WARRANT AGREEMENT
AGREEMENT, dated this _______ day of March, 1997, between POWERTRADER,
INC., a Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER AND
TRUST COMPANY, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with the offering to the public of units (the
"Units"), each Unit consisting of one share of the Company's common stock, $0.01
par value per share (the "Common Stock"), and one warrant to purchase one
additional share of Common Stock at an exercise price of $3.50 per share (the
"Warrants") at an offering price of $3.25 per Unit, the Company will issue up to
1,700,000 Warrants; and
WHEREAS, the Company desires to provide for the issuance of
certificates representing 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 certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the Warrant
Agent and the holders of the certificates representing the Warrants, 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. "Business Day" shall mean each day on which the principal
securities exchange on which the Common Stock is listed is open for trading, or
if the Common Stock is not so listed, then each day on which The Nasdaq Stock
Market is open for trading.
b. "Common Stock" shall mean the common stock, $0.01 par value
per share heretofore and hereafter issued by the Company and any other capital
stock of the Company into which such common stock may be converted.
c. "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal business
in New York, New York, shall be administered, which office is located on the
date hereof at 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
d. "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 completed and executed by the Registered
Holder thereof 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.
e. "Market Price" shall mean, for any Business Day, an amount
determined as follows: (i) if the Common Stock is listed for trading on a
national or regional stock exchange or is included on the Nasdaq National Market
or Small Cap Market, the closing bid price quoted on such exchange or the Nasdaq
National Market or Small Cap Market; or (ii) if the shares are not so listed,
admitted to trading or included, the average of the highest reported bid price
and the lowest reported ask price as quoted in the Nasdaq OTC Bulletin Board for
such Business Day.
f. "Purchase Price" shall mean, subject to modification and
adjustment as provided in Section 8, Three Dollars and Fifty Cents ($3.50) in
the case of the Warrants, and further subject to Company's right, in its sole
discretion, to decrease the Purchase Price for a period of not less than 30 days
on not less than 30 days' prior written notice to the Registered Holders.
g. "Redemption Date" shall mean the date fixed for
redemption of the Warrants pursuant to Section 9.
h. "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.
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.
j. "Transfer Agent" shall mean American Stock Transfer and
Trust Company, or its authorized successor.
k. "Warrant Certificate" shall mean a certificate representing
a Warrant.
l. "Initial Warrant Exercise Date" shall mean the effective
date of the Registration Statement or such earlier date as the Company may
determine.
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m. "Warrant Agent" shall mean American Stock Transfer and
Trust Company, or its authorized successor.
n. "Warrant Expiration Date" shall mean 5:00 p.m. (New York
City time), on the earlier of: (i) the Business Day immediately preceding the
Redemption Date; or (ii) March __, 2002, the date which is 60 months after the
effective date of the Registration Statement, or, if such date shall in the
State of New York be a 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 holiday or a day on which banks are authorized to close,
subject to the Company's right, prior to the Warrant Expiration Date determined
pursuant to this clause (ii), 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 the Warrant Certificate representing such 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:
(i) modification and adjustment as provided in Section 8; and (ii) the Company's
right to redeem the Warrants pursuant to Section 9.
b. Upon execution of this Agreement, Warrant Certificates
representing 1,700,000 Warrants to purchase up to an aggregate of 1,700,000
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.
c. From time to time, up to 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 issuance, 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, and (iv) 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
therefor made pursuant to Section 8 hereof.
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SECTION 3. Form and Execution of Warrant Certificates.
a. The Warrant Certificates 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 or association on which the Warrants may be
listed or quoted, 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, President or any Vice 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, and shall have
imprinted thereon a facsimile of the Company's seal. 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 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 completed and
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
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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. As soon as
practicable on or after the Exercise Date and in any event within five business
days after such date, if two 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 Warrant, the Warrant Agent shall promptly notify the Company in
writing of such fact and of the number of securities delivered upon such
exercise and 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. 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 or pay cash in lieu of
fractional interests. Any fraction equal to or greater than one-half shall be
rounded up to the next full share or Warrant, as the case may be, any fraction
less than one-half shall be eliminated.
SECTION 5. Reservation of Shares; Listings; 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
issue 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 or
association, if any, on which the other shares of outstanding Common Stock of
the Company are then listed or quoted.
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 (the "Act"), to the Registered Holder
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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 (the "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 of those states where the offer and sale of the Units is to be
registered. 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.
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.
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c. With respect to any Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the subscription or
exercise form, as the case may be, on the reverse thereof shall be duly
completed and 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 completed and 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.
f. All Warrant Certificates surrendered for exercise or
for exchange shall be promptly cancelled by the Warrant Agent.
g. 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 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. Adjustment of Exercise Price. Subject to the
provisions of this Section 8, the exercise price in effect from
time to time shall be subject to adjustment, as follows:
(i) In case the Company shall at any time after the date
hereof (i) declare a dividend on the outstanding Common Stock payable
in shares of its capital stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller number
of shares, or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such
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reclassification in connection with a consolidation or merger in which
the Company is the continuing corporation), then, in each case, the
exercise price, and the number of shares of Common Stock issuable upon
exercise of the Warrants in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately adjusted so
that the holders of the Warrants after such time shall be entitled to
receive the aggregate number and kind of shares which, if such Warrants
had been exercised immediately prior to such time, such holders would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(ii) In case the Company shall issue or fix a record date for
the issuance to all holders of Common Stock of rights, options, or
warrants to subscribe for or purchase Common Stock (or securities
convertible into or exchangeable for Common Stock) at a price per share
(or having a conversion or exchange price per share, if a security
convertible into or exchangeable for Common Stock) less than the
exercise price per share of Common Stock on such record date, then, in
each case, the exercise price shall be adjusted by multiplying the
exercise price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares
of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial
conversion or exchange price of the convertible or exchangeable
securities so to be offered) would purchase at such exercise price and
the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of
Common Stock to be offered for subscription or purchase (or into which
the convertible or exchangeable securities so to be offered are
initially convertible or exchangeable). Such adjustment shall become
effective at the close of business on such record date; provided,
however, that, to the extent the shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) are not
delivered, the exercise price shall be readjusted after the expiration
of such rights, options, or warrants (but only with respect to Warrants
exercised after such expiration), to the exercise price which would
then be in effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of delivery of
only the number of shares of Common Stock (or securities convertible
into or exchangeable for shares of Common Stock) actually issued. In
case any subscription price may be paid in a consideration part or all
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of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the board of
directors of the Company, whose determination shall be conclusive
absent manifest error. Shares of Common Stock owned by or held for the
account of the Company or any majority-owned subsidiary shall not be
deemed outstanding for the purpose of any such computation.
(iii) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders
of the Company in connection with a consolidation or merger in which
the Company is the continuing corporation) evidences of its
indebtedness, cash (other than any cash dividend which, together with
any cash dividends paid within the 12 months prior to the record date
for such distribution, does not exceed 5% of the exercise price at the
record date for such distribution) or assets (other than distributions
and dividends payable in shares of Common Stock), or rights, options,
or warrants to subscribe for or purchase Common Stock, or securities
convertible into or exchangeable for shares of Common Stock (excluding
those with respect to the issuance of which an adjustment of the
exercise price is provided pursuant to Section 8(a)(i) hereof), then,
in each case, the exercise price shall be adjusted by multiplying the
exercise price in effect immediately prior to the record date for the
determination of the stockholders entitled to receive such distribution
by a fraction, the numerator of which shall be the exercise price per
share of Common Stock on such record date, less the fair market value
(as determined in good faith by the board of directors of the Company,
whose determination shall be conclusive absent manifest error) of the
portion of the evidences of indebtedness or assets so to be
distributed, or of such rights, options, or warrants or convertible or
exchangeable securities, or the amount of such cash, applicable to one
share, and the denominator of which shall be such exercise price per
share of Common Stock. Such adjustment shall become effective at the
close of business on such record date.
(b) No Adjustments to exercise price. No adjustment in the
exercise price shall be required if such adjustment is less than $.10; provided,
however, that any adjustments which by reason of this Section 8 are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 8 shall be made to the nearest
cent or to the nearest one thousandth of a share, as the case may be.
(c) Deferral of Adjustments to exercise price. In any case in
which this Section 8 shall require that an adjustment in the exercise price be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the holders of the
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Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
exercise price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such exercising holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(d) Adjustment to Number of Shares. Upon each adjustment of
the exercise price as a result of the calculations made in Sections 8.a(ii) or
8.a(iii) hereof, the Warrants shall thereafter evidence the right to purchase,
at the adjusted exercise price, that number of shares (calculated to the nearest
thousandth) obtained by dividing (A) the product obtained by multiplying the
number of shares purchasable upon exercise of the Warrants prior to adjustment
of the number of shares by the exercise price in effect prior to adjustment of
the exercise price by (B) the exercise price in effect after such adjustment of
the exercise price.
(e) Reorganization. In case of any capital reorganization,
other than in the cases referred to in Section 8(a) hereof, or the consolidation
or merger of the company with or into another corporation (other than a merger
or consolidation in which the Company is the continuing corporation and which
does not result in any reclassification of the outstanding shares of Common
Stock or the conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or the sale of the property of
the Company as an entirety or substantially as an entirety (collectively such
actions being hereinafter referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
shares of Common Stock theretofore deliverable) the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock which would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, shall be made in the application of the provisions
herein set forth with respect to the rights and interests of Warrant holders so
that the provisions set forth herein shall thereafter be applicable, as nearly
as possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants. Any such adjustment shall be made by and set forth in
a supplemental agreement between the Company, or any successor thereto, and the
Warrant Agent and shall for all purposes hereof conclusively be deemed to be an
appropriate adjustment. The Company shall not effect any such Reorganization,
unless upon or prior to the consummation thereof the successor corporation, or
if the Company shall be the surviving corporation in any such Reorganization and
is not the issuer of the shares of stock or other securities or property to be
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delivered to holders of shares of the Common Stock outstanding at the effective
time thereof, then such issuer, shall assume by written instrument the
obligation to deliver to the registered holder of any Warrant Certificate such
shares of stock, securities, cash or other property as such holder shall be
entitled to purchase in accordance with the foregoing provisions. In the event
of sale or conveyance or other transfer of all or substantially all of the
assets of the Company as a part of a plan for liquidation of the Company, all
rights to exercise any Warrant shall terminate 30 days after the Company gives
written notice to each registered holder of a Warrant Certificate that such sale
or conveyance of other transfer has been consummated.
(f) Reclassifications. In case of any reclassification or
change of the shares of Common Stock issuable upon exercise of the Warrants
(other than a change in par value or from no par value to a specified par value,
or as a result of a subdivision or combination, but including any change in the
shares into two or more classes or series of shares), the holders of the
Warrants shall have the right thereafter to receive upon exercise of the
Warrants solely the kind and amount of shares of stock and other securities,
property, cash, or any combination thereof receivable upon such reclassification
or change by a holder of the number of shares of Common Stock for which the
Warrants might have been exercised immediately prior to such reclassification or
change. Thereafter, appropriate provision shall be as nearly equivalent as
practicable to the adjustments in Section 8. The above provisions of this
paragraph (f) shall similarly apply to successive reclassifications and changes
of shares of Common Stock.
(g) Verification of Computations. Whenever the exercise price
is adjusted as provided in this Section 8, the Corporation will promptly obtain
a certificate of a firm of independent public accountants of recognized standing
selected by the Board of Directors (who may be the regular auditors of the
Corporation) setting forth the exercise price as so adjusted and a brief
statement of the facts accounting for such adjustment, and will make available a
brief summary thereof to the Warrant Agent and to the holders of the Warrant
Certificates, at their addresses listed on the register maintained for the
purpose by the Warrant Agent.
(h) Notice of Certain Actions. In case at any time the
Company shall propose:
(i) to pay any dividend or make any distribution on shares of
Common Stock in shares of Common Stock or make any other distribution
(other than regularly scheduled cash dividends which are not in a
greater amount per share than the most recent such cash dividend) to
all holders of Common Stock; or
(ii) to issue any rights, warrants, or other securities
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to all holders of Common Stock entitling them to purchase any
additional shares of Common Stock or any other rights, warrants, or
other securities; or
(iii) to effect any reclassification or change of outstanding
shares of Common Stock, or any consolidation, merger, sale, lease, or
conveyance of property, described in Section 8(f); or
(iv) to effect any liquidation, dissolution, or winding-
up of the Company; or
(v) to take any other action which would cause an
adjustment to the exercise price;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to the Warrant Agent. Such notice shall specify the date on which
the books of the Company shall close, or a record be taken, for determining
holders of Common Stock entitled to receive such stock dividend or other
distribution of such rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, lease, other disposition,
liquidation, dissolution, winding-up or exchange or other action shall take
place or commence, as the case may be, and the date as of which it is expected
that holders of record of Common Stock shall be entitled to receive securities
or other property deliverable upon such action, if any such date has been fixed.
The Company shall cause copies of such notice to be mailed to each registered
holder of a Warrant Certificate. Such notice shall be mailed, in the case of any
action covered by Section 8(h)(i) or 8(h)(ii) above, at least ten (10) days
prior to the record date for determining holders of the Common Stock for
purposes of receiving such payment or offer; in the case of any action covered
by Section 8(h)(iii) or 8(h)(iv) above, at least ten (10) days prior to the
earlier of the date upon which such action is to take place or any record date
to determine holders of Common Stock entitled to receive such securities or
other property; and in the case of any action covered by Section 8(h) above, no
more than thirty (30) days after such action.
(i) Warrant Certificate Amendments. Irrespective of any
adjustments pursuant to this Section 8, Warrant Certificates theretofore or
thereafter issued need not be amended or replaced, but certificates thereafter
issued shall bear an appropriate legend or other notice of any adjustments.
(j) Fractional Shares. The Company shall not be required upon
the exercise of any Warrant to issue fractional shares of Common Stock which may
result from adjustments in accordance with this Section 8 to the exercise price
or number of shares of Common Stock purchasable under each Warrant. If more than
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one Warrant is exercised at one time by the same registered holder, the number
of full shares of Common Stock which shall be deliverable shall be computed
based on the number of shares deliverable in exchange for the aggregate number
of Warrants exercised.
SECTION 9. Redemption of Warrants.
a. If the Market Price of the Common Stock shall equal or
exceed $4.50 for any 20 Business Days during any period of 30 consecutive
Business Days ending on the fifth trading day prior to the date of notice of
redemption, the Company may, at its option, and prior to the Warrant Expiration
Date, redeem all but not less than all, of the Warrants, in each case at the
redemption price of $0.01 (the "Redemption Price").
b. In case the Company shall desire to exercise such right to
redeem the Warrants in accordance with the right reserved so to do, it shall
give notice of such redemption to the Warrant Agent within 30 days after the end
of the 30 Business Day period referred to in Section 9(a). Such notice shall be
signed by the Company's Chairman of the Board, President or a Vice President and
by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary, and shall set forth in reasonable detail the Market Prices and
respective Business Days which satisfy the condition precedent in Section 9(a).
The Company also shall cause notice of redemption to be given to the
holders of Warrants by mailing by first-class mail, with postage prepaid, not
less than 30 days prior to the date fixed for redemption, to their last
addresses as they shall appear upon the Warrant register, but failure to give
such notice by mail to the holder of any Warrant, or any defect therein, shall
not affect the validity of the proceedings for the redemption of any other
Warrants. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
received the notice.
Each such notice of redemption shall specify the Redemption Date and
the Redemption Price, and shall state that payment of the Redemption Price of
the Warrants be made at the office or agency of the Company for such purpose in
Vancouver, Canada, or at such other locations as the Company shall determine
upon presentation and surrender of such Warrant. Each such notice of redemption
shall also specify the last date when the Warrants may be exercised, and the
Purchase Price then in effect.
c. If the giving of notice of redemption shall have been
completed as provided in Section 9(b), from and after the Redemption Date upon
presentation and surrender of the Warrants at said place of payment specified in
said notice, the same Warrants shall be redeemed by the Company at the
Redemption Price.
13
d. All Warrants surrendered to the Warrant Agent pursuant to
the provisions of this Section 9 shall be forthwith cancelled by it.
e. Anything contained in this Warrant Agreement to the
contrary notwithstanding, if the giving of the notice of redemption shall have
been completed as provided in Section 9(b) hereof, or if provision satisfactory
to the Warrant Agent for the giving of such notice shall have been made, and if
the Company shall have deposited with the Warrant Agent funds (to be immediately
due and payable) sufficient to redeem the Warrants on the Redemption Date, at
the Redemption Price, then on the Redemption Date all obligations of the Company
in respect of such Warrants, shall cease and be discharged, and the holders of
such Warrants shall thereafter be restricted exclusively to such funds, for any
and all claims of whatsoever nature on their part under this Warrant Agreement,
or in respect of such Warrants.
SECTION 10. Concerning the Warrant Agent.
a. The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company and the underwriters, 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.
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
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.
14
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 Board of Directors, President or any Vice 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 at least 30 days' prior written notice to the Company. At least 15
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 warrant agent. If the
Company shall fail to make such appointment within a period of 30 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 warrant agent. Any warrant
agent, whether appointed by the 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 registered with the U.S. Securities and Exchange Commission in New York,
New York. After acceptance in writing of such appointment by the warrant agent
is received by the Company, such 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.
15
g. Any corporation into which the Warrant Agent or any warrant
agent may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any warrant agent shall be a party,
or any corporation succeeding to the corporate trust business of the Warrant
Agent or any 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.
j. 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.
k. Warrant Agent shall retain for a period of at least two
years from the date of exercise any Warrant Certificate received by it upon such
exercise.
SECTION 11. Modification of Agreement.
The Warrant Agent and the Company may by supplemental agreement make
any changes or corrections in this Agreement (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; or (ii) that they may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Warrant Certificates; provided, however, that this Agreement
shall not otherwise be modified, 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 to increase the Purchase Price therefor, shall be made without the consent in
writing of the affected Registered Holders, other than such changes as are
presently specifically prescribed by this Agreement as originally executed.
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
16
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 Xxxxx 000, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0, Attention: President, 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.
SECTION 13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware 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.
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]
POWERTRADER, INC. AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: By:
Name: Xxxxxxx X. Xxxxxxx Name:
Title: President Title:
By:
Assistant Secretary
17
EXHIBIT A
No. W VOID AFTER ____________, 2002
WARRANTS
COMMON STOCK PURCHASE WARRANT CERTIFICATE TO
PURCHASE ONE SHARE OF COMMON STOCK
THIS WARRANT IS TRANSFERRABLE IN NEW YORK, NEW YORK
POWERTRADER, INC.
CUSIP 738909 11 8
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number of
Common Stock Purchase 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 nonassessable share of Common Stock,
$0.01 par value, of PowerTrader, Inc., a Delaware corporation (the "Company"),
at any time after the effective date of the Registration Statement on Form SB-2
(File no. 333-20121) or such earlier date as the Company may determine (the
"Initial Warrant Exercise Date"), 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 completed and
executed, at the corporate office of American Stock Transfer and Trust Company,
00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Warrant Agent, or its
successor (the "Warrant Agent"), accompanied by payment of $3.50, subject 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, dated _____________, 1997, by and
between the Company and the Warrant Agent (the "Warrant Agreement"). In the
event of a conflict between the terms and conditions hereof and the terms and
conditions of the Warrant Agreement, the terms and conditions of the Warrant
Agreement will control. Copies of the Warrant Agreement are on file at the
corporate office of the Warrant Agent and are obtainable without charge from the
Warrant Agent.
In the event of certain contingencies provided for in the
Warrant Agreement, 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.
A-1
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 the earlier of: (i) the Business Day (as defined in the Warrant
Agreement) immediately preceding the Redemption Date (as defined in the Warrant
Agreement), or (ii) March _____, 2002, the date which is 60 months after the
Initial Warrant Exercise Date. If each 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 City 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.
The Warrants may be redeemed at the election of the Company
upon 30 days' written notice to the holders, at a Redemption Price (as defined
in the Warrant Agreement) equal to $.01 per Warrant, if the Market Price (as
defined in the Warrant Agreement) of the Common Stock is at least $4.50 per
share for at least 20 Business Days out of any period of 30 consecutive Business
Days ending on the fifth Business Day prior to the date of notice of redemption.
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 it will file a registration statement under the
Federal securities laws, 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.
A-2
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, 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.
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 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 Delaware without giving effect to
conflicts of laws.
This Warrant Certificate is not valid unless countersigned by
the Warrant Agent.
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.
POWERTRADER, INC. Dated: ______________, 1997
By: COUNTERSIGNED:
President AMERICAN STOCK TRANSFER AND
TRUST COMPANY
[SEAL] as Warrant Agent
By: By:
Secretary Authorized Officer
A-3
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned hereby irrevocably elects to exercise
________________ of the Warrants represented by this Warrant Certificate and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants,
and requests that certificates for such shares be issued and delivered as
follows:
issue to:_______________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
________________________________________________________________________________
(SOCIAL SECURITY OR OTHER TAX IDENTIFYING NUMBER)
delivered to:___________________________________________________________________
(NAME)
________________________________________________________________________________
(ADDRESS, INCLUDING ZIP CODE)
If such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued in the name of, and delivered to the Registered Holder at the address
stated below.
In full payment of the purchase price with respect to the
Warrants exercised and transfer taxes, if any, the undersigned hereby tenders
payment of $________ by certified check or money order payable in United States
currency to the order of the Company.
Dated:_____________________ X____________________________________
____________________________________
____________________________________
Address
____________________________________
Social Security or Taxpayer
Identification Number
____________________________________
Signature Guaranteed
A-4
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
Warrants set forth below:
Name of Assignee Address No. of Warrants
---------------- ------- ---------------
and does hereby irrevocably constitute and appoint
_________________________________________________________Attorney
to make such transfer of the books of Powertrader, Inc. maintained
for that purpose, 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 COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE,
MIDWEST STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
A-5
