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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
RALLY'S HAMBURGERS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 62-1210077
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
10002 Shelbyville Road
Suite 150
Louisville, Kentucky 40223
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(Address of principal executive office) (Zip code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [_]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered each class is to be registered
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Securities to be registered pursuant to Section 12(g) of the Act:
Rights
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(Title of class)
Common Stock Purchase Warrants
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(Title of class)
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ITEM 1
DESCRIPTION OF SECURITIES
For a description of the terms of rights and warrants to which this Form
8-A relates see the sections entitled "The Rights Offering -- The Rights" and
"Description of Securities -- Warrants" contained in the Company's Registration
Statement of Form S-3 (No. 333-07609) which are incorporated herein by
reference.
ITEM 2
EXHIBITS
1. Form of Subscription Certificate.
2. Form of Warrant Agreement between Rally's Hamburgers, Inc. and
American Stock Transfer and Trust Company, as Warrant Agent, together
with form of Warrant Certificate.
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Signature
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Rally's Hamburgers, Inc.
Date: July 24, 1996
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By: /s/ Michael E. Foss
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Name: Michael E. Foss
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Title: Senior Vice President
and Chief Financial
Officer
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NUMBER OF SUBSCRIPTION RIGHTS
RIGHTS CUSIP NO. 75 1203 118
CERTIFICATE NO.
VOID AND VALUELESS IF NOT RECEIVED BY SUBSCRIPTION AGENT WITH PAYMENT
IN FULL BY 5:00 P.M. NEW YORK CITY TIME ON AUGUST 30, 1996.
SUBSCRIPTION PRICE: $3.00 for each Unit EXPIRATION TIME: 5:00 p.m. New York
City Time on
August 30, 1996
The registered holder named below or assigns is entitled to subscribe
for one Unit for each 4.5 Rights held. Each Unit consists of one share of
Common Stock, par value $.10 per share, and one warrant to purchase an
additional share of Common Stock of Rally's Hamburgers, Inc. upon the terms and
conditions set forth in the Prospectus, dated July 31, 1996 and the instructions
relating thereto. All capitalized terms used herein have the same meaning as
are given to them in the Prospectus, which is available from the Information
Agent.
4.5 Rights and $3.00 are need to subscribe for one Unit.
RALLY'S HAMBURGERS,INC.
By
____________________________________
DONALD E. DOYLE
President and Chief Executive Officer
____________________________________
EVAN G. HUGHES
Secretary
Countersigned and Registered
THE SUBSCRIPTION
AGENT, AMERICAN
STOCK TRANSFER &
TRUST COMPANY
By
__________________________
THIS OFFERING MAY BE WITHDRAWN UNDER CERTAIN CIRCUMSTANCES. Subscribers are
advised to review the instructions and the Prospectus, copies of which are
available from Morrow & Co., Inc., Information Agent, 909 Third Avenue, New
York, New York 10022, telephone: (800) 566-9061, before subscribing for Units.
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FORM 1-SUBSCRIPTION: The undersigned hereby irrevocably subscribes for full
Units as indicated below, on the terms specified in the Prospectus dated July
31, 1996, receipt of which is hereby acknowledged.
Number of Units subscribed for pursuant to
the Basic Subscription Privilege (4.5 Rights
needed to subscribe for each Unit)
______
Number of Units subscribed for pursuant to
the Oversubscription Privilege
______
Cost (total Units subscribed for times $3.00)
$_____
CHECK, BANK DRAFT OR MONEY ORDER PAYABLE TO
AMERICAN STOCK TRANSFER & TRUST COMPANY
MUST BE ENCLOSED HEREWITH.
_______________________________
Subscriber(s) Signature(s) (See
Instructions 4 and 5 as to
Signature Guarantee)
Telephone No. ( ) ___-____.
PLEASE READ BEFORE SIGNING:
Signature(s) must correspond with the name(s) of the
registered holder of the subscription certificate.
If a joint account, each must sign. Persons signing
in a representative or fiduciary capacity must
indicate capacity when signing.
FORM 2-TO TRANSFER YOUR RIGHTS: For
value received (insert number) Rights
represented by this Subscription Certificate
are hereby assigned to (please print name and
address and Social Security no. of transferee
in full):
______________________________________________
______________________________________________
______________________________________________
Social Security Number
______________________________________________
Signature(s) of Transferor(s)
(See Instructions 4 and 5 as to Signature Guarantee)
FORM 3-DELIVERY INSTRUCTIONS. Address for
delivery of stock if other than shown
on the reverse side hereof of in Form 2
______________________________________________
______________________________________________
[_] FORM 4-CHECK HERE TO SELL YOUR UNEXERCISED
RIGHTS THROUGH THE SUBSCRIPTION AGENT: Check box if
the undersigned hereby authorizes the Subscription
Agent to sell any Rights represented by this Subscription
Certificate but not exercised hereby and to deliver
to the undersigned a check for the net proceeds.
Signature(s) guaranteed by:
______________________________________________
(See Instructions 4 and 5)
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INSTRUCTIONS AS TO USE OF RALLY'S HAMBURGERS, INC.
SUBSCRIPTION CERTIFICATE
___________________
CONSULT THE INFORMATION AGENT, THE SUBSCRIPTION AGENT,
YOUR BANK OR BROKER AS TO ANY QUESTIONS
The following relates to a rights offering by Rally's Hamburgers, Inc. (the
"Company") to the holders of its outstanding Common Stock, $0.10 par value per
share (the "Common Stock") (the "Rights Offering"). Holders of record at the
close of business on July 31, 1996 (the "Record Date") are receiving one right
("Right") for each share of Common Stock held on the Record Date. Rights
holders may purchase one Unit (a "Unit") consisting of one share of Common Stock
and one warrant to purchase an additional share of Common Stock for each 4.5
Rights held ("Basic Subscription Privilege") at the subscription price of $3.00
(the "Subscription Price"). No fractional Units will be sold, and fractional
interests will be rounded down. There will be no adjustment to the Rights upon
any dividend to or on changes in the outstanding shares of Common Stock.
Subscriptions, once exercised, are irrevocable.
Each holder of Rights who subscribes in full for Units pursuant
to the Basic Subscription Privilege will be entitled to purchase any
unsubscribed Units at the Subscription Price ("Oversubscription Privilege").
However, if the total number of Units subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege exceeds the total
number of Units underlying Rights issued to stockholders, the number of Units
available for subscription pursuant to the Oversubscription Privilege will be
allocated, to the nearest whole Unit, among those stockholders oversubscribing
on the basis of their relative subscriptions pursuant to the Oversubscription
Privilege.
The number of Rights to which you are entitled is printed on the face of
your subscription certificate. You should indicate the use you wish to make of
your Rights by completing the appropriate form or forms on the back of your
subscription certificate and returning the certificate to the Subscription Agent
in the envelope provided.
YOUR SUBSCRIPTION CERTIFICATE AND THE RELATED PAYMENT MUST BE RECEIVED BY
THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 30,
1996, SUBJECT TO EXTENSION BY THE COMPANY ("EXPIRATION DATE"). AFTER THE
EXPIRATION DATE, THE COMPANY'S OFFER WILL NO LONGER BE EFFECTIVE, AND THE RIGHTS
WILL BE VOID AND VALUELESS. THE COMPANY IS NOT OBLIGATED TO HONOR ANY
SUBSCRIPTIONS RECEIVED BY THE SUBSCRIPTION AGENT AFTER THE EXPIRATION DATE,
REGARDLESS OF WHEN SUCH SUBSCRIPTIONS WERE SENT. THE RISK OF DELIVERY OF THE
SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE SUBSCRIPTION PRICE IS ON
SUBSCRIBERS, NOT THE COMPANY OR THE SUBSCRIPTION AGENT.
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1. SUBSCRIPTION. Complete and execute Form 1, have your signature
guaranteed, if required (see paragraph 5(c) below), and send your subscription
certificate, together with payment of the total Subscription Price, to the
Subscription Agent. DO NOT SEND SUBSCRIPTION CERTIFICATES OR PAYMENTS TO THE
COMPANY. Payment of the Subscription Price should be made in U.S. dollars by (i)
check or bank draft drawn upon a U.S. Bank or postal, telegraphic or express
money order payable to American Stock Transfer & Trust Company, Subscription
Agent, for the full number of Units subscribed for, or (ii) wire transfer of
funds to the account maintained by the Subscription Agent for such purpose at
Chase Manhattan Bank, 55 Water Street, New York, New York, Account #323053718,
ABA #021000021 Bank, or (iii) in such other manner as the Company may approve in
writing in the case of persons acquiring Units at an aggregate Subscription
Price of $500,000 or more, provided in the case of (iii) that the full amount of
such Subscription Price is received by the Subscription Agent in currently
available funds within three NASDAQ National Market ("NNM") trading days
following the Expiration Date (the payment method under (iii) being an "Approved
Payment Method"). Payment of the Subscription Price will be deemed to have been
received by the Subscription Agent only upon (a) clearance of any uncertified
check, (b) receipt by the Subscription Agent of any certified check or bank
draft drawn upon a United States bank or of any postal, telegraphic or express
money order, (c) receipt of good funds in the Subscription Agent's account
designated above, or (d) receipt of funds by the Subscription Agent through an
Approved Payment Method.
If paying by uncertified personal check, please note that the funds paid
thereby may take at least five business days to clear. Accordingly, Holders who
wish to pay the Subscription Price by means of uncertified personal check are
urged to make payment sufficiently in advance of the Expiration Date to ensure
that such payment is received and clears by such date and are urged to consider
payment by means of certified or cashier's check, money order or wire transfer
of funds.
The Subscription Agent is American Stock Transfer & Trust Company. The
address and telephone number of the Subscription Agent are as follows:
IF BY HAND OR BY MAIL:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
TELEPHONE:
(800) 937-5009
Facsimile: (718) 234-5001
If you subscribe for a number of Units requiring a lesser number of Rights
than are evidenced by your subscription certificate, the Subscription Agent
will, if practicable, sell such
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excess Rights and will remit the net proceeds, if any, to the subscriber,
provided appropriate instructions are received.
2. DELIVERY OF STOCK CERTIFICATES, ETC. Certificates representing the
share(s) of Common Stock and the Warrant(s) comprising the Unit(s) will be
mailed to subscribers as soon as practicable after a subscription has been
accepted by the Subscription Agent.
3. TO PURCHASE, SELL OR TRANSFER THE RIGHTS. Rights may be purchased or
sold through normal investment channels, including brokers. To sell or transfer
all or a portion of the Rights evidenced by a subscription certificate, other
than through the Subscription Agent, you must complete and execute Form 2 in its
entirety and have your signature guaranteed (see paragraph 5(c) below). If you
are transferring Rights through a bank or broker, deliver the executed
subscription certificate and a completed form W-9, as described in paragraph 6
below, to you bank or broker. If you transfer less than all of the Rights
evidenced by your subscription certificate, the Subscription Agent will issue a
new subscription certificate evidencing the remaining Right(s) to you.
The Rights are traded on the NNM and in the over-the-counter market, but
trading on the NNM will be discontinued at the close of business on the trading
day preceding the Expiration Date. The Rights will trade under the symbol
"RLLYR."
4. TO HAVE SUBSCRIPTION CERTIFICATE DIVIDED INTO SMALLER DENOMINATIONS.
Send you subscription certificate, together with complete separate instructions
(including specification of the denominations into which you wish your Rights to
be divided) signed by you, to the Subscription Agent allowing for a sufficient
amount of time for new subscription certificates to be issued and returned so
that they can be used prior to the Expiration Date. Your signature must be
guaranteed, as described in paragraph 5(c) below, if any of the new subscription
certificates are to be issued in a name other than that in which the old
subscription certificate was issued.
5. EXECUTION.
(A) EXECUTION BY REGISTERED HOLDER. The signature on the
subscription certificate must correspond with the name as it appears in the
register for the Rights maintained by the Subscription Agent in every particular
without alteration or any change whatsoever. Persons who sign the subscription
certificate in a representative or fiduciary capacity must indicate their
capacity when signing and, unless waived by the Subscription Agent in its sole
and absolute discretion, must present to the Subscription Agent satisfactory
evidence of their authority to so act.
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(B) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the
subscription certificate is executed by a person other than the registered
holder, proper evidence of authority of the person executing the subscription
certificate must accompany the same unless the Subscription Agent, in its sole
and absolute discretion, dispenses with proof of authority.
(C) SIGNATURE GUARANTEE. Holders of record may exercise, divide or
combine their Rights without a signature guarantee, if the securities issued as
a result of such exercise, division or combination are to be registered in such
record holder's name and returned to such record holder. ALL OTHER EXERCISES,
TRANSFERS, DIVISIONS OR COMBINATIONS OF RIGHTS REQUIRE A SIGNATURE GUARANTEE OF
AN ELIGIBLE INSTITUTION OF THE SIGNATURE OF THE PERSON SEEKING TO TAKE SUCH
ACTION. An Eligible Institution means a firm or other entity identified in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended, including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities dealer, municipal securities broker, government securities dealer or
government securities broker; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a savings
association. A verification by a Notary Public is not acceptable.
6. FORM W-9 AND TAXPAYER IDENTIFICATION NUMBER. Federal income tax law
requires that a holder of Rights who sells or transfers such Rights through a
broker or bank must provide the bank or broker with his or her correct taxpayer
identification number ("TIN") by completing the enclosed Form W-9. In the case
of a holder of Rights who is an individual, the TIN is his or her social
security number.
If such bank or broker, as the case may be, is not provided with the TIN,
the holder of Rights may be subject to backup withholding. Backup withholding
may also result if an incorrect TIN is so provided. If backup withholding
results in an overpayment of taxes, a refund may be obtained. To prevent backup
withholding, each holder who sells Rights must provide his or her correct TIN by
completing the enclosed Form W-9, certifying that the TIN provided is correct
(or that such holder is awaiting a TIN).
7. METHOD OF DELIVERY. The method of delivery of subscription
certificates and payment of the Subscription Price to the Subscription Agent
will be at the election and risk of the Rights holder, but if sent by mail, it
is recommended that they be sent by registered mail, properly insured, with
return receipt requested, and that a sufficient number of days be allowed to
ensure delivery to the Subscription Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.
8. LATE DELIVERY OF SUBSCRIPTION CERTIFICATE. If, prior to 5:00 p.m. on
the Expiration Date, the Subscription Agent has received full payment for the
total number of Units subscribed for
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by a Rights holder, together with an executed Notice of Guaranteed Delivery (in
the form provided with the Rights certificate and available from the
Subscription Agent) from a commercial bank, a trust company having an office in
the United States or a member firm of any registered national securities
exchange or the National Association of Securities Dealers, Inc. stating the
name of the subscriber, the number of Rights represented by the Rights
certificate and the number of Units subscribed for and guaranteeing that the
subscription certificate and the number of Units subscribed for and guaranteeing
that the subscription certificate will be delivered within three NNM trading
days after the Expiration Date to the Subscription Agent, such subscription will
be accepted. The certificates representing the shares of Common Stock and the
Warrants comprising the Units will be withheld by the Subscription Agent until
receipt of the duly completed and executed subscription certificate.
THE RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 30,
1996, AND WILL BE VALUELESS THEREAFTER.
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Exhibit 2
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RALLY'S HAMBURGERS, INC.
WARRANT AGREEMENT
BETWEEN
RALLY'S HAMBURGERS, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS WARRANT AGENT
Dated as of , 1996
================================================================================
<PAGE>
RALLY'S HAMBURGERS, INC.
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of
1996, is made and entered into by and between RALLY'S HAMBURGERS, INC., a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, as warrant agent (the "Warrant Agent")
WHEREAS, in connection with a rights offering (the "Rights Offering")
pursuant to which the shareholders of the Company ("Shareholders") may purchase
up to 3,484,074 units (the "Units"), each Unit consisting of one share of the
Company's common stock, $.10 par value (the "Common Stock"), and one redeemable
common stock purchase warrant (the "Warrant"), the Company will issue up to
3,484,074 Warrants evidencing the right to purchase an aggregate of 3,484,074
shares of Common Stock as constituted on the date hereof; and
WHEREAS, the Company desires the Warrant Agent act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange, exercise and redemption of the
Warrants;
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent of the Company for the Warrants, and the
Warrant Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this Agreement.
SECTION 2. WARRANTS AND FORM OF WARRANT CERTIFICATES.
(A) Each Warrant shall entitle the registered holder of the
certificate representing such Warrant to purchase upon the exercise thereof, one
share of Common Stock, subject to the adjustments provided for in Section 9
hereof, at any time until 5:00 p.m, Eastern time, on _________________, 2000
("Expiration Date") unless earlier redeemed pursuant to Section 11 hereof.
(B) The Warrant certificates shall be in registered form only. The
text of the Warrant certificate and the form of election to exercise a Warrant
on the reverse side thereof shall be substantially in the form of Exhibit A
attached hereto. Each Warrant certificate shall be dated as of the date of
issuance thereof by the Warrant Agent (whether upon initial issuance or upon
transfer or exchange) and shall be executed on behalf of the Company by the
manual or facsimile signature of its President or a Vice President, under its
corporate seal, affixed or in facsimile, and attested to by the manual or
facsimile signature
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of its Secretary or an Assistant Secretary. In case any officer of the Company
who shall have signed any Warrant certificate shall cease to be such officer of
the Company prior to the issuance thereof, such Warrant certificate may
nevertheless be issued and delivered with the same force and effect as though
the person who signed the same had not ceased to be such officer of the Company.
Any such Warrant certificate may be signed on behalf of the Company by persons
who, at the actual date of execution of such Warrant certificate, are the proper
officers of the Company, although at the nominal date of such Warrant
certificate any such person shall not have been such officer of the Company.
SECTION 3. EXERCISE OF WARRANTS AND WARRANT PRICE. Subject to the
provisions of this Agreement, each registered holder of one or more Warrant
certificates shall have the right, which may be exercised as in such Warrant
certificates expressed, to purchase from the Company (and the Company shall
issue and sell to such registered holder) the number of shares of Common Stock
to which the Warrants represented by such certificates are at the time entitled
hereunder.
Each Warrant not exercised by its expiration date shall become void,
and all rights thereunder and all rights in respect thereof under this Agreement
shall cease on such date.
A Warrant may be exercised by the surrender of the certificate
representing such Warrant to the Company, at the office of the Warrant Agent, or
at the office of a successor to the Warrant Agent, with the subscription form
set forth on the reverse thereof duly executed and properly endorsed with the
signatures properly guaranteed, and upon payment in full to the Warrant Agent
for the account of the Company of the Warrant Price (as hereinafter defined) for
the number of shares of Common Stock as to which the Warrant is exercised. Such
Warrant Price shall be paid in full in cash, or by certified check or bank draft
payable in United States currency to the order of the Warrant Agent.
The price per share of Common Stock at which the Warrants may be
exercised (the "Warrant Price") shall be $3.00 (adjusted in accordance with
Section 9 hereof, taking into account prior adjustments). At any time, or from
time to time the Company may reduce either or both of the Warrant Prices or
extend the expiration date for such period or periods of time as it may
determine. Notice of any such reduction in the Warrant Prices or extension of
the expiration date shall be promptly provided to the Warrant Agent.
Subject to the further provisions of this Section 3 and of Section 6
hereof, upon such surrender of Warrant certificates and payment of the
applicable Warrant Price as aforesaid, the Company shall issue and cause to be
delivered, with all reasonable
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dispatch to or upon the written order of the registered holder of such Warrants
and in such name or names as such registered holder may designate, a certificate
or certificates for the number of securities so purchased upon the exercise of
such Warrants, together with cash, as provided in Section 10 of this Agreement,
in respect of any fraction of a share or security otherwise issuable upon such
surrender. All shares of Common Stock issued upon the exercise of a Warrant
shall be validly issued, fully paid and nonassessable and shall be listed on any
and all national securities exchanges upon which any other shares of the Common
Stock or securities otherwise issuable are then listed.
Certificates representing such securities shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such securities as of the date of the surrender of
such Warrants and payment of the Warrant Price as aforesaid; provided, however,
that if, at the date of surrender of such Warrants and payment of the applicable
Warrant Price, the transfer books for the Common Stock or other securities
purchasable upon the exercise of such Warrants shall be closed, the certificates
for the securities in respect of which such Warrants are then exercised shall be
issuable as of the date on which such books shall next be opened and until such
date the Company shall be under no duty to deliver any certificate for such
securities. The rights of purchase represented by each Warrant certificate
shall be exercisable, at the election of the registered holders thereof, either
as an entirety or from time to time for part of the number of securities
specified therein and, in the event that any Warrant certificate is exercised in
respect of less than all of the securities specified therein at any time prior
to the expiration date of the Warrant certificate, a new Warrant certificate or
certificates will be issued to such registered holder for the remaining number
of securities specified in the Warrant certificate so surrendered.
SECTION 4. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books (the "Warrant Register") for the registration and the
registration of transfer of the Warrants. The Warrant certificates shall be
countersigned manually or by facsimile by the Warrant Agent (or by any successor
to the Warrant Agent then acting as such under this Agreement) and shall not be
valid for any purpose unless so countersigned. Warrant certificates may be so
countersigned, however, by the Warrant Agent and delivered by the Warrant Agent
notwithstanding that the persons whose manual or facsimile signatures appear
thereon as proper officers of the Company shall have ceased to be such officers
at the time of such countersignature or delivery.
Prior to due presentment for registration of transfer of any Warrant
certificate, the Company and the Warrant Agent may deem and treat the person in
whose name such Warrant certificate shall
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be registered upon the Warrant Register (the "registered holder") as the
absolute owner of such Warrant certificate and of each Warrant represented
thereby (notwithstanding any notation of ownership or other writing on the
Warrant certificate made by anyone other than the Company or the Warrant Agent),
for the purpose of any exercise thereof, of any distribution or notice to the
holder thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
SECTION 5. TRANSFER AND EXCHANGE OF WARRANTS. The Warrant Agent
shall register the transfer, from time to time, any outstanding Warrant upon the
Warrant Register, upon surrender of the certificate evidencing such Warrant for
transfer, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Warrant
certificate representing an equal aggregate number of Warrants shall be issued
to the transferee and the surrendered Warrant certificate shall be canceled by
the Warrant Agent. The Warrant certificates so canceled shall be delivered by
the Warrant Agent to the Company from time to time upon request.
Warrant certificates may be surrendered to the Warrant Agent, together
with a written request for exchange, and thereupon the Warrant Agent shall issue
in exchange therefor one or more new Warrant certificates as requested by the
registered holder of the Warrant certificate or certificates so surrendered,
representing an equal aggregate number of Warrants.
The Warrant Agent shall not be required to effect any registration of
transfer or exchange which will result in the issuance of a Warrant certificate
for a fraction of a warrant.
No service charge shall be made for any exchange or registration of
transfer of Warrant certificates.
The Warrant Agent is hereby authorized to countersign and to deliver,
in accordance with the terms of this Agreement, the new Warrant certificates
required to be issued pursuant to the provisions hereof, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrant certificates duly executed on behalf of the Company for such purpose.
SECTION 6. PAYMENT OF TAXES. The Company will pay any documentary
stamp taxes attributable to the initial issuance of the shares of Common Stock
issuable upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issuance or delivery of any certificates for shares
of Common Stock in a name other than that of the registered holder of Warrants
in respect of which such shares are issued, and in such case neither the Company
nor the
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Warrant Agent shall be required to issue or deliver any certificate for shares
of Common Stock or any Warrant certificate until the person requesting the same
has paid to the Company the amount of such tax or has established to the
Company's satisfaction that such tax has been paid.
SECTION 7. MUTILATED OR MISSING WARRANTS. In case any of the Warrant
certificates shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and the Warrant Agent shall countersign and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate lost,
stolen or destroyed, a new Warrant certificate representing an equal aggregate
number of Warrants, but only upon receipt of evidence satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Warrant
certificate and reasonable indemnity, if requested, also satisfactory to them.
Applicants for such substitute Warrant certificates shall also comply with such
other reasonable conditions and pay such reasonable charges as the Company or
the Warrant Agent may prescribe.
SECTION 8. RESERVATION OF COMMON STOCK. There have been reserved,
and the Company shall at all times keep reserved, out of the authorized and
unissued shares of Common Stock, a number of shares sufficient to provide for
the exercise of the rights of purchase represented by the Warrants then
outstanding, and the transfer agent for the Common Stock and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of any of the rights of purchase aforesaid are hereby irrevocably
authorized and directed at all times to reserve such number of authorized and
unissued shares as shall be requisite for such purpose.
Prior to the issuance of any shares of Common Stock upon exercise of
the Warrants, the Company shall secure the listing of such shares on any and all
national securities exchanges upon which any of the other shares of the Common
Stock are then listed. So long as any unexpired Warrants remain outstanding,
the Company will file such post-effective amendments to the Registration
Statement or supplements to the Prospectus filed pursuant to the Securities Act
of 1933, as amended (the "Act"), with respect to the Warrants (or such other
registration statements or post-effective amendments or supplements) as may be
necessary to permit trading in the Warrants and to permit the Company to deliver
to each person exercising a Warrant a Prospectus meeting the requirements of
Section 10(a)(3) of the Act, and otherwise complying therewith; and the Company
will, from time to time, furnish the Warrant Agent with such Prospectuses in
sufficient quantity to permit the Warrant Agent to deliver such a Prospectus to
each holder of a Warrant upon the exercise thereof. The Company will keep a
copy of this Agreement on file with the transfer agent for the Common Stock and
with
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every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants.
The Warrant Agent is hereby irrevocably authorized to requisition from
time to time from such transfer agent stock certificates required to honor
outstanding Warrants. The Company will supply such transfer agent with duly
executed certificates for such purpose and will itself provide or otherwise make
available any cash as provided in Section 10 of this Agreement. All Warrant
certificates surrendered in the exercise of the rights thereby evidenced shall
be canceled by the Warrant Agent and shall thereafter be delivered to the
Company, and such canceled Warrant certificates shall constitute sufficient
evidence of the number of shares of Common Stock which have been issued upon the
exercise of such Warrants. Promptly after the expiration date of the Warrants,
the Warrant Agent shall certify to the Company the aggregate number of such
Warrants which expired unexercised, and after the expiration date of the
Warrants, no shares of Common Stock shall be subject to reservation in respect
of such Warrants.
SECTION 9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES OF COMMON
STOCK. The number and kind of securities purchasable upon the exercise of the
Warrants and the applicable Warrant Price shall be subject to adjustment from
time to time upon the happening of certain events, as follows:
9.1 ADJUSTMENTS. The number of shares of Common Stock purchasable
upon the exercise of each Warrant and the applicable Warrant Price shall be
subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock
or make a distribution in Common Stock, (ii) subdivide its outstanding
Common Stock, (iii) combine its outstanding Common Stock into a smaller
number of shares of Common Stock, or (iv) issue, by reclassification of its
Common Stock, other securities of the Company, the number of shares of
Common Stock purchasable upon exercise of a Warrant immediately prior
thereto shall be adjusted so that the holder of a Warrant shall be entitled
to receive the kind and number of shares of Common Stock or other
securities of the Company which such holder would have owned or would have
been entitled to receive immediately after the happening of any of the
events described above, had the Warrant been exercised immediately prior to
the happening of such event or any record date with respect thereto. Any
adjustment made pursuant to this subsection 9.1(a) shall become effective
immediately after the effective date of such event retroactive to the
record date, if any, for such event.
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(b) In case the Company shall issue rights, options, warrants or
convertible securities to all or substantially all holders of its Common
Stock, without any charge to such holders, entitling them to subscribe for
or purchase Common Stock at a price per share which is lower at the record
date mentioned below than the then Current Market Price (as defined in
Section 10 hereof), the number of shares of Common Stock thereafter
purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of shares of Common Stock theretofore purchasable
upon exercise of a Warrant by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding immediately prior to the
issuance of such rights, options, warrants or convertible securities plus
the number of additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such rights,
options, warrants or convertible securities plus the number of shares which
the aggregate offering price of the total number of shares offered would
purchase at such Current Market Price. Such adjustment shall be made
whenever such rights options, warrants or convertible securities are issued
and shall become effective immediately and retroactive to the record date
for the determination of shareholders entitled to receive such rights,
options, warrants or convertible securities.
(c) In case the Company shall distribute to all or substantially
all holders of its Common Stock, evidences of its indebtedness or assets
(excluding cash dividends or distributions out of earnings) or rights,
options, warrants or convertible securities containing the right to
subscribe for or purchase Common Stock (excluding those referred to in
subsection 9.1 (b) above), then in each case the number of shares of Common
Stock thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock theretofore
purchasable upon exercise of such Warrant by a fraction, of which the
numerator shall be the then Current Market Price on the date of such
distribution, and of which the denominator shall be such Current Market
Price on such date minus the then fair value (as determined by the Board of
Directors, which determination, if reasonable and based upon the Board of
Directors' good faith business judgment, shall be binding upon the
registered holders) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights, options,
warrants or convertible securities applicable to one share. Such adjustment
shall be made whenever any such distribution is made and shall become
effective on the date of distribution retroactive to the record date for
the determination of shareholders entitled to receive such distribution.
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(d) No adjustment in the number of shares of Common Stock
purchasable pursuant to the Warrants shall be required unless such
adjustment would require an increase or decrease of at least one percent in
the number of shares of Common Stock then purchasable upon the exercise of
the Warrants; provided, however that any adjustments which by reason of
this subsection 9.1(d) are not required to be made immediately shall be
carried forward and taken into account in any subsequent adjustment.
(e) Whenever the number of shares of Common Stock purchasable
upon the exercise of a Warrant is adjusted as herein provided, the
applicable Warrant Price payable upon exercise of the Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to such
adjustment by the fraction, of which the numerator shall be the number of
shares of Common Stock purchasable upon the exercise of such Warrant
immediately prior to such adjustment, and of which the denominator shall be
the number of shares of Common Stock so purchasable immediately thereafter.
(f) To the extent not covered by subsections 9.1 (b) or (c)
hereof, in case the Company shall sell or issue Common Stock or rights,
options, warrants or convertible securities containing the right to
subscribe for or purchase shares of Common Stock at a price per share
(determined, in the case of such rights, options, warrants or convertible
securities, by dividing (i) the total amount received or receivable by the
Company in consideration of the sale or issuance of such rights, options,
warrants or convertible securities, plus the total consideration payable to
the Company upon exercise or conversion thereof, by (ii) the total number
of shares covered by such rights, options, warrants or convertible
securities) lower than the then Current Market Price in effect immediately
prior to such sale or issuance, then the number of Shares thereafter
purchasable upon the exercise of the Warrants shall be determined by
multiplying the number of Shares theretofore purchasable upon exercise of
the Warrants by a fraction, of which the numerator shall be the applicable
Warrant Price and the denominator shall be that price calculated to the
nearest cent) determined by dividing (I) an amount equal to the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such
sale or issuance multiplied by the applicable Warrant Price, plus (B) the
consideration received by the Company upon such sale or issuance, by (II)
the total number of shares of Common Stock outstanding immediately after
such sale or issuance. For the purpose of such adjustments, the Common
Stock which the holders of any such rights, options, warrants or
convertible securities shall be entitled to subscribe for or purchase shall
be deemed issued and outstanding as of the date of such sale or issuance
and the consideration received by the
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Company therefor shall be deemed to be the consideration received by the
Company for such rights, options, warrants or convertible securities, plus
the consideration or premiums stated in such rights, options, warrants or
convertible securities to be paid for the Common Stock covered thereby In
case the Company shall sell or issue Common Stock or rights, options,
warrants or convertible securities containing the right to subscribe for or
purchase Common Stock for a consideration consisting, in whole or in part,
of property other than cash or its equivalent, then in determining the
"price per share" of Common Stock and the "consideration received by the
Company" for purpose of the first sentence of this subsection 9.1(f), the
Board of Directors shall determine the fair value of said property, and
such determination, if reasonable and based upon the Board of Directors'
good faith business judgment, shall be binding upon the Warrantholder. In
determining the "price per share" of Common Stock, any underwriting
discounts or commissions shall not be deducted from the price received by
the Company for sales of securities registered under the Act.
(g) Whenever the number of shares of Common Stock purchasable
upon the exercise of a Warrant or the Warrant Price is adjusted as herein
provided, the Company shall cause to be promptly mailed to the Warrant
Agent and each registered holder of a Warrant by first class mail, postage
prepaid, notice of such adjustment or adjustments and, with regard to the
Warrant Agent only, a certificate of the chief financial officer of the
Company setting forth the number of shares of Common Stock purchasable upon
the exercise of a Warrant and the applicable Warrant Price after such
adjustment, a brief statement of the facts requiring such adjustment and
the computation by which such adjustment was made.
(h) For the purpose of this Section 9, the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassification of such Common Stock
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as
a result of an adjustment made pursuant to this Section 9, a registered
holder shall become entitled to purchase any securities of the Company
other than Common Stock, (i) if the registered holder's right to purchase
is on any other basis than that available to all holders of the Company's
Common Stock, the Company shall obtain an opinion of an investment banking
firm valuing such other securities and (ii) thereafter the number of such
other securities so purchasable upon exercise of a Warrant and the
applicable Warrant Price of such securities shall be
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subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in this Section 9.
(i) Upon the expiration of any rights, options, warrants or
conversion privileges, if such shall not have been exercised, the number of
shares of Common Stock purchasable upon exercise of a Warrant and the
applicable Warrant Price, to the extent a Warrant has not then been
exercised shall, upon such expiration, be readjusted and shall thereafter
be such as they would have been had they been originally adjusted (or had
the original adjustment not been required, as the case may be) on the basis
of (A) the fact that the only shares of Common Stock so issued were the
shares of Common Stock, if any, actually issued or sold upon the exercise
of such rights, options, warrants or conversion privileges, and (B) the
fact that such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the issuance,
sale or grant of all such privileges, options, warrants or conversion
privileges whether or not exercised; provided, however, that no such
readjustment shall have the effect of increasing the applicable Warrant
Price by an amount in excess of the amount of the adjustment initially made
in respect of the issuance, sale or grant of such rights, options, warrants
or conversion privileges.
9.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 9.1
hereof, no adjustment in respect of any dividends or distributions out of
earnings shall be made during the term of a Warrant or upon the exercise of a
Warrant.
9.3 NO ADJUSTMENT IN CERTAIN CASES. No adjustments shall be made pursuant
to Section 9 hereof in connection with the issuance of the Rights, the Units (or
the shares of Common Stock included therein) or the Warrants (or the underlying
shares of Common Stock). No adjustments shall be made pursuant to Section 9
hereof in connection with the grant or exercise of presently authorized or
outstanding options to purchase, or the issuance of shares of Common Stock on
the exercise thereof under the Company's 1990 Stock Option Plan and 1995 Stock
Option Plan for Non-Employee Directors or other options described in the
Prospectus, or incorporated by reference, dated July 31, 1996, as supplemented,
pursuant to which the Warrants were offered and sold.
9.4 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the Company
into another corporation or in case of any sale or conveyance to another
corporation of the property, assets or business of the Company as an entirety or
substantially
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as an entirety, the Company or such successor or purchasing corporation, as the
case may be, shall execute with the Warrant Agent an agreement that the
registered holders of the Warrants shall have the right thereafter, upon payment
of the Warrant Price in effect immediately prior to such action, to purchase,
upon exercise of each Warrant, the kind and amount of shares and other
securities and property which it would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had each Warrant been exercised immediately prior to such action. In the event
of a merger described in Section 368(a)(2)(E) of the Internal Revenue Code of
1986, as amended, in which the Company is the surviving corporation, the right
to purchase shares of Common Stock under the Warrants shall terminate on the
date of such merger and thereupon the Warrants shall become null and void, but
only if the controlling corporation shall agree to substitute for the Warrants
its warrants which entitle the holders thereof to purchase upon their exercise
the kind and amount of shares and other securities and property which they would
have owned or been entitled to receive had the Warrants been exercised
immediately prior to such merger. Any such agreements referred to in this
subsection 9.4 shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section 9
hereof. The provisions of this subsection 9.4 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
9.5 PAR VALUE OF SHARES OF COMMON STOCK. Before taking any action which
would cause an adjustment reducing the applicable Warrant Price below the then
par value of the Common Stock issuable upon exercise of the Warrants, the
Company will take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Common Stock at such adjusted applicable Warrant Price.
9.6 INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a firm of
independent public accountants of recognized national standing (which may be any
such firm regularly employed by the Company) to make any computation required
under this Section 9.0 and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 9.
9.7 STATEMENT ON WARRANT CERTIFICATES. Irrespective of any adjustments in
the applicable Warrant Price or the number of securities issuable upon exercise
of Warrants, Warrant certificates theretofore or thereafter issued may continue
to express the same price and number of securities as are stated in the similar
Warrant certificates initially issuable pursuant to this Agreement. However,
the Company may, at any time in its sole discretion (which shall be conclusive),
make any change in the form of Warrant certificate that it may deem appropriate
and
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that does not affect the substance thereof; and any Warrant certificate
thereafter issued, whether upon registration of transfer of, or in exchange or
substitution for, an outstanding Warrant certificate, may be in the form so
changed.
9.8 NO RIGHTS AS SHAREHOLDER; NOTICES TO HOLDERS OF WARRANTS. If, at any
time prior to the expiration of a Warrant and prior to its exercise, any one or
more of the following events shall occur: (a) any action which would require an
adjustment pursuant to subsection 9.1 or 9.4 hereof, or (b) a dissolution,
liquidation or winding up of the Company (other than in connection with a
consolidation, merger or sale of its property, assets and business as an
entirety or substantially as an entirety) shall be proposed:
then the Company shall give notice in writing of such event to the registered
holders of the Warrants, as provided in Section 18 hereof, at least 20 days
prior (and pursuant to the provisions of subsection 9.1(e) with respect to
adjustments pursuant to subsection 9.1(f) and 9.1(i)) to the date fixed as a
record date or the date of closing the transfer books for the determination of
the shareholders entitled to any relevant dividend, distribution, subscription
rights or other rights or for the determination of shareholders entitled to vote
on such proposed dissolution, liquidation or winding up. Such notice shall
specify such record date or the date of closing the transfer books, as the case
may be. Failure to mail or receive such notice or any defect therein shall not
affect the validity of any action taken with respect thereto.
Section 10. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of a Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 10, be issuable on the exercise of a Warrant (or specified portion
thereof), the Company shall in lieu thereof pay an amount in cash equal to the
then Current Market Price multiplied by such fraction. For purposes of this
Agreement, the term "Current Market Price" shall mean (i) if the Common Stock is
traded in the over-the-counter market and not in the NASDAQ National Market
System nor on any national securities exchange, the average of the per share
closing bid prices of the Common Stock on the 30 consecutive trading days
immediately preceding the date in question, as reported by NASDAQ or an
equivalent generally accepted reporting service, or (ii) if the Common Stock is
traded in the NASDAQ National Market System or on a national securities
exchange, the average for the 30 consecutive trading days immediately preceding
the date in question of the daily per share closing prices of the Common Stock
in the NASDAQ National Market System or on the principal stock exchange on which
it is listed, as the case may be. For purposes of clause (i) above, if trading
in the Common Stock is not reported by NASDAQ, the bid price referred to in said
clause shall be the lowest bid price as
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reported in the "pink sheets" published by National Quotation Bureau,
Incorporated. The closing price referred to in clause (ii) above shall be the
last reported sale price or, in the case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices, in either
case in the NASDAQ National Market System or on the national securities exchange
on which the Common Stock is then listed.
SECTION 11. REDEMPTION.
(A) The then outstanding Warrants may be redeemed, at the option of
the Company, at $.01 per share of Common Stock purchasable upon exercise of such
Warrants, at any time after the Daily Market Price per share of the Common Stock
for a period of 20 out of 30 consecutive trading days ending not more than 30
days prior to the date of the notice given pursuant to Section 11(B) hereof has
equaled or exceeded $6.00, as adjusted from time to time as provided in Section
9 hereof, and prior to expiration of the Warrants. The Daily Market Price of
the Common Stock shall be determined by the Company in the manner set forth in
Section 11(E) as of the end of each trading day (or, if no trading in the Common
Stock occurred on such day, as of the end of the immediately preceding trading
day in which trading occurred) and verified to the Warrant Agent before the
Company may give notice of redemption. All outstanding Warrants must be
redeemed if any are redeemed, and any right to exercise an outstanding Warrant
shall terminate at 5:00 p.m. (New York City Time) on the business day
immediately preceding the date fixed for redemption. A trading day shall mean a
day in which trading of securities occurred on the New York Stock Exchange.
(B) The Company may exercise its right to redeem the Warrants only by
giving the notice set forth in the following sentence by the end of the
thirtieth (30th) trading day after the provisions of Section 11(A) have been
satisfied. In case the Company shall exercise its right to redeem, it shall
give notice to the Warrant Agent and the registered holders of the outstanding
Warrants, by mailing to such registered holders a notice of redemption, first
class, postage prepaid, at their addresses as they shall appear on the records
of the Warrant Agent. Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not the registered
holder actually receives such notice.
(C) The notice of redemption shall specify the redemption price, the
date fixed for redemption (which shall be between the thirtieth (30th) and
forty-fifth (45th) day after such notice is mailed), the place where the Warrant
certificates shall be delivered and the redemption price shall be paid, and that
the right to exercise the Warrant shall terminate at 5:00 p.m. (New York City
Time) on the business day immediately preceding the date fixed for redemption.
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(D) Appropriate adjustment shall be made to the redemption price and
to the minimum Daily Market Price prerequisite to redemption set forth in
Section II(A) hereof, in each case on the same basis as provided in Section 9
hereof with respect to adjustment of the Warrant Price.
(E) For purposes of this Agreement, the term "Daily Market Price"
shall mean (i) if the Common Stock is traded in the over-the-counter market and
not in the NASDAQ National Market System nor on any national securities
exchange, the closing bid price of the Common Stock on the trading day in
question, as reported by NASDAQ or an equivalent generally accepted reporting
service, or (ii) if the Common Stock is traded in the NASDAQ National Market
System or on a national securities exchange, the daily per share closing price
of the Common Stock in the NASDAQ National Market System or on the principal
stock exchange on which it is listed on the trading day in question, as the case
may be. For purposes of clause (i) above, if trading in the Common Stock is not
reported by NASDAQ, the bid price referred to in said clause shall be the lowest
bid price as reported in the "pink sheets" published by National Quotation
Bureau, Incorporated. The closing price referred to in clause (ii) above shall
be the last reported sale price or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices, in either
case in the NASDAQ National Market System or on the national securities exchange
on which the Common Stock is then listed.
SECTION 12. RIGHTS AS WARRANTHOLDERS. Nothing contained in this Agreement
or in any of the Warrants shall be construed as conferring upon the holders
thereof, as such, any of the rights of shareholders of the Company, including
without limitation, the right to receive dividends or other distributions, to
exercise any preemptive rights, to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
directors or the Company or any other matter. Anything herein to the contrary
notwithstanding, the Company shall cause copies of all financial statements and
reports, proxy statements and other documents as it shall send to its
shareholders to be sent by the same class mail as sent to its shareholders,
postage prepaid, on the date of the mailing to such shareholders, to each
registered holder of Warrants at his address appearing on the Warrant Register
as of the record date for the determination of the shareholders entitled to such
documents.
SECTION 13. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS. The
Warrant Agent shall account promptly to the Company with respect to Warrants
exercised, and shall promptly pay to the Company all monies received by it upon
the exercise of such Warrants, and shall keep copies of this Agreement available
for inspection by holders of Warrants during normal business hours
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SECTION 14. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 16 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement and any of the Warrant certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrant
certificates so countersigned, and in case at that time any of the Warrant
certificates shall not have been countersigned, any successor to the Warrant
Agent may countersign such Warrant certificates either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent, and in
all such cases the Warrants represented by such Warrant certificates shall have
the full force provided in the Warrant certificates and in this Agreement. Any
such successor Warrant Agent shall promptly give notice of its succession as
Warrant Agent to the Company and to the registered holder of each Warrant
certificate.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrant certificates so countersigned, and, in case at that time any
of the Warrant certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant certificates either in its prior name or in its
changed name, and, in all such cases, the Warrants represented by such Warrant
certificates shall have the full force provided in the Warrant certificates and
in this Agreement.
SECTION 15. DUTIES OF WARRANT AGENT. The Warrant Agent hereby
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, all of which shall bind the Company and the
holders of Warrants by their acceptance thereof.
(A) The statements of fact and recitals contained herein and in the
Warrants shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrants
except as herein expressly provided.
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(B) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
(C) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
(D) The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(E) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement, except as a result of the Warrant Agent's
negligence, willful misconduct or bad faith.
(F) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action on behalf of the
Company or any registered holder, but this provision shall not affect the power
of the Warrant Agent to take such action as the Warrant Agent may consider
proper. All rights of action under this Agreement or under any of the Warrants
may be enforced by the Warrant Agent without the possession of any of the
Warrants or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of all the registered holders of the Warrants,
as their respective rights or interests may appear.
(G) The Warrant Agent and any shareholder, director, officer, or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall
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preclude the Warrant Agent from acting in any other capacity for the Company or
for any other legal entity.
(H) The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement, except for its
own negligence, willful misconduct or bad faith.
(I) Any request, direction, election, order or demand of the Company
shall be sufficient if evidenced by an instrument signed in the name of the
Company by its President, a Vice President or chief financial officer (unless
other evidence in respect thereof is therein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.
SECTION 16. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving the Company at
least 30 days' prior notice in writing, and by mailing notice in writing to the
registered holders at their addresses appearing on the Warrant Register, of such
resignation, specifying a date when such resignation shall take effect. The
Warrant Agent may be removed by like notice to the Warrant Agent from the
Company and by like mailing of notice to the registered holders of the Warrants.
If the Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the registered
holder of a Warrant (who shall, with such notice, submit his Warrant certificate
for inspection by the Company), then the registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a successor
to the Warrant Agent. Any successor Warrant Agent, whether appointed by the
Company or by such a court, shall be registered and otherwise authorized to
serve as a transfer agent pursuant to the Securities Exchange Act of 1934, as
amended. If at any time the Warrant Agent shall cease to be eligible in
accordance with the provisions of this Section 16, it shall resign immediately
in the manner and with the effect specified in this Section 16. After
acceptance in writing of the appointment, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Upon
request of any successor Warrant Agent,
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the Company shall make, execute, acknowledge and deliver any and all instruments
in writing for more fully and effectually vesting in and confirming to such
successor Warrant Agent all such powers, rights, duties and responsibilities.
Failure to file or mail any notice provided in this Section 16, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Warrant Agent or the appointment of the successor Warrant Agent,
as the case may be.
SECTION 17. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment
of any transfer agent for the Common Stock or of any subsequent transfer agent
for shares of the Common Stock or other shares of the Company's capital stock
issuable upon the exercise of the rights of purchase represented by the
Warrants, the Company will file with the Warrant Agent a statement setting forth
the name and address of such transfer agent.
SECTION 18. NOTICES. All notices, requests and other communications
pursuant to this Agreement shall be in writing and shall be sufficiently given
or made when delivered or three business days after deposit in the U.S. mail, by
first class mail, postage prepaid, addressed as follows:
(a) if to the Company, to (until another address is filed in writing
by the Company with the Warrant Agent):
Rally's Hamburgers, Inc.
10002 Shelbyville Road, Suite 150
Louisville, Kentucky 40223
Attention: President
(b) if to the Warrant Agent, to (until another address is filed in
writing by the Warrant Agent with the Company):
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: George Karfunkel
(c) if to the registered holder of a Warrant, to the address of such
holder as shown in the Warrant Register.
SECTION 19. SUPPLEMENTS AND AMENDMENTS. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Warrants in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants, or which shall not adversely
affect the interests of
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the holders of Warrants (including reducing the Warrant Price or extending the
redemption or expiration date).
SECTION 20. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent or the
registered holders of the Warrants shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 21. GOVERNING LAW. This Agreement shall be deemed to be
a contract made under the laws of the State of Delaware and for all purposes
shall be construed in accordance with the laws of said State.
SECTION 22. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Company, the Warrant Agent and the registered holders of the Warrants any legal
or equitable right, remedy or claim under this Agreement. This Agreement shall
be for the sole and exclusive benefit of the Company, the Warrant Agent and the
registered holders of the Warrants.
SECTION 23. COUNTERPARTS. This Agreement may be executed in
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 24. DESCRIPTIVE HEADINGS. The descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
RALLY'S HAMBURGERS, INC.
By:________________________________
Its:_______________________________
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:___________________________
Its:__________________________
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EXHIBIT A
WARRANT CERTIFICATE NO. ______ _____ WARRANTS
CUSIP 75 1203126
WARRANT TO PURCHASE SHARES OF COMMON STOCK
VOID AFTER _________,
PACIFIC TIME, ON _________________
RALLY'S HAMBURGERS, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
This certifies that, for value received,
__________________________________________, the registered holder hereof or
assigns (the "Holder"), is entitled to purchase from Rally's Hamburgers, Inc., a
Delaware corporation (the "Company"), at any time before 5:00 p.m., New York
City Time, on _________________, at the purchase price per share of $3.00 (the
"Warrant Price"), the number of shares of Common Stock of the Company set forth
above (the "Shares"). The number of Shares purchasable upon exercise of each
Warrant evidenced hereby and the Warrant Price per Share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement referred to
below. This Warrant is subject to redemption by the Company, at $.01 per Share
of Common Stock purchasable upon exercise hereof, upon not less than 30 nor more
than 45 days' notice, at any time after the Daily Market Price (determined
pursuant to the Warrant Agreement) per share of Common Stock has equaled or
exceeded $6.00 for a period of at least 20 out of 30 consecutive trading days
during the 30 trading days prior to the date of the notice of redemption, and
prior to expiration of the Warrants. The Warrant redemption price and the Daily
Market Price referred to above shall be subject to adjustment from time to time
as set forth in the Warrant Agreement.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant certificate with the Purchase Form attached hereto
duly executed (with a signature guarantee as provided thereon) and simultaneous
payment of the Warrant Price (subject to adjustment) at the principal office in
American Stock Transfer & Trust Company, 40 Wall Street, 46th Floor, New York,
New York 10005 (the "Warrant Agent"). Payment of such price shall be made at
the option of the Holder in cash or by certified check or bank draft payable to
the Warrant Agent, all as provided in the Warrant Agreement.
The Warrants evidenced hereby are part of a duly authorized issue of
Common Stock Purchase Warrants with rights to purchase an aggregate of up to
3,484,074 Shares of Common Stock of the
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<PAGE>
Company and are issued under and in accordance with a Warrant Agreement dated as
of ____________, 1996, between the Company and the Warrant Agent and are subject
to the terms and provisions contained in such Warrant Agreement, to all of which
the Holder of this Warrant certificate by acceptance hereof consents. A copy of
the Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Warrant Agent.
Upon any partial exercise of the Warrants evidenced hereby, there
shall be countersigned and issued to the Holder a new Warrant certificate in
respect of the Shares as to which the Warrants evidenced hereby have not been
exercised. This Warrant certificate may be exchanged at the office of the
Warrant Agent by surrender of this Warrant certificate properly endorsed (with a
signature guarantee) either separately or in combination with one or more other
Warrants or one or more new Warrants to purchase the same aggregate number of
Shares as here evidenced by the Warrant or Warrants exchanged. No fractional
Shares will be issued upon the exercise of rights to purchase hereunder, but the
Company shall pay the cash value of any fraction upon the exercise of one or
more Warrants. The Warrants evidenced hereby are transferable at the office of
the Warrant Agent in the manner and subject to the limitations set forth in the
Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent and
all other persons dealing with this Warrant certificate as the absolute owner
hereof for all purposes and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding, and until such
transfer is entered on such books, the Company may treat the Holder hereof as
the owner for all purposes.
This Warrant certificate does not entitle the Holder hereof to any of
the rights of a stockholder of the Company.
This Warrant certificate shall not be valid or obligatory for any
purpose until it has been countersigned by the Warrant Agent.
Dated: ___________, 1996 RALLY'S HAMBURGERS, INC.
By:________________________________
____________________
ATTEST:
___________________________
___________________________
Countersigned:
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<PAGE>
___________________________
Warrant Agent
By:_________________________
Authorized Signatory
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<PAGE>
[Reverse side of Warrant Certificate]
RALLY'S HAMBURGERS, INC.
PURCHASE FORM
Mailing Address:
Rally's Hamburger, Inc.
_____________________________
_____________________________
_____________________________
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant for and to purchase thereunder,
_________ Shares of Common Stock provided for therein, and requests that
certificates for such Shares be issued in the name of:
_________________________________________________________________
(Please Print or Type Name, Address and Social Security number)
_________________________________________________________________
and if said number of Shares shall not be all the Shares purchasable hereunder
that a new Warrant certificate for the balance of the Shares purchasable under
the within Warrant certificate be registered in the name of the undersigned
Holder or his Assignee as below indicated and delivered to the address stated
below.
Dated:________________________
Name of Holder or Assignee:
______________________________
(Please Print)
Address:
_______________________________________________________
_______________________________________________________
Signature:
_______________________________________________________
Note: The above signature must correspond with the name as it
appears upon the face of the within Warrant certificate in
every particular, without alteration or enlargement or any
change whatever, unless these Warrants have been assigned.
Signature Guaranteed:
_______________________________________________________
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<PAGE>
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)
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<PAGE>
ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_________________________________________________________________
(Name and Address of Assignee Must Be Printed or Typewritten)
_________________________________________________________________
the within Warrant, hereby irrevocably constituting and appointing
____________________ Attorney to transfer said Warrant on the books of the
Company, with full power of substitution in the premises.
Dated:____________________________
___________________________________
Signature of Registered Holder
Note: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Warrant certificate in every
particular, without alteration or enlargement or
any change whatever.
Signature Guaranteed:
_____________________________
(Signature must be guaranteed by a bank or trust company having an office or
correspondent in the United States or by a member firm of a registered
securities exchange or the National Association of Securities Dealers, Inc.)
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