Exhibit 4.4
WARRANT AGREEMENT
This Warrant Agreement ("Agreement") effective the 21st day of June,
1999 is entered into by and between XXXX AGRICULTURAL PRODUCTS CO., an Ohio
corporation, (hereinafter referred to as the "Company") and Xxxxxx X. Xxxxxxxxxx
("Holder").
W I T N E S S E T H:
WHEREAS, as of the effective date of this Agreement, the Company is
authorized to issue Four Million (4,000,000) shares of common stock on such
terms, conditions and provisions as the Board of Directors of the Company may
from time to time determine; and
WHEREAS, the Board of Directors has authorized the Company to issue
5,000 warrants to purchase common shares of the Company to Holder
pursuant to a Subscription Agreement effective June 21, 1999, (the "Agreement"),
which Agreement is expressly incorporated herein by reference.
NOW, THEREFORE, pursuant to the applicable laws of the State of Ohio, the
parties hereto hereby agree as follows:
1. Redeemable Nontransferable Common Stock Purchase Warrant. The Company
shall issue to Holder, in accordance with the Agreement, 5,000 Common Share
Purchase Warrants (hereinafter referred to as "Warrants"). The Warrants
shall be evidenced by a Warrant Certificate in the form attached hereto as
Exhibit A, the terms and provisions of which are expressly incorporated herein
by reference. Holder may not transfer, assign, pledge or hypothecate any Warrant
without the prior written consent of the Company.
2. Declared Value. The declared value of each Warrant shall be One Cent
($.01).
3. Exercise Price. The exercise price of the Warrants shall be One Cent
($0.01).
4. Par Value. Each common share issuable upon exercise of the Warrants
shall have no par value.
5. Warrant Rights. No Warrant Holder as such, shall be able to vote or
receive dividends or be deemed the Holder of shares of common stock for any
purpose, nor shall anything contained in any Warrant Certificate be construed to
confer upon any Warrant Holder, as such, any of the rights of the shareholder of
the Company or any right to vote, give or withhold consent to any action by the
Company (whether upon recapitalization, issuance of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings or other actions affecting shareholders, receive dividends or
subscription rights or otherwise, until such Warrants shall have been exercised
and the shares of common stock purchasable upon the exercise thereof, shall
become deliverable as provided in this Warrant Agreement.
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If any Warrant Certificate is lost, stolen, mutilated or destroyed, the
Company may, on such terms as to such indemnification or otherwise as it may, in
its discretion, 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.
6. Warrant Exercise. The Warrants may not be exercised until after June
30, 2000. Thereafter, the Warrants are exercisable as follows: 1,667 Warrants
are exercisable at any time after June 30, 2000; 1,666 Warrants are exercisable
at any time after June 30, 2001; and 1,666 Warrants are exercisable at any time
after June 30, 2002. All of the Warrants expire June 30, 2006. The Warrant
Holder may exercise a Warrant, in whole or in part, by surrendering the Warrant
Certificate, with the subscription form thereon duly executed, to the Company or
its Warrant Agent if any, at the appropriate corporate office, together with the
exercise price for each share of common stock to be purchased, payable 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. All common shares issued upon the exercise of the Warrants shall be,
upon receipt by the Company of payment therefor, validly issued and outstanding
and fully paid and nonassessable. 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 such Warrant, a new Warrant Certificate, continuing on the same
terms as the exercised Warrant Certificate except as to the number of shares
subject to purchase thereunder, shall be countersigned and delivered to or upon
the order of said Warrant Holder.
7. Adjustment of Shares of Common Stock Purchasable or of Warrant Price.
The number of Common Shares purchasable or the Warrant Price, or both, are
subject to adjustment from time to time as follows:
(a) In case the Company shall at any time split, reverse split,
subdivide or combine its outstanding common shares, by reclassification or
otherwise, the Warrant Price or the number of Shares purchasable upon
exercise thereof, or both, then in effect shall be proportionately
decreased or increased, as the case may be, effective simultaneously with
the effective date of such split, reverse split, subdivision or
combination. The Company shall have the option of choosing either an
adjustment in the Warrant Price or the number of Shares purchasable upon
exercise of a Warrant, or a combination of the two. A dividend in the form
of common stock shall be considered a subdivision of shares for the
purposes of this paragraph.
(b) In case of any capital reorganization or of any reclassification
of the common shares of the Company, the Company shall execute an
amendment to this Agreement, providing that the Warrants shall, upon such
capital reorganization or reclassification, evidence the right to purchase
the number of shares of stock or other securities or property of the
Company to which the common shares issuable (at the time of such capital
reorganization or reclassification of common stock) upon exercise of the
Warrants would have been entitled upon such capital reorganization or
reclassification of common shares; and in any such case, if necessary, the
provisions set forth herein
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with respect to the rights and interests thereafter of the Warrant Holder
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property
thereafter deliverable on the exercise of the Warrants. Any such
adjustment which shall be approved by the Board of Directors of the
Company shall for all purposes of this Section 7 conclusively be deemed to
be an appropriate adjustment.
(c) Anything in this Section 7 to the contrary notwithstanding, the
Company shall not be required, except as hereinafter provided, to make any
adjustment of the Warrant Price in any case in which the amount by which
such Warrant Price would be reduced in accordance with the foregoing
provisions would be less than $.10, but in such case any adjustment that
would otherwise be required then to be made will be carried forward and
made at the time and together with the next subsequent adjustment which,
together with any and all such adjustments so carried forward, shall
amount to not less than $.10, provided, however, that adjustments in the
Warrant Price shall be required and made in accordance with the provisions
of this Section 7 (other than this subparagraph c) not later than such
time as may be required in order to preserve the tax-free nature of any
distribution (within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Internal Revenue Code of 1986, as amended) to the Warrant Holder or the
holders of common stock. In the event of any split, reverse split,
subdivision or combination of shares of common stock, the $.10 referenced
in this paragraph (as theretofore decreased or increased) shall be
proportionately decreased or increased.
(d) Upon each adjustment of the Warrant Price pursuant to
subparagraphs (a), (b) and (c) of this Section 7, the number of common
shares specified in each Warrant Certificate shall thereupon evidence the
right to purchase that number of common shares (calculated to the nearest
hundredth of a common share) obtained by multiplying the number of common
shares purchasable immediately prior to such adjustment upon exercise of
such Warrant by the Warrant Price in effect immediately prior to such
adjustment and dividing the product so obtained by the Warrant Price in
effect after such adjustment.
(e) Whenever the Warrant Price or the number of common shares
issuable upon the exercise of a Warrant shall be adjusted as herein
provided:
(i) the Company shall compute the adjusted Warrant Price or
the adjusted number of common shares in accordance with such
provisions and shall prepare a certificate signed by its President,
and any Vice President, Treasurer or Secretary, setting forth the
adjusted Warrant Price or the adjusted number of shares of common
stock issuable upon the exercise of a Warrant and showing in
reasonable detail the facts upon which such adjustments are based;
(ii) the Company shall cause to be mailed to the Warrant
Holder in accordance with the provisions of Section 11 hereof a
notice stating that the Warrant Price or the number of shares of
common stock purchasable upon
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exercise of the Warrants, or both, have been adjusted and setting
forth the adjusted Warrant Price or the adjusted number of shares of
common stock purchasable upon the exercise of a Warrant.
(f) In case at any time after the date of this Agreement:
(i) the Company shall declare a dividend (or any other
distribution) on its common stock payable otherwise than in cash out
of its undistributed net income;
(ii) the Company shall authorize the grant to the holders of
its common shares of rights to subscribe for or purchase any shares
of any class or of any other rights;
(iii) there shall be any reclassification of the common shares
(other than a split, reverse split, subdivision or combination of
its outstanding common shares);
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be mailed to the Warrant Holder in
accordance with the provisions of Section 11 hereof, at least 20 days
prior to the applicable record date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights, or, if a record is not to be taken,
the date as of which the holders of common shares of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the
date on which such reclassification, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is
expected that holders of common shares of record shall be entitled to
exchange their common shares for securities or other property deliverable
upon such reclassification, dissolution, liquidation or winding up.
(g) The form of Warrant Certificate need not be changed because of
any change in the Warrant Price or in the number of common shares
purchasable upon the exercise of a Warrant pursuant to this Section 7 and
Warrant Certificates issued after such change may state the same Warrant
Price and the same number of common shares as are stated in the Warrant
Certificates initially issued pursuant to this Agreement. However, the
Company may at any time in its sole discretion (which shall be conclusive)
make any change in the form of Warrant Certificate that it may deem
appropriate that does not affect the substance thereof, and any Warrant
Certificate thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant Certificate or otherwise, may be
in the form as so changed.
8. Issuance of Shares Upon Exercise of Warrants. The issuance of shares
and any offer to issue shares upon exercise of the Warrants is conditioned upon
the availability of an
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exemption from registration of such issuance under Section 4(2) or Regulation D,
Rule 506 or Section 4(6) of the Securities Act of 1933, as amended (the "Act")
and corresponding state securities laws, or some other exemption from
registration under federal and state securities laws acceptable to the Company.
Holder understands and agrees that the Warrants and the Common Shares to be
issued upon exercise of the Warrants will be considered "restricted" securities
within the meaning of the Act and will be subject to significant limitations on
resale under the Act and state securities laws. Prior to the issuance of such
shares, the Company shall secure from its counsel an opinion to the effect that
the issuance of the shares on the exercise of the Warrants will be a transaction
exempt from registration under applicable federal and state securities laws.
Prior to the resale of such shares, Holder shall secure from his counsel an
opinion to the effect that the resale of the shares received on the exercise of
the Warrants will be done in compliance with applicable federal and state
securities laws. Holder shall indemnify and hold harmless the Company for all
claims, losses or expenses, including attorney fees, arising out of Holder's
failure to comply with all applicable securities laws. The Company shall
indemnify and hold harmless Holder for all claims, losses or expenses, including
attorney fees, arising out of the Company's failure to comply with all
applicable securities laws.
9. Exemption of Shares of Common Stock Issuable Upon Exercise of Warrants.
If any shares of common stock issuable upon the exercise of a Warrant require
the filing of any document or notice or approval of any governmental authority,
or the taking of any other action under the laws of the United States of America
or any state, before such shares of common stock may be validly issued pursuant
to exemption from registration under the laws of the United States of America or
any state, then the Company covenants and represents to the Warrant Holder that
it will in good faith and as expeditiously as possible endeavor to prepare and
make such filing, secure such approval or to take such other action as the case
may be, at its sole expense; provided, however, that in no event shall such
shares of Common Stock be issued, and the Company shall be authorized hereby to
suspend the exercise of all Warrants for the period during which it is
endeavoring to obtain such approval or take such other action. In the event the
Company shall, at any time, suspend the exercise of Warrants as aforesaid, the
expiration date of the Warrants in effect at the date of each such suspension
shall be extended for the number of days such suspension shall be in effect.
10. Warrant Redemption. The Warrants are redeemable by the Company at any
time after issuance through the expiration date of June 30, 2006 at the declared
value of $.01 per Warrant ("Redemption Price"). If the Company shall elect to
redeem Warrants as permitted herein, notice of redemption shall be given to the
Holder of all outstanding Warrants to whom the redemption shall apply by mailing
first class mail a notice of such redemption not less than 60 days prior to the
date fixed for the redemption at his last address as it shall appear upon the
books of the Company, but failure to give such notice by mailing to any Holder
of the Warrant, or any defect therein, shall not effect the legality or validity
of the proceedings for the redemption of any other Warrant. The notice of
redemption to each Holder of Warrants shall specify the date fixed for
redemption (the "Redemption Date") and the Redemption Price, and shall state
that payment of the Redemption Price of the Warrants will be made at the office
of the Company or its Warrant Agent, if any, upon presentation and surrender of
such
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Warrants, and shall also state that the right to exercise the Warrants so
redeemable shall terminate on the Redemption Date (stating such date). If the
giving of notice of redemption shall have been completed as above provided, and,
in the case where a Warrant Agent is utilized, its funds sufficient for the
redemption of the Warrant shall have been deposited with the Warrant Agent for
such purpose, the right to exercise the Warrants shall terminate at the close of
business on the Redemption Date, and the Holder of each Warrant shall thereafter
be entitled upon surrender of his Warrant only to receive the Redemption Price
for such Warrant, without interest.
11. Notice. All notices due to a party to this Agreement shall be sent by
U.S. mail, regular postage, at the following addresses:
Xxxx Agricultural Products Co.
Attn: Xxxxxx X. Xxxx, President
0000 Xxxxxx Xxxx 00
Xx. Xxxxxx, Xxxx 00000
Xxxxxx X. Xxxxxxxxxx
000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
or at such other address or addresses as any party may from time to time furnish
to the others in writing.
12. Rights. Except for the rights and privileges specifically set forth
herein, the Holder of the Warrants shall have no other rights, powers,
authorities or privileges as holders of stock of the Company and each Warrant
Holder expressly waives all of such rights to the extent permitted by law.
13. Liability. The Company and the Board of Directors of the Company and
each member thereof will incur no liability for the creation of a series of
preferred stock or a new class of common stock so long as they acted in good
faith in the creation of any such series or class. The Board of Directors'
determination of the dividend rate with respect to any such series or classes of
shares shall be final and conclusive and so long as the Board of Directors acted
in good faith and with reasonable prudence, no Holder of any share of common
stock or Warrant shall have any right to make any claim against any member of
the Board of Directors of the Company. Holders of common shares or Warrants of
the Company shall and do hereby save harmless each member of the Board of
Directors of the Company for any actions taken by them in connection with this
Agreement or the issuance of series or other classes of preferred or common
stock.
14. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Ohio, and the parties agree to submit
themselves to the jurisdiction of the courts of that state, with venue in Xxxxxx
County, for the resolution of any dispute arising hereunder.
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15. Titles. The titles and headings contained in this Agreement are for
convenience only and shall not affect the interpretation of any of the terms
hereof.
16. Copies. A copy of this Agreement shall be mailed by the Company to
Warrant Holder upon the written request of such Warrant Holder.
17. Cooperation and Further Assurances. The parties hereto agree that they
will execute and deliver to each other and third parties any and all documents
in addition to those expressly provided for herein that may be necessary or
appropriate to effectuate the provisions of this Agreement, whether before, on
or after the date hereof. The parties mutually agree to cooperate with each
other to the extent reasonably required in order to fully accomplish the
transactions herein contemplated.
18. Amendments. No amendments or variation of the terms and conditions of
this Agreement shall be valid unless evidence by arriving signed by all parties
to this Agreement.
19. Integration. All agreements, contracts, understandings or arrangements
which may have been heretofore made or had with reference to the subject matter
of this Agreement are hereby wholly abrogated, superseded, discharged and
annulled, it being agreed between the parties that this Agreement constitutes
and expresses the entire understanding between them, all other promises,
representations, agreements, understandings and arrangements being herein
merged.
20. Legal Representation. The parties hereto have carefully read this
Agreement and have had ample time and opportunity to discuss the terms and
contents of this Agreement with their attorneys and other advisors and know and
understand the contents of this Agreement. The parties hereto have signed this
Agreement as their own free and voluntary acts.
21. Non-Waiver. The failure of any party to insist in any one or more
instances upon performance by another party of any of the terms and conditions
of this Agreement shall not be construed as a waiver or relinquishment of the
future performance thereof, and the other's obligation with respect to such
future performance shall continue in full force and effect.
22. Restrictions on Assignment. The provisions of this Agreement
pertaining to the rights and duties of Holder are personal to Holder and Holder
shall not assign any such right or delegate any such duty without the prior
written consent of the Company. The Company shall have the right to assign this
Agreement without the consent of Holder.
IN WITNESS WHEREOF, this Agreement has been executed the 21st day of
June, 1999.
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XXXX AGRICULTURAL PRODUCTS CO.
By:
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Xxxxxx X. Xxxx, President
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"Holder"
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EXHIBIT A
WARRANT CERTIFICATE
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