1, 1996.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and
belief, it is certified that the information set forth in this statement is
true, complete and correct.
Dated: August 1, 1997
/s/ Joseph Berland
-------------------------
Joseph Berland, Chairman
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<PAGE>
Exhibit Index
Exhibit 1: Warrant Agreement between Gaines, Berland Inc. and Infinity,
Inc., dated August 1, 1996.
7 of 19
<PAGE>
THE REGISTERED HOLDER OF THIS WARRANT BY ITS ACCEPTANCE
HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN
THIS Warrant EXCEPT AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, JULY 31, 2001
Warrant
For the Purchase of
900,000 Shares of Common Stock
of
INFINITY, INC.
1. Warrant
THIS CERTIFIES THAT, in consideration of $10.00 and other good and
valuable consideration, duly paid by or on behalf of Gaines, Berland Inc.
("Holder"), as registered owner of this Warrant, to Infinity, Inc. ("Company").
Holder is entitled, at any time or from time to time at or after August 1, 1997
("Commencement Date"), and at or before 5:00 p.m., Eastern Time July 31, 2001
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part, up to Nine Hundred Thousand (900,000) shares of Common
Stock of the Company ("Common Stock"). If the Expiration Date is a day on which
banking institutions are authorized by law to close, then the Warrant may be
exercised on the next succeeding day which is not such a day in accordance with
the terms herein. During the period ending on the Expiration Date, the Company
agrees not to take any action that would terminate the Warrant. This Warrant is
initially exercisable at $0.875 per share of Common Stock purchased; provided,
however, that upon the occurrence of any of the events specified in Section 5
hereof, the rights granted by this Warrant, including the exercise price and the
number of shares of Common Stock to be received upon such exercise, shall be
adjusted as therein specified. The term "Exercise Price" shall mean the initial
exercise price or the adjusted exercise price, depending on the context, of a
share of Common Stock. The term "Securities" shall mean the shares of Common
Stock issuable upon exercise of this Warrant.
2. Exercise
2.1 Exercise Form. In order to exercise this Warrant, the exercise form
attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
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<PAGE>
2.2 Legend. Each certificate for Securities purchased under this
Warrant shall bear a legend as follows, unless such Securities have been
registered under the Securities Act of 1933, as amended ("Act').
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act") or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act,
and applicable state law."
2.3 Conversion Right
2.3.1 Determination of Amount In lieu of the payment of the
Exercise Price in cash, the Holder shall have the right (but not the obligation)
to convert this Warrant, in whole or in part, into Common Stock ("Conversion
Right"), as follows: upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of any of the Exercise
Price) that number of shares of Common Stock equal to the quotient obtained by
dividing (x) the "Value" ( as defined below) of the portion of the Warrant being
converted at the time the Conversion Right is exercised by (y) the Exercise
Price. The "Value" of the portion of the Warrant being converted shall equal the
remainder derived from subtracting (a) the Exercise Price multiplied by the
number of shares of Common Stock being converted from (b) the Market Price of
the Common Stock multiplied by the number of shares of Common Stock being
converted. As used herein, the term "Market Price" at any date shall be deemed
to be the last reported sale price of the Common Stock on such date, or, in case
no such reported sale takes place on such day, the average of the last reported
sale prices for the immediately preceding three trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common is not listed or
admitted to trading on any national securities exchange or if any such exchange
on which the Common Stock is listed is not its principal trading market, the
last reported sale price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the Nasdaq National Market or SmallCap Market,
or, if applicable, the OTC Bulletin Board, or if the Common Stock is not listed
or admitted to trading on any of the foregoing markets, or similar organization,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
2.3.2 Exercise of Conversion Right. The Conversion Right may
be exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date by delivering the Warrant with a duly
executed exercise form attached hereto with the conversion section completed to
the Company, exercising the Conversion right and specifying the total number of
shares of Common Stock the Holder will purchase pursuant to such conversion.
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
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<PAGE>
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Warrant may be exercised or assigned in whole or in part.
In the event of the exercise of assignment hereof in part only, upon surrender
of this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price and/or transfer tax, the Company shall cause to be delivered to
the Holder without charge a new Warrant of like tenor to this Warrant in the
name of the Holder evidencing the right of the Holder to purchase the aggregate
number or shares of Common Stock and Warrants purchasable hereunder as to which
this Warrant has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of reasonably satisfactory indemnification,, the Company shall execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered as a result of such loss, theft, mutilation or destruction shall
constitute a substitute contractual obligation on the part of the Company.
5. Registration Rights.
5.1 "Piggy-Back" Registration.
5.1.1 Grant of Right. The Holders of this Warrant shall have
the right for a period of seven years from the Commencement Date to include all
or any part of this Warrant and the shares of Common Stock underlying this
Warrant (collectively, the Registrable Securities") as part of any registration
of securities filed by the Company (other than in claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement. The Holders) of the Registrable Securities to
be sold pursuant to such registration statement, and their successors and
assigns, shall severalty, and not jointly, indemnify the Company, against all
loss, claim, damage, expense or liability (including all reasonable attorneys'
forms and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which they may become subject under
the Act, the Exchange Act or otherwise, arising from information furnished by or
on behalf of such Holders, in writing, for
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<PAGE>
specific inclusion in such registration statement.
(b) If any action is brought against a party hereto, ("Indemnified party")
in respect of which indemnity may be sought against the other party
("indemnifying Party"), such indemnified party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and fees
of counsel reasonably satisfactory to the Indemnified Party. Such Indemnified
Party shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of such counsel shall have been
authorized in writing by Indemnifying Party in connection with the defense of
such action, or (ii) indemnifying party shall not have employed counsel to
defend such action, or (iii) such Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which may
result in a conflict between the Indemnified Party and Indemnifying party (in
which case Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnified Party), in any of which events, the
reasonable fees and expenses of not more than one additional firm of attorneys
designated in writing by the Indemnified Party shall be borne by Indemnifying
Party. Notwithstanding anything to the contrary contained herein, if Indemnified
Party shall assume the defense of such action as provided above, Indemnifying
Party shall not be liable for any settlement of any such action effected without
its written consent.
(c) If the indemnification or reimbursement provided for hereunder is
finally judicially determined by a court of competent jurisdiction to be
unavailable to an indemnified Party (other than as a consequence of a final
judicial determination of willful misconduct, bad faith or gross negligence of
such Indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying
such Indemnified Party, to contribute to the amount paid of payable to such
indemnified Party (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by Indemnifying Party on
the one hand and by such Indemnified Party on the other or (ii) if (but only if)
the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (i) but also the fault of
Indemnifying Party and of such Indemnified Party; provided, however, that in no
event shall the aggregate amount contributed by a Holder exceed the profit, if
any, earned by such Holder as a result of the exercise by him of the Warrants
and the sale by him of the underlying shares of Common Stock.
(d) The rights accorded to indemnified Parties hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise in connection with a transaction contemplated by
Rule 145(a) promulgated under the Act or pursuant to Form S-8 or any equivalent
form): provided, however, that if, in the written opinion of the Company's
managing underwriter or underwriters, if any, for such offering (the
"Underwriter"), the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective; and provided further that, if any
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<PAGE>
securities are registered for sale on behalf of other stockholders in such
offering and such stockholders have not agreed to defer such sale until the
expiration of such 90 day period, the number of securities to be sold by all
stockholders in such public offering during such 90 day period shall be
apportioned pro rata among all such selling stockholders, including all holders
of the Registrable Securities, according to the total amount of securities of
the Company proposed to be sold by said selling stockholders, including all
holders of the Registrable Securities.
5.1.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, bu the holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then holders of outstanding Registrable Securities
with not less than thirty days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company until such time
as all of the Registrable Securities have been sold by the Holder. The holders
of the Registrable Securities shall exercise the "piggyback" rights provided for
herein by giving written notices, within twenty days of the receipt of the
Company's notice of its intention to file a registration statement. The Company
shall cause any registration statement filed pursuant to the above "piggyback"
rights to remain effective for at least nine months from the date that the
Holders of the Registrable Securities are first given the opportunity to sell
all of such securities. Nothing contained in this Warrant shall be construed as
requiring any holder to exercise this Warrant or any part thereof prior to the
initial filing of any registration statement of the effectiveness thereof.
5.2 General Terms
5.2.1 Indemnification
(a) The Company shall indemnify the Holder(s) of the Registrable Securities
to be sold pursuant to any registration statement hereunder and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such Holders or underwriters or persons deemed to be underwriters
within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act'), against all loss, claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement. The
Holder(s) of the Registrable Securities to be sold pursuant to such registration
statement, and their successors and assigns, shall severalty, and not jointly,
indemnify the Company, against all loss, claim, damage, expense or liability
(including all reasonable attorneys' fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information, furnished by or on behalf of such Holders, in writing, for
specific inclusion in such registration statement.
(b) If any action is brought against a party hereto, ("Indemnified Party")
in respect of which indemnity may be sought against the other party
("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action
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<PAGE>
and Indemnifying Party shall assume the defense of such action , including the
employment and fees of counsel reasonably satisfactory to the Indemnified party.
Such indemnified Party shall have the right to employ its or their own counsel
in any such case, but the fees and expenses of such co sel shall be at the
expense of such indemnified Party unless (i) the employment of such counsel
shall have been authorized in writing by Indemnified party in connection with
the defense of such action, or (ii) indemnifying Party shall not have employed
counsel to defend such action, or (iii) such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to it
which may result in a conflict between the Indemnified Party and the
Indemnifying party (in which case Indemnifying party shall not have the right to
direct the defense of such action on behalf of the Indemnified party), in any of
which event, the reasonable fees and expenses of not more than one additional
firm of attorneys designated in writing by the Indemnified Party shall be borne
by Indemnifying Party. Notwithstanding anything to the contrary contained
herein, if Indemnified Party shall assume the defense of such action as provided
above, Indemnifying party shall not be liable for any settlement of any such
action effected without its written consent.
(c) If the Indemnification or reimbursement provided for hereunder is
finally judicially determined by a court or competent jurisdiction to be
unavailable to an Indemnified Party (other than as a consequence of a final
judicial determination of willful misconduct, bad faith or gross negligence of
such indemnified Party), then Indemnifying Party agrees, in lieu of indemnifying
such indemnified Party, to contribute to the amount paid of payable by such
indemnified party (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by Indemnifying Party on
the one hand and by such Indemnified party or the other or (ii) if (but only if)
the allocation provided in clause (i) of this sentence is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in such clause (i) but also the fault of
Indemnifying Party and of such Indemnified Party; provided, however, that in no
event shall the aggregate amount contributed by a Holder exceed the profit, if
any, earned by such Holder as a result of the exercise by him of the Warrants
and the sale by him of the Underlying shares of Common Stock.
(d) The rights accorded to Indemnified Parties hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise.
5.2.2 Exercise of Warrants. Nothing contained in this Warrant
shall be construed as requiring the Holder(s) to exercise their Warrants prior
to or after the initial filing of any registration statement or the
effectiveness thereof.
5.2.3 Documents Delivered to Holders. The Company shall
furnish to each holder participating in any of the foregoing offerings and to
each Underwriter of any such offering. If any, a signed counterpart, addressed
to such holder or Underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwriter public offering an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwriter public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such
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<PAGE>
registration statement. In each case covering substantially the same matters
with respect to such registration statement (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwriter public offerings of securities. The Company shall
also deliver promptly to each holder participating in the offering requesting
the correspondence and memoranda described below and to the managing underwriter
copies of all correspondence between the Commission and the Company, it counsel
or auditors and all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement as it deems reasonably
necessary to comply with applicable securities, laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable time
and as often as any such Holder shall reasonably request.
6. Adjustments
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of shares of Common Stock underlying this Warrant
shall be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock Dividers, Recapitalization, Reclassification,
Split-Ups. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective data thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.3, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of this
Warrant shall be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in this Section 6.1, the Exercise price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 Replacement of Securities upon Reorganization, etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change coveted by Section 6.1.1 hereof or which safety
affects the par value of such shares of Common stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
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corporation and which does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter ( until
the expiration of the right of exercise of this Warrant) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Warrant immediately prior to
such event, and if any reclassification also results in a change in shares of
Common Stock covered by Sections 6.1.1 or 6.1.2, than such adjustment shall be
made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The
provisions of this Section 6.1.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
6.1.5 Changes in Form of Warrant This form of Warrant need not
be changed because of any change pursuant to this Section, and Warrants issued
after such change may state the same Exercise Price and the same number of
shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, not shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to redemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
8. Certain Notice Requirements.
8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
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Company shall give written notice of such event at least fifteen days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be.
8.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or Warrant to subscribe
therefor, or (iii) a merger or reorganization in which the Company is not the
surviving party, or (iv) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of the property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly
after an event requiring a change in the Exercise price pursuant to Section 8
hereof, send notice to the Holders of such event and change ("Price Notice").
The Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company's President and Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, with acknowledgment of receipt by the party to which notice
is given, or on the fifth day after mailing if mailed to the party to whom
notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i)if to the
registered Holder of this Warrant, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, to the principal executive
officer
9. Miscellaneous
9.1 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.2 Entire Agreement. This Warrant (together with the other agreements and
documents being delivered pursuant to or in connection with this Warrant)
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
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9.3 Binding Effect. This Warrant shall inure solely to the benefit of
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
9.4 Governing Law Submission to Jurisdiction. This Warrant shall be
governed by and construed and enforced in accordance with the law of the State
of New York, without giving effect to conflict of laws. The Company hereby
agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Warrant shall be brought and enforced in the courts
of the State of New York or of the United States of America for the Souther
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any objection to such
exclusive jurisdiction and that such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any process of summons to be served upon the
Company may be served by transmitting a copy thereof by registered or certified
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section B hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim.
The Company agrees that the prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of the reasonable attorneys'
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
9.5 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way effect the
validity of this Warrant or any provision hereof of the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, non-compliance or non-fulfillment or any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
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Infinity, Inc.
211 West 14th
Chanute, Kansas
Date: __________
The undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase _________ shares of Common Stock of Infinity,
Inc. and hereby makes payment of $________ (at the rate of $_______ per share of
Common Stock) in payment of the Exercise Price pursuant thereto. Please issue
the Common Stock as to which this Warrant is exercised in accordance with the
instructions give below.
or
The undersigned hereby elects irrevocably to convert its right
to purchase ________ shares of Common Stock purchasable under the within Warrant
into ________ shares of Common Stock of Infinity, Inc. (based on a "Market
price" of $_________ per share of Common Stock). Please issue the Common Stock
in accordance with the instructions given below.
_________________
Signature
______________________
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ______________________________________________________
(Print in Block Letters)
Address ______________________________________________________
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ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within
Warrant):
FOR VALUE RECEIVED, ________________________ does hereby sell, assign and
transfer unto _______________________ The right to purchase ________ shares of
Common Stock of Infinity, Inc. ("Company') evidenced by the within Warrant and
does hereby authorize the Company to transfer such right on the books of the
Company.
Dated: ____________
____________________
Signature
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.
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