Warrant Agreement
28331_1 - 75205/00003
XXXXX'X
WARRANT AGREEMENT
___________, 1998
Xxx X. Xxxxx, Esq.
Xxxxx & Staples
130 Lincoln center Two
Xxxxxx, Xxxxx, 00000
Dear Sir:
Woodhaven Homes, Inc., a Texas corporation (the "Company"), hereby
agrees to sell to you, and you hereby agree to purchase from the Company at an
aggregate purchase price of $100 warrants (the "Xxxxx'x Warrants") to purchase
100,000 Units (the "Units"), each consisting of one share of the Company's
Common Stock, no par value (the "Common Stock"), and one Redeemable Common Stock
Purchase Warrant (the "Warrants") of the Company, or the underlying Common Stock
and Warrants, if separately transferable, issued in accordance with the terms of
the Warrant Agreement (the "Warrant Agreement"), dated as of _____________,
1998, between the Company and Security Transfer Corporation, Dallas, Texas, as
warrant agent (the "Warrant Agent"). The Xxxxx'x Warrants will be exercisable by
you as to all or any lesser number of Units, or the underlying Common Stock and
Warrants, if separately transferable, at the Purchase Price per Unit as defined
below, at any time and from time to time on and after the first anniversary of
the date hereof and ending at 5:00 p.m. on the fifth anniversary of the date
hereof.
1.Definitions.
As used herein, the following terms, unless the context otherwise
requires, shall have for all purposes hereof the following meanings:
The term "Act" refers to the Securities Act of 1933, as amended.
The term "Affiliate" of any Person refers to any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with, such other Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
The term "Commission" refers to the Securities and Exchange Commission.
The term "Common Stock" refers to all stock of any class or classes
(however designated) of the Company, now or hereafter authorized, the holders of
which shall have the right without limitation as to amount, either to all or to
a part of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference, and
the holders of which shall ordinarily, in the absence of contingency, be
entitled to vote for the election of a majority of the directors of the Company
(even though the right so to vote has been suspended by the occurrence of such a
contingency).
The term "Current Market Price" on any date refers to the average of the
daily Market Price per share for the 30 consecutive Trading Days commencing 45
Trading Days before the date in question.
The term "Exchange Act" refers to the Securities Exchange Act of 1934,
as amended.
10
The term "Market Price" refers to the closing sale price on the
American Stock Exchange ("AMEX") or, if no closing sale price is reported, the
closing bid price of the Common Stock, as quoted on the Nasdaq National Market,
or, if the Common Stock is not quoted on the Nasdaq National Market, as reported
by the National Quotation Bureau Incorporated. If Market Price cannot be
established as described above, Market Price shall be the fair market value of
the Common Stock as determined in good faith by the Board of Directors whose
determination shall be conclusive.
The term "Other Securities" refers to any securities of the Company
(other than the Units, Common Stock or Warrants) or any other person (corporate
or otherwise) which the holders of the Xxxxx'x Warrants at any time shall be
entitled to receive, or shall have received, upon the exercise of the Xxxxx'x
Warrants, in lieu of or in addition to the Units, Common Stock or Warrants, or
which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Units, Common Stock, Warrants or Other Securities pursuant to
Section 6 below or otherwise.
The term "Person" refers to an individual, a partnership, a
corporation, a trust, a joint venture, an unincorporated organization and a
government or any department or agency thereof.
The term "Prospectus" shall mean the final prospectus of the Company,
dated the date hereof, relating to the offer and sale of 1,000,000 Units.
The term "Purchase Price" refers to the purchase price of the Units
subject to this Agreement. The Purchase Price shall equal 100% of the initial
offering price to public per Unit as set forth in the Prospectus, subject to
adjustment as provided in Section 6 below.
The term "Registration Statement" refers to a Registration Statement
filed with the Commission pursuant to the Rules and Regulations of the
Commission promulgated under the Act.
The term "Trading Day" shall mean a day on which the Nasdaq Stock
Market or the principal national securities exchange on which the Common Stock
is listed or admitted to trading is open for the transaction of business.
The term "Underlying Securities" refers to the Units, Common Stock and
Warrants (or Other Securities) issuable under this Warrant Agreement, pursuant
to the exercise, in whole or in part, of the Xxxxx'x Warrants.
The term "Warrant Stock" refers to shares of Common Stock issuable upon
the exercise of the Warrants or the Xxxxx'x Warrants.
The purchase and sale of the Xxxxx'x Warrants shall take place, and the
purchase price therefore shall be paid by delivery of your check, simultaneously
with the purchase of and payment for 1,000,000 Units, as provided in the
Underwriting Agreement between the Company and you, dated the date hereof.
2. Representations and Warranties.
The Company represents and warrants to you as follows:
(a)Corporate Action. The Company has all requisite corporate power and
authority, and has taken all necessary corporate action, to execute and deliver
this Agreement, to issue and deliver the Xxxxx'x Warrants and certificates
evidencing same, and to authorize and reserve for issuance, and upon payment
from time to time of the Purchase Price to issue and deliver, the Units,
including the Common Stock and the Warrants and shares of Common Stock
underlying the Warrants.
(b)No Violation. Neither the execution nor delivery of this Agreement,
the consummation of the actions herein contemplated nor compliance with the
terms and provisions hereof will conflict with, or result in a breach of, or
constitute a default or an event permitting acceleration under, any of the
terms, provisions or conditions of the Articles of Incorporation or Bylaws of
the Company or any indenture, mortgage, deed of trust, note, bank loan, credit
agreement, franchise, license, lease, permit, judgment, decree, order, statute,
rule or regulation or any other agreement, understanding or instrument to which
the Company is a party or by which it is bound.
3.Compliance with the Act.
(a) Transferability of Xxxxx'x Warrants. You agree that the Xxxxx'x
Warrants may not be transferred, sold, assigned or hypothecated for a period of
one (1) year from the date hereof, except to (i) persons who are officers of
you; (ii) a successor to you in a merger or consolidation; (iii) a purchaser of
all or substantially all of your assets; and (iv) your shareholders in the event
you are liquidated or dissolved.
(b) Registration of Underlying Securities. The Underlying Securities
issuable upon the exercise of the Xxxxx'x Warrants have not been registered
under the Act. You agree not to make any sale or other disposition of the
Underlying Securities, except pursuant to a Registration Statement which has
become effective under the Act, setting forth the terms of such offering, the
underwriting discount and the commissions and any other pertinent data with
respect thereto, unless you have provided the Company with an opinion of counsel
reasonably acceptable to the Company that such registration is not required.
(c) Inclusion in Registration of Other Securities. If at any time
commencing one year after the date hereof but prior to the fifth anniversary of
the date hereof, the Company shall propose the registration on an appropriate
form under the Act of any shares of Common Stock or Other Securities (the
"Subject Securities"), the Company shall at least 30 days prior to the filing of
such Registration Statement give you written notice, or telegraphic or
telephonic notice followed as soon as practicable by written confirmation
thereof, of such proposed registration and, upon written notice, or telegraphic
or telephonic notice followed as soon as practicable by written confirmation
thereof, given to the Company within five business days after the giving of such
notice by the Company, shall include or cause to be included in any such
Registration Statement all or such portion of the Underlying Securities as you
may request, provided, however, that the Company may at any time withdraw or
cease proceeding with any such registration if it shall at the same time
withdraw or cease proceeding with the registration of such Common Stock or such
Other Securities originally proposed to be registered.
Notwithstanding any provision of this Agreement to the contrary, if any
holder of the Xxxxx'x Warrants exercises such Xxxxx'x Warrants but shall not
have included all the Underlying Securities in a Registration Statement which
complies with Section 10(a)(3) of the Act, which has been effective for at least
30 calendar days following the exercise of the Xxxxx'x Warrants, the
registration rights set forth in this Section 3(c) shall be extended until such
time as (i) such a Registration Statement including such Underlying Securities
has been effective for at least 30 calendar days, or (ii) in the opinion of
counsel satisfactory to you and the Company, registration is not required under
the Act or under applicable state laws for resale of the Underlying Securities
in the manner proposed.
(d) Company's Obligations in Registration. In connection with any
offering of Subject Stock pursuant to Section 3(c) above, the Company shall:
(i) Notify you as to the filing thereof and of all amendments
or supplements thereto filed prior to the effective date thereof;
(ii) Comply with all applicable rules and regulations of the
Commission;
(iii) Notify you immediately, and confirm the notice in
writing, (1) when the Registration Statement becomes effective, (2) of
the issuance by the Commission of any stop order or of the initiation,
or the threatening, of any proceedings for that purpose, (3) of the
receipt by the Company of any notification with respect to the
suspension of qualification of the Subject Stock for sale in any
jurisdiction or of the initiation, or the threatening, of any
proceedings for that purpose and (4) of the receipt of any comments, or
requests for additional information, from the Commission or any state
regulatory authority. If the Commission or any state regulatory
authority shall enter such a stop order or order suspending
qualification at any time, the Company will make every reasonable
effort to obtain the lifting of such order as promptly as practicable.
(iv) During the time when a Prospectus is required to be
delivered under the Act during the period required for the distribution
of the Subject Stock, comply so far as it is able with all requirements
imposed upon it by the Act, as hereafter amended, and by the Rules and
Regulations promulgated thereunder, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Subject Stock. If at any time when a Prospectus relating to the
Subject Stock is required to be delivered under the Act any event shall
have occurred as a result of which, in the opinion of counsel for the
Company or your counsel, the Prospectus relating to the Subject Stock
as then amended or supplemented includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend such Prospectus to comply with the
Act, the Company will promptly prepare and file with the Commission an
appropriate amendment or supplement (in form satisfactory to you).
(v) Endeavor in good faith, in cooperation with you, at or
prior to the time the Registration Statement becomes effective, to
qualify the Subject Stock for offering and sale under the securities
laws relating to the offering or sale of the Subject Stock of such
jurisdictions as you may reasonably designate and to continue the
qualifications in effect so long as required for purposes of the sale
of the Subject Stock; provided that no such qualification shall be
required in any jurisdiction where, as a result thereof, the Company
would be subject to service of general process, or to taxation as a
foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company
will, unless you agree that such action is not at the time necessary or
advisable, file and make such statements or reports at such times as
are or may reasonably be required by the laws of such jurisdiction. For
the purposes of this paragraph, "good faith" is defined as the same
standard of care and degree of effort as the Company will use to
qualify its securities other than the Subject Stock.
(vi) Make generally available to its security holders as soon
as practicable, but not later than the first day of the eighteenth full
calendar month following the effective date of the Registration
Statement, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless
required by the Act or the rules and regulations promulgated
thereunder, but which shall satisfy the provisions of Section 11(a) of
the Act) covering a period of at least twelve months beginning after
the effective date of the Registration Statement.
(vii) After the effective date of such Registration Statement,
prepare, and promptly notify you of the proposed filing of, and
promptly file with the Commission, each and every amendment or
supplement thereto or to any Prospectus forming a part thereof as may
be necessary to make any statements therein not misleading; provided
that no such amendment or supplement shall be filed if you shall object
thereto in writing promptly after being furnished a copy thereof.
(viii) Furnish to you, as soon as available, copies of any
such Registration Statement and each preliminary or final Prospectus,
or supplement or amendment prepared pursuant thereto, all in such
quantities as you may from time to time reasonably request;
(ix) Make such representations and warranties to any
underwriter of the Subject Stock, and use your best efforts to cause
Company counsel to render such opinions to such underwriter, as such
underwriter may reasonably request; and
(x) Pay all costs and expenses incident to the performance of
the Company's obligations under Sections 3(c) and (d), including,
without limitation, the fees and disbursements of the Company's
auditors and legal counsel, fees and disbursements of legal counsel for
you, registration, listing and filing fees, printing expenses and
expenses in connection with the transfer and delivery of the Underlying
Securities; provided, however, that the Company shall not be
responsible for compensation and reimbursement of expenses to
underwriters or selling agents for the included Subject Stock.
(e) Agreements by Warrant Holder. In connection with the filing of a
Registration Statement pursuant to Section 3(c) above, if you participate in the
offering of the Subject Stock by including shares owned by you, you agree:
(i) To furnish the Company all material information requested
by the Company concerning yourself and your holdings of securities of
the Company and the proposed method of sale or other disposition of the
Subject Stock and such other information and undertakings as shall be
reasonably required in connection with the preparation and filing of
any such Registration Statement covering all or a part of the Subject
Stock and in order to ensure full compliance with the Act; and
(ii) To cooperate in good faith with the Company and its
underwriters, if any, in connection with such registration, including
placing the shares of Subject Stock to be included in such Registration
Statement in escrow or custody to facilitate the sale and distribution
thereof.
(f) Indemnification. The Company shall indemnify and hold harmless you
and any underwriter (as defined in the Act) for you, and each person, if any,
who respectively controls you or such underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against any loss, liability,
claim, damage and expense whatsoever (including but not limited to any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever), joint
or several, to which any of you or such underwriter or such controlling person
becomes subject, under the Act or otherwise, insofar as such loss, liability,
claim, damage and expense (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in (i) a Registration Statement covering the Subject Stock, in the
prospectus contained therein, or in an amendment or supplement thereto or (ii)
in any application or other document or communication (in this Section
collectively called "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Subject Stock under the securities laws
thereof or filed with the Commission, or arise out of or based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company shall not be obligated to indemnify in any such case
to the extent that any such loss, claim, damage, expense or liability arises out
of or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon, and in conformity with, written
information respectively furnished by you or such underwriter or such
controlling person for use in the Registration Statement, or any amendment or
supplement thereto, or any application, as the case may be.
If any action is brought against a person in respect of which indemnity may be
sought against, the Company pursuant to the foregoing paragraph, such person
shall promptly notify the Company in writing of the institution of such action
and the Company shall assume the defense of the action, including the employment
of counsel (satisfactory to the indemnified person in its reasonable judgment)
and payment of expenses. The indemnified person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified person or unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of the action or the Company shall not have
employed counsel to have charge of the defense of the action or the indemnified
person shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of the action on behalf of the indemnified person), in any of which
events these fees and expenses shall be borne by the Company. Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any claim or action effected without its written consent. The
Company's indemnity agreements contained in this Section shall remain in full
force and effect regardless of any investigation made by or on behalf of any
indemnified person, and shall survive any termination of this Agreement. The
Company agrees promptly to notify you of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the Registration Statement pursuant to Section 3(c) above.
If you choose to include any Subject Stock in a public offering
pursuant to Section 3(c) above, then you agree to indemnify and hold harmless
the Company and each of its directors and officers who have signed any such
Registration Statement, and any underwriter for the Company (as defined in the
Act), and each person, if any, who controls the Company or such underwriter
within the meaning of the Act, to the same extent as the indemnity by the
Company in this Section 3(f) but only with respect to statements or omissions,
if any, made in such Registration Statement, or any amendment or supplement
thereto, or in any application in reliance upon, and in conformity with, written
information furnished by you to the Company for use in the Registration
Statement, or any amendment or supplement thereto, or any application, as the
case may be. In case any action shall be brought in respect of which indemnity
may be sought against you, you shall have the rights and duties given to the
Company, and the persons so indemnified shall have the rights and duties given
to you by the provisions of the first paragraph of this Section.
The Company further agrees that, if the indemnity provisions of the
foregoing paragraphs are held to be unenforceable, any holder of the Xxxxx'x
Warrants or controlling person of such a holder may recover contribution from
the Company in an amount which, when added to contributions such holder or
controlling person has theretofore received or concurrently receives from
officers and directors of the Company or controlling persons of the Company,
will reimburse such holder or controlling person for all losses, claims, damages
or liabilities and legal or other expenses; provided, however, that if the full
amount of the contribution specified in this Section 3(f) is not permitted by
law, then such holder or controlling person shall be entitled to contribution
from the Company and its officers, directors and controlling persons to the full
extent permitted by law.
4.Exercise of Xxxxx'x Warrants.
(a) Cash Exercise. Each Xxxxx'x Warrant may be exercised in full or in
part (but not as to a fractional share of Common Stock) by the holder thereof by
surrender of the Warrant Certificate, with the form of subscription at the end
thereof duly executed by such holder, to the Company at its principal office,
accompanied by payment, in cash or by certified or bank cashier's check payable
to the order of the Company, in the respective amount obtained by multiplying
the number of shares of the Underlying Securities to be purchased by the
Purchase Price per share.
(b) Net Exercise. Notwithstanding anything to the contrary contained in
Section 4(a), any holder of the Xxxxx'x Warrants may elect to exercise the
Xxxxx'x Warrants in full or in part and receive shares on a "net exercise" basis
in an amount equal to the value of the Xxxxx'x Warrants by delivery of the form
of subscription attached to the Warrant Certificate and surrender of the Xxxxx'x
Warrants at the principal office of the Company, in which event the Company
shall issue to the holder a number of shares computed using the following
formula:
X=(P)(Y)(A-B)
A
Where:X=the number of shares of Common Stock to be issued to holder.
P=the portion of the Xxxxx'x Warrants being exercised (expressed as a
fraction).
Y=the total number of shares of Common Stock issuable upon exercise of
the Xxxxx'x Warrants.
A=the Current Market Price of one share of Common Stock.
B=Purchase Price.
(c) Partial Exercise. Prior to the expiration of the Xxxxx'x Warrants,
upon any partial exercise, the Company at its expense will forthwith issue and
deliver to or upon the order of the purchasing holder, a new Warrant Certificate
or Certificates of like tenor, in the name of the holder thereof or as such
holder (upon payment by such holder of any applicable transfer taxes) may
request calling in the aggregate for the purchase of the number of shares of the
Underlying Securities equal to the number of such shares called for on the face
of the Warrant Certificate (after giving effect to any adjustment therein as
provided in Section 6 below) minus the number of such shares (after giving
effect to such adjustment) designated by the holder in the aforementioned form
of subscription.
(d) Company to Reaffirm Obligations. The Company will, at the time of
any exercise of the Xxxxx'x Warrants, upon the request of the holder thereof,
acknowledge in writing its continuing obligation to afford to such holder any
rights (including without limitation any right to registration of the shares of
the Underlying Securities issued upon such exercise) to which such holder shall
continue to be entitled after such exercise in accordance with the provisions of
this Agreement; provided, however, that if the holder of the Xxxxx'x Warrants
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
0.Xxxxxxxx of Certificates on Exercise.
As soon as practicable after any exercise of the Xxxxx'x Warrants in
full or in part, and in any event within twenty days thereafter, the Company at
its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the purchasing holder
thereof, a certificate or certificates for the number of fully paid and
nonassessable Common Stock and Warrants to which such holder shall be entitled
upon such exercise, plus in lieu of any fractional share to which such holder
would otherwise be entitled, cash in an amount determined pursuant to Section
7(g), together with any other stock or other securities and property (including
cash, where applicable) to which such holder is entitled upon such exercise
pursuant to Section 6 below or otherwise.
6.Anti-Dilution Provisions.
The Xxxxx'x Warrants are subject to the following terms and conditions
during the term thereof:
(a) Stock Distributions and Splits. In case (i) the outstanding shares
of Common Stock (or Other Securities) shall be subdivided into a greater number
of shares or (ii) a dividend in Common Stock (or Other Securities) shall be paid
in respect of Common Stock (or Other Securities), the Purchase Price per share
in effect immediately prior to such subdivision or at the record date of such
dividend or distribution shall simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend or
distribution be proportionately reduced; and if outstanding shares of Common
Stock (or Other Securities) shall be combined into a smaller number of shares
thereof, the Purchase Price per share in effect immediately prior to such
combination shall simultaneously with the effectiveness of such combination be
proportionately increased. Any dividend paid or distributed on the Common Stock
(or Other Securities) in stock or any other securities convertible into shares
of Common Stock (or Other Securities) shall be treated as a dividend paid in
Common Stock (or Other Securities) to the extent that shares of Common Stock (or
Other Securities) are issuable upon the conversion thereof.
(b) Adjustments. Whenever the Purchase Price per share is adjusted as
provided in Section 6(a) above, the number of shares of the Underlying
Securities purchasable upon exercise of the Xxxxx'x Warrants immediately prior
to such Purchase Price adjustment shall be adjusted, effective simultaneously
with such Purchase Price adjustment, to equal the product obtained (calculated
to the nearest full share) by multiplying such number of shares of the
Underlying Securities by a fraction, the numerator of which is the Purchase
Price per share in effect immediately prior to such Purchase Price adjustment
and the denominator of which is the Purchase Price per share in effect upon such
Purchase Price adjustment, which adjusted number of shares of the Underlying
Securities shall thereupon be the number of shares of the Underlying Securities
purchasable upon exercise of the Xxxxx'x Warrants until further adjusted as
provided herein.
(c) Reorganizations. In case the Company shall be recapitalized by
reclassifying its outstanding Common Stock (or Other Securities) into a stock
with a different par value or by changing its outstanding Common Stock (or Other
Securities) with par value to stock without par value, then, as a condition of
such reorganization, lawful and adequate provision shall be made whereby each
holder of the Xxxxx'x Warrants shall thereafter have the right to purchase, upon
the terms and conditions specified herein, in lieu of the shares of Common Stock
(or Other Securities) theretofore purchasable upon the exercise of the Xxxxx'x
Warrants, the kind and amount of shares of stock and other securities receivable
upon such recapitalization by a holder of the number of shares of Common Stock
(or Other Securities) which the holder of the Xxxxx'x Warrants might have
purchased immediately prior to such recapitalization. If any consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation, shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, as a
condition of such consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions specified
in this Warrant Agreement and in lieu of the shares of the Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such consolidation, merger or sale not taken
place, and in any such case, appropriate provision shall be made with respect to
the rights and interests of the holders of the Xxxxx'x Warrants to the end that
the provisions hereof (including without limitation provisions for adjustments
of the Purchase Price and of the number of shares purchasable and receivable
upon the exercise of the Xxxxx'x Warrants) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof (including an immediate
adjustment, by reason of such consolidation or merger, of the Purchase Price to
the value for the Common Stock reflected by the terms of such consolidation or
merger if the value so reflected is less than the Purchase Price in effect
immediately prior to such consolidation or merger). In the event of a merger or
consolidation of the Company with or into another corporation as a result of
which a number of shares of Common Stock of the surviving corporation greater or
lesser than the number of shares of Common Stock of the Company outstanding
immediately prior to such merger or consolidation are issuable to holders of
Common Stock of the Company, then the Purchase Price in effect immediately prior
to such merger or consolidation shall be adjusted in the same manner as though
there were a subdivision or combination of the outstanding shares of Common
Stock of the Company. The Company will not effect any such consolidation, merger
or sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument executed
and mailed or delivered to the registered holder hereof at the last address of
such holder appearing on the books of the Company, the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase. If a
purchase, tender or exchange offer is made to and accepted by the holders of
more than of the outstanding shares of Common Stock of the Company, the Company
shall not effect any consolidation, merger or sale with the Person having made
such offer or with any Affiliate of such Person, unless prior to the
consummation of such consolidation, merger or sale the holders of the Xxxxx'x
Warrants shall have been given a reasonable opportunity to then elect to receive
upon the exercise of the Xxxxx'x Warrants either the stock, securities or assets
then issuable with respect to the Common Stock of the Company or the stock,
securities or assets, or the equivalent issued to previous holders of the Common
Stock in accordance with such offer.
(d) Effect of Dissolution or Liquidation. In case the Company shall
dissolve or liquidate all or substantially all of its assets, all rights under
this Agreement shall terminate as of the date upon which a certificate of
dissolution or liquidation shall be filed with the Secretary of the State of
Texas (or, if the Company theretofore shall have been merged or consolidated
with a corporation incorporated under the laws of another state, the date upon
which action of equivalent effect shall have been taken); provided, however,
that (i) no dissolution or liquidation shall affect the rights under Section
6(c) of any holder of the Xxxxx'x Warrants and (ii) if the Company's Board of
Directors shall propose to dissolve or liquidate the Company, each holder of the
Xxxxx'x Warrants shall be given written notice of such proposal at the earlier
of (x) the time when the Company's shareholders are first given notice of the
proposal or (y) the time when notice to the Company's shareholders is first
required.
(e) Notice of Change of Purchase Price. Whenever the Purchase Price per
share or the kind or amount of securities purchasable under the Xxxxx'x Warrants
shall be adjusted pursuant to any of the provisions of this Agreement, the
Company shall forthwith thereafter cause to be sent to each holder of the
Xxxxx'x Warrants, a certificate setting forth the adjustments in the Purchase
Price per share and/or in such number of shares, and also setting forth in
detail the facts requiring, such adjustments, including without limitation a
statement of the consideration received or deemed to have been received by the
Company for any additional shares of stock issued by it requiring such
adjustment. In addition, the Company at its expense shall within 90 days
following the end of each of its fiscal years during the term of this Agreement,
and promptly upon the reasonable request of any holder of the Xxxxx'x Warrants
in connection with any exercise from time to time of all or any portion of the
Xxxxx'x Warrants, cause independent certified public accountants of recognized
standing selected by the Company to compute any such adjustment in accordance
with the terms of the Xxxxx'x Warrants and prepare a certificate setting forth
such adjustment and showing in detail the facts upon which such adjustment is
based.
(f) Notice of a Record Date. In the event of (i) any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, (ii) any capital reorganization of the Company, or any
reclassification or recapitalization of the capital stock of the Company, or any
transfer of all or substantially all of the assets of the Company to, or
consolidation or merger of the Company with or into, any other person or (iii)
any voluntary or involuntary dissolution or liquidation of the Company, then and
in each such event the Company will mail or cause to be mailed to each holder of
the Xxxxx'x Warrants a notice specifying not only the date on which any such
record is to be taken for the purpose of such dividend, distribution or right
and stating the amount and character of such dividend, distribution or right,
but also the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or other Securities) for securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up.
Such notice shall be mailed at least 20 days prior to the proposed record date
therein specified.
7.Further Covenants of the Company.
(a) Reservation of Stock. The Company shall at all times reserve and
keep available, solely for issuance and delivery upon the exercise of the
Xxxxx'x Warrants, all shares of the Underlying Securities from time to time
issuable upon the exercise of the Xxxxx'x Warrants and shall take all necessary
actions to ensure that the par value per share, if any, of the Underlying
Securities is, at all times equal to or less than the then effective Purchase
Price per share.
(b)Title to Units. All of the Underlying Securities delivered upon the
exercise of the Xxxxx'x Warrants shall be validly issued, fully paid and
nonassessable; each holder of the Xxxxx'x Warrants shall receive good and
marketable title to the Underlying Securities, free and clear of all voting and
other trust arrangements, liens, encumbrances, equities and adverse claims
whatsoever; and the Company shall have paid all taxes, if any, in respect of the
issuance thereof.
(c) Listing on Securities Exchanges; Registration. If the Company at
any time shall list any Units, Common Stock or Warrants on any national
securities exchange, the Company will, at its expense, simultaneously list on
such exchange, upon official notice of issuance upon the exercise of the Xxxxx'x
Warrants, and maintain such listing of, all of the Underlying Securities from
time to time issuable upon the exercise of the Xxxxx'x Warrants; and the Company
will so list on any national securities exchange, will so register and will
maintain such listing of, any Other Securities if and at the time that any
securities of like class or similar type shall be listed on such national
securities exchange by the Company.
(d) Exchange of Xxxxx'x Warrants. Subject to Section 3(a) hereof, upon
surrender for exchange of any Warrant Certificate to the Company, the Company at
its expense will promptly issue and deliver to or upon the order of the holder
thereof a new Warrant Certificate or certificates of like tenor, in the name of
such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate for the purchase of the
number of shares of the Underlying Securities called for on the face or faces of
the Warrant Certificate or Certificates so surrendered.
(e) Replacement of Xxxxx'x Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant Certificate and, in the case of any such loss, theft
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant Certificate, the Company, at the
expense of the warrant holder will execute and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
(f) Reporting by the Company. The Company agrees that, if it files a
Registration Statement during the term of the Xxxxx'x Warrants, it will use its
best efforts to keep current in the filing of all forms and other materials
which it may be required to file with the appropriate regulatory authority
pursuant to the Exchange Act, and all other forms and reports required to be
filed with any regulatory authority having jurisdiction over the Company.
(g) Fractional Shares. No fractional shares of Underlying Securities
are to be issued upon any exercise of the Xxxxx'x Warrants, but the Company
shall pay a cash adjustment in respect of any fraction of a share which would
otherwise be issuable in an amount equal to the same fraction of the highest
market price per share of Underlying Securities on the day of exercise, as
determined by the Company.
8.Other Holders.
The Xxxxx'x Warrants are issued upon the following terms, to all of
which each holder or owner thereof by the taking thereof consents and agrees as
follows: (a) any person who shall become a transferee, within the limitations on
transfer imposed by Section 3(a) hereof, of the Xxxxx'x Warrants properly
endorsed shall take such Xxxxx'x Warrants subject to the provisions of Section
3(a) hereof and thereupon shall be authorized to represent himself as absolute
owner thereof and, subject to the restrictions contained in this Agreement,
shall be empowered to transfer absolute title by endorsement and delivery
thereof to a permitted bona fide purchaser for value; (b) each prior taker or
owner waives and renounces all of his equities or rights in such Xxxxx'x
Warrants in favor of each such permitted bona fide purchaser, and each such
permitted bona fide purchaser shall acquire absolute title thereto and to all
rights presented thereby; (c) until such time as the respective Xxxxx'x Warrants
is transferred on the books of the Company, the Company may treat the registered
holder thereof as the absolute owner thereof for all purposes, notwithstanding
any notice to the contrary and (d) all references to the word "you" in this
Warrant Agreement shall be deemed to apply with equal effect to any person to
whom a Warrant Certificate or Certificates have been transferred in accordance
with the terms hereof, and where appropriate, to any person holding the
Underlying Securities.
9.Miscellaneous.
All notices, certificates and other communications from or at the
request of the Company to the holder of the Xxxxx'x Warrants shall be mailed by
first class, registered or certified mail, postage prepaid, to such address as
may have been furnished to the Company in writing by such holder, or, until an
address is so furnished, to the address of the last holder of such Xxxxx'x
Warrants who has so furnished an address to the Company, except as otherwise
provided herein. This Agreement and any of the terms hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. The headings in this Agreement are
for reference only and shall not limit or otherwise affect any of the terms
hereof. This Agreement, together with the forms of instruments annexed hereto as
Exhibit A, constitutes the full and complete agreement of the parties hereto
with respect to the subject matter hereof.
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed on the date
hereof.
WOODHAVEN HOMES, INC.
By:__________________________________
Xxxxxxx X. Xxxxxx, Chief Executive Officer
EXHIBIT A
WOODHAVEN HOMES, INC.
COMMON STOCK PURCHASE WARRANT
to Purchase 100,000 Units
This is to certify that______________ ("Xxxxx") or assigns, is entitled
to purchase at any time or from time to time after 9 A.M., on ___________, 1999
and until 9 A.M., on ___________, 2003 up to the above referenced number of
Units ("Units"), each consisting of one share of Common Stock, no par value
("Common Stock"), and one Common Stock Purchase Warrant ("Warrants") of
Woodhaven Homes, Inc., a Texas corporation (the "Company"), or the underlying
shares of Common Stock and Warrants if separately transferable, for the
consideration specified in Section 4 of the Warrant Agreement, dated the date
hereof, between the Company and Xxxxx (the "Warrant Agreement"), pursuant to
which this Warrant is issued. All rights of the holder of this Warrant are
subject to the terms and provisions of the Warrant Agreement, copies of which
are available for inspection at the office of the Company. Capitalized terms
used but not defined herein shall have the respective meanings set forth in the
Warrant Agreement.
The Underlying Securities issuable upon the exercise of this Warrant
have not been registered under the Securities Act of 1933, as amended (the
"Act"), and no distribution of such Underlying Securities may be made until the
effectiveness of a Registration Statement under the Act covering such Underlying
Securities. Transfer of this Warrant is restricted as provided in Section 3(a)
of the Warrant Agreement.
This Warrant has been issued to the registered owner in reliance upon
written representations necessary to ensure that this Warrant was issued in
accordance with an appropriate exemption from registration under any applicable
state and federal securities laws, rules and regulations. This Warrant may not
be sold, transferred, or assigned unless, in the opinion of the Company and its
legal counsel, such sale, transfer or assignment will not be in violation of the
Act, applicable rules and regulations of the Securities and Exchange Commission,
and any applicable state securities laws.
Subject to the provisions of the Act and of such Warrant Agreement,
this Warrant and all rights hereunder are transferable, in whole or in part, at
the offices of the Company, by the holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant, together with the Assignment hereof
duly endorsed. Until transfer of this Warrant on the books of the Company, the
Company may treat the registered holder hereof as the owner hereof for all
purposes.
Any Underlying Securities (or Other Securities) which are acquired
pursuant to the exercise of this Warrant shall be acquired in accordance with
the Warrant Agreement and certificates representing all securities so acquired
shall bear a restrictive legend reading substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND ANY APPLICABLE STATE LAW, OR (2) AN OPINION OF COUNSEL (SATISFACTORY TO THE
CORPORATION) THAT REGISTRATION IS NOT REQUIRED.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer.
Date:_________________, 1998
WOODHAVEN HOMES, INC.
By:
Xxxxxxx X. Xxxxxx, Chief Executive Officer
SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Woodhaven Homes, Inc.
The undersigned, the holder of the enclosed Warrant Certificate, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
Certificate for, and to purchase thereunder, _________________ Units ("Units"),
each consisting of one share of Common Stock, no par value ("Common Stock"), and
one Common Stock Purchase Warrant ("Warrants") of Woodhaven Homes, Inc., or the
underlying Common Stock and Warrants, if separately transferable, and either
tenders herewith payment of the purchase price in full in the form of cash or a
certified or cashier's check in the amount of $______________ therefor or, if
the undersigned elects pursuant to Section 4(b) of the Warrant Agreement
referred to in the Warrant Certificate to convert the enclosed Warrant
Certificate into Units or underlying Common Stock or Warrants by net issuance,
the undersigned exercises the Warrants by exchange under the terms of said
Section 4(b), and requests that the certificate or certificates for such
securities be issued in the name of and delivered to the undersigned.
Date:______________________________
----------------------------------------
(Signature must conform
in all respects to name
of holder as specified on
the face of the Warrant
Certificate)
=======================================
---------------------------------------
(Address)
Please indicate in the space below the number of shares called for on the face
of the Warrant Certificate (or, in the case of a partial exercise, the portion
thereof as to which the Warrant is being exercised), in either case without
making any adjustment for additional shares or other securities or property or
cash which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise and whether the exercise is a cash exercise pursuant
to Section 4(a) of the Warrant Agreement or a net issuance exercise pursuant to
Section 4(b) of the Warrant Agreement.
Number of Units (or shares of Common Stock and Warrants):_____________________
Cash:____________________
Net issuance:______________
ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto ____________________________ the right represented by the enclosed Warrant
Certificate to purchase ____________________ Units ("Units"), each consisting of
one share of Common Stock, $.01 par value ("Common Stock"), and one Common Stock
Purchase Warrant ("Warrants") of Woodhaven Homes, Inc., or the underlying Common
Stock or Warrants, with full power of substitution.
The undersigned represents and warrants that the transfer, in whole in
or in part, of such right to purchase represented by the enclosed Warrant
Certificate is permitted by the terms of the Warrant Agreement referred to in
the Warrant Certificate, and the transferee hereof, by his acceptance of this
Assignment, represents and warrants that he or she is familiar with the terms of
such Warrant Agreement and agrees to be bound by the terms thereof with the same
force and effect as if a signatory thereto.
Date:___________________
-------------------------------------------
(Signature must conform
in all respects to name of
holder as specified on
the face of the Warrant
Certificate)
--------------------------------------------
(Address)
Signed in the presence of:______________________________
