EXHIBIT4.4
WARRANT AGREEMENT
AGREEMENT, dated as of ________, 1998 between THE HAVANA GROUP, INC.,
a Delaware corporation (the "Company"), and XXXXXX TRUST COMPANY OF NEW YORK, as
Warrant Agent (the "Warrant Agent").
W I T N E S S E T H :
WHEREAS, in connection with (i) the offering (the "Initial Public
Offering") to the public of up to 460,000 units (each Unit consisting of one
share of Common Stock and two Class A Warrants) which includes 460,000 shares
(the "Shares"), of the Company's common stock, $.001 par value ("Common
Stock"), and 920,000 Class A Common Stock Purchase Warrants (the "Warrants"),
entitling the holder of each Warrant to purchase one share of Common Stock, (ii)
the over-allotment option granted by Xxxxxx Xxxx, Inc. ("Xxxxxx Xxxx") to
purchase up to an additional 69,000 units including 69,000 shares of Common
Stock and 138,000 Warrants (the "Over-Allotment Option"), and (iii) the sale to
VTR Capital, Inc., its successors and assigns ("VTR" or the "Representative") of
warrants (the "Representative's Warrants") to purchase up to 46,000 units
consisting of 46,000 shares of Common Stock and 92,000 Class A Warrants, such
Class A Warrants being identical to the Class A Warrants being sold to the
public except as may be otherwise provided herein (the Warrants issuable upon
the exercise of the Representative's Warrants are referred to as the "Common
Stock Warrants"), the Company will issue up to 1,058,000 Class A Warrants,
192,000 Common Stock Warrants and the Representative's Warrants (subject to
increase as provided in the Representative's Warrant Agreement); and
WHEREAS, the Company is obligated to issue an additional 1,738,000
Class A Warrants to certain existing Warrant holders (including 138,000 Class A
Warrants to Xxxxxx Xxxx to be sold pursuant to the Over-Allotment option); and
WHEREAS, the Company desires to provide for the issuance of
certificates representing the Warrants and the Common Stock Warrants
(collectively, the Warrants and the Common Stock Warrants shall be referred to
herein as the "Warrants"); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the respective rights and obligations thereunder
of the Company, the Representative, the holders of certificates representing the
Warrants and the Warrant Agent, the parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any class,
whether now or hereafter authorized, which has the right to participate in the
voting and in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business shall be
administered, which office is located on the date hereof at 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000.
(c) "Exercise Date" shall mean, subject to the provisions of Section
5(b) hereof, as to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and (ii) payment in cash or by check made
payable to the Warrant Agent for the account of the Company, of the amount in
lawful money of the United States of America equal to the applicable Purchase
Price.
(d) "Initial Warrant Exercise Date" shall mean in the case of the
Warrants ________, 1998 and in the case of the Common Stock Warrants ________,
1999.
(e) "Initial Warrant Redemption Date" shall mean ________, 1999.
(f) "Purchase Price" shall mean $5.25 for the Warrants other than the
Warrants issuable upon exercise of the Representative's Warrants, whose Purchase
Price shall be equal to the lesser of 150% of the Purchase Price of the Warrants
then in effect and $7.875, subject in each case to modification and adjustment
as provided in Section 8.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing the Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(h) The Representative shall mean VTR Capital, Inc.
(i) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to elect
a majority of the Board of Directors of such corporation (regardless of whether
or not at the time stock of any other class or classes of such corporation shall
have or may have voting power by reason of the happening of any contingency) is
at the time directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
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(j) "Transfer Agent" shall mean Xxxxxx Trust Company of New York or
its authorized successor.
(k) "Underwriting Agreement" shall mean the underwriting agreement
dated ________, 1998 between the Company and the Representative, relating to the
purchase for resale to the public of the Units.
(l) "Representative's Warrant Agreement" shall mean the agreement(s)
dated as of _________, 1998 between the Company and the Representative relating
to and governing the terms and provisions of the Representative's Warrants.
(m) "Separation Date" shall mean the earlier of _______,1998 or the
date selected by the Representative in writing for Separation. Until the
Separation Date, the Common Stock and Warrants shall not be detachable or
separately transferable.
(n) "Warrant Certificate" shall mean a certificate representing
Warrants substantially in the form annexed hereto as Exhibit A.
(o) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date, 5:00 p.m. (New York
City Time) on ________, 2003, or if such date shall in the State of New York be
a Saturday, Sunday, holiday or a day on which banks are authorized to close,
then 5:00 p.m. (New York City Time) on the next following day which in the State
of New York is not a Saturday, Sunday, holiday or a day on which banks are
authorized to close, subject to the Company's right, prior to the Warrant
Expiration Date, in its sole discretion, to extend such Warrant Expiration Date
on five business days prior written notice to the Registered Holders.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) One Warrant shall initially entitle the registered holder of a
Warrant to purchase at the Purchase Price therefor from the Initial Warrant
Exercise Date until the Warrant Expiration Date one share of Common Stock upon
the exercise thereof, subject to modification and adjustment as provided in
Section 8.
(b) Upon execution of this Agreement, Warrant Certificates
representing 1,738,000 Warrants to purchase up to an aggregate of 1,738,000
shares of Common Stock and 460,000 Units shall be executed by the Company and
delivered to the Warrant Agent. On the Separation Date, the Units will be
exchanged for 460,000 shares of Common Stock and 920,000 Warrants to purchase
920,000 shares of Common Stock (subject to modification and adjustment as
provided in Section 8) shall be executed by the Company and delivered to the
Warrant Agent.
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(c) Upon exercise of the Representative's Warrants as provided
therein, Warrant Certificates representing 92,000 Common Stock Warrants to
purchase up to an aggregate of 92,000 shares of Common Stock (subject to
modification and adjustment as provided in Section 8 hereof and in the
Representative's Warrant Agreement), shall be countersigned, issued and
delivered by the Warrant Agent upon written order of the Company signed by its
Chairman of the Board, Chief Executive Officer, or President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary.
(d) From time to time until the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
denominations of one or whole number multiples thereof to the person entitled
thereto in connection with any transfer or exchange permitted under this
Agreement. Except as provided in Section 7 hereof, no Warrant Certificates
shall be issued except (i) Warrant Certificates initially issued hereunder, (ii)
Warrant Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7, (iv) Warrant Certificates
issued pursuant to the Representative's Warrant Agreement and (v) at the option
of the Company, Warrant Certificates in such form as may be approved by its
Board of Directors, to reflect any adjustment or change in the Purchase Price,
the number of shares of Common Stock purchasable upon exercise of the Warrants
or the Redemption Price therefor made pursuant to Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates evidencing the Warrants shall be
substantially in the form annexed hereto as Exhibit A (the provisions of which
are hereby incorporated herein), and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates).
(b) Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, Chief Executive Officer, or President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary,
by manual signatures or by facsimile signatures printed thereon. Warrant
Certificates shall be manually countersigned by the Warrant Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Warrant Certificates shall cease to be
such officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates, nevertheless, may be countersigned
by the Warrant
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Agent, issued and delivered with the same force and effect as though the person
who signed such Warrant Certificates had not ceased to be such officer of the
Company.
SECTION 4. Exercise.
(a) Warrants in denominations of one or whole number multiples
thereof may be exercised commencing at any time on or after the Initial Warrant
Exercise Date, but not after the Warrant Expiration Date, upon the terms and
subject to the conditions set forth herein (including the provisions set forth
in Sections 5 and 9 hereof) and in the applicable Warrant Certificate. A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date, provided that the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing, together
with payment in cash or by check made payable to the Warrant Agent for the
account of the Company, of an amount in lawful money of the United States of
America equal to the applicable Purchase Price has been received in good funds
by the Warrant Agent. The person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the holder of such
securities as of the close of business on the Exercise Date. If Warrants in
denominations other than one or whole number multiples thereof shall be
exercised at one time by the same Registered Holder, the number of full shares
of Common Stock which shall be issuable upon exercise thereof shall be computed
on the basis of the aggregate number of full shares of Common Stock issuable
upon such exercise. As soon as practicable on or after the Exercise Date and in
any event within five business days after such date, if one or more Warrants
have been exercised, the Warrant Agent on behalf of the Company shall cause to
be issued to the person or persons entitled to receive the same, a Common Stock
certificate or certificates for the shares of Common Stock deliverable upon such
exercise, and the Warrant Agent shall deliver the same to the person or persons
entitled thereto. Upon the exercise of any one or more Warrants, the Warrant
Agent shall promptly notify the Company and the Representative in writing of
such fact and of the number of securities delivered upon such exercise and,
subject to subsection (b) below, shall cause all payments of an amount in cash
or by check made payable to the order of the Company, equal to the Purchase
Price, to be deposited promptly in the Company's bank account.
(b) If at the time of exercise of any Warrant commencing one year
after the date of issuance (i) the market price of the Company's Common Stock is
equal to or greater than the then Purchase Price of the Warrant, (ii) the
exercise of the Warrant is solicited by the Representative or another
broker-dealer who is at such time is a member of the National Association of
Securities Dealers, Inc. ("NASD"), (iii) the Warrant is not held in a
discretionary account, (iv) disclosure of the compensation arrangement is made
in documents provided to the holders of the Warrants, and (v) the solicitation
of the exercise of the Warrant is not in violation of Regulation M (as such rule
or any successor rule may be in effect as of such time of exercise) promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act"), then the
Representative shall be entitled to
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receive from the Company upon exercise of each of the Warrants so exercised a
fee (the "Exercise Fee") of five percent (5%) of the aggregate Purchase Price of
the Warrants so exercised commencing in the second year following the date of
issuance. Anything to the contrary in the foregoing notwithstanding, no
Exercise Fee with respect to any Warrants exercised shall be payable to the
Representative if the payment of the Exercise Fee with respect to such Warrants
would be in violation of the General Rules and Regulations promulgated under the
Exchange Act, or the rules and regulations of the NASD or applicable state
securities or "blue sky" laws, or the Warrants are Common Stock Warrants
underlying the Representative's Warrants. The procedures for payment of the
warrant solicitation fee are set forth in Section 5(c) below.
(c) (1) Within ten (10) days after the last day of each month
commencing with ________, 1999, the Warrant Agent will notify the Representative
of each Warrant Certificate which has been properly completed for exercise by
holders of Warrants during the last month. The Company and Warrant Agent shall
determine, in their sole and absolute discretion, whether a Warrant Certificate
has been properly completed. The Warrant Agent will provide the Representative
with such information in connection with the exercise of each Warrant as the
Representative shall reasonably request.
(2) The Company hereby authorizes and instructs the Warrant Agent
to deliver to the Representative the Exercise Fee promptly after receipt by the
Warrant Agent from the Company of a check payable to the order of the
Representative in the amount of the Exercise Fee. In the event that an Exercise
Fee is paid to the Representative with respect to a Warrant which the Company or
the Warrant Agent determines is not properly completed for exercise or in
respect of which the Representative is not entitled to an Exercise Fee, the
Representative will be instructed by the Warrant Agent to return such Exercise
Fee to the Warrant Agent which shall forthwith return such fee to the Company.
While the Warrants are outstanding, the Representative and the Company
may at any time during business hours, examine the records of the Warrant Agent,
including its ledger of original Warrant certificates returned to the Warrant
Agent upon exercise of Warrants. Notwithstanding any provision to the contrary,
the provisions of Section 4(b) and 4(c) may not be modified, amended or deleted
without the prior written consent of the Representative.
(d) The Company shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Warrant or
Warrants, nor shall it be obligated to issue scrip in lieu of fractional
interests. However, the Company shall pay the Registered Holder of any
fractional warrant interest an amount in cash based upon the average of the high
and low bid prices for the Common Stock on the NASD Electronic Bulletin Board
(or if applicable The NASDAQ Stock Market) during the ten day trading period
immediately preceding the date of exercise.
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SECTION 5. Reservation of Shares: Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issuance upon exercise of Warrants, such number of shares of Common Stock as
shall then be issuable upon the exercise of all outstanding Warrants. The
Company covenants that all shares of Common Stock which shall be issuable upon
exercise of the Warrants shall, at the time of delivery thereof, be duly and
validly issued and fully paid and nonassessable and free from all preemptive or
similar rights, taxes, liens and charges with respect to the issue thereof, and
that upon issuance such shares shall be listed on each securities exchange, if
any, on which the other shares of outstanding Common Stock of the Company are
then listed.
(b) The Company covenants that if any securities to be reserved for
the purpose of exercise of Warrants hereunder require registration with, or
approval of, any governmental authority under any federal securities law before
such securities may be validly issued or delivered upon such exercise, then the
Company will file a registration statement under the federal securities laws or
a post-effective amendment, use its best efforts to cause the same to become
effective, keep such registration statement current while any of the Warrants
are outstanding and deliver a prospectus which complies with Section 10(a)(3)
of the Securities Act of 1933, as amended, to the Registered Holder exercising
the Warrant. The Company will use its best efforts to maintain appropriate
approvals or registrations under state "blue sky" securities laws in states
where the Initial Public Offering is sold. With respect to any such securities,
however, Warrants may not be exercised by, or shares of Common Stock issued to,
any Registered Holder in any state in which such exercise would be unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock or other securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
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SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants or may be
transferred in whole or in part. Warrant Certificates to be so exchanged shall
be surrendered to the Warrant Agent at its Corporate Office, and the Company
shall execute and the Warrant Agent shall countersign, issue and deliver in
exchange therefor, the Warrant Certificate or Certificates which the Registered
Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the Company
shall execute and the Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal
aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the subscription of
exercise form, as the case may be, on the reverse thereof shall be duly endorsed
or be accompanied by a written instrument or instruments of transfer and
subscription, in form satisfactory to the Company and the Warrant Agent, duly
executed by the Registered Holder thereof or his attorney duly authorized in
writing.
(d) No service charge shall be made for any exchange or registration
of transfer of Warrant Certificates. However, the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange
shall be promptly cancelled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof,
the Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and the Warrant
Agent of evidence satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and (in the case of loss,
theft or destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company shall execute
and the Warrant Agent shall countersign and deliver in lieu thereof a new
Warrant Certificate representing an equal aggregate number of
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Warrants. Applicants for a substitute Warrant Certificate shall also comply
with such other reasonable regulations and pay such other reasonable charges as
the Warrant Agent may prescribe.
SECTION 8. Adjustment of Purchase Price and Number of Shares of Common Stock
Deliverable.
(a) (i) Except as hereinafter provided, in the event the Company shall, at any
time or from time to time after the date hereof, issue any shares of Common
Stock as a stock dividend to the holders of Common Stock, or subdivide or
combine the outstanding shares of Common Stock into a greater or lesser number
of shares (any such issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter immediately before the date of such
sale or the record date for each Change of Shares, the Purchase Price for the
Warrants (whether or not the same shall be issued and outstanding) in effect
immediately prior to such Change of Shares shall be changed to a price
(including any applicable fraction of a cent to the nearest cent) determined by
dividing (1) the product of (a) the Purchase Price in effect immediately before
such Change of Shares and (b) the total number of shares of Common Stock
outstanding immediately prior to such Change of Shares, by (2) the total number
of shares of Common Stock outstanding immediately after such Change of Shares.
(ii) Upon each adjustment of the Purchase Price pursuant to this
Section 8, the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Purchase
Price in effect prior to such adjustment and dividing the product so obtained by
the applicable adjusted Purchase Price.
(b) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or as a result of subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification or change of the then outstanding shares of Common Stock or
other capital stock issuable upon exercise of the Warrants) or in case of any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant, the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale
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or conveyance and shall forthwith file at the Corporate Office of the Warrant
Agent, a statement signed by its Chairman, Chief Executive Officer or President
and by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary evidencing such provision. Such provisions shall include provision
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 8(a). The above provisions of this Section
8(b) shall similarly apply to successive reclassifications and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.
(c) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock purchasable upon exercise of the Warrants,
the Warrant Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant Certificates pursuant to
Section 2(e) hereof, continue to express the Purchase Price per share and the
number of shares purchasable thereunder as the Purchase Price per share and the
number of shares purchasable thereunder were expressed in the Warrant
Certificates when the same were originally issued.
(d) After each adjustment of the Purchase Price pursuant to this Section
8, the Company will promptly prepare a certificate signed by the Chairman, Chief
Executive Officer or President, and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, of the Company setting forth: (i)
the Purchase Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant, after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to each Registered Holder at his
last address as it shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof. The affidavit of an officer of the Warrant
Agent or the Secretary or an Assistant Secretary of the Company that such notice
has been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(e) No adjustment of the Purchase Price shall be made as a result of
or in connection with the issuance or sale of shares of Common Stock if the
amount of said adjustment shall be less than $.05 for one share of Common Stock;
provided, however, that in such case, any adjustment that would otherwise be
required to be made shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment that shall amount, together
with any adjustment so carried forward, to at least $.05 for one share of Common
Stock. In addition, Registered Holders shall not be entitled to cash dividends
paid by the Company prior to the exercise of any Warrant or Warrants held by
them.
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SECTION 9. Redemption.
(a) Commencing on or after the Initial Warrant Redemption Date, the
Company may redeem all the Warrants at $.10 per Warrant on at least 30 days
prior written notice to the Registered Holders of the Warrants, commencing on
the Initial Warrant Redemption Date; provided, however, that before any such
call for redemption of Warrants can take place, the Market Price of the Common
Stock for twenty (20) consecutive trading days ending within 15 days of the
notice of redemption shall be $10.50, subject to adjustment in the event of any
stock splits or other similar events as provided in Section 8 hereof. All
Warrants must be redeemed if any are redeemed. For purposes of this Section 9,
the "Market Price" of the Common Stock for any trading day means the last sale
price for the Common Stock on The OTC Electronic Bulletin Board or The NASDAQ
Stock Market if quoted thereon.
(b) In the event the Company exercises its right to redeem all of the
Warrants, it shall give or cause to be given notice to the Registered Holders of
the Warrants, by mailing to such Registered Holders a notice of redemption,
first class, postage prepaid, within fifteen (15) calendar days of the
aforementioned twenty (20) consecutive trading days and at least by the
thirtieth (30th) day before the date fixed for redemption, at their last address
as shall appear on the records of the Warrant Agent. Any notice mailed in the
manner provided herein shall be conclusively presumed to have been duly given
whether or not the Registered Holder receives such notice. At the time of the
mailing to the Registered Holders of the Warrants of the notice of redemption,
the Company shall deliver or cause to be delivered to the Representative a
similar notice telephonically and confirmed in writing together with a list of
the Registered Holders (including their respective addresses and number of
Warrants beneficially owned) to whom such notice of redemption has been or will
be given.
(c) The notice of redemption, which may not be mailed until on or
after the Initial Warrant Redemption Date, shall specify (i) the redemption
price, (ii) the date fixed for redemption, (iii) the place where the Warrant
Certificate shall be delivered and the redemption price shall be paid, (iv) that
the Representative is the Company's exclusive warrant solicitation agent and
shall receive the commission contemplated by Section 4(b) hereof, and (v) that
the right to exercise the Warrant shall terminate a 5:00 p.m. (New York City
Time) on the business day immediately preceding the date fixed for redemption.
The date fixed for the redemption of the Warrants shall be the Redemption Date.
No failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity of the proceedings for such redemption except as to a
Registered Holder (a) to whom notice was not mailed or (b) whose notice was
defective. An affidavit of the Warrant Agent or the Secretary or Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. (New
York City Time) on the business day immediately preceding the Redemption Date.
The
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redemption price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
(e) The Company shall indemnify the Representative and each person, if
any, who controls the Representative within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act against all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from the
registration statement or prospectus referred to in Section 5(b) hereof to the
same extent and with the same effect (including the provisions regarding
contribution) as the provisions pursuant to which the Company has agreed to
indemnify the Representative contained in Sections 6 and 7 of the Underwriting
Agreement.
(f) The Company shall as soon as practicable after the Redemption
Date, and in any event within 15 months thereafter, make "generally available to
its security holders" (within the meaning of Rule 158 under the Act) an earnings
statement (which need not be audited) complying with Section ll(a) of the Act
and covering a period of at least 12 consecutive months beginning after the
Redemption Date.
(g) The Company shall deliver within five (5) business days prior to
the Redemption Date, copies of all correspondence between the Securities and
Exchange Commission ("Commission") and the Company, its counsel or auditors and
all memoranda relating to discussions with the Commission or its staff with
respect to such registration statement and permit the Representative to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as the Representative shall reasonably request.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and the Representative, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not, by
issuing and delivering Warrant Certificates or by any other act hereunder, be
deemed to make any representations as to the validity or value or authorization
of the Warrant Certificates or the Warrants represented thereby or of any
securities or other property delivered upon exercise of any Warrant or whether
any stock issued upon exercise of any Warrant is fully paid and nonassessable.
12
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price provided in this Agreement, or to determine
whether any fact exists which may require any such adjustment, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be liable for any
recital or statement of fact contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other document or
instrument believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties, (ii) be responsible for any failure on
the part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement, except for its own
gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board of Directors, Chief Executive Officer or President
(unless other evidence in respect thereof is herein specifically prescribed).
The Warrant Agent shall not be liable for any action taken, suffered or omitted
by it in accordance with such notice, statement, instruction, request,
direction, order or demand.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder; the Company further agrees to indemnify the Warrant Agent
and save it harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's gross
negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own gross negligence or willful misconduct), after giving
60 days prior written notice to the Company. At least 30 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation the Company shall
appoint in writing a new warrant agent. If the Company shall fail to make such
appointment within a period of 60 days after it has been notified in writing of
such resignation by the resigning Warrant Agent, then the Registered Holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the
13
Company or by such a court, shall be a bank or trust company having a capital
and surplus, as shown by its last published report to its stockholders, of not
less than $10,000,000 or a stock transfer company doing business in New York,
New York. After acceptance in writing of such appointment by the new warrant
agent is received by the Company, such new warrant agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the warrant agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not later than
the effective date of any such appointment the Company shall file notice thereof
with the resigning Warrant Agent and shall forthwith cause a copy of such notice
to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant
agent may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent or any new warrant agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation is
eligible for appointment as successor to the Warrant Agent under the provisions
of the preceding paragraph. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed to the Company and
to the Registered Holders of each Warrant Certificate.
(h) The Warrant Agent, its Subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of three years from
the date of exercise any Warrant Certificate received by it upon such exercise,
marked to indicate its cancellation thereof in accordance with Section 6(e)
hereof.
SECTION 11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental agreement make
any changes or corrections in this Agreement without the approval of any holders
of Warrants (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained; (ii) that they may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Warrant Certificates; (iii)
that they deem necessary or desirable to decrease the Purchase Price as provided
for in Section 1(f) hereof; or (iv) which may be required by law; provided,
however, that this Agreement shall not otherwise be modified,
14
supplemented or altered in any respect except with the consent in writing of the
Registered Holders representing not less than 50% of the Warrants then
outstanding; provided, further, that no change in the number or nature of the
securities purchasable upon the exercise of any Warrant, or the Purchase Price
(other than a decrease in the Purchase Price as provided in Section l(f)
thereof) therefor, shall be made without the consent in writing of the
Registered Holder of the Warrant Certificate, other than such changes as are
specifically permitted or prescribed by this Agreement as originally executed.
In addition, this Agreement may not be modified, amended or supplemented without
the prior written consent of the Representative, other than (i) to cure any
ambiguity or to correct any provision which is inconsistent or which is a
manifest mistake or error; (ii) to make any such change that is necessary or
desirable and which shall not adversely affect the interests of the
Representative; (iii) to decrease the Purchase Price as provided for in Section
1 (f) hereof; or (iv) except as may be required by law.
SECTION 12. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first-class postage prepaid, or delivered to a telegraph office for
transmission if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company at 0000 Xxxxxx Xxxxxxx Xxxxxx, X.X., Xxxxxx, Xxxx
00000, Attention: Chief Executive Officer, or at such other address as may have
been furnished to the Warrant Agent in writing by the Company; and if to the
Warrant Agent, at its Corporate Office. Copies of any notice delivered pursuant
to this Agreement shall be delivered to the Representative at 00 Xxxxxxx Xxxx
Xxxxx, 00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxx,
President, or at such other addresses as may have been furnished to the Company
and the Warrant Agent in writing.
SECTION 13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflicts of laws.
SECTION 14. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and the
holders from time to time of Warrant Certificates or any of them. Except as
hereinafter stated, nothing in this Agreement is intended or shall be construed
to confer upon any other person any right, remedy or claim or to impose upon any
other person any duty, liability or obligation. The Representative is, and shall
at all times irrevocably be deemed to be, third-party beneficiaries of this
Agreement, with full power, authority and standing to enforce the rights granted
to it hereunder.
15
SECTION 15. Counterparts.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first date first above written.
[SEAL]
THE HAVANA GROUP, INC. XXXXXX TRUST COMPANY OF
NEW YORK
By: By:
--------------------- -------------------------
Xxxxxxx Xxxxxx authorized officer
President
16
Exhibit A
No. THG VOID AFTER _________ , 2003
WARRANTS
WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
THE HAVANA GROUP, INC.
CUSIP 419209 119
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number of
Warrants (the "Warrants") specified above. Each Warrant initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter defined), one fully
paid and non-assessable share of Common Stock, $.001 par value, of The Havana
Group, Inc., a Delaware corporation (the "Company"), at any time from
____________, 1998, and prior to the Expiration Date (as hereinafter defined),
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate office
of Xxxxxx Trust Company of New York 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$5.25, subject
17
to adjustment (the "Purchase Price"), in lawful money of the United States of
America in cash or by check made payable to the Warrant Agent for the account of
the Company.
This Warrant Certificate and each Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement (the "Warrant Agreement"), dated __________ ,
1998, by and between the Company and the Warrant Agent.
The Purchase Price and the number of shares of Common Stock subject to
purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment upon the occurrence of certain events as provided for
in the Warrant Agreement.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case of
the exercise of less than all the warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and shall execute and
deliver a new Warrant Certificate or Warrant Certificates of like tenor, which
the Warrant Agent shall countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. New York City Time)
on __________ , 2003. If such date shall in the State of New York be a Saturday,
Sunday, holiday or a day on which the banks are authorized to close, then the
Expiration Date shall mean 5:00 P.M. (New York City Time) the next following day
which in the State of New York is not a Saturday, Sunday, holiday or a day on
which banks are authorized to close.
18
The Company shall not be obligated to deliver any securities pursuant
to the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to such securities
is effective or an exemption thereunder is available. The Company has covenanted
and agreed that, if required by the Act, it will file a registration statement
under the Act, use its best efforts to cause the same to become effective, to
keep such registration statement current, if required under the Act, while any
of the Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder exercising this Warrant.
This Warrant shall not be exercisable by a Registered Holder in any state where
such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by
the Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. Upon due presentment and payment of any tax or other
charge imposed in connection therewith or incident thereto, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
of Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including,
19
without limitation, the right to vote or to receive dividends or other
distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may
be redeemed at the option of the Company at a redemption price of $.10 per
Warrant, at any time commencing after _____________ , 1999, provided that the
Market Price (as defined in the Warrant Agreement) of the Common Stock for
twenty (20) consecutive trading days and ending no more than fifteen (15) days
prior to the Notice of Redemption, as defined below, shall have averaged at
least $10.50 per share, subject in each case to adjustment in the event of any
stock splits or similar events. Notice of redemption (the "Notice of
Redemption") shall be given at least thirty days before the date fixed for
redemption, all as provided in the Warrant Agreement. On and after the date
fixed for redemption, the Registered Holder shall have no rights with respect to
this Warrant except to receive the $.10 per Warrant upon surrender of this
Certificate.
Under certain circumstances, VTR Capital, Inc., its successors and
assigns shall be entitled to receive, in connection with the exercise of the
Warrants represented hereby, five percent (5%) of the Purchase Price of the
Warrants so exercised commencing on or after ____________________, 1999.
Prior to due presentment for registration of transfer hereof, the
Company and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby (notwithstanding
any notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the
20
Company or the Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to
conflicts of law principles.
This Warrant Certificate is not valid unless countersigned by the
Warrant Agent.
21
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed, manually or in facsimile by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
Dated: , 1998
THE HAVANA GROUP, INC.
[SEAL] By:
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
By:
---------------------------
Name: Xxxxxxxxxxx Xxxxxx
Title: Secretary
COUNTERSIGNED:
XXXXXX TRUST COMPANY OF NEW YORK
as Warrant Agent
By:
-------------------------
Name:
Title: Principal
22
SUBSCRIPTION FORM
-----------------
To Be Executed by the Registered Holder
in Order to Exercise Warrant
The undersigned Registered Holder hereby irrevocably elects to exercise
Warrants represented by this Warrant Certificate, and to purchase the securities
issuable upon the exercise of such Warrants, and requests that certificates for
such Securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
------------------------
------------------------
------------------------
------------------------
(please print or type name and address)
and be delivered to
------------------------
------------------------
------------------------
------------------------
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
23
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was solicited by VTR Capital, Inc. / /
2. The exercise of this Warrant was solicited by
.
------------------------- / /
3. If the exercise of this Warrant was not solicited, please check the
following box. / /
Dated: X
------------------- -----------------------------------
-----------------------------------
-----------------------------------
Address
-----------------------------------
Social Security or Taxpayer
Identification Number
-----------------------------------
Signature Guaranteed
-----------------------------------
24
ASSIGNMENT
----------
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, , hereby sells, assigns and transfers unto
---------------
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
------------------------
------------------------
------------------------
------------------------
(please print or type name and address)
of the Warrants represented by this Warrant
--------------------------
Certificate, and hereby irrevocably constitutes and appoints attorney to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.
Dated: X
------------------ ------------------------------
Signature Guaranteed
------------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE
GUARANTEED BY A MEMBER OF THE MEDALLION SIGNATURE PROGRAM.
25
