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EXHIBIT 4.9
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of June 1997 between
Capital Beverage Corporation, a Delaware corporation, having
its principal place of business at 0000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx, Xxx Xxxx 00000 (the "Company") and Continental
Stock Transfer and Trust Company, as Warrant Agent, having
its principal place of business at 0 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Warrant Agent")
WITNESSETH:
WHEREAS, the Company proposes to issue and sell to the
public 800,000 Units (each Unit consisting of one share (1)
of Common Stock, $.001 par value (the "Shares") and one half
(1/2) Class A Redeemable Common Stock Purchase Warrant (the
"Warrants"). Each one-half (1/2) Class A Warrant may only be
exercised in combination with another one-half (1/2) Class A
Warrant. Each whole Class A Warrant will entitle the holder
to purchase one (1) share of Common Stock, to be evidenced by
certificates substantially in the form of Exhibit A annexed
hereto (the "Warrant Certificate"), and entitling the
registered holder thereof to purchase one share of Common
Stock; and
WHEREAS, the Warrants will have an exercise price of
$6.25 per share of Common Stock, subject to certain
adjustments (the "Warrant Price") , will be exercisable
commencing one (1) year after the date of the prospectus
(the "Effective Date") and expiring at the close of business
on the last day of the four (4) year period following the
Effective Date (the "Last Exercise Date");
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to
act in connection with the issuance, registration, transfer,
exchange and replacement of the Warrant Certificates and
exercise of the Warrants; and
WHEREAS, the Company and the Warrant Agent desire to set
forth in this Agreement the terms and conditions upon which
the Warrant Certificates shall be issued, transferred,
exchanged and placed and the Warrants exercised, and to
provide for the rights of the holders of the Warrants;
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NOW, THEREFORE, in consideration of the foregoing and
other good and valuable consideration, the receipt of which
is hereby acknowledged, and the respective undertakings
herein below set forth, the Company and the Warrant Agent
agree as follows:
ARTICLE I
ISSUANCE AND EXECUTION OF WARRANTS
SECTION 1.01 - The Company hereby appoints the Warrant
Agent to act on behalf of the Company in accordance with the
terms and conditions herein set forth, and the Warrant Agent
hereby accepts such appointment and agrees to perform the
same in accordance with such provisions.
SECTION 1.02. The Warrant Certificates for the Warrants
shall be issued in registered form only. The text of the
Warrant Certificate including the form of assignment and
subscription to printed on the reverse side thereof shall be
substantially in the form of Exhibit A annexed hereto, which
text is hereby incorporated in this Agreement by reference as
though fully set forth herein and to whose terms and
conditions the Company and the Warrant Agent hereby agree.
Each Warrant Certificate shall evidence the right, subject to
the provisions of this Agreement and of such Warrant
Certificate, to purchase the number of validly issued, fully
paid and non-assessable shares of Common Stock, as that term
is defined in Section 1.05 of this Agreement, stated therein,
free of preemptive rights, subject to adjustment as provided
in Article III of this Agreement.
SECTION 1.03. Upon the written order of the Company, signed
by the President or any Vice President, and the Secretary,
Treasurer, Assistant Secretary or Assistant Treasurer of the
Company, the Warrant Agent shall issue and register Warrants
in the names and denominations specified in that order, and
will countersign and deliver Warrant Certificates evidencing
the same in accordance with that order. Each Warrant
Certificate shall be dated the date of its countersignature.
Each Warrant Certificate all be executed on behalf of the
Company by the manual or facsimile signature of the President
of the Company, under its corporate seal, affixed or
facsimile, attested by the manual or facsimile signature of
the Secretary of the Company and shall be countersigned
manually by the
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Warrant Agent. The Warrant Certificates shall not be valid for
any purpose unless so countersigned. In case any officer whose
facsimile signature has been placed upon any Warrant
Certificate shall have ceased to be such before such Warrant
Certificate is issued, it may be issued with the same effect as
if such officer had not ceased to be such on the date of
issuance,
SECTION 1.04. Except as otherwise expressly stated herein,
all terms used in this Agreement have the meanings provided in
the Warrant Certificate.
SECTION 1.05. The term "Common Stock" shall mean the
aggregate number of shares that the Company, by its Certificate
of Incorporation, as from time to time amended, is authorized
to issue, which are not limited to a fixed sum or percentage of
the book value in respect of the rights of the holders thereof
to participate in dividends or in distribution of assets upon
the voluntary or involuntary liquidation, dissolution, or
winding up the Company.
ARTICLE II
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS,
CALL OF WARRANTS AND TRADING OF WARRANT
SECTION 2.01. (1) Each whole Warrant shall entitle the
person in whose name at the time the Warrant shall be
registered upon the books to be maintained by the Warrant Agent
for that purpose (the "Warrant Holder") subject to the
provisions of the Warrant Certificates and of this Agreement,
to purchase from the Company at any time after its date of
issuance and on or after the Effective Date but at or before
the Last Exercise Date, the number of shares of Common Stock
stated therein, as adjusted, at the Warrant Price in effect at
such date, payable in full at the time of purchase in the
manner provided in Section 2.02 of this Agreement.
(2) Each Warrant shall be exercisable in
accordance with the terms herein and in the Warrant Certificate
which among other offerings contains certain terms as to the
Warrant Price.
SECTION 2.02. (1) The Warrant Holder may only exercise a
Warrant, in whole but not in part, (each one-half (1/2) Class A
Warrant may only be exercised in combination with another
one-half (1/2) Class A Warrant), to be able
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to surrender of the Warrant Certificate, with the form of
subscription thereon duly executed by the Warrant Agent at its
corporate office, together with the Warrant Price for each
share of Common Stock to be purchased in lawful money of the
United States, or by certified check, bank draft, or postal or
express money order payable in United States Dollars to the
order of the Company.
(2) Upon receipt of a Warrant Certificate with the form
of election to purchase thereon duly executed and accompanied
by payment of the aggregate Warrant Price for the shares of
Common Stock for which the Warrant is then being exercised the
Warrant Agent shall requisition from the transfer agent
certificates for the total number of the shares of Common
Stock, as defined in Section 1.05 of this Agreement, for which
the Warrant is being exercised in such names and denominations
as are required for delivery to the Warrant Holder, and the
Warrant Agent shall thereupon deliver such certificates to or
in accordance with the instructions of the Warrant Holder. The
Company covenants and agrees that it has duly authorized and
directed its transfer agent (and will authorize and direct all
its future transfer agents) to comply with all such requests
of the Warrant Agent.
(3) In case any Warrant Holder shall exercise his
Warrant with respect to less than all of the shares of Common
Stock that may be purchased under the Warrant, a new Warrant
Certificate for be balance shall be countersigned and
delivered to or upon the order of the Warrant Holder.
(4) The Company covenants and agrees that it will pay
when due and make payable any and all taxes which may be
payable in respect to the issuance of Warrants, or the
issuance of any shares of Common Stack upon the exercise of
warrants. However, neither the Company nor the Warrant Agent
shall be required to issue or deliver any Warrant Certificate
or shares of Common Stock in a name other than that of the
Warrant Holder at the time of surrender if any tax is payable
in respect of such transfer until the person requesting the
same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has
been paid. In the event that any transfer tax is due and
payable, the Warrant Agent shall be under no obligation to
issue or deliver any Warrant Certificate or shares of Common
Stock in a name other than that of the Warrant Holder until
the Company has notified the Warrant Agent that the transfer
tax if any, has been paid, or in the alternative, that no
transfer tax is due and payable by reason of an exemption.
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(5) The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently
account to the Company for all moneys received by the Warrant
Agent for the purchase of shares of Common Stock upon the
exercise of Warrants.
(6) The Warrant Agent covenants and agrees that upon
the exercise of any of the Warrants, the Warrant Agent shall
provide written notice to the Company and to X. X. Xxxxx and
Company, Inc. (the "Underwriter") at its offices, the expense
of which notice shall be borne by the Company. Each notice
shall contain the name of the exercising Warrant Holder, the
number of shares of Common Stock that the Warrant Holder has
elected to purchase, the purchase price paid on a per share
basis and the cumulative number of Warrants exercised by all
of the Warrant Holders as of the date of the transaction
which is the subject of the aforesaid notice. Such notice
shall be made on the date of the exercise of the Warrant.
Nothing contained herein shall be construed so as to prevent
the Warrant Agent from providing the information required in
this Section 2.02(6) in a consolidated or tabular form,
provided that all other provisions of this Section are
complied with.
(7) The Warrant Agent covenants and agrees that it
shall provide a list of each and every holder of the Warrants
to the Company and the Underwriter at such time or from time
to time as shall be required by the Company or the
Underwriter, but in no event shall such a list be provided
less frequently than once per annum at a date as shall be
determined by the Company.
SECTION 2.03. The Company may, subject to the conditions
set forth herein, redeem all, but not less than all, the
Warrants then outstanding at a redemption price of $.001 per
Warrant provided (i) notice of not less than forty five (45)
days is given (ii) the closing bid quotation of the Common
Stock of the Company has been at least One Hundred Sixty
Percent (160%) of the then exercise price of the Warrants on
all twenty (20) days of the trading days ending prior to the
day that notice is given; and (iii) holders of the Warrants
shall have had exercise rights until the close of business on
the date fixed for redemption. Notice will be effective upon
mailing and the time of mailing is the "Effective Date of The
Notice". The Notice will state a redemption date not less
than forty five (45) days from the Effective Date of the
Notice (the "Redemption Date"). No Notice shall be mailed
unless all funds necessary to pay for redemption of all
Warrants then outstanding shall have first been set aside by
the Company in trust with the
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Warrant Agent for the benefit of all Warrant Holders so as to
be and continue to be available therefor. The redemption
price to be paid to the Warrant Holders will be 6.25 for each
share of Common Stock of the Company to which the Warrant
Holder would then be entitled upon exercise of the Warrant
being redeemed, as adjusted from time to time as provided
herein (the "Redemption Price"). In the event the number of
shares of Common Stock issuable upon exercise of the Warrant
being redeemed are adjusted pursuant to Article II hereof,
then upon each such adjustment the Redemption Price will be
adjusted by multiplying the Redemption Price in effect
immediately prior to such adjustment by a fraction, the
numerator of which is the number of shares of Common Stock
issuable upon exercise of the Warrant being redeemed
immediately prior to such adjustment and the denominator of
which is the number of shares of Common Stock issuable upon
exercise of such Warrant being redeemed immediately after
such adjustment. The Warrants may only be redeemed if the
Company has in effect a current Registration Statement or
post-effective amendment covering the shares underlying the
Warrants. The Warrant Holders may exercise their Warrants
between the Effective Date of The Notice and the Redemption
Date, such exercise being effective if done in accordance
with Section 2.02(l), and if the Warrant Certificate, with
form of election to purchase duly executed and the Warrant
Price, as applicable for such Warrant subject to redemption
far each share of Common Stock to be purchased is actually
received by the Warrant Agent at its office located at 0
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, no later than 5:00 P.M.
New York Time on the Redemption Date.
If any Warrant Holder does not wish to exercise any
Warrant being redeemed, he should mail such Warrant to the
Warrant Agent at its office located at 0 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 after receiving the notice of redemption
required by this Section. If such notice of redemption shall
have been so mailed, and if on or before the Effective Date
of the Notice all funds necessary to pay for redemption of
all Warrants then outstanding shall have been set aside by
the Company in trust with the Warrant Agent for the benefit
of all Warrant Holders so as to be and continue to be
available therefor, then, on and after said Redemption Date,
notwithstanding that any Warrant subject to redemption shall
not have been surrendered for redemption, the obligation
evidenced by all Warrants not surrendered for redemption or
effectively exercised shall be deemed no longer outstanding,
and all rights with respect thereto shall forthwith cease and
terminate, except only the right of the holder of each
Warrant subject to redemption
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to receive the Redemption Price for each share of Common Stock to
which he would be entitled if he exercised the Warrant upon
receiving notice of redemption of the Warrant subject to redemption
held by him.
ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF WARRANT PRICE
SECTION 3.01- In case the Company shall at any time after the
date of this Agreement (i) declare a dividend on the outstanding
Common Stock in shares of its capital stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger
in which the Company is the continuing corporation), then, in each
case, the Warrant Price, and the number and kind of shares
receivable upon exercise in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination, or reclassification shall be proportionately adjusted
so that the holder of any warrant exercised after such time shall be
entitled to receive the aggregate number and kind of shares which if
such warrant had been exercised immediately prior to such time, he
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
SECTION 3-02. In case the Company shall issue rights, options, or
warrants to all holders of Common Stock entitling them to subscribe
for or purchase Common Stock or securities convertible into or
exchangeable for Common Stock) at a price per share (or having a
conversion price per share, if a security convertible into or
exchangeable for common Stock) less than the "current market price
per share of Common Stock (as defined in Section 3.04 of this
Article III) on such record date, then, in such case, the Warrant
Price shall be adjusted by multiplying the Warrant Price in effect
immediately prior to such record date by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding
on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of
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shares of Common Stock so to be offered (or the aggregate
initial conversion price of the convertible securities to be
offered) would purchase at such "current market price" and of
which the denominator shall be the number of shares of Common
Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for
subscription purchase (or into which the convertible or
exchangeable securities so to be offered are initially
convertible or exchangeable) - such adjustment shall become
effective at the close of business on such record date;
provided, however, that, to the extent the shares of Common
Stock (or securities convertible to or exchangeable for
shares of common Stock) are not delivered, the Warrant Price
shall be readjusted after the expiration of such rights,
options, or warrants (but only with respect to Warrants
exercised after such expiration), to the Warrant Price which
would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis
of delivery of only the number of shares of Common Stock or
securities convertible into or exchangeable for shares of
Common Stock) actually issued. In case any subscription price
may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration
shall be as determined in good faith by the board of
directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of Common Stock
owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for
the purpose of any such computation.
SECTION 3-03. In case the Company shall distribute to all
holders of Common Stock (including any such distribution made
to the stockholders of the Company in connection with a
consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness or
assets (other then cash dividends distributions and dividends
payable in shares of Common Stock) subscription rights,
options, or warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase
shares of Common Stock (excluding those referred to in
Section 3.02 of this Article III), then, in each case, the
Warrant Price shall be adjusted by multiplying the Warrant
Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be
the "current market price" per share of Common Stock (as
defined in Section 3.04 of this Article III) on such record
date, less the fair market value (as determined in good faith
by the board of directors of the Company, whose determination
shall be conclusive absent manifest error) of the portion of
the
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evidences of indebtedness or assets so to be distributed, or
of such subscription rights, options, or warrants,
convertible or exchangeable securities containing the right
to subscribe for or purchase shares of Common Stock,
applicable to the share, and of which the denominator shall
be such "current market price" per share of Common Stock.
Such adjustment shall be made whenever any such distribution
is made, and shall become effective on the date of such
distribution retroactive to the record date for the
determination of stockholders entitled to receive such
distribution.
SECTION 3.04. For the purpose of any computation under
Sections 3.02 and 3.03 of this Article III, the "current
market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices for the
30 consecutive trading days commencing 45 trading days
before such date. The closing price for each day shall be
the last reported sales price regular way or, in case no
such reported sale takes place on such day, the closing bid
price regular way, in either case on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, the
highest reported bid price as furnished by the National
Association of Securities Dealers, Inc. through NASDAQ or a
similar organization if NASDAQ is no longer reporting such
information. If on any such date the Common Stock is not
quoted in any such organization, the fair value of the
Common Stock on such date, as determined in good faith by
the board of directors of the Company, whose determination
shall be conclusive absent manifest error, shall be used.
SECTION 3.05. No adjustment in the Warrant Price shall be
required if such adjustment is less than $.001; provided,
however, that any adjustments which by reason of this
Section 3.05 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Article III shall be made to the
nearest cent or to the nearest one-thousandth of a share, as
the case may be.
SECTION 3.06. In any case in which this Article III shall
require that an adjustment in the Warrant Price be made
effective as or a record data for a specified event the
Company may elect to defer until the occurrence of such
event issuing to the holder of
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any Warrant exercised later such record date the shares, if
any, issuable upon such exercise over and above the shares,
if any, issuable upon such exercise on the basis of the
Warrant Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence
of the event requiring such adjustment.
SECTION 3.07. Upon each adjustment of the Warrant Price as
a result of the calculations made in Section 3.01, 3.02, or
3.03 of this Article III, each Warrant outstanding prior to
the making of the adjustment in the Warrant Price shall
thereafter evidence the right to purchase, at the adjusted
Warrant Price, that number of shares (calculated to the
nearest thousandth) obtained by dividing (A) the product
obtained by multiplying the number of shares purchasable upon
exercise of a Warrant prior to adjustment of the number of
shares by the Warrant Price in effect prior to adjustment of
the Warrant Price by (B) the Warrant Price in effect after
such adjustment of the Warrant Price.
SECTION 3.08. In case of any capital reorganization of the
Company, or of any reclassification of the Common Stock
(other than a reclassification of the Common Stock referred
to in Section 3.01 of this Article III), or in the case of
the consolidation of the Company with or the merger of the
Company into any other corporation or of the sale, transfer,
or lease of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation or
other entity, each Warrant shall after such capital
reorganization, reclassification of Common Stock,
consolidation, merger, sale, transfer, or lease, be
exercisable, on the terms and conditions specified in this
Agreement, for the number of shares of stock or other
securities, assets, or cash to which a holder of the number
of shares purchasable (at the time of such capital
reorganization, reclassification of Common Stock,
consolidation, merger, sale, transfer, or lease) upon
exercise of such Warrant would have been entitled upon such
capital reorganization, reclassification of Common Stock,
consolidation, merger, sale, transfer, or lease; and in any
such case, if necessary, the provisions set forth in this
Article III with respect to the rights and interests
thereafter of the holders or the Warrants shall be
appropriately adjusted so as to be applicable, as nearly as
may reasonably be, to any shares of stock other securities,
assets, or cash thereafter deliverable on the exercise of the
Warrants. The subdivision or combination of shares
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of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a
reclassification of the Common Stock for the purposes of this
subsection. The Company shall not effect any such
consolidation, merger, transfer, or lease, unless prior to or
simultaneously with the consummation thereof, the successor
corporation (if other than the Company) resulting from such
consolidation or merger or the Corporation purchasing,
receiving, or leasing such assets or other appropriate
corporation or entity shall expressly assume, by written
instrument in form satisfactory to the Underwriter and duly
executed and delivered to each holder of a Warrant, the
obligation to deliver to the holder of each Warrant such
shares of stock, securities, or assets as, in accordance with
the foregoing provisions, such holders may be entitled to
purchase and to perform the other obligations of the Company
under this Agreement.
SECTION 3.09. The Company may make such reductions in the
Warrant Price, in addition to those required by this Article
III, as it shall, in its sole discretion, determine to be
advisable.
ARTICLE IV
OTHER PROVISIONS EFFECTING RIGHTS OF
WARRANT HOLDERS
SECTION 4.01. No Warrant Holder, as such shall be entitled
to vote or receive dividends or be deemed the holder of shares
of Common Stock for any purposes, nor shall anything contained
in any Warrant Certificate be construed to confer upon any
Warrant Holder, as such, any of the rights of a shareholder of
the Company or any right to vote, give or withhold consent to
any action by the Company, whether upon any recapitalization,
issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise; receive dividends or
subscription rights, or otherwise, until in connection with
the exercise of any Warrant, such Warrant shall have been
surrendered and the purchase price or the shares of Common
Stock for which such Warrant is being exercised shall have
been received by the Warrant Agent; provided, however, that
any such surrender and payment on any date when the stock
transfer books of the Company shall be closed shall constitute
the person or persons in whose name or names the certificate
or certificates for those shares of Common Stock are to be
issued as the record holder or holders thereof for all
purposes at the opening of business on
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the next succeeding day on which such stock transfer books are
open and the Warrant surrendered shall not be deemed to have
been exercised, in whole or in part, as the case maybe, until
such next succeeding day on which stock transfer books are
open.
SECTION 4.02. The Company covenants and agrees that it shall
contemporaneously provide to all Warrant Holders of record any
publication, mailing or notice which it shall provide to all
of its shareholders of record. For purposes of this Section
4.02, the Warrant Holders of record shall be those Warrant
Holders who are of record on a date even with the date chosen
by the Company for the purpose of determining the shareholders
of record who shall be entitled to receive such publication,
mailing or notice.
SECTION 4.03. If any Warrant Certificate is lost, stolen,
mutilated or destroyed, the Company and the Warrant Agent may,
on such terms as to indemnity or otherwise as they may in
their discretion reasonably impose which shall, in the case of
a mutilated Warrant Certificate, include the surrender
thereof, issue a new Warrant Certificate of like denomination
and tenor as, and in substitution for, the Warrant Certificate
so lost, stolen, mutilated or destroyed.
SECTION 4.04. (1) The Company covenants and agrees that at
all times it shall reserve and keep available for the exercise
of outstanding Warrants such number of authorized shares of
Common Stock as are sufficient to permit the exercise in full
of such Warrants and that it will make available to the
Warrant Agent from time to time a number of duly executed
certificates representing shares of Common Stock sufficient
therefor.
(2) The Company shall secure the listing, upon official
notice of issuance, of shares of Common Stock issuable upon
exercise of Warrants upon any securities exchange upon which
shares of Common Stock become listed.
(3) The Company covenants that all shares of Common
Stock issued on exercise of Warrants shall be validly issued,
fully paid, non-assessable and free of preemptive rights.
(4) The Company shall use its best efforts to secure
the effective registration of the Warrants and the shares of
Common Stock issuable upon exercise of the Warrants under the
Securities Act of 1933, as amended (the "Act"), and to
register or qualify such Warrants and shares of Common Stock
under the laws of any
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states in which the sale of the Warrants was registered or
qualified and shall use its reasonable good faith efforts to
register and qualify such Warrants and shares of Common Stock
in such additional states and jurisdictions as may be
appropriate; provided, however, that the Company shall have
no obligation to register such Warrants and shares of Common
Stock or maintain the effectiveness of such registration or
qualification, as aforesaid, in the event that, by amendment
to the Act or otherwise, such registration or qualification
is not required at the time such warrants and shares of
Common Stock are to be issued or, if permitted by applicable
Federal securities laws or the rules and regulations
promulgated thereunder, at any time when the relationship of
the Warrant Price to the then current market price of the
Company's Common Stock makes it unlikely that any Warrants
will be exercised.
(5) The Company will furnish to the Warrant Agent,
upon request, an opinion of counsel satisfactory to the
Warrant Agent the effect that (i) a Registration Statement
under the Act is then in effect with respect to shares of
Common Stock issuable upon exercise of the Warrants and that
the prospectus included therein complies as to form in all
material respects, except as to financial statements,
including schedules, and other accounting and financial data,
as to which such counsel need express no opinion, with the
requirements of the Act and the rules and regulations of the
Securities and Exchange Commission (the "Commission")
thereunder; or (ii) a Registration Statement under the Act
with respect to said shares of Common Stock is not required.
In the event that said opinion states that such a
Registration Statement is in effect, the Company will from
time to time furnish the Warrant Agent with current
prospectuses meeting the requirements of the Act and such
rules and regulations in sufficient quantity to permit the
Warrant Agent to deliver a prospectus ("Prospectus") to each
Warrant Holder upon exercise thereof. The Company further
agrees to pay all fees, costs and expenses in connection with
the preparation and delivery to the Warrant Agent of the
foregoing opinions and Prospectuses and the above mentioned
registrations and other actions, and to immediately notify
the Warrant Agent in the event that (i) the Commission shall
have issued or threatened to issue any order preventing or
suspending the use of any Prospectus; (ii) at any time any
Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; or (iii) for any reason it shall be necessary to
amend or supplement any Prospectus in order to comply with
the Act.
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SECTION 4.05. If the number of shares purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 3.07
of Article IV, the Company shall not be required to issue
fractions of shares upon exercise of the Warrants or to
distribute share certificates which evidence fractional shares
in lieu of fractional shares, there shall be paid to the
registered holders of Warrant Certificates at the time such
Warrants are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a
share. For purposes of this Section 4.05, the current market
value of a share issuable upon the exercise of a Warrant shall
be the closing price of a share of Common Stock, as determined
pursuant to the second and third sentences of Section 3.04, for
the trading day immediately prior to the date of such exercise.
ARTICLE V
TREATMENT OF WARRANT HOLDERS
SECTION 5.01. Prior to due presentment for registration of
transfer of any Warrant, the Company and the Warrant Agent may
deem and treat the Warrant Holder as the absolute owner of such
warrant, notwithstanding any notation of ownership or other
writing thereon, for the purpose of any exercise thereof and
for all other purposes, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary.
ARTICLE VI
CONCERNING THE WARRANT AGENT
AND OTHER MATTERS
SECTION 6.01. The Company will from time to time promptly
pay, subject to the provisions of Section 2.02 of this
Agreement, all taxes and charges that may be imposed upon the
Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of
Warrants.
15
SECTION 6.02 (1) The Warrant Agent may resign and be
discharged from its duties under this Agreement upon thirty
(30) days notice in writing, mailed to the Company by
registered or certified mail, and to each Warrant Holder. The
Company may remove the Warrant Agent or any successor warrant
agent upon thirty (30) days notice in writing, mailed to the
Warrant Agent or successor Warrant Agent, as the case may be,
by registered or certified mail, and to each Warrant Holder;
provided, however, the Company shall appoint a new Warrant
Agent as hereinafter provided and such removal shall not
become effective until a successor Warrant Agent has been
appointed and has accepted such appointment. If the Warrant
Agent shall resign or shall otherwise become capable of
acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after it has been
notified in writing of such resignation or incapability by
the Warrant Agent by a Warrant Holder, who shall, with such
notice, submit his Warrant Certificate for inspection by the
Company, then any Warrant Holder may apply to any court of
competent jurisdiction or the appointment of a successor to
the Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such a court shall be a
registered transfer agent, bank or trust company, subject to
the terms and conditions of this Section 6.02, in good
standing and incorporated under the laws of any State of the
United States, having its principal office in the United
States of America. After appointment, the successor Warrant
Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as
Warrant Agent without further act or deed. The former Warrant
Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder and
execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Failure to give any notice
provided for in this section, however, or any defect therein,
shall not affect the legality or validity of the resignation
or removal of the Warrant Agent or the appointment of the
successor Warrant Agent, as the case may be.
(2) Any corporation into which the Warrant Agent may
be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant
Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case at the
time such successor to the Warrant
16
Agent shall succeed to the agency created by this Agreement,
any of the Warrant Certificates shall have been countersigned
but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the original Warrant Agent
and deliver such Warrant Certificates so countersigned, and
in case at that time any of the Warrant Certificates shall
not have been countersigned, any successor to the Warrant
Agent may countersign such Warrant Certificate in its own
name or in the name of the successor Warrant Agent; and in
all such cases such Warrant Certificates shall have the full
force provided in the Warrant Certificates and this
Agreement.
In case at any time the name of the Warrant Agent
shall be changed and at such time any of the Warrant
Certificates shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under this
prior name and deliver Warrant Certificates so countersigned;
and in case at that time any of the Warrant Certificates
shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior
name or in its changed name; and in all such cases such
Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.
SECTION 6.03. The Company agrees to pay the Warrant Agent
from time to time, on demand of the Warrant Agent, reasonable
compensation for all services rendered by it hereunder and
also as reasonable expenses and counsel fees and other
disbursements of any kind incurred in the administration and
execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify
the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without gross
negligence, willful misconduct or bad faith on the part of
the Warrant Agent, arising out of or in connection with the
acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability in the premises.
SECTION 6.04. The Company covenants and agrees that it
shall, at the Company's expense, provide to the Warrant Agent
copies of its current prospectus in such quantity as to
enable the Warrant Agent to deliver one copy of such current
prospectus to such Warrant Holder who shall exercise his
rights under a Warrant. Notwithstanding anything else
contained in this Section 6.04, the Company shall not be
obligated to provide copies of its current prospectus for the
purpose of allowing the Warrant Agent to deliver
17
such copies to any Warrant Holder who delivers all of his
redeemable warrants for redemption pursuant to Section 2.03
or who shall notice the Company of his intent to permit
redemption of all of his Warrants pursuant to Section 2.03
herein or to any person who shall hold any Warrant subject to
the terms of this Agreement after the earlier of the
Redemption Date or the Last Exercise Date of the Warrants.
SECTION 6.05. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the
holders of Warrant Certificates, by their acceptance thereof,
shall be bound:
(1) Whenever in the performance of its duties under
this Agreement the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action
hereunder, that fact or matter, unless other evidence in
respect thereof be herein specifically prescribed, may be
deemed to be conclusively proved and established by a
certificate signed by the President or the Secretary of the
Company and delivered to the Warrant Agent. That certificate
shall be full authorization to the Warrant Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement reliance upon that certificate.
(2) The Warrant Agent shall be liable hereunder only
for its own gross negligence or willful misconduct.
(3) The Warrant Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Warrant Certificates, except its
countersignature thereof, or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(4) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof, except the due
execution hereof by the Warrant Agent, or in respect of the
validity or execution of any Warrant Certificate, except its
countersignature thereof; nor shall it be responsible for any
Warrant Certificate; nor shall it be responsible for the
adjustment of the Warrant Price or the making of any change
in the number of shares of Common Stock required under the
provisions of Article III of this Agreement or
18
responsible for the manner, method or amount of any such
change or the ascertaining of the existence of facts that
would require any such adjustment or change except with
respect to the exercise of Warrant Certificates after actual
notice of any adjustment of the Warrant Price; nor shall it
by any act under this Agreement be deemed to make any
representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued
pursuant to this Agreement or any Warrant Certificate or as
to whether any share of Common Stock will when issued be
validly issued, fully paid, non-assessable and free of
preemptive rights.
(5) The Warrant Agent and any shareholder, director,
officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrant Certificates or other securities
of the Company to retain a pecuniary interest in any
transaction in which the Company may be interested or
contract with or lend money to or otherwise act as fully and
freely as though it was not Warrant Agent or subject to this
Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any
other legal entity.
(6) The Warrant Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any officer or
assistant officer of the company, and to apply to any such
officer or assistant officer for advice or instructions in
connection with its duties and shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or
assistant officer.
(7) The Warrant Agent may consult with its counsel or
other counsel satisfactory to it, including counsel for the
Company, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any
action taken, offered, or omitted by it hereunder in good
faith and in accordance with the opinion of such counsel.
(8) The Warrant Agent shall incur no liability to the
Company or to any holder of any Warrant for any action taken
by it in reliance upon any Warrant Certificate or
certificate for Common Stock, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed, and where necessary, certified or
acknowledged, by the proper person or persons
19
SECTION 6.06. The Warrant Agent may, without the consent or concurrence of
the Warrant Holders, by supplemental agreement or otherwise, concur with the
Company in making any changes or corrections in this Agreement that it shall
have been advised by counsel, who may be counsel for the Company, are required
to cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error herein contained, and which shall
not be inconsistent with the provisions of the Warrant Certificates, provided
such changes or corrections do not adversely affect the privileges or immunities
of the Warrant Holders.
SECTION 6.07. All the Covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 6.08. Forthwith upon the appointment after the date thereof of any
transfer agent for the Common Stock, or of any subsequent transfer agent for the
Common Stock, the Company will file with the Warrant Agent a statement setting
forth the name and address of such transfer agent.
SECTION 6.09. Notice or demand pursuant to this Agreement to be given or
made by the Warrant Agent or by any Warrant Holder to or on the Company shall be
sufficiently given or made and effective on the third business day after posting
thereof, unless otherwise provided in this Agreement, if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing by
the Company with the Warrant Agent) as follows:
Capital Beverage Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxx 00000
notice or demand pursuant to this Agreement to be given or made by the Company
or any Warrant Holder to or on the Warrant Agent shall be sufficiently given or
made and effective on the third business day after posting thereof, unless
otherwise provided in this Agreement, if sent by first-class mail, postage
prepaid, addressed
20
(until another address is filed in writing by the Warrant Agent
with the Company) as follows:
Continental Stock Transfer & Trust Company
0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
notice or demand pursuant to this Agreement to be given or made
by the Company or the Warrant Agent to or on the Underwriter
shall be sufficiently given or made and effective on the third
business day after posting thereof, unless otherwise provided
in this Agreement, if sent by first-class mail, postage
prepaid, addressed until another address is filed in writing by
the Underwriter with the Company) as follows:
X.X. Xxxxx and Company, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
notice or demand pursuant to this Agreement to be given or made
by the Company or the Warrant Agent to or on any Warrant Holder
shall be sufficiently given or made and effective on the third
business day after posting thereof, unless otherwise provided
in this Agreement, if sent by first-class mail, postage
prepaid, addressed to such Warrant Holder at his last known
address as it shall appear in the records of the Company, if
such notice shall be given by the Company or, if such notice
shall be given by the Warrant Agent, as it shall appear on the
register maintained by the Warrant Agent.
A copy of any Notice or demand given or made pursuant to
this Agreement on the Warrant Agent, Company or Underwriter
shall be promptly forwarded by the recipient thereof to each of
the Company, Warrant Agent or Underwriter who shall not have
received or made such demand or notice.
SECTION 6.10. The validity, interpretation and performance
of this Agreement and the Warrants shall be governed by the
laws of the State of New York.
21
SECTION 6.11. Nothing in this Agreement shall be
construed to give to any person or corporation other than the
parties hereto and the Warrant Holders any right, remedy or
claim under promise or agreement hereof all covenants,
conditions, stipulations, promises and agreements contained in
this Agreement shall be for the sole and exclusive benefit of
the Company and the Warrant Agent and their successors and of
the Warrant Holders, and their heirs, representatives,
successors, assigns and transferees.
SECTION 6.12. A copy of this Agreement shall be available
for inspection by any Warrant Holder during the regular
business hours and at the corporate office of the Warrant
Agent in New York, New York, at which time the Warrant Agent
may require any Warrant Holder to submit his Warrant
Certificate for inspection by it.
SECTION 6.13. This Agreement shall terminate on the Last
Exercise Date, or such earlier date upon which all Warrants
have been exercised, except that the Warrant Agent shall
account to the Company pursuant to Paragraph (5) of Section
2.02 of this Agreement for all cash held by it. The provisions
of Section 6.03 and 6.04 of this Agreement shall survive such
termination.
SECTION 6.14. The Article headings in this Agreement are
for convenience only and are not part of this Agreement and
shall not affect the interpretation thereof.
SECTION 6.15. This Agreement may be executed in any number
counterparts, each of which is so executed shall be deemed to
be an original, and all such counterparts shall together
constitute but one and the same agreement.
ATTEST: CAPITAL BEVERAGE CORPORATION
________________________ ____________________________
ATTEST: CONTINENTAL STOCK TRANSFER AND
TRUST COMPANY
________________________ ______________________________
