SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DISC GRAPHICS, INC.
(Exact name of the Registrant as specified in its charter)
Delaware 13-3678012
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Gilpin Avenue
Hauppauge, New York 11788
(Address of principal executive offices) (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:
None
(Title of class)
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Common Stock, $.01 par value per share Nasdaq Stock Market
Class A Redeemable Common Stock
Purchase Warrants Nasdaq Stock Market
Exhibit Index begins on Page 6
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
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COMMON STOCK
The Registrant is currently authorized to issue 20,000,000 shares of
Common Stock, par value $.01 per share. As of June 14, 1996, there were
outstanding 5,036,262 shares of Common Stock held of record by 58 stockholders.
The holders of the Registrant's Common Stock are entitled to one vote for each
share held of record on all matters to be voted on by stockholders. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voting for the election of
directors can elect all of the directors. The holders of the Registrant's Common
Stock are entitled to receive dividends when, as and if declared by the
Registrant's Board of Directors out of the funds legally available therefor. In
the event of liquidation, dissolution or winding up of the Registrant, the
holders of the Registrant's Common Stock are entitled to share ratably in all
assets remaining available for distribution after payment of liabilities and
after provision has been made for each class of stock, if any, having preference
over the Registrant's Common Stock. Holders of shares of the Registrant's Common
Stock, as such, have no conversion, preemptive or other subscription rights. All
of the outstanding shares of the Registrant's Common Stock are, and the shares
of the Registrant's Common Stock included in the units of the issuer ("Units"),
and the shares of the Registrant's Common Stock underlying the Class A
Redeemable Common Stock Purchase Warrants (the "Class A Warrants"), when issued
in accordance with the terms of the Class A Warrants, will be, validly
authorized and issued, fully paid and nonassessable.
DIVIDENDS
The Registrant has not paid any cash dividends on the Registrant's
Common Stock since its inception. The payment of any dividends is within the
discretion of the Registrant's Board of Directors. The Registrant presently
intends to retain all earnings, if any, for use in its business operations and
to further the growth of its business. Accordingly, the Registrant's Board of
Directors does not anticipate declaring any dividends in the foreseeable future.
CLASS A WARRANTS
As of June 14, 1996 there were outstanding 2,700,000 Class A Warrants
(including Class A Warrants included in outstanding Units) held of record by 10
holders. Each Class A Warrant entitles the registered holder thereof to purchase
one share of the Registrant's Common Stock at a price of $5.50, subject to
adjustment in certain circumstances, at any time prior to 5:00 p.m., New York
time, on November 9, 1999, at which time the Class A Warrants will expire.
The Class A Warrants are separable from the units and tradeable by
themselves. The Registrant may call the Class A Warrants for redemption as a
class, in whole and not in part, at the option of the Registrant, at a price of
$.05 per Class A Warrant at any time, upon not less than 30 days prior written
notice, provided that the high closing bid price of the Registrant's Common
Stock equals or exceeds $9.50 per share for 20 trading days within a period of
30 consecutive trading days ending on the fifth trading day prior to the date of
the notice of redemption to warrantholders. The warrantholders shall have
exercise rights until 5:00 p.m. (New York time) on the business day immediately
preceding the date fixed for redemption.
The exercise price and number of shares of the Registrant's Common
Stock issuable on exercise of the Class A Warrants are subject to adjustment
under certain circumstances, including in the event of the sale by the
Registrant of shares of Common Stock for consideration per share less than the
exercise price of the Class A Warrants, a stock dividend, a subdivision or
combination of outstanding shares of Common Stock, or a reclassification of
securities of the Registrant other than Common Stock into securities including
shares of Common Stock.
The Registrant has the right, in its sole discretion, to decrease the
exercise price of the Class A Warrants for a period of not less than 30 days on
not less than 30 days prior written notice to the warrantholders, subject to
compliance with applicable laws. In addition, the Registrant has the right, in
its sole discretion, to extend the expiration date of the Class A Warrants on
five business days prior written notice to the warrantholders.
The Class A Warrants may be exercised upon surrender of the warrant
certificate on or prior to November 9, 1999 at the offices of the warrant agent,
with the exercise form on the reverse side of the warrant certificate completed
and executed as indicated, accompanied by full payment of the exercise price (by
check payable to American Stock Transfer and Trust Company, as warrant agent,
for the account of the Registrant) to the warrant agent for the number of Class
A Warrants being exercised. The warrantholders do not have the rights or
privileges of holders of the Registrant's Common Stock.
The Registrant shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Class A
Warrant or Class A Warrants, nor shall it be obligated to issue scrip or pay
cash in lieu of fractional interests. Any fraction equal to or greater than
one-half shall be rounded up to the next full share or Class A Warrant, as the
case may be, any fraction less than one-half shall be eliminated.
The Class A Warrants have been traded on the Nasdaq SmallCap Market
since May 28, 1996. Prior to that time, they were traded in the OTC Bulletin
Board. Accordingly, set forth below are the range of high and low bid quotations
from such markets for each quarter in 1994 and 1995 and the first and second
quarters of 1996 (through June 14, 1996) for the Class A Warrants. This price
information reflects inter-dealer quotations, without retail mark-up, markdown
or commission and may not represent actual transactions.
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1994 - HIGH BID LOW BID
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First Quarter Ending - 3/31 1.125 .625
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Second Quarter Ending - 6/30 .75 .50
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Third Quarter Ending - 9/30 .50 .375
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Fourth Quarter Ending - 12/30 .50 .25
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1995 -
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First Quarter Ending - 3/31 .50 .375
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Second Quarter Ending - 6/30 .50 .375
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Third Quarter Ending - 9/30 .9125 .4375
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Fourth Quarter Ending 12/31 .8125 .4375
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1996
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First Quarter Ending - 3/31 .8125 .50
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Second Quarter Ending - 6/14 .8125 .375
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Item 2. Exhibits.
(a) The following exhibit is being filed with the Securities and Exchange
Commission (the "Commission"):
4.1 Redeemable Warrant Agreement between the Registrant and
American Stock Transfer & Trust Company, as warrant agent,
including the form of Certificates representing the Class A
Warrants.
4.2 Specimen Common Stock certificate. Incorporated herein by
reference to Exhibit 4.c to the Current Report on Form 8-K
dated October 27, 1995, as amended by the Form 8-K/A
Amendment No. 1 thereto.
4.3 Specimen Certificate for Class A Redeemable Common Stock
Purchase Warrant (included in Exhibit 4.1).
(b) The following exhibits are being filed solely with the Nasdaq Stock
Market and are not being filed with or incorporated by reference for
purposes of filing with the Commission:
Exhibit No.
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 Amended and Restated By-Laws of the Registrant.
4.1 Redeemable Warrant Agreement between the Registrant and American Stock
Transfer & Trust Company, as warrant agent, including the form of
Certificates representing the Class A Warrants.
4.2 Specimen Common Stock Certificate.
4.3 Specimen Certificate for Class A Redeemable Common Stock Purchase
Warrants (included in Exhibit 4.1).
13.1 Transition Report on Form 10-K of the Registrant for the transition
period from April 1, 1995 to December 31, 1995.
13.2 Annual Report for the period ended December 31, 1995.
13.3 Quarterly Report on Form 10-Q of the Registrant for the quarterly
period ended March 31, 1996 filed with the Commission on May 15, 1996.
13.4 Proxy Statement of the Registrant dated April 17, 1996 filed with the
Commission.
13.5 Current Report on Form 8-K of the Registrant filed with the Commission
on June 3, 1996.
<PAGE>
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, thereunto duly authorized.
DISC GRAPHICS, INC.
By: /s/ Donald Sinkin
--------------------
Name: Donald Sinkin
Title: President
Dated: June 21, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
(a) The following exhibit is being filed with the Securities
and Exchange Commission (the "Commission"):
4.1 Redeemable Warrant Agreement between the Registrant and
American Stock Transfer & Trust Company, as warrant agent,
including the form of Certificates representing the Class A
Warrants.
4.2 Specimen Common Stock certificate. Incorporated herein
by reference to Exhibit 4.c to the Current Report on Form
8-K dated October 27, 1995, as amended by the Form 8-K/A
Amendment No. 1 thereto.
4.3 Specimen Certificate for Class A Redeemable Common Stock
Purchase Warrant (included in Exhibit 4.1).
(b) The following exhibits are being filed solely with the
Nasdaq Stock Market and are not being filed with or
incorporated by reference for purposes of filing with the
Commission:
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 Amended and Restated By-Laws of the Registrant.
4.1 Redeemable Warrant Agreement between the Registrant and
American Stock Transfer & Trust Company, as warrant agent,
including the form of Certificates representing the Class A
Warrants.
4.2 Specimen Common Stock Certificate.
4.3 Specimen Certificate for Class A Redeemable Common Stock
Purchase Warrants (included in Exhibit 4.1).
13.1 Transition Report on Form 10-K of the Registrant for
the transition period from April 1, 1995 to December 31,
1995.
13.2 Annual Report for the period ended December 31, 1995.
13.3 Quarterly Report on Form 10-Q of the Registrant for the
quarterly period ended March 31, 1996 filed with the
Commission on May 15, 1996.
13.4 Proxy Statement of the Registrant dated April 17, 1996
filed with the Commission.
13.5 Current Report on Form 8-K of the Registrant filed with
the Commission on June 3, 1996.
<PAGE>
Exhibit 4.1
Execution Copy
RCL CAPITAL CORP.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGREEMENT
Dated as of November 10, 1993
<PAGE>
AGREEMENT, dated this l0th day of 1993, between RCL CAPITAL CORP., a
Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, a New York corporation, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with (i) the offering to the public of
1,350,000 units (the "Units"), each unit consisting of one share of the
Company's common stock, $.01 par value ("Common Stock"), and two Class A
Redeemable Common Stock Purchase Warrants (the "Warrants") each Warrant
entitling the registered holder thereof to purchase one (1) share of Common
Stock, (ii) the over-allotment option to purchase up to an additional 202,500
Units, (the "Over-allotment Option"), and (iii) the sale to RAS Securities Corp.
and Rodman & Renshaw, Inc., their successors and assigns (collectively, the
"Representatives") of warrants (the "Representatives' Warrants") to purchase up
to 135,000 Units, the Company will issue up to 3,375,000 Warrants (subject to
increase as provided in the Representatives' Warrant Agreement); and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the
Representatives, the holders of certificates representing the Warrants and the
Warrant Agent, the parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall have
the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any class,
whether now or hereafter authorized, which has the right to participate in the
voting and in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business in New
York, New York, shall be administered, which office is located on the date
hereof at 40 Wall Street, New York, New York 10005.
(c) "Exercise Date" shall mean, subject to the provisions of Section
5(b) hereof, as to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and (ii) payment in cash or by check made
payable to the Warrant Agent for the account of the Company, of the amount in
lawful money of the United States of America equal to the applicable Purchase
Price.
(d) "Initial Warrant Exercise Date" shall mean the Separation Date.
(e) "Initial Warrant Redemption Date" shall mean the Separation Date.
(f) "Purchase Price" shall mean, subject to modification and
adjustment as provided in Section 8, $5.50 for the Warrants and further subject
to the Company's right, in its sole discretion, to decrease the Purchase Price
for a period of not less than 30 days on not less than 30 days' prior written
notice to the Registered Holders and the Representatives.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing the Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(h) "Separation Date" shall mean the earlier of (a) 90 days after the
effective date of the Registration Statement or (b) the date the Units become
separately tradeable.
(i) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to elect
a majority of the Board of Directors of such corporation (regardless of whether
or not at the time stock of any other class or classes of such corporation shall
have or may have voting power by reason of the happening of any contingency) is
at the time directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
(j) "Transfer Agent" shall mean American Stock Transfer & Trust
Company, New York, New York, or its authorized successor.
(k) "Underwriting Agreement" shall mean the underwriting agreement
dated November 10, 1993 between the Company and the Representatives, as
representatives of the several underwriters listed therein, relating to the
purchase for resale to the public of the 1,350,000 Units.
(l) "Representatives' Warrant Agreement" shall mean the agreement
dated as of November 10, 1993 among the Company, RAS Securities Corp. and Rodman
& Renshaw, Inc. relating to and governing the terms and provisions of the
Representatives' Warrants.
(m) "Warrant Certificate" shall mean a certificate representing the
Warrants substantially in the form annexed hereto as Exhibit A and Exhibit B,
respectively.
(n) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date, 5:00 p.m. (New York
time) on November 9, 1999 or, if such date shall in the State of New York be a
holiday or a day on which banks are authorized to close, then 5:00 p.m. (New
York time) on the next following day which in the State of New York is not a
holiday or a day on which banks are authorized to close, subject to the
Company's right, prior to the Warrant Expiration Date, in its sole discretion,
to extend such Warrant Expiration Date on five business days prior written
notice to the Registered Holders.
(o) "Warrant Agent" shall mean American Stock Transfer & Trust
Company, New York, New York or its authorized successor.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) One Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the Purchase Price
therefor from the Initial Warrant Exercise Date until the Warrant Expiration
Date one share of Common Stock upon the exercise thereof, subject to
modification and adjustment as provided in Section 8.
(b) Upon execution of this Agreement, Warrant Certificates
representing 2,700,000 Warrants to purchase up to an aggregate of 2,700,000
shares of Common Stock (subject to modification and adjustment as provided in
Section 8) shall be executed by the Company and delivered to the Warrant Agent.
(c) Upon exercise of the Over-allotment Option, in whole or in part,
Warrant Certificates representing up to 405,000 Warrants to purchase up to an
aggregate of 405,000 shares of Common Stock (subject to modification and
adjustment as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(d) Upon exercise of the Representatives' Warrants as provided
therein, Warrant Certificates representing 270,000 Warrants to purchase up to an
aggregate of 270,000 shares of Common Stock (subject to modification and
adjustment as provided in Section 8 hereof and in the Representatives' Warrant
Agreement), shall be countersigned, issued and delivered by the Warrant Agent
upon written order of the Company signed by its Chairman of the Board, President
or a Vice President and by its Treasurer or an Assistant Treasurer or its
Secretary or an Assistant Secretary.
(e) From time to time, up to the Warrant Expiration Date, as the case
may be, the Warrant Agent shall countersign and deliver Warrant Certificates in
required denominations of one or whole number multiples thereof to the person
entitled thereto in connection with any transfer or exchange permitted under
this Agreement. Except as provided in Section 7 hereof, no Warrant Certificates
shall be issued except (i) Warrant Certificates initially issued hereunder, (ii)
Warrant Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7, (iv) Warrant Certificates
issued pursuant to the Representatives' Warrant Agreement (including Warrants in
excess of the 135,000 Representatives' Warrants issued as a result of the
antidilution provisions contained in the Representatives' Warrant Agreement),
and (v) at the option of the Company, Warrant Certificates in such form as may
be approved by its Board of Directors, to reflect any adjustment or change in
the Purchase Price, the number of shares of Common Stock purchasable upon
exercise of the Warrants or the Redemption Price therefor made pursuant to
Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form
annexed hereto as Exhibit A for the Warrants (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be dated the date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen or destroyed Warrant
Certificates).
(b) Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President and by its Treasurer
or an Assistant Treasurer or its Secretary or an Assistant Secretary, by manual
signatures or by facsimile signatures printed thereon, and shall have imprinted
thereon a facsimile of the Company's seal. Warrant Certificates shall be
manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of
the Company before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates, nevertheless, may be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
SECTION 4. Exercise.
(a) Warrants in denominations of one or whole number multiples thereof
may be exercised commencing at any time on or after the Initial Warrant Exercise
Date, but not after the Warrant Expiration Date, upon the terms and subject to
the conditions set forth herein (including the provisions set forth in Sections
5 and 9 hereof) and in the applicable Warrant Certificate. A Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
Exercise Date, provided that the Warrant Certificate representing such Warrant,
with the exercise form thereon duly executed by the Registered Holder thereof or
his attorney duly authorized in writing, together with payment in cash or by
check made payable to the Warrant Agent for the account of the Company, of an
amount in lawful money of the United States of America equal to the applicable
Purchase Price has been received in good funds by the Warrant Agent. The person
entitled to receive the securities deliverable upon such exercise shall be
treated for all purposes as the holder of such securities as of the close of
business on the Exercise Date. If Warrants in denominations other than two or
whole number multiples thereof shall be exercised at one time by the same
Registered Holder, the number of full shares of Common Stock which shall be
issuable upon exercise thereof shall be computed on the basis of the aggregate
number of full shares of Common Stock issuable upon such exercise. As soon as
practicable on or after the Exercise Date and in any event within five business
days after such date, if two or more Warrants have been exercised, the Warrant
Agent on behalf of the Company shall cause to be issued to the person or persons
entitled to receive the same a Common Stock certificate or certificates for the
shares of Common Stock deliverable upon such exercise, and the Warrant Agent
shall deliver the same to the person or persons entitled thereto. Upon the
exercise of any two or more Warrants, the Warrant Agent shall promptly notify
the Company in writing of such fact and of the number of securities delivered
upon such exercise and, subject to subsection (b) below, shall cause all
payments of an amount in cash or by check made payable to the order of the
Company, equal to the Purchase Price, to be deposited promptly in the Company's
bank account.
(b) At any time upon the exercise of any two or more Warrants after
the date hereof, the Warrant Agent shall, on a daily basis, within two business
days after such exercise, notify the Representatives, their successors or
assigns of the exercise of any such Warrants and shall, on a weekly basis
(subject to collection of funds constituting the tendered Purchase Price, but in
no event later than five business days after the last day of the calendar week
in which such funds were tendered), remit to the Representatives an amount equal
to $.40 for each Warrant being then exercised unless the Representatives shall
have notified the Warrant Agent that the payment of such amount with respect to
such Warrant is violative of the General Rules and Regulations promulgated under
the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or the
rules and regulations of the National Association of Securities Dealers, Inc.
("NASD") or applicable state securities or "blue sky" laws, or the Warrants are
those underlying the Representatives' Warrants in which event, the Warrant Agent
shall have to pay such amount to the Company; provided, that, the Warrant Agent
shall not be obligated to pay any amounts pursuant to this Section 4(b) during
any week that such amounts payable are less than $1,000 and the Warrant Agent's
obligation to make such payments shall be suspended until the amount payable
aggregates $1,000, and provided further, that, in any event, any such payment
(regardless of amount) shall be made not less frequently than monthly.
(c) The Company shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Warrant or
Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of
fractional interests. Any fraction equal to or greater than one-half shall be
rounded up to the next full share or Warrant, as the case may be, any fraction
less than one-half shall be eliminated.
SECTION 5. Reservation of Shares: Listing: Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of Warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of Common Stock which shall be issuable upon exercise of the
Warrants shall, at the time of delivery thereof, be duly and validly issued and
fully paid and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each securities exchange, if any, on
which the other shares of outstanding Common Stock of the Company are then
listed.
(b) The Company covenants that if any securities to be reserved for
the purpose of exercise of Warrants hereunder require registration with, or
approval of, any governmental authority under any federal securities law before
such securities may be validly issued or delivered upon such exercise, then the
Company will file a registration statement under the federal securities laws or
a post effective amendment, use its best efforts to cause the same to become
effective, keep such registration statement current while any of the Warrants
are outstanding and deliver a prospectus which complies with Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Act"), to the Registered Holder
exercising the Warrant (except, if in the opinion of counsel to the Company,
such registration is not required under the federal securities law or if the
Company receives a letter from the staff of the Securities and Exchange
Commission (the "Commission") stating that it would not take any enforcement
action if such registration is not effected). The Company will use best efforts
to obtain appropriate approvals or registrations under state "blue sky"
securities laws. With respect to any such securities, however, Warrants may not
be exercised by, or shares of Common Stock issued to, any Registered Holder in
any state in which such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock or other securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be so exchanged shall
be surrendered to the Warrant Agent at its Corporate Office, and the Company
shall execute and the Warrant's Agent shall countersign, issue and deliver in
exchange therefor the Warrant Certificate or Certificates which the Registered
Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the Company
shall execute and the Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal
aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the subscription or
exercise form, as the case may be, on the reverse thereof shall be duly endorsed
or be accompanied by a written instrument or instruments of transfer and
subscription, in form satisfactory to the Company and the Warrant Agent, duly
executed by the Registered Holder thereof or his attorney duly authorized in
writing.
(d) No service charge shall be made for any exchange or registration
of transfer of Warrant Certificates. However, the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange
shall be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof of each Warrant represented
thereby (notwithstanding any notations of ownership or writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes and shall
not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Warrant Certificate and (in the case of
loss, theft or destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company shall execute
and the Warrant Agent shall countersign and deliver in lieu thereof a new
Warrant Certificate representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
SECTION 8. Adjustment of Purchase Price and Number of Shares of Common
Stock Deliverable.
(a) (i) Except as hereinafter provided, in the event the Company
shall, at any time or from time to time after the date hereof, sell any shares
of Common Stock for a consideration per share less than the Purchase Price or
issue any shares of Common Stock as a stock dividend to the holders of Common
Stock, or subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter upon
each further Change of Shares, the Purchase Price for the Warrants (whether or
not the same shall be issued and outstanding) in effect immediately prior to
such Change of Shares shall be changed to a price (including any applicable
fraction of a cent to the nearest cent) determined by dividing (i) the sum of
(a) the total number of shares of Common Stock outstanding immediately prior to
such Change of Shares, multiplied by the Purchase Price in effect immediately
prior to such Change of Shares, and (b) the consideration, if any, received by
the Company upon such sale, issuance, subdivision or combination by (ii) the
total number of shares of Common Stock outstanding immediately after such Change
of Shares; provided, however, that in no event shall the Purchase Price be
adjusted pursuant to this computation to an amount in excess of the Purchase
Price in effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock.
For the purposes of any adjustment to be made in accordance with this
Section 8(a) the following provisions shall be applicable:
(A) In case of the issuance or sale of shares of Common Stock (or of
other securities deemed hereunder to involve the issuance or sale of shares of
Common Stock) for a consideration part or all of which shall be cash, the amount
of the cash portion of the consideration therefor deemed to have been received
by the Company shall be (i) the subscription price, if shares of Common Stock
are offered by the Company for subscription, or (ii) the public offering price
(before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection therewith),
if such securities are sold to underwriters or dealers for public offering
without a subscription offering, or (iii) the gross amount of cash actually
received by the Company for such securities, in any other case.
(B) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company, and otherwise than on the
exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of Common
Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company on the basis of a record
of values of similar property or services.
(C) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(D) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (B) of this Section 8(a).
(E) The number of shares of Common Stock at any one time outstanding
shall be deemed to include the aggregate maximum number of shares issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise of
options, rights or warrants and upon the conversion or exchange of convertible
or exchangeable securities.
(ii) Upon each adjustment of the Purchase Price pursuant to this
Section 8, the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained by
the applicable adjusted Purchase Price.
(b) In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock, for
a consideration per share (determined as provided in Section 8(a) and as
provided below) less than the Purchase Price in effect immediately prior to the
issuance of such options, rights or warrants, or such convertible or
exchangeable securities, or without consideration (including the issuance of any
such securities by way of dividend or other distribution), the Purchase Price
for the Warrants (whether or not the same shall be issued and outstanding) in
effect immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, as the case may be, shall be
reduced to a price determined by making the computation in accordance with the
provisions of Section 8(a) hereof, provided that:
(A) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable or that may become issuable under such options, rights or
warrants (assuming exercise in full even if not then currently exercisable or
currently exercisable in full) shall be deemed to be issued and outstanding at
the time such options, rights or warrants were issued, for a consideration equal
to the minimum purchase price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration, if any, received by
the Company for such options, rights or warrants; provided, however, that upon
the expiration or other termination of such options, rights or warrants, if any
thereof shall not have been exercised, the number of shares of Common Stock
deemed to be issued and outstanding pursuant to this subsection (A) (and for the
purposes of subsection (E) of Section 8(a) hereof) shall be reduced by the
number of shares as to which options, warrants and/or rights shall have expired,
and such number of shares shall no longer be deemed to be issued and
outstanding, and the Purchase Price then in effect shall forthwith be readjusted
and thereafter be the price that it would have been had adjustment been made on
the basis of the issuance only of the shares actually issued plus the shares
remaining issuable upon the exercise of those options, rights or warrants as to
which the exercise rights shall not have expired or terminated unexercised.
(B) The aggregate maximum number of shares of Common Stock issuable or
that may become issuable upon conversion or exchange of any convertible or
exchangeable securities (assuming conversion or exchange in full even if not
then currently convertible or exchangeable in full) shall be deemed to be issued
and outstanding at the time of issuance of such securities, for a consideration
equal to the consideration received by the Company for such securities, plus the
minimum consideration, if any, receivable by the Company upon the conversion or
exchange thereof; provided, however, that upon the termination of the right to
convert or exchange such convertible or exchangeable securities (whether by
reason of redemption or otherwise), the number of shares of Common Stock deemed
to be issued and outstanding pursuant to this subsection (B) (and for the
purposes of subsection (E) of Section 8(a) hereof) shall be reduced by the
number of shares as to which the conversion or exchange rights shall have
expired or terminated unexercised, and such number of shares shall no longer be
deemed to be issued and outstanding, and the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the shares actually
issued plus the shares remaining issuable upon conversion or exchange of those
convertible or exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
(C) If any change shall occur in the price per share provided for in
any of the options, rights or warrants referred to in subsection (A) of this
Section 8(b), or in the price per share or ratio at which the securities
referred to in subsection (B) of this Section 8(b) are convertible or
exchangeable, such options, rights or warrants or conversion or exchange rights,
as the case may be, to the extent not theretofore exercised, shall be deemed to
have expired or terminated on the date when such price change became effective
in respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to have issued
upon such date new options, rights or warrants or convertible or exchangeable
securities.
(c) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger with
a Subsidiary in which merger the Company is the continuing corporation and which
does not result in any reclassification or change of the then outstanding shares
of Common Stock or other capital stock issuable upon exercise of the Warrants
(other than a change in par value, or from par value to no par value, or from no
par value to par value or as a result of subdivision or combination) or in case
of any sale or conveyance to another corporation of the property of the Company
as an entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and shall forthwith file at the Corporate Office of the Warrant Agent
a statement signed by its President or a Vice President and by its Treasurer or
an Assistant Treasurer or its Secretary or an Assistant Secretary evidencing
such provision. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 8(a) and (b). The above provisions of this Section 8(c) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
(d) Irrespective of any adjustments or changes in the Purchase Price
or the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant Certificates
pursuant to Section 2(e) hereof, continue to express the Purchase Price per
share and the number of shares purchasable thereunder as the Purchase Price per
share and the number of shares purchasable thereunder were expressed in the
Warrant Certificates when the same were originally issued.
(e) After each adjustment of the Purchase Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Purchase Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant, after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to each Registered Holder at his
last address as it shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof except as to the holder to whom the Company
failed to mail such notice, or except as to the holder whose notice was
defective. The affidavit of an officer of the Warrant Agent or the Secretary or
an Assistant Secretary of the Company that such notice has been mailed shall, in
the absence of fraud, be prima facie evidence of the facts stated therein.
(f) No adjustment of the Purchase Price shall be made as a result of
or in connection with (A) the issuance of shares of Common Stock upon
consummation of and in connection with the Business Combination and the grant by
the Company of options or warrants to purchase Common Stock which may be issued
or granted upon the consummation of and in connection with the Business
Combination; (B) the issuance or sale of shares of Common Stock pursuant to
options, warrants, stock purchase agreements and convertible or exchangeable
securities outstanding or in effect on the date hereof, (C) the issuance or sale
of shares of Common Stock upon the exercise of any "incentive stock options" (as
such term is defined in the Internal Revenue Code of 1986, as amended), whether
or not such options were outstanding on the date hereof, or (D) the issuance or
sale of shares of Common Stock if the amount of said adjustment shall be less
than $.10, provided, however, that in such case, any adjustment that would
otherwise be required then to be made shall be carried forward and shall be made
at the time of and together with the next subsequent adjustment that shall
amount, together with any adjustment so carried forward, to at least $.10. In
addition, Registered Holders shall not be entitled to cash dividends paid by the
Company prior to the exercise of any Warrant or Warrants held by them.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date, the Company
may, on 30 days prior written notice redeem all the Warrants at $.05 per
Warrant, provided, however, that before any such call for redemption of Warrants
can take place, the (A) high closing bid price for the Common Stock in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotation System or (B) the closing sale price on the primary
exchange on which the Common Stock is traded, if the Common Stock is traded on a
national securities exchange, shall have for twenty (20) trading days within a
period of thirty (30) consecutive trading days ending on the fifth trading day
prior to the date on which the notice contemplated by (b) and (c) below is
given, equalled or exceeded $9.50 per share with respect to the Warrants
(subject to adjustment in the event of any stock splits or other similar events
as provided in Section 8 hereof). Notwithstanding the foregoing, the Warrants
underlying the Representatives' Warrants are not subject to redemption prior to
the issuance of the underlying Representatives' Warrants.
(b) In case the Company shall exercise its right to redeem all of the
Warrants, it shall give or cause to be given notice to the Registered Holders of
the Warrants, by mailing to such Registered Holders a notice of redemption,
first class, postage prepaid, at their last address as 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 receives such notice. Not less than five business days prior
to the mailing to the Registered Holders of the Warrants of the notice of
redemption, the Company shall deliver or cause to be delivered to the
Representatives a similar notice telephonically and confirmed in writing
together with a list of the Registered Holders (including their respective
addresses and number of Warrants beneficially owned) to whom such notice of
redemption has been or will be given.
(c) The notice of redemption shall specify (i) the redemption price,
(ii) the date fixed for redemption, which shall in no event be less than thirty
(30) days after the date of mailing of such notice, (iii) the place where the
Warrant Certificate shall be delivered and the redemption price shall be paid,
(iv) that the Representatives are the Company's exclusive warrant solicitation
agent and shall receive the commission contemplated by Section 4(b) hereof, and
(v) that the right to exercise the Warrant shall terminate at 5:00 p.m. (New
York time) on the business day immediately preceding the date fixed for
redemption. The date fixed for the redemption of the Warrants shall be the
Redemption Date. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary or Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. (New
York time) on the business day immediately preceding the Redemption Date. The
redemption price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
(e) The Company shall indemnify the underwriters and each person, if
any, who controls the underwriters within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act against all loss, claim, damage, expense or
liability (including all 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 the
registration statement or prospectus referred to in Section 5(b) hereof to the
same extent and with the same effect (including the provisions regarding
contribution) as the provisions pursuant to which the Company has agreed to
indemnify the underwriters contained in Section 7 of the Underwriting Agreement.
(f) Five business days prior to the Redemption Date, the Company shall
furnish to the Representatives (i) an opinion of counsel to the Company, dated
such date and addressed to the Representatives, and (ii) a "cold comfort" letter
dated such date addressed to the Representatives, signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such 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 underwritten public offerings of
securities, including, without limitation, those matters covered in Sections
6(d) and (i) of the Underwriting Agreement.
(g) The Company shall as soon as practicable after the Redemption
Date, and in any event within 15 months thereafter, make "generally available to
its security holders" (within the meaning of Rule 158 under the Act) an earnings
statement (which need not be audited) complying with Section ll(a) of the Act
and covering a period of at least 12 consecutive months beginning after the
Redemption Date.
(h) The Company shall deliver within five business days prior to the
Redemption Date copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to such registration statement and
permit the Representatives to do such investigation, upon reasonable advance
notice, with respect to information contained in or omitted from 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 times and as often as the
Representatives shall reasonably request.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and the underwriters, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not, by
issuing and delivering Warrant Certificates or by any other act hereunder, be
deemed to make any representations as to the validity or value or authorization
of the Warrant Certificates or the Warrants represented thereby or of any
securities or other property delivered upon exercise of any Warrant or whether
any stock issued upon exercise of any Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of fact contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement except for its own
gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board of Directors, President or any Vice President (unless
other evidence in respect thereof is herein specifically prescribed). The
Warrant Agent shall not be liable for any action taken, suffered or omitted by
it in accordance with such notice, statement, instruction, request, direction,
order or demand.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder; the Company further agrees to indemnify the Warrant Agent
and save it harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's gross
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own gross negligence or willful misconduct), after giving
30 days' prior written notice to the Company. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation the Company shall
appoint in writing a new warrant agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such resignation by the resigning Warrant Agent, then the Registered Holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a bank or trust company having a
capital and surplus, as shown by its last published report to its stockholders,
of not less than $10,000,000 or a stock transfer company doing business in New
York, New York. After acceptance in writing of such appointment by the new
warrant agent is received by the Company, such new warrant agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not later than
the effective date of any such appointment the Company shall file notice thereof
with the resigning Warrant Agent and shall forthwith cause a copy of such notice
to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent or any new warrant agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation is
eligible for appointment as successor to the Warrant Agent under the provisions
of the preceding paragraph. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed to the Company and
to the Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two years from the
date of exercise any Warrant Certificate received by it upon such exercise.
SECTION 11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental agreement make
any changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained; or (ii) that they may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Warrant Certificates; provided, however, that this Agreement
shall not otherwise be modified, supplemented or altered in any respect except
with the consent in writing of the Registered Holders; provided, further, that
no change in the number or nature of the securities purchasable upon the
exercise of any Warrant, or to increase the Purchase Price therefor, shall be
made without the consent in writing of the Registered Holders representing not
less than 66 2/3% of the Warrants then outstanding, other than such changes as
are presenting specifically prescribed by this Agreement as originally executed.
In addition, this Agreement may not be modified, amended or supplemented without
the prior written consent of the Representatives, other than to cure any
ambiguity or to correct any provision which is inconsistent with any other
provision of this Agreement or to make any such change that is necessary or
desirable and which shall not adversely affect the interests of the underwriters
except as stated herein and except as may be required by law.
SECTION 12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid, or delivered to a telegraph office for
transmission if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company at 800 Second Avenue, Suite 603, New York, New York
10017, Attention: H. Sean Mathis, President, or at such other address as may
have been furnished to the Warrant Agent in writing by the Company; and if to
the Warrant Agent, at its Corporate Office. Copies of any notice delivered
pursuant to this Agreement shall be delivered to the Representatives c/o RAS
Securities Corp., Two Broadway, New York, New York 10004, Attention: Robert A.
Schneider, or at such other address as may have been furnished to the Company
and the Warrant Agent in writing.
SECTION 13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflicts of laws.
SECTION 14. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and the
holders from time to time of Warrant Certificates or any of them. Except as
hereinafter stated, nothing in this Agreement is intended or shall be construed
to confer upon any other person any right, remedy or claim or to impose upon any
other person any duty, liability or obligation. The underwriters are, and shall
at all times irrevocably be deemed to be, third-party beneficiaries of this
Agreement, with full power, authority and standing to enforce the rights granted
to it hereunder.
SECTION 15. Counterparts.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the first date first above written.
[SEAL]
RCL CAPITAL CORP. AMERICAN STOCK TRANSFER
& TRUST COMPANY
As Warrant Agent
By: _____________________ By: ________________________
H. Sean Mathis Name: Herbert J. Lemmer
President Title: Vice President
By: _____________________
Mark L. Friedman
Secretary
<PAGE>
EXHIBIT A
No. W __________ VOID AFTER November 9, 1999
WARRANTS
CLASS A REDEEMABLE COMMON STOCK PURCHASE WARRANT
CERTIFICATE TO PURCHASE ONE SHARE OF COMMON STOCK
RCL CAPITAL CORP.
CUSIP _____
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number of
Class A Redeemable Common Stock Purchase Warrants (the "Class A Warrants")
specified above. Each Class A Warrant initially entitles the Registered Holder
to purchase, subject to the terms and conditions set forth in this Certificate
and the Warrant Agreement (as hereinafter defined), one fully paid and
nonassessable share of Common Stock, $.01 par value, of RCL Capital Corp., a
Delaware corporation (the "Company"), at any time from November 10, 1993, and
prior to the Expiration Date (as hereinafter defined) upon the presentation and
surrender of this Warrant Certificate with the Subscription Form on the reverse
hereof duly executed, at the corporate office of American Stock Transfer & Trust
Company, 40 Wall Street, New York, New York 10005, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $5.50, subject to
adjustment (the "Purchase Price"), in lawful money of the United States of
America in cash or by check made payable to the Warrant Agent for the account of
the Company.
This Warrant Certificate and each Class A Warrant represented hereby
are issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant Agreement"), dated
November 10, 1993, by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Class A Warrant represented hereby are
subject to modification or adjustment.
Each Class A Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional interests will be issued. In the
case of the exercise of less than all the Class A Warrants represented hereby,
the Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Class A Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on
November 9, 1999. If each such date shall in the State of New York be a holiday
or a day on which the banks are authorized to close, then the Expiration Date
shall mean 5:00 p.m. (New York time) the next following day which in the State
of New York is not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Class A Warrant unless a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to such
securities is effective or an exemption thereunder is available. The Company has
covenanted and agreed that it will file a registration statement under the
Federal securities laws, use its best efforts to cause the same to become
effective, to keep such registration statement current, if required under the
Act, while any of the Class A Warrants are outstanding, and deliver a prospectus
which complies with Section 10(a)(3) of the Act to the Registered Holder
exercising this Class A Warrant. This Class A Warrant shall not be exercisable
by a Registered Holder in any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Class A Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment and payment of any
tax or other charge imposed in connection therewith or incident thereto, for
registration of transfer of this Warrant Certificate at such office, a new
Warrant Certificate representing an equal aggregate number of Class A Warrants
will be issued to the transferee in exchange therefor, subject to the
limitations provided in the Warrant Agreement.
Prior to the exercise of any Class A Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
Subject to the provisions of the Warrant Agreement, this Class A
Warrant may be redeemed at the option of the Company, at a redemption price of
$.05 per Class A Warrant, at any time commencing after the Separation Date,
provided that (i) the high closing bid price for the Company's Common Stock in
the over-the-counter market as reported by the National Association of
Securities Dealers Automated Quotation System, or (ii) the closing sale price on
the primary exchange on which the Common Stock is traded, if the Common Stock is
traded on a national securities exchange, shall have for twenty (20) trading
days within a period of thirty (30) consecutive trading days ending on the fifth
trading day prior to the Notice of Redemption, as defined below, equalled or
exceeded $9.50 per share (subject to adjustment in the event of any stock splits
or other similar events). Notice of redemption (the "Notice of Redemption")
shall be given not later than the thirtieth day before the date fixed for
redemption, all as provided in the Warrant Agreement. On and after the date
fixed for redemption, the Registered Holder shall have no rights with respect to
this Class A Warrant except to receive the $.05 per Warrant upon surrender of
this Certificate.
Under certain circumstances, RAS Securities Corp. and Rodman &
Renshaw, Inc., as representatives of the several underwriters, shall be entitled
to receive an aggregate of $.40 for each Class A Warrant represented hereby.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Class A Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by anyone
other than a duly authorized officer of the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the contrary, except as
provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
conflicts of laws.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: , 1993
[SEAL] RCL CAPITAL CORP.
By: _________________________
H. Sean Mathis
President
By: ________________________
Mark L. Friedman
Secretary
COUNTERSIGNED:
AMERICAN STOCK TRANSFER
& TRUST COMPANY, as Warrant Agent
By: _____________________________
Authorized Officer
<PAGE>
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably elects to
exercise _________ Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
---------------------------
---------------------------
---------------------------
---------------------------
(please print or type name and address)
and be delivered to
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---------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by RAS
Securities Corp. or Rodman & Renshaw, Inc.
unless the following box is checked:
[ ]
2. The exercise of this Warrant was solicited by:
[ ]
-----------------------------------------------.
3. If the exercise of this Warrant was not solicited,
please check the following box:
[ ]
Dated: ________________ X__________________________
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Address
---------------------------
Social Security or Taxpayer
Identification Number
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Signature Guaranteed
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<PAGE>
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _________________, hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
----------------------------
----------------------------
----------------------------
----------------------------
(please print or type name and address)
________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints ___________________
Attorney to transfer this Warrant Certificate on the books of the Company, with
full power of substitution in the premises.
Dated: ______________ X_________________________
Signature Guaranteed
-------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
