EXHIBIT 10.23
EXHIBIT C
FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TOWARD RESALE OR DISTRIBUTION. THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT.
TCPI, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.:000 Number of Shares Issuable:
Date of Issuance:
TCPI, Inc., a Florida corporation (the "Company"), hereby certifies
that, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, that __________, the registered holder hereof or its
permitted assigns, is entitled, subject to the terms set forth below, to
purchase from the Company upon surrender of this Warrant, at any time or times
on or after the date hereof, but not after 5:00 P.M. Eastern Standard Time on
the Expiration Date (as defined herein) _________ fully paid nonassessable
shares of Common Stock (as defined herein) of the Company (the "Warrant Shares")
at the Warrant Exercise Price per share provided in Section l(b) below;
Section 1.
(a) Letter Agreement. This Warrant is one of the warrants (the "
Warrants") issued pursuant to the terms of Placement Agent Agreement between the
Company and The May Davis Group, dated August 28, 2000.
(b) Definitions. The following words and terms as used in this
Warrant shall have the following meanings:
(i) "Common Stock" means (i) the Company's common stock, no par
value per share, and (ii) any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.
(ii) "Common Stock Deemed Outstanding" means, at any given time, the
number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to Sections
8(b)(i) and 8(b)(ii) hereof regardless of whether the Options (as defined below)
are actually exercisable or convertible at such time, but excluding any shares
of Common Stock owned or held by or for the account of the Company or issuable
upon exercise of the Warrants.
(iii) "Convertible Securities" means any stock or securities (other
than Options) directly or indirectly convertible into or exchangeable for Common
Stock.
(iv) "Expiration Date" means the date five (5) years from the date of
the issuance of the Warrant or, if such date falls on a Saturday, Sunday or
other day on which banks are required or authorized to be closed in the City of
New York or the State of New York (a "Holiday"), the next preceding date that is
not a Holiday.
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(v) "Forced Conversion" The Company has the right to force
conversion of the Warrant if Closing Bid Price of the Company's common stock
closes at $3.00 or higher for ten (10) consecutive trading days.
(vi) "Options" means any rights, warrants or options to subscribe for
or purchase Common Stock or Convertible Securities.
(vii) "Other Securities" means other Warrants.
(viii) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(ix) "Principal Market" means the the Nasdaq National Market, the
Nasdaq SmallCap Market, Bulletin Board, Over the Counter Market, the American
Stock Exchange or the New York Stock Exchange, whichever is at the time the
principal trading exchange or market for the Common Stock.
(x) "Securities Act" means the Securities Act of 1933, as amended.
(xi) "Warrant" shall mean this warrant and all warrants issued in
exchange, transfer or replacement of any thereof.
(xii) "Warrant Exercise Price" shall be equal to $ 1.50.
(b) Other Definitional Provisions.
(i) Except as otherwise specified herein, all references herein
(A) to the Company shall be deemed to include the Company's successors
and (B) to any applicable law defined or referred to herein, shall be
deemed references to such applicable law as the same may have been or
may be amended or supplemented from time to time.
(ii) When used in this Warrant, the words "herein," "hereof,"
and "hereunder," and words of similar import, shall refer to this
Warrant as a whole and not to any provision of this Warrant, and the
words "Section," "Schedule," and "Exhibit" shall refer to Sections of,
and Schedules and Exhibits to, this Warrant unless otherwise specified.
(iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes
the plural, and vice versa.
Section 2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, in
whole or in part, at any time on any business day or after the opening of
business on the date hereof and prior to 11:59 P.M. Eastern Standard Time on the
Expiration Date by (i) delivery of a written notice, in the form of the
subscription notice attached as Exhibit A hereto, of such holder's election to
exercise this Warrant, which notice shall specify the number of Warrant Shares
to be purchased, (ii) (A) payment to the Company of an amount equal to the
Warrant Exercise Price multiplied by the number of Warrant Shares as to which
the Warrant is being exercised (plus any applicable issue or transfer taxes)
(the "Aggregate Exercise Price") in cash or by check or wire transfer, or (B) by
notifying the Company that it should subtract from the number of Warrant Shares
Issuable to the holder upon such exercise an amount of warrant shares having a
last reported sale price (as reported by Bloomberg) or fair market value on the
date immediately preceding the date of the subscription notice equal the
Aggregate Exercise Price of the Warrant shares for which this warrant is being
exercised (a "Cashless Exercise"), and (iii) the surrender of this Warrant, to a
common carrier for delivery to the Company as soon as practicable following such
date, this Warrant (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft, or destruction); provided that if such
Warrant Shares are to be issued in any name other than that of the registered
holder of this Warrant, such issuance shall be deemed a transfer and the
provisions of Section 7 shall be applicable. In the event of any exercise of the
rights represented by this Warrant in compliance with this Section 2, a
certificate or certificates for the Warrant Shares so purchased, in such
denominations as may be requested by the holder hereof and registered in the
name of, or as directed by, the holder, shall be delivered at the Company's
expense to, or as
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directed by, such holder as soon as practicable after such rights shall have
been so exercised, and in any event no later than two (2) business days after
the Company's receipt of the Exercise Notice, the Aggregate Exercise Price and
this Warrant (or indemnification undertaking with respect to this Warrant in the
case of its loss, theft or destruction) Upon delivery of the Exercise Notice and
Aggregate Exercise Price referred to in clause (ii) (A) above or notification to
the Company of a Cashless exercise referred to in clause (ii) (B) above, the
holder of this Warrant shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date of delivery of this Warrant as
required by clause (iii) above or the certificates evidencing such Warrant
Shares. In the case of a dispute as to the determination of the Warrant Exercise
Price or the Average Market Price of a security or the arithmetic calculation of
the Warrant Shares, the Company shall promptly issue to the holder the number of
shares of Common Stock that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the holder via facsimile within two
(2) business days of receipt of the holder's subscription notice. If the holder
and the Company are unable to agree upon the determination of the Warrant
Exercise Price or Average Market Price or arithmetic calculation of the Warrant
Shares within two (2) business days of such disputed determination or arithmetic
calculation being submitted to the holder, then the Company shall immediately
submit via facsimile (i) the disputed determination of the Warrant Exercise
Price or the Average Market Price to an independent, reputable investment
banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares
to its independent, outside accountant. The Company shall cause the investment
banking firm or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the holder of the
results no later than forty-eight (48) hours from the time it receives the
disputed determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be deemed conclusive
absent manifest error and the Company shall be liable for the costs and expenses
related to such determination or calculation.
(b) Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, as soon as practicable and
in any event no later than five (5) business days after any exercise and at its
own expense, issue a new Warrant identical in all respects to the Warrant
exercised except (i) it shall represent rights to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under the Warrant
exercised, less the number of Warrant Shares with respect to which such Warrant
is exercised, and (ii) the holder thereof shall be deemed for all corporate
purposes to have become the holder of record of such Warrant Shares immediately
prior to the close of business on the date on which the Warrant is surrendered
and payment of the amount due in respect of such exercise and any applicable
taxes is made, irrespective of the date of delivery of certificates evidencing
such Warrant Shares, except that, if the date of such surrender and payment is a
date when the stock transfer books of the Company are properly closed, such
person shall be deemed to have become the holder of such Warrant Shares at the
opening of business on the next succeeding date on which the stock transfer
books are open. Upon presentation of a duly executed Subscription Form in the
Form of Exhibit A to this Warrant, the holder shall be entitled to exercise this
Warrant in whole or in part, if the holder shall have previously exercised and
surrendered this Warrant and the Company shall not have issued a new Warrant
representing the number of shares issuable following such prior exercise.
(c) No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon exercise of this Warrant shall be rounded up or down to the nearest whole
number.
(d) If the Company shall fail for any reason or for no reason to issue
to holder on a timely basis as described under this Section 2, a certificate for
the number of shares of Common Stock to which the holder is entitled upon the
holder's exercise of this Warrant or a new Warrant for the number of shares of
common stock to which such holder is entitled pursuant to section 2(b) hereof,
the Company shall, in addition to any other remedies under this Agreement or
otherwise available to such holder pay as additional damages in cash to such
holder for each day such issuance is not timely effected an amount equal to .25%
of the product of (A) the sum of the number of shares of Common Stock not issued
to the holder on a timely basis and to which the holder is entitled and/or, the
number of shares represented by the portion of this Warrant which is not being
converted, as the case may be, and (B) the sum derived by subtracting (1) the
Warrant exercise price then in effect, from (2) the average of the Closing Bid
Price of the Common Stock on the last possible date which the Company could have
issued Common Stock or Warrant, as the case may be, to the holder without
violating this Section 2.
(e) The Company shall not affect any exercise of any Warrant and no
holder of any Warrant shall have the right to exercise any Warrant pursuant to
Section 2 to the extent that after giving effect to such exercise such person
(together with such Persons affiliates) (A) would beneficially own in excess of
4.9% of the outstanding shares of Common Stock following such conversion and (B)
would have acquired, through exercise of any Warrant or otherwise, in excess of
4.9% of the outstanding shares of the Common Stock following such exercise
during the 60-day period ending on and including such
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exercise date. For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by a person and its affiliates or acquired by a
person and its affiliates, as the case may be, shall include the number of
shares of Common Stock issuable upon the exercise of the Warrants with respect
to which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (i) exercise of
the remaining, non exercisable Warrants beneficially owned by such person and
its affiliates and (ii) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company subject to limitation on
conversion or exercise analogous to the limited contained herein beneficially
owned by such Person and its affiliates. Excepts as set forth in the preceding
sentence, for purposes of this section 2(e), beneficial ownership shall be
calculated in accordance with Section 13 (d) of the Securities Exchange Act of
1934, as amended. Notwithstanding anything to the contrary contained herein,
each Exercise Notice shall constitute a representation by the holder submitting
such Exercise Notice that, after giving effect to such Exercise Notice (A) the
holder will not beneficially own (as determined in accordance with this Section
2(e)) and (B) during the 60-day period ending on and including such exercise
date, the holder will not have acquired, through exercise of any Warrant or
otherwise, a number of shares of Common Stock in excess of 4.9% of the
outstanding shares of Common Stock as reflected in the Company's most recent
Form 10-Q or Form 10-K, as the case may be, or more recent public release or
other public notice by the Company setting forth the number of Shares of Common
Stock outstanding, but after giving effect to exercise of any Warrant by such
holder since the date as of which such numbers of outstanding shares of the
Common Stock was reported.
Section 3. Covenants as to Common Stock. The Company hereby covenants
and agrees as follows:
(a) This Warrant is, and any Debenture Share Warrants issued in
substitution for or replacement of this Warrant will upon issuance be, duly
authorized and validly issued.
(b) All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.
(c) During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved at least the number of shares of Common Stock needed to provide for the
exercise of the rights then represented by this Warrant and the par value of
said shares will at all times be less than or equal to the applicable Warrant
Exercise Price.
(d) The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, or
over-the-counter-bulletin board upon which shares of Common Stock are then
listed or quoted (subject to official notice of the over-the-counter bulletin
board of issuance upon exercise of this Warrant) and shall maintain, so long as
any other shares of Common Stock shall be so listed or quoted, such listing or
quotation of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall so list or obtain quotation on
each such national securities exchange, automated quotation system or
over-the-counter bulletin board, as the case may be, and shall maintain such
listing in quotation of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the
same class shall be listed on such national securities exchange, automated
quotation system or over-the-counter bulletin board.
(e) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. No impairment of the designations, preferences and rights of the
Debenture Shares contained in the Certificate of Designations or any waiver
thereof which has an adverse effect on the rights granted hereunder shall be
given effect until the Company has taken appropriate action (satisfactory to the
holders of Debenture Share Warrants representing a majority of the shares of
Common Stock issuable upon the exercise of such Debenture Share Warrants then
outstanding) to avoid such adverse effect with respect to this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, and (ii) will take all such
actions as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant.
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(f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.
(g) If at any time the Company proposes to file with the Securities
and Exchange Commission a registration statement relating to an offering for its
own account or the account of others under the Securities Act of any of its
Securities (other than on Form S-4 or Form S-8 (or their equivalents at such
time) relating to securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans the Company shall
promptly send to the Holder's written notice of the Company's intention to file
a registration statement and of the holder's rights under this section and, if
within twenty (20) days after receipt of such notice, the holder hereof shall so
request in writing, the Company shall include in such registration statement all
or any part of the Common Stock underlying this Warrant the holder requests to
be registered. If a registration pursuant this section is to be an underwritten
public offering and the managing underwriters advise the Company in writing,
that in their reasonable good faith opinion, marketing or other factors dictate
that a limitation on the number of shares of Company common stock which may be
included in the registration statement is necessary to facilitate and not
adversely affect the proposed offering, then the Company shall included in such
registration : (1) first, all securities the Company proposes to sell for its
own account, (2) second, up to the full number of securities proposed to be
registered for the account of the holders of securities entitled to inclusion of
their securities requested to be registered by the holder hereof and other
holders of securities entitled to participate in the registration, as of the
date hereof, drawn from them pro rata based on the number each has requested to
be included in such registration.
Section 4. Taxes. The Company shall not be required to pay any tax or
taxes attributable to the initial issuance of the Warrant Shares or any
permitted transfer involved in the issue or delivery of any certificates for
Warrant Shares in a name other than that of the registered holder hereof or upon
any permitted transfer of this Warrant.
Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the holder of this Warrant of the Warrant Shares which he or she is
then entitled to receive upon the due exercise of this Warrant.
In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities or as a
stockholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 5, the Company will
provide the holder of this Warrant with copies of the same notices and other
information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.
Section 6. Representations of Holder. The holder of this Warrant, by
the acceptance hereof, represents (and any assignor shall represent) that it is
acquiring this Warrant and the Warrant Shares for its own account for investment
purposes and not with a view to, or for sale in connection with, any
distribution hereof, and not with any present intention of distributing any of
the same. The holder of this Warrant further represents (and any assignor shall
represent), by acceptance hereof, that, as of this date, such holder is an
"accredited investor" as such term is defined in Rule 501(a)(1) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities Act
(an "Accredited Investor"). Upon exercise of this Warrant, the holder shall, if
requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the Warrant Shares so purchased are being acquired solely for the
holder's own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale and that such holder is an
Accredited Investor. If such holder cannot make such representations because
they would be factually incorrect, it shall be a condition to such holder's
exercise of the Warrant that the Company receive such other representations as
the Company considers reasonably necessary to assure the Company that the
issuance of its securities upon exercise of the Warrant shall not violate any
United States Federal or state securities laws.
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Section 7. Ownership and Transfer.
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(a) The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each permissible transferee. The Company may
treat the person in whose name any Warrant is registered on the register as the
owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, but in all events recognizing any transfers made in accordance with
the terms of this Warrant.
(b) This Warrant and the rights granted to the holder hereof are
transferable, in whole or in part, upon surrender of this Warrant, together with
a properly executed warrant power in the form of Exhibit B attached hereto;
provided, however, that any transfer or assignment shall subject to the
conditions set forth in Section 6 above and Section 7(c) below.
(c) The holder of this Warrant understands that this Warrant has not
been and is not expected to be, registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (a) subsequently registered thereunder, or (b) such holder shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration. Any sale of such securities made in
reliance on Rule 144 promulgated under the Securities Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the Securities and Exchange Commission thereunder; and neither
the Company nor any other person is under any obligation to register the
Debenture Share Warrants under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder except as
set forth in Section 7(d) below.
(d) The Company is obligated to register the Warrant Shares for resale
under the Securities Act pursuant to the Registration Rights Agreement dated as
of August [ ] , 2000, by and between the Company and the Buyers listed on the
signature page thereto (the "Registration Rights Agreement") and the initial
holder of this Warrant (and certain assignees thereof) is entitled to the
registration rights in respect of the Warrant Shares as set forth in the
Registration Rights Agreement.
Section 8. Adjustment of Warrant Exercise Price and Number of Shares.
The Warrant Exercise Price and the Number of Shares of Common Stock issuable
upon exercise of this Warrant shall be adjusted from time to time as follows:
(a) Adjustment of Warrant Exercise Price and Number of Shares Upon
Issuance of Common Stock. If and whenever on or after the date of issuance this
Warrant, the Company issues or sells, or in accordance with Section 8(b) is
deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock deemed to have been issued
by the Company in connection with an Approved Stock Option Plan, including
employee benefit stock option plans and 401k plans and issuance of stock
pursuant to agreements with RGC International Investors LDC and its affiliates,
the May Davis Group, its clients and affiliates and Swartz Private Equity, LLC,
or upon exercise or conversion of the Other Securities) for a consideration per
share less than the Warrant Exercise Price in effect immediately prior to such
time (the "Applicable Price"), then immediately after such issue or sale the
Warrant Exercise Price then in effect shall be reduced to an amount equal to (A)
Warrant Exercise Price multiplied by the quotient of (D) price per share of the
new issuance divided by (C) the Market Price or (E) the Applicable
Price(E=A(D/C, where E equals the "Adjusted Exercise Price"). Upon each such
adjustment of the Warrant Exercise Price hereunder, the number of shares of
Common Stock acquirable upon exercise of this Warrant shall be adjusted to the
number of shares determined by dividing (H) the number of share Warrants by the
sum of 1 minus the quotient of (F) the number of shares of the new issuance
divided by the sum of (B) the number of shares outstanding prior to any
additional issuance and (F) the number of shares of the new issuance.
(G=H/(1-(F/(B+F), where G equals the "Adjusted Number of Warrant Shares").
(b) Effect of Warrant Exercise Price of Certain Events. For purposes of
determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:
(i) Issuance of Options. If the Company in any manner grants any
Options and the lowest Price for which one share of Common Stock is issuable
upon the exercise of any such Option or upon Conversion or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company a t the time of the
granting or sale of
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such option for such price per share. For purposes of this Section 8(b)(i), the
"lowest price per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such Convertible
Securities" shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option and upon conversion or exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the Warrant Exercise Price
shall be made upon the actual issuance of such Common Stock or of such
convertible Securities upon the exercise of such Options or upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities. Notwithstanding the foregoing, no adjustment shall be made pursuant
to this Section 8(b)(i) to the extent that such adjustment is based solely on
the fact that the Convertible Securities issuable upon exercise of such Option
are convertible into or exchangeable for Common Stock at a price which varies
with the market price of the Common Stock.
(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities and the lowest price per share
for which one share of Common Stock is issuable upon such conversion or exchange
thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issues and sold by the Company at
the time of the issuance or sale of such Convertible Securities for such price
per share. For the purposes of Section 8(b)(ii), the "lowest price per share for
which one share of Common Stock issuable upon such conversion or exchange" shall
be equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to one share of Common Stock upon the
issuance or sale of the Convertible Security and upon conversion or exchange of
such convertible security. No further adjustment of the Warrant Exercise Price
shall be made upon the actual issuance of such Common Stock upon conversion or
exchange of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of the Warrant Exercise Price had been or are to be made pursuant to other
provisions of this Section 8(b), no further adjustment of the foregoing, no
adjustment shall be made pursuant to this Section 8(b)(ii) to the extent that
such adjustment is based solely on the fact that such Convertible Securities are
convertible into or exchangeable for Common Stock at a price which varies with
the market price of the Common Stock.
(iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable for Common Stock changes at any time, the Warrant exercise Price
in effect at the time of such change shall be adjusted to the Warrant Exercise
Price which would have been in effect at such time had such Options or
Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the number of shares of Common Stock
acquirable hereunder shall be correspondingly readjusted. For purposes of this
Section 8(b)(iii), if the terms of any Option or Convertible Security that was
outstanding as of the date of issuance of this Warrant are changed in the manner
described in the immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise, conversion or
exchange thereof shall be deemed to have been issued as of the date of such
change. No adjustment shall be made if such adjustment would result in an
increase of the Warrant Exercise Price then in effect.
(c ) Effect on Warrant Exercise Price of Certain Events. For purposes
of determining the adjusted Warrant Exercise Price Under Sections 8(a) and 8(b),
the following shall be applicable:
(i) Calculation of Consideration Received. In case any Option is
issued in connection with the issue or sale of the other securities of the
Company, together compromising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $.01. If any Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefore will be
deemed to be the net amount received by the Company therefore. If any Common
Stock, Options or Convertible Securities are issued or sold for a cash
consideration other than cash, the amount of such consideration received by the
Company will be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the market price of such securities, in which
case the amount of consideration received by the Company will be the market
price of such securities for the twenty (20) consecutives trading days
immediately preceding the date of receipt. If any Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Company is the surviving entity, in
connection with any merger in which the Company the surviving entity, the amount
of consideration therefore will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving entity as attributable to
such Common Stock, Options or Convertible Securities, as the case may be. The
7
<PAGE>
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of the Warrants representing a majority
of the shares of Common Stock obtainable upon exercise of the Warrants
Outstanding. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined with five (5) business
days after the tenth (10) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the holders of Warrants
representing a majority of the shares of Common Stock obtainable upon exercise
of the Warrants then outstanding. The determination of such appraiser shall be
final and binding upon all parties and the fees and expenses of such appraiser
shall be borne by the Company.
(ii) Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (1) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (2) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
(d) Adjustment of Warrant Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant, subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common Stock obtainable upon exercise of this Warrant
will be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, the Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of shares
of Common Stock obtainable upon exercise of this Warrant will be proportionately
decreased.
(e) Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other transaction)(a "Distribution"), at any time after the
issuance of this Warrant, then, in each case:
(i) the Warrant Exercise Price in effect immediately prior to the
close of business on the record date fixed for the determination of
holders of Common Stock entitled to receive the Distribution shall be
reduced, effective as of the close of business on such record date, to
a price determined by multiplying such Warrant Exercise Price by a
Fraction of which (A) the numerator shall be the Closing bid price on
the trading day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company's Board
of Directors) applicable to one share of Common Stock, and (B) the
denominator shall be the Closing bid price on the trading day
immediately preceding such record date; and
(ii) either (A) the number of Warrant Shares obtainable upon
exercise of this warrant shall be increased to a number of shares equal
to the number of shares of Common Stock obtainable immediately prior to
the close of business on the record date fixed for the determination of
holders of Common Stock entitled to receive the Distribution multiplied
by the reciprocal of the fraction set forth in the immediately
preceding clause (i), or (B) in the Event that the Distribution is of
Common Stock of the Company whose common stock is traded on a national
securities exchange or a national automated quotation system, then the
holder of this Warrant shall receive an additional warrant to purchase
Common Stock, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the amount
of assets that would have been payable to the holder of this Warrant
pursuant to the Distribution had the holder exercised this Warrant
immediately prior to such record date with an exercise price equal to
the amount by which the exercise price of this Warrant was decreased
with respect to the Distribution pursuant to the terms of the
immediately preceding clause (i).
(f) Certain Events. If any event occurs of the type contemplated by the
provisions of this Section 8 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features), than the Company's
Board of Directors will make an appropriate adjustment in the Warrant Exercise
price and the number of shares of Common Stock obtainable upon exercise of this
Warrant so as to protect the rights of the holders of the Warrants, provided
that no such adjustment will increase the Warrant Exercise Price or decrease the
number of shares of Common Stock obtainable as otherwise determined pursuant to
this Section 8.
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(g) Notices.
(i) Immediately upon any adjustment of the Warrant Exercise
Price pursuant to this Section 8, the Company will give written notice thereof
to the holder of this Warrant, setting forth in reasonable detail and certifying
the calculation of such adjustment.
(ii) The Company will give written notice to the holder of
this Warrant at least twenty (20) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any Organic Change, dissolution or liquidation, except that
in no event shall such notice be provided to such holder prior to such
information being made known to the public.
(iii) The Company will also give written notice to the holder of
this Warrant at least twenty (20) days prior to the date on which any Organic
Change, dissolution or liquidation will take place.
Section 9. (a) Purchase Rights. If at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights"), then the holder of this Warrant
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such holder could have acquired if such
holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
(b) Reorganization, Reclassification, Consolidation, Merger
or Sale. Any recapitalization, reorganization reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
Person or other similar transaction which is effected in such a way that holders
of Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock is referred to herein as in "Organic Change." Prior to the
consummation of any Organic Change, the Company will make appropriate provision
(in form and substance reasonably satisfactory to the holders of a majority of
the Warrants then outstanding) to insure that, upon the consummation of such
Organic Change, each of the holders of the Warrants will thereafter have the
right to acquire and receive in lieu of the Common Stock, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of the Warrants had such Organic Change not taken
place. In any such case, the Company will make appropriate provision (in form
and substance reasonably satisfactory to the holders of a majority of the
Warrants then outstanding) with respect to such holders' rights and interests to
insure that the provisions of this Section 8(b) will thereafter be applicable to
the Warrants.
Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt
of an indemnification undertaking, issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.
Section 11. Notice. Any notices, consents, waivers, or other
communications required or permitted to be given under the terms of this Warrant
must be in writing and will be deemed to have been delivered (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile, provided a
copy is mailed by U.S. certified mail, return receipt requested; (iii) three (3)
days after being sent by U.S. certified mail, return receipt requested; or (iv)
one (1) day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
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If to the Company: TCPI, Inc.
3341 S.W. 15th Street
Pompano Beach, Fl 33069
Attention: Walter V. Usinowicz, Jr.
Chief Financial Officer
Telephone: (954) 979-0400
Facsimile: (954) 979-6125
With a copy to: Jay E. Eckhaus, Esq.
3341 S.W. 15th Street
Pompano Beach, Fl 33069
Telephone: (954) 979-0400
Facsimile: (954) 979-6125
And
Teddy D. Klinghoffer, Esq.
Akerman, Senterfitt & Eidson, P.A.
Suntrust International Center, 26th Floor
One S.E. 3rd Avenue
Miami, FL 33131-1714
If to a holder of this Warrant, to it at the address set forth below
such holder's signature on the signature page hereof. Each party shall provide
five (5) days' prior written notice to the other party of any change in address
or facsimile number.
Section 12. Amendments. This Warrant and any term hereof may be
changed, waived, discharged, or terminated only by an instrument in writing
signed by the party or holder hereof against which enforcement of such change,
waiver, discharge or termination is sought.
Section 13. Date. The date of this Warrant is August [ ] , 2000. This
Warrant, in all events, shall be wholly void and of no effect after the close of
business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 7 shall continue in full force and
effect after such date as to any Warrant Shares or other securities issued upon
the exercise of this Warrant.
Section 14. Amendment and Waiver. Except as otherwise provided herein,
the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omitted to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of Warrants representing a majority of the shares of Common Stock
obtainable upon exercise of the Warrants then outstanding, provided that no such
action may increase the Warrant Exercise Price of the Warrants or decrease the
number of shares or class of stock obtainable upon exercise of any warrants with
out the written consent of the holder of such warrant.
Section 15. Descriptive Headings; Governing Law. The descriptive
headings of the several sections of this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. This
Warrant shall be governed by and interpreted under the laws of the State of New
York, without giving effect to any choice of law or conflict of law provision .
This Warrant has been duly executed by the Company as of the date first
set forth above.
TCPI, INC.
By:
-----------------------------------------------
Name: Walter V. Usinowicz, Jr.
Title: Vice President and Chief Financial Officer
[HOLDER]
By:
-------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Address:
---------------------------------
---------------------------------
---------------------------------
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EXHIBIT A
FORM OF SUBSCRIPTION
(Complete and sign only exercise of the Warrant in whole
or in part.)
TO: TCPI, Inc.
The undersigned, the holder of the attached Warrant to which this Form
of Subscription applies, hereby irrevocably elects to exercise the purchase
rights represented by such warrant for and to purchase thereunder _______ shares
of Common Stock, no par value per share (the "Shares"), from TCPI, Inc., (or
such other securities issuable pursuant to the terms of the Warrant) and either:
(i) herewith makes payment of $_______ therefor in cash or by certified or
official bank check or (ii) elects to make payment upon a cashless basis
pursuant to Section 2(b) of the Warrant and hereby exercises ______ Warrants and
the Average Market Price Per Share for purposes hereof is $_______. The
undersigned hereby requests that the certificate(s) representing such securities
be issued in the name(s) and delivered t the address(es) as follows:
Name:
--------------------------------------------
Address:
--------------------------------------------
Social Security Number:
--------------------------------------------
Deliver to:
--------------------------------------------
Address:
--------------------------------------------
This the foregoing subscription evidences an exercise of the Warrant to
purchase fewer than all of the Shares (or other securities issuable pursuant to
the terms of the Warrant) to which the undersigned is entitled under such
warrant, please issue a new warrant, of like tenor, relating to the remaining
portion of the securities issuable upon exercise of such warrant (or other
securities issuable pursuant to the terms of such warrant) in the name(s), and
deliver the same to the address(es), as follow:
Name:
--------------------------------------------
Address:
--------------------------------------------
Dated:
--------------------------------------------
----------------------------- --------------------------------------
(Name of Holder) (Social Security or Taxpayer Identification
Number of Holder, if applicable)
-----------------------------
(Signature of Holder or Authorized
Signatory)
Signature Guaranteed:
----------------------------------
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EXHIBIT B
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
____________________________________________ Federal Identification No.______, a
warrant to purchase shares of the capital stock of TCPI, Inc., a Florida
corporation, represented by warrant certificate No._________, standing in the
name of the undersigned on the books of said corporation. The undersigned does
hereby irrevocably constitute and appoint ____________________________, attorney
to transfer the warrants of said corporation, with full power of substitution in
the premises.
Dated:
-----------------------
By:
-----------------------
Its:
-----------------------
12
