EXHIBIT 4f
WARRANT AGREEMENT
QC Optics, Inc., a Delaware corporation (the "Company"), and American
Securities Transfer & Trust, Inc. ("AST"), 0000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx, a Colorado corporation (the "Warrant Agent"), agree as follows:
1. PURPOSE. The Company proposes to publicly offer and issue up to
950,000 Redeemable Warrants (the "Warrants"), each Warrant permitting the holder
to purchase one (1) share of the Company's Common Stock, $.01 par value per
share (a "Share").
2. WARRANTS. Each Warrant will entitle the registered holder of a
Warrant (the "Warrant Holder") to purchase from the Company one (1) Share at
$7.80 per Share (the "Exercise Price"). A Warrant Holder may exercise all or any
number of Warrants resulting in the purchase of a whole number of Shares.
3. EXERCISE PERIOD. The Warrants may be exercised at any time during
the period commencing _____________, 1997 and ending at 5:00 p.m., New York time
on __________, 2001 (the "Expiration Date") except as changed by Section 13 of
this Agreement. If such date shall in the State of New York be a holiday or a
day on which the banks are authorized to close, then the Expiration Date shall
mean 5:00 p.m. (New York time) the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close. After the
Expiration Date, any unexercised warrants will be void and all rights of Warrant
Holders shall cease.
4. DETACHABILITY. The Shares and Warrants are immediately separate.
5. REDEMPTION OF WARRANTS.
a. Redemption; Redemption Price. Commencing ___________, 1997,
the Warrants are redeemable by the Company, in whole or in part, at $.20 per
Warrant on thirty (30) days' prior written notice provided that the market price
of the Common Stock equals or exceeds $10.80 for twenty (20) consecutive trading
days ending within ten (10) days prior to the notice of redemption. "Market
Price" is defined as the closing bid price as quoted on the American Stock
Exchange. If the Company shall determine to redeem less than all of the Warrants
then outstanding, then the Warrant Agent shall determine the Warrants to be
redeemed by such manner or method as it shall deem fair and appropriate, either
by lot or pro-rata.
b. Notice of Redemption. The Company shall give notice to the
Warrant Agent of any redemption in sufficient time so that the Warrant Agent
shall give the Notice of Redemption to all Holders of Warrant Certificates to be
redeemed at least thirty (30) days prior to the date established for such
redemption (the "Redemption Date"). Each Notice of Redemption shall: (a) specify
the Redemption Date and the Redemption Price; (b) state that payment of the
Redemption Price will be made by the Warrant Agent upon presentation and
surrender to the Warrant Agent at its principal office of the Warrant
Certificates representing the Warrants being redeemed; (C) state that
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the rights to exercise the Warrants shall terminate at 5:00 p.m. New York time,
on the fifth business day preceding the Redemption Date; and (d) if less than
all of the Warrants then outstanding are being redeemed, specify the serial
numbers or portions of the Warrants to be redeemed.
c. Payment of Redemption Price. On or prior to the opening of
business on the Redemption Date, the Company will deposit with the Warrant Agent
cash, or an irrevocable letter of credit issued by a national or state bank and
in form reasonably satisfactory to the Warrant Agent, sufficient in amount to
purchase all of the Warrants stated in the Notice of Redemption to be redeemed.
Payment of the Redemption Price shall be made by the Warrant Agent upon
presentation and surrender of the Warrant Certificates representing such
Warrants to the Warrant Agent at its principal office. If the Notice of
Redemption shall have been duly given and if the Company shall have duly
deposited with the Warrant Agent the cash or irrevocable letter of credit
required by this Section 4c, then any Warrants not exercised by 5:00 p.m., New
York City time, on the Redemption Date shall no longer be deemed to be
outstanding, and all rights with respect to such Warrants shall from and after
such time and date cease and terminate, except only for the right of the Holders
thereof to receive the Redemption Price, without interest.
6. CERTIFICATES. The Warrant Certificates shall be in registered form
only and shall be substantially in the form set forth in Exhibit A attached to
this Agreement. Warrant Certificates shall be signed by, or shall bear the
facsimile signature of, the President or a Vice President of the Company and the
Secretary or an Assistant Secretary of the Company and shall bear a facsimile of
the Company's corporate seal. If any person, whose facsimile signature has been
placed upon any Warrant Certificate as the signature of an officer of the
Company, shall have ceased to be such officer before such Warrant Certificate is
countersigned, issued and delivered, such Warrant Certificate shall be
countersigned, issued and delivered with the same effect as if such person had
not ceased to be such officer. Any Warrant Certificate may be signed by, or made
to bear the facsimile signature of, any person who at the actual date of the
preparation of such Warrant Certificate shall be a proper officer of the Company
to sign such Warrant Certificate even though such person was not such an officer
upon the date of this Agreement.
7. COUNTERSIGNING. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign and deliver
to, or in accordance with the instructions of, any Warrant Holder any Warrant
Certificate which is properly issued.
8. REGISTRATION OF TRANSFERS AND EXCHANGES.
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. The Warrant Agent shall from time to time
register the transfer of any outstanding Warrant Certificate upon records
maintained by the Warrant Agent for such purpose upon surrender of such Warrant
Certificate to the Warrant Agent for transfer, accompanied by appropriate
instruments of transfer in form satisfactory to the Company and the Warrant
Agent and duly executed by the Warrant Holder
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or a duly authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued in the name of and to the transferee and the
surrendered Warrant Certificate shall be canceled.
b. With respect to any Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the subscription or
exercise form, as the case may be, on the reverse thereof shall be duly endorsed
or be accompanied by a written instrument or instruments of transfer and
subscription, in form satisfactory to the Company and the Warrant Agent, duly
executed by the Warrant Holder thereof or his attorney duly authorized in
writing.
9. EXERCISE OF WARRANTS.
a. Any one Warrant or any multiple of one Warrant evidenced by
any Warrant Certificate may be exercised upon any single occasion on or after
the Exercise Date, and on or before the Expiration Date. A Warrant shall be
exercised by the Warrant Holder by surrendering to the Warrant Agent the Warrant
Certificate evidencing such Warrant with the exercise form on the reverse of
such Warrant Certificate duly completed and executed and delivering to the
Warrant Agent, by good check or bank draft payable to the order of the Company,
the Exercise Price for each Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise
form thereon duly executed together with payment in full of the Exercise Price
for the Shares for which Warrants are then being exercised, the Warrant Agent
shall requisition from any transfer agent for the Shares, and upon receipt shall
make delivery of, certificates evidencing the total number of whole Shares for
which Warrants are then being exercised in such names and denominations as are
required for delivery to, or in accordance with the instructions of, the Warrant
Holder. Such certificates for the Shares shall be deemed to be issued, and the
person to whom such Shares are issued of record shall be deemed to have become a
holder of record of such Shares, as of the date of the surrender of such Warrant
Certificate and payment of the Exercise Price, whichever shall last occur,
provided that if the books of the Company with respect to the Shares shall be
closed as of such date the Shares shall be deemed to be issued, and the person
to whom such Shares are issued of record shall be deemed to have become a record
holder of such Shares, as of the date on which such books shall next be open
(whether before, on or after the Expiration Date) but at the Exercise Price,
whichever shall have last occurred, to the Warrant Agent.
c. If less than all the Warrants evidenced by a Warrant
Certificate are exercised upon a single occasion, a new Warrant Certificate for
the balance of the Warrants not so exercised shall be issued and delivered to,
or in accordance with, transfer instructions properly given by the Warrant
Holder until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of
Warrants shall be canceled.
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e. Upon the exercise, or conversion of any warrant, the
Warrant Agent shall promptly deposit the payment into an escrow account
established by mutual agreement of the Company and the Warrant Agent at a
federally insured commercial bank. All funds deposited in the escrow account
will be disbursed on a weekly basis to the Company once they have been
determined by the Warrant Agent to be collected funds. Once the funds are
determined to be collected, the Warrant Agent shall cause the share
certificate(s) representing the exercised warrants to be issued.
f. Expenses incurred by AST while acting in the capacity as
Warrant Agent will be paid by the Company. These expenses, including delivery of
exercised share certificate to the shareholder, will be deducted from the
exercise fee submitted prior to distribution of funds to the Company. A detailed
accounting statement relating to the number of shares exercised, names of
registered warrant holder and the net amount of exercised funds remitted will be
given to the Company with the payment of each exercise amount.
g. At the time of exercise of the warrant(s), the transfer fee
is to be paid by the Company.
h. 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 and use its best efforts to keep such registration statement current
while any of the Warrants are outstanding and deliver a prospectus which
complies with Section 10(a)(3) of the Securities Act of 1933, as amended (the
"Act"), to the Registered Holder exercising the Warrant (except, if in the
opinion of counsel to the Company, such registration is not required under the
federal securities law or if the Company receives a letter from the staff of the
Securities and Exchange Commission stating that it would not take any
enforcement action if such registration is not effected). The Company will use
best efforts to obtain appropriate approvals or registrations under state "blue
sky" securities laws. With respect to any such securities, however, Warrants may
not be exercised by, or shares of Common Stock issued to, any Registered Holder
in any state in which such exercise would be unlawful.
10. TAXES. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not, however, be
required to pay any tax which may be payable in respect to any transfer involved
in any issue of Warrant Certificates or in the issue of any certificates of
Shares in the name other than that of the Warrant Holder upon the exercise of
any Warrant.
11. MUTILATED OR MISSING WARRANT CERTIFICATES. If any Warrant
Certificate is mutilated, lost, stolen or destroyed, the Company and the Warrant
Agent may, on such terms as to indemnify or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant Certificate,
include the surrender thereof), and upon receipt of evidence satisfactory to the
Company
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and the Warrant Agent of such mutilation, loss, theft or destruction, issue a
substitute Warrant Certificate of like denomination and tenor as the Warrant
Certificate so mutilated, lost, stolen or destroyed. Applicants for substitute
Warrant Certificates shall comply with such other reasonable regulations and pay
any reasonable charges as the Company or the Warrant Agent may prescribe.
12. RESERVATION OF SHARES. For the purpose of enabling the Company to
satisfy all obligation to issue Shares upon exercise of Warrants, the Company
will at all times reserve and keep available free from preemptive rights, out of
the aggregate of its authorized but unissued Shares, the full number of Shares
which may be issued upon the exercise of Warrants will upon issue be fully paid
and nonassessable by the Company and free from all taxes, liens, charges and
security interests with respect to the issue thereof.
13. GOVERNMENTAL RESTRICTIONS. If any Shares issuable upon the exercise
of Warrants require registration or approval of any governmental authority, the
Company will endeavor to secure such registration or approval; provided, that in
no event shall such Shares be issued, and the Company shall have the authority
to suspend the exercise of all Warrants, until such registration or approval
shall have been obtained; but all Warrants, the exercise of which is requested
during any such suspension, shall be exercisable at the Exercise Price. If any
such period of suspension continues past the Expiration Date, all Warrants, the
exercise of which have been requested on or prior to the Expiration Date, shall
be exercisable upon the removal of such suspension until the close of business
on the business day immediately following the expiration of such suspension.
14. ADJUSTMENTS. If prior to the exercise of any Warrants the Company
shall have effected one or more stock split-ups, stock dividends or other
increases or reductions of the number of shares of its $.01 par value common
stock outstanding without receiving compensation therefore in money, services or
property, the number of Shares subject to the Warrant granted shall, (I) if a
net increase shall have been effected in the number of outstanding shares of the
Company's shares of common stock, be proportionately increased, and the cash
consideration payable per share shall be proportionately reduced, and, (ii) if a
net reduction shall have been effected in the number of outstanding shares of
the Company's common stock, be proportionately reduced and the cash
consideration payable per share be proportionately increased.
15. NOTICE TO WARRANT HOLDERS. Upon any adjustment as described in
Section 14, the Company within twenty (20) days thereafter shall (I) cause to be
filed with the Warrant Agent a certificate signed by a Company officer setting
forth the details of such adjustment, the method of calculation and the facts
upon which such calculation is based, which certificate shall be conclusive
evidence of the correctness of the matters set forth therein, and (ii) cause
written notice of such adjustments to be given to each Warrant Holder as of the
record date applicable to such adjustment. Also, if the Company proposes to
enter into any reorganization, reclassification, sale of substantially all of
its assets, consolidation, merger, dissolution, liquidation or winding up, the
Company shall give notice of such fact at least twenty (20) days prior to such
action to all Warrant Holders which notice shall set forth such facts as
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
Shares or
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other securities and property deliverable upon exercise of the Warrants. Without
limiting the obligation of the Company hereunder to provide notice to each
Warrant Holder, failure of the Company to give notice shall not invalidate
corporation action taken by the Company.
16. NO FRACTIONAL WARRANTS OR SHARES. The Company shall not be required
to issue fractions of Warrants upon the reissue of Warrants, any adjustments as
described in Section 14 or otherwise; but the Company in lieu of issuing any
such fractional interest, shall round up to the nearest full Warrant or pay cash
(computed to the nearest cent) for the value of such fractional interest. If the
total Warrants surrendered by exercise would result in the issuance of a
fractional share, the Company shall not be required to issue a fractional share
but rather shall round up the aggregate number of shares issuable to the nearest
full share or pay cash (computed to the nearest cent) for the value of such
fractional share.
17. RIGHTS OF WARRANT HOLDERS. No Warrant Holder, as such, shall have
any rights of a shareholder of the Company, either at law or equity, and the
rights of the Warrant Holders, as such, are limited to those rights expressly
provided in this Agreement or in the Warrant Certificates. The Company and the
Warrant Agent may treat the registered Warrant Holder in respect of any Warrant
Certificate as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the Company or the
Warrant Agent) for all purposes notwithstanding any notice to the contrary.
18. WARRANT AGENT. The Company hereby appoints the Warrant Agent to act
as the agent of the Company and the Warrant Agent hereby accepts such
appointment upon the following terms and conditions by all of which the Company
and every Warrant Holder, by acceptance of his Warrants, shall be bound:
a. Statements contained in this Agreement and in the Warrant
Certificates shall be taken as statements of the Company. The Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describes the Warrant Agent or for action taken or to be taken by the Warrant
Agent.
b. The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the Company's covenants contained in this
Agreement or in the Warrant Certificates.
c. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Warrant
Holder in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the opinion or the advice of such counsel,
provided the Warrant Agent shall have exercised reasonable care in the selection
and continued employment of such counsel.
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d. The Warrant Agent shall incur no liability or
responsibility to the Company or to any Warrant Holder for any action taken in
reliance upon any notice, resolution, waiver, consent, order, certificate or
other paper, document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
e. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and all other charges of any kind in nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for this Agreement except as a result of the Warrant
Agent's negligence or bad faith.
f. The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Warrant Holders shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred in connection with such action, suit or legal
proceeding, but this provision shall not effect the power of the Warrant Agent
to take such action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable benefit
of the Warrant Holders as their respective rights or interests may appear.
g. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other legal
entity.
19. SUCCESSOR WARRANT AGENT. Any corporation into which the Warrant
Agent may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion 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 of a
party or the parties hereto. In any such event or if the name of the Warrant
Agent is changed, the Warrant Agent or such successor may adopt the
countersignature of the original Warrant Agent and may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent.
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20. CHANGE OF WARRANT AGENT. The Warrant Agent may resign or be
discharged by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, giving notice in writing to the other,
and by giving a date when such resignation or discharge shall take effect, which
notice shall be sent at least thirty (30) days prior to the date so specified.
If the Warrant Agent shall resign, be discharged or shall otherwise become
incapable 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
incapacity by the resigning or incapacitated Warrant Agent or by any Warrant
Holder or after discharging the Warrant Agent, then any Warrant Holder may apply
to the District Court for Denver County, Colorado, for the appointment of a
successor to the Warrant Agent. Pending appointment of a successor to the
Warrant Agent, either by the Company or by such Court, the duties of the Warrant
Agent shall be carried out by the Company. Any successor Warrant Agent, whether
appointed by the Company or by such Court, shall be a bank or a trust company,
in good standing, organized under the laws of the State of Colorado or of the
United States of America, having its principal office in Denver, Colorado and
having at the time of its appointment as Warrant Agent, a combined capital and
surplus of at least four million dollars. 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 and the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it thereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
effecting the delivery or transfer. 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.
21. NOTICES. Any notice or demand authorized by 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 if sent by mail, first class, certified or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
QC Optics, Inc.
000 Xxxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Any notice or demand authorized by this Agreement to be given or made by any
Warrant Holder or by the Company to or on the Warrant Agent shall be
sufficiently given or made if sent by mail, first class, certified or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
American Securities Transfer & Trust, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
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Any distribution, notice or demand required or authorized by this Agreement to
be given or made by the Company or the Warrant Agent to or on the Warrant
Holders shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed to the Warrant Holders at
their last known addresses as they shall appear on the registration books for
the Warrant Certificates maintained by the Warrant Agent.
22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any
Warrant Holders or the representatives of the underwriters in the Company's
initial public offering in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable.
23. SUCCESSORS. 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.
24. TERMINATION. This Agreement shall terminate at the close of
business on the Expiration Date or such earlier date upon which all Warrants
have been exercised; provided, however, that if exercise of the Warrants is
suspended pursuant to Section 13 and such suspension continues past the
Expiration Date, this Agreement shall terminate at the close of business on the
business day immediately following the expiration of such suspension. The
provisions of Section 18 shall survive such termination.
25. GOVERNING LAW. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Colorado and for all purposes shall be construed in accordance with the laws of
said State.
26. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give any person or corporation other than the Company, the Warrant
Agent and the Warrant Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Warrant Holders.
27. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original and all such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year indicated below.
Date:_________________________ QC OPTICS, INC., a Delaware corporation
By:_________________________________
Xxxx X. Xxxxx, President
SEAL
ATTEST:
------------------------------
, Secretary
AMERICAN SECURITIES
TRANSFER & TRUST, INC.
a Colorado corporation
By:_________________________________
Xxxxxxx X. Xxxxx, Vice President
SEAL
ATTEST:
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