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EXHIBIT 4.5
EURO TECH HOLDINGS COMPANY LIMITED
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGREEMENT
Dated as of , 1997
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WARRANT AGREEMENT, dated as of , 1997, by and between
EURO TECH HOLDINGS COMPANY LIMITED, INC., a British Virgin Islands company
(the "Company") and AMERICAN STOCK TRANSFER & TRUST COMPANY, as warrant and
transfer agent (hereinafter called the Warrant Agent").
WHEREAS, the Company proposes to issue and sell to the public up to
690,000 shares of Common Stock, $.01 par value (hereinafter referred to as
"Common Stock" or "Common Shares"), and 690,000 Redeemable Common Stock
Purchase Warrants to purchase a share of Common Stock at $5.50 per share (the
"Warrant") (including the underwriter's overallotment option granted to May
Xxxxx Group, Inc. (the "Underwriter")), (the "Public Offering"); and
WHEREAS, the Company has issued and sold 1,000,000 Warrants to Private
Placement investors (the "Private Warrants") delivered to said investors in
type written format containing terms and conditions substantially identical to
the Public Offering Warrants (the "Warrants") and "Private Warrants" maybe
from time to time herein collectively referred to as the "Warrants"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfers, exchanges and exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT: DEFINED TERMS. The Company
hereby appoints the Warrant Agent to act as agent ("Agent") for the Company in
accordance with the instructions hereinafter in this Agreement set forth, and
the Warrant Agent hereby accepts such appointment. The capitalized terms shall
have the meanings set forth in the recitals and the Sections of this Agreement
and the Addendum attached hereto.
SECTION 2. FORM OF WARRANT. The text of the Warrant and of the form of
election to purchase shares as is printed on the reverse thereof as now
outstanding, is substantially as set forth respectively in Exhibit A attached
hereto. The per share Warrant Price (as hereinafter defined) and the number of
shares issuable upon exercise of the Warrants are subject to adjustment upon
the occurrence of certain events, all as hereinafter provided. The Warrants
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman, President, or Vice President
of the Company, under its corporate seal, affixed or in facsimile, attested by
the manual or facsimile signature of the present or any future Secretary or
Assistant Secretary of the Company.
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The Warrants will be dated as of the date of issuance by the Warrant
Agent either upon initial issuance or upon transfer or exchange.
SECTION 3. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books for the transfer and registration of Warrants. Upon the initial
issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective holders thereof. The Warrants shall be
countersigned manually or by facsimile by the Warrant Agent (or by any
successor to the Warrant Agent then acting as warrant agent under this
Agreement) and shall not be valid for any purpose unless so countersigned.
Warrants may be so countersigned, however, by the Warrant Agent (or by its
successor as warrant agent) and be delivered by the Warrant Agent,
notwithstanding that the persons whose manual or facsimile signatures appear
thereon as proper officers of the Company shall have ceased to be such
officers at the time of such countersignature or delivery.
SECTION 4. EXCHANGES AND TRANSFERS. (a) Upon written advice from the
Company that it has received an original Private Warrant to be exchanged for a
printed format warrant, the Warrant Agent shall issue a Warrant in the form
annexed hereto as Exhibit A to person(s) and in the denominations specified in
such notice and deliver same to the address specified in such notice. (b) The
Warrant Agent shall transfer, from time to time, any outstanding Warrants upon
the books to be maintained by the Warrant Agent for that purpose, upon
surrender thereof for transfer properly endorsed or accompanied by appropriate
instructions for transfer. Upon any such transfer, a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be delivered by the
Warrant Agent. Warrants so cancelled shall be cancelled by the Warrant Agent
to the Company from time to time upon request. Warrants may be exchanged at
the option of the holder thereof, when surrendered at the office of the
Warrant Agent, for another Warrant, or other Warrants of different
denominations, of like tenor or representing in the aggregate the right to
purchase a like number of Common Shares.
SECTION 5. RIGHTS OF REDEMPTION BY COMPANY. (i) At any time that the
Warrants are exercisable and on not less than thirty (30) days notice, the
Warrants may be redeemed, at the option of the Company, at a redemption price
of $.10 per Warrant, provided the average closing bid price of the Common
Stock receivable upon exercise of the Warrant shall have exceeded $8.50 per
share (the "Target Price"), subject to adjustment as set forth in Section 11
hereof, for a period of twenty consecutive trading days immediately prior to
the date on which notice of redemption is given. Warrantholders will be
entitled to exercise Warrants at any time up to the business day next
preceding the redemption date.
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(ii) Providing the conditions set forth in Section 5(i) are met, and the
Company shall desire to exercise its right to redeem the Warrants, it shall
mail a notice of redemption to the holders of the Warrants to be redeemed,
first class, postage prepaid, within ten days after the end of such foregoing
period, not later than the thirtieth (30th) day before the date fixed for
redemption, at his/her last address as shall appear on the records of the
Company. Any notice mailed in the manner provided herein shall be conclusively
presumed to have been duly given whether or not the holder receives such
notice.
(iii) The notice of redemption shall specify (i) the redemption price,
(ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price paid, and (iv) that
the right to exercise the Warrant shall terminate at 5:00 p.m. (New York time)
on the trading day immediately preceding the date fixed for redemption. The
date fixed for redemption of the Warrants shall be the Redemption Date. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity of the proceedings for such redemption except as to
a holder (a) to whom notice was mailed; or (b) whose notice was defective. An
affidavit of the Secretary or an Assistant Secretary of the Company that
notice of redemption has been mailed shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
(iv) Except as provided herein, any right to exercise a Warrant shall
terminate at 5:00 p.m. (New York time) on the trading day immediately
proceeding the Redemption Date. On and after the Redemption Date, the holders
shall have no further rights except to receive, upon surrender of the Warrant,
the redemption price.
(v) From and after the Redemption Date, the Company shall, at the place
specified in the notice of redemption, upon presentation and surrender to the
Company by or on behalf of the holder thereof of one or more Warrants to be
redeemed, deliver or cause to be delivered to or upon the written order of
such holder a sum in cash equal to the redemption price of each such Warrant.
From and after the date fixed for redemption and upon the deposit or setting
aside by the Company of a sum sufficient to redeem all the Warrants called for
redemption, such Warrants shall expire and become void and all rights
hereunder and under the Warrant Certificate, except the right to receive
payment of the redemption price, shall cease.
(vi) If the shares of the Company's Common Stock are subdivided or
combined into a greater of smaller number of shares of Common Stock, the
Target Price shall be proportionately adjusted by the ratio which the total
number of shares of Common Stock outstanding immediately prior to such event
bears to the total
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number of shares of Common Stock to be outstanding immediately after such
event.
SECTION 6. EXERCISE OF WARRANTS. Subject to the provisions of this
Agreement, each registered holder of Warrants shall have the right which may
be exercised through _____________, 2006 commencing one year from the
Effective Date, provided, however, that prior to the second year after the
Effective Date, the Warrants will be exercisable only if the Underwriter has
consented in writing to all of the Warrants being exercisable, and ending at
the close of business on _____________, 2006 to purchase from the Company (and
the Company shall issue and sell to such registered holder of Warrants) the
number of fully paid and non-assessable Common Shares specified in such
Warrants, upon surrender to the Company at the office of the Warrant Agent of
such Warrants, with the form of election to purchase duly filled in and
signed, and upon payment to the order of the Company of the Warrant Price,
determined in accordance with Sections 10 and 11 herein, for the number of
shares in respect of which such Warrants are then exercised. Payment of such
Warrant Price shall be made in cash or by certified check or official bank
check, payable in United States dollars, to the order of the Company. No
adjustments shall be made for any dividends on any Common Shares issuable upon
exercise of a Warrant. Subject to Section 7, upon such surrender of Warrants,
and payment of the Warrant Price as aforesaid, the Company shall issue and
cause to be delivered with all reasonable dispatch to or upon the written
order of the registered holder of such Warrants and in such name or names as
such registered holder may designate, a certificate or certificates for the
largest number of whole Common Shares so purchased upon the exercise of such
Warrants. The Company shall not be required to issue any fraction of a share
of Common Stock or make any cash or other adjustment except as provided in
Section 12 herein, in respect of any fraction of a Common Share otherwise
issuable upon such surrender. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares as of the date of the
surrender of such Warrants and payment of the Warrant Price as aforesaid,
provided, however, that if, at the date of surrender of such Warrants and
payment of such Warrant Price, the transfer books for the Common Shares or
other class of stock purchasable upon the exercise of such Warrants shall be
closed, the certificates for the shares in respect of which such Warrants are
then exercised shall be issuable as of the date on which such books shall be
opened, and until such date the Company shall be under no duty to deliver any
certificate for such shares; provided, further, however, that the transfer
books aforesaid, unless otherwise required by law or by applicable rule of any
national securities exchange, shall not be closed at any one time for a period
longer than 20 days. The rights of purchase represented by the Warrants shall
be exercisable, at the election of the
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registered holders thereof, either as an entirety or from time to time for
part only of the shares specified therein and, in the event that any Warrant
is exercised in respect of less than all of the shares specified therein at
any time prior to the date of expiration of the Warrant, a new Warrant or
Warrants will be issued to such registered holders for the remaining number of
shares specified in the Warrant so surrendered, and the Warrant Agent is
hereby irrevocably authorized to countersign and to deliver the required new
Warrants pursuant to the provisions of this Section during the Warrant
exercise period, and the Company, whenever requested by the Warrant Agent,
will supply the Warrant Agent, with Warrants duly executed on behalf of the
Company for such purpose.
SECTION 7. PAYMENT OF TAXES. The Company will pay any documentary stamp
taxes attributable to the initial issuance of Common Shares issuable upon the
exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificates for Common
Shares in a name other than that of the registered holder of Warrants in
respect of which such shares are issued, and in such case neither the Company
nor the Warrant Agent shall be required to issue or deliver any certificate
for Common Shares or any Warrant until the person requesting the same has paid
to the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid.
SECTION 8. MUTILATED OR MISSING WARRANTS. In case any of the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may in its
discretion issue, and the Warrant Agent shall countersign and deliver, in
exchange and substitution for and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for the Warrant lost, stolen or destroyed, a
new Warrant of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company and the Warrant
Agent of such loss, theft or destruction of such Warrant and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrants
shall also comply with such other reasonable regulations and pay such
reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 9. RESERVATION OF COMMON SHARES. There have been reserved, and
the Company shall at all times keep reserved, out of the authorized and
unissued Common Shares, a number of shares sufficient to provide for the
exercise of the rights of purchase represented by the Warrants, and the
Transfer Agent for the Common Shares and every subsequent transfer agent for
any shares of the Company's capital stock issuable upon the exercise of any of
the rights of purchase aforesaid are hereby irrevocably authorized and
directed at all times to reserve such number of authorized and
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unissued shares as shall be requisite for such purpose. The Company agrees
that all Common Shares issued upon exercise of the Warrants shall be, at the
time of delivery of the certificates for such Common Shares, validly issued
and outstanding, fully paid and non-assessable and listed on any securities
exchange upon which the other Common Shares are then listed. The Company will
file such registration statement(s) pursuant to the Securities Act of 1933, as
amended, with respect to the Common Shares as may be necessary to permit it to
deliver to each person exercising a Warrant, a Prospectus meeting the
requirements of Section 11(a) (3) of such act and otherwise complying
therewith, and will deliver such a Prospectus to each such person; provided,
that the Company shall only be obligated to use its reasonable, good faith
efforts to have any such registration statement declared effective by the
Securities and Exchange Commission, and to have such reserved shares qualified
for delivery to holders of the Warrants under applicable state securities
laws, and to the extent that the Company has used such prescribed efforts but
has been unsuccessful in obtaining any such registration(s) or
qualification(s), it shall not constitute a breach of this Agreement by the
Company. The Company will keep a copy of this Agreement on file with the
Transfer Agent for the Common Shares and with every subsequent transfer agent
for any shares of the Company's capital stock issuable upon the exercise of
the rights of purchase represented by the Warrants. The Warrant Agent is
hereby irrevocably authorized to requisition from time to time such Transfer
Agent for stock certificates required to honor outstanding Warrants. The
Company will supply such Transfer Agent with duly executed stock certificates
for such purpose. All Warrants surrendered in the exercise of the rights
thereby evidenced shall be cancelled by the Warrant Agent and shall thereafter
be delivered to the Company, and such cancelled Warrants shall constitute
sufficient evidence of the number of Common Shares which have been issued upon
the exercise of such Warrants. Promptly after the date of expiration of the
Warrants, the Warrant Agent shall certify to the Company the total aggregate
amount of Warrants then outstanding, and thereafter no Common Shares shall be
subject to reservation in respect to such Warrants which shall have expired.
SECTION 10. WARRANT PRICE. The Warrant Price at which Common Stock shall
be purchasable shall be $5.50 per whole share. No fractional shares shall be
issued.
SECTION 11. ADJUSTMENTS. Subject and pursuant to the provisions of this
Section 11, the Warrant Price and number of Common Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(A) Except as hereinafter provided in the event the Company shall, at
any time or from time to time after the date hereof, sell
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any shares of Common Stock for a consideration per share less than the lower
of (i) the closing bid price of the Common Stock as reported on NASDAQ on the
trading date next preceding such sale (the "Market Price"), or (ii) the
Warrant Price then in effect, or issue any shares of Common Stock as a stock
dividend to the holders of Common Stock, or subdivide or combine the
outstanding shares of Common Stock into a greater or lesser number of shares
(any such sale, issuance, subdivision or combination being herein called a
"Change of Shares"), then, and hereafter immediately before the date of such
sale or the record date for each Change of Shares, the Warrant Price for the
Warrants (whether or not the same shall be issued and outstanding) in effect
immediately prior to such Change of Shares shall be changed to a price
(including any applicable fraction of a cent to the nearest cent) determined
by dividing (1) the product of (a) the Warrant Price in effect immediately
before such Change of Shares and (b) the sum (i) the total number of shares of
Common Stock outstanding immediately prior to such Change of Shares, and (ii)
the number of shares determined by dividing (A) the aggregate consideration,
if any, received by the Company upon such consideration, issuance, subdivision
or combination by (3) the lesser of (x) the Market Price, or (y) the Warrant
Price, in effect immediately prior to such Change of Shares; by (2) the total
number of shares of Common Stock outstanding immediately after such Change of
Shares.
For the purposes of any adjustment to be made in accordance with this
Section 11(A) the following provisions shall be applicable: In case of the
issuance or sale of shares of Common Stock (or of other securities deemed
hereunder to involve the issuance or sale of shares of Common Stock) for a
consideration part or all of which shall be cash, the amount of the cash
portion of the consideration therefor deemed to have been received by the
Company shall be (i) the subscription price (before deducting any commissions
or any expenses incurred in connection therewith), if shares of Common Stock
are offered by the Company for subscription, or (ii) the public offering price
(before deducting therefrom any compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers or others
performing similar services, or any expenses incurred in connection
therewith), if such securities are sold to underwriters or dealers for public
offering without a subscription offering, or (iii) the gross amount of cash
actually received by the Company for such securities, in any other case.
(B) In case of the issuance or sale (otherwise than as a dividend or
other distribution on any stock of the Company, and otherwise than on the
exercise of options, rights or warrants or the conversion or exchange of
convertible or exchangeable securities) of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of
Common
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Stock) for a consideration part or all of which shall be other than cash, the
amount of the consideration therefor other than cash deemed to have been
received by the Company shall be the value of such consideration as determined
in good faith by the Board of Directors of the Company.
(C) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after the opening of business on the day following the record date
for the determination of shareholders entitled to receive such dividend or
other distribution and shall be deemed to have been issued without
consideration.
(D) The reclassification of securities of the Company other than shares
of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to receive
such shares, and the value of the consideration allocable to such shares of
Common Stock shall be determined as provided in subsection (B) of this Section
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(E) The number of shares of Common Stock at any one time outstanding
shall be deemed to include the aggregate maximum number of shares issuable
(subject to readjustment upon the actual issuance thereof) upon the exercise
of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(F) Upon each adjustment of the Warrant Price pursuant to this Section
11, the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Warrant
Price in effect prior to such adjustment and dividing the product so obtained
by the applicable adjusted Warrant Price.
(G) In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock,
for a consideration per share (determined as provided in Section 11(A) and as
provided below) less than the lower of (i) the Market Price, or (ii) the
Warrant Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, or without
consideration (including the issuance of any such securities by way of
dividend or other distribution), the Warrant Price for the Warrants (whether
or not the same shall be issued and outstanding) in effect immediately prior
to the issuance of such
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options, rights or warrants, or such convertible or exchangeable securities,
as the case may be, shall be reduced to a price determined by making the
computation in accordance with the provisions of Section 11 (A) hereof,
provided that:
(1) The aggregate maximum number of shares of Common Stock, as the case
may be, issuable or that may become issuable under such options, rights
or warrants (assuming exercise in full even if not then currently
exercisable or currently exercisable in full) shall be deemed to be
issued and outstanding at the time such options, rights or warrants were
issued, for a consideration equal to the minimum purchase price per share
provided for in such options, rights or warrants at the time of issuance,
plus the consideration, if any, received by the Company for such options,
rights or warrants; provided, however, that upon the expiration or other
termination of such options, rights or warrants, if any thereof shall not
have been exercised, the number of shares of Common Stock deemed to be
issued and outstanding pursuant to this subsection (A) (and for the
purposes of subsection (E) of Section 11 hereof) shall be reduced by the
number of shares as to which options, warrants and/or rights shall have
expired, and such number of shares shall no longer be deemed to be issued
and outstanding, and the Purchase Price then in effect shall forthwith be
readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the shares
actually issued plus the shares remaining issuable upon the exercise of
those options, rights or warrants as to which the exercise rights shall
not have expired or terminated unexercised.
(2) The aggregate maximum number of shares of Common Stock issuable or
that may become issuable upon conversion or exchange of any convertible
or exchangeable securities (assuming conversion or exchange in full even
if not then currently convertible or exchangeable in full) shall be
deemed to be issued and outstanding at the time of issuance of such
securities, for a consideration equal to the consideration received by
the Company for such securities, plus the minimum consideration, if any,
receivable by the Company upon the conversion or exchange thereof;
provided, however, that upon the expiration or other termination of the
right to convert or exchange such convertible or exchangeable securities
(whether by reason of redemption or otherwise), the number of shares of
Common Stock deemed to be issued and outstanding pursuant to this
subsection 11 (G)(2) (and for the purposes of subsection 11 (E) hereof)
shall be reduced by the number of shares as to which the conversion or
exchange rights shall have expired or terminated unexercised, and such
number of shares shall no longer be deemed to be issued and outstanding,
and the Warrant
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Price then in effect shall forthwith be readjusted and thereafter be the
price that it would have been had adjustment been made on the basis of
the issuance only of the shares actually issued plus the shares remaining
issuable upon conversion or exchange of those convertible or exchangeable
securities as to which the conversion or exchange rights shall not have
expired or terminated unexercised.
(3) If any change shall occur in the exercise price per share provided
for in any of the options, rights or warrants referred to in subsection
11 (B), or in the price per share or ratio at which the securities
referred to in subsection 11 (G) are convertible or exchangeable, such
options, rights or warrants or conversion or exchange rights, as the case
may be, to the extent not theretofore exercised, shall be deemed to have
expired or terminated on the date when such price change became effective
in respect of shares not theretofore issued pursuant to the exercise or
conversion or exchange thereof, and the Company shall be deemed to have
issued upon such date new options, rights or warrants or convertible or
exchangeable securities.
(H) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in
par value, or from par value to no par value, or from no par value to par
value or as a result of subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger with a subsidiary in which merger the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety, then, as a condition of such reclassification, change,
consolidation, merger, sale or conveyance, the Company, or such successor or
purchasing corporation, as the case may be, shall make lawful and adequate
provision whereby the registered holder of each Warrant then outstanding shall
have right thereafter to receive on exercise of such Warrant the kind and
amount of securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the number of
securities issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance and shall
forthwith file at the Corporate Office of the Warrant Agent a statement signed
by its President or a Vice President and by its Treasurer or an Assistant
Treasurer or its Secretary or an Assistant Secretary evidencing such
provision. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
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provided for in subsection 11 (A). The above provisions of this subsection 11
(H) shall similarly apply to successive reclassifications and changes of
shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.
(I) After each adjustment of the Purchase Price pursuant to this
Section 11, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Warrant Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant, after such adjustment, and (iii) a
brief statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Warrant Agent and cause a brief
summary thereof to be sent by ordinary first class mail to each registered
holder at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity thereof except as to the holder
to whom the Company failed to mail such notice, or except as to the holder
whose notice was defective. The affidavit of any officer of the Warrant Agent
or the Secretary or an Assistant Secretary of the Company that such notice has
been mailed, shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(J) NO ADJUSTMENT IN CERTAIN CASES. No adjustment shall be made:
(i) upon the issuance of the Warrants (including shares of Common Stock
issued upon exercise of those warrants);
(ii) upon the issuance of shares of Common Stock and warrants (including
shares of Common Stock issued upon exercise of those warrants) issued
prior to or in connection with the Public Offering (including those
shares of the Company's Common Stock issued in connection with the
Company's Acquisition of Euro Tech (Far East) Limited);
(iii) upon the issuance or sale of shares of Common Stock issuable upon
the exercise of any stock options granted under any stock option plan of
the Company and up to 1,400,000 Management Options; or
(iv) if the amount of said adjustment shall be less than five cents
($.05) per share of Common Stock, provided, however, that in such case,
any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so carried
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forward, shall amount to at least five cents ($.05) per share of Common
Stock.
(K) The foregoing provisions notwithstanding on the effective date of
any new Warrant Price the number of shares as to which any Warrant may be
exercised shall be increased or decreased so that the total sum payable to the
Company on the exercise of such Warrant shall remain constant.
(L) The form of Warrant need not be changed because of any change
pursuant to this Section, and Warrants issued after such change may state the
same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any
time in its sole discretion (which shall be conclusive) make any change in the
form of Warrant that the Company may deem appropriate and that does not effect
the substance thereof; and any Warrant thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant or otherwise,
may be in the form as so changed.
SECTION 12. FRACTIONAL INTEREST. The Company shall not be required to
issue fractions of Common Stock on the exercise of Warrants or any cash or
other adjustment in respect of such fractions of Common Shares. If any
fraction of a Common Share would, except for the provisions of this Section
12, be issuable on the exercise of any Warrant (or specified portions
thereof), the Company shall issue such number of shares of Common Stock to
which the Warrant holder is entitled, rounded up to the nearest number of
whole shares.
SECTION 13. NOTICES TO WARRANTHOLDERS.
(A) In case at any time:
(a) the Company shall pay any dividends payable in stock upon its
Common Stock or make any distribution (other than regular cash dividends) to
the holders of its Common Stock;
(b) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or
other rights;
(c) there shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
(in which the Company is not the surviving corporation) with, or sale of all
or substantially all of its assets to, another corporation; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company;
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then, in any one or more such cases, the Company shall give written notice to
all Warrant holders of record not fewer than 10 days' prior to the date of
which the books of the Company shall close or a record shall be taken for (i)
such dividend, distribution, or subscription rights, or (ii) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend, distribution, or subscription rights, or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, as the
case may be. Failure to give or publish such notice, or any defect therein,
shall not affect the legality or validity of any of the matters set forth in
this Section 13 inclusive.
(B) The Company shall cause copies of all financial statements and
reports, proxy statements and other documents as it shall send to its
stockholders to be sent by first-class mail, postage prepaid, on the date of
mailing to such stockholders, to each registered holder of Warrants at his
address appearing on the Warrant register as of the record date for the
determination of the stockholders entitled to such documents.
SECTION 14. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS.
(A) The Warrant Agent shall forward promptly to the Company, with
respect to Warrants exercised, the funds which will be deposited in a special
account in a bank designated by the Company for the benefit of the Company,
for the purchase of Common Shares through the exercise of such Warrants.
(B) The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours.
SECTION 15. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
Any corporation or company which may succeed to the business of the
Warrant Agent by any merger or consolidation or otherwise to which the Warrant
Agent shall be a party shall be the successor Warrant Agent hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 17 of
this Agreement. In case at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement, any of the Warrants shall
have been countersigned but not delivered, any
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such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent and deliver such Warrants so countersigned; and in case
at that time any of the Warrants shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrants either in the
name of the predecessor Warrant Agent or in the name of the successor warrant
agent; and in all such cases such Warrants shall have the full force provided
in the Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and
deliver Warrants so countersigned, and in case at that time any of the
Warrants shall not have been countersigned, the Warrant Agent may countersign
such Warrants either in its prior name or in its changed name; and in all such
cases such Warrants shall have the full force provided in the Warrants and in
this Agreement.
SECTION 16. DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
A. The statements of fact and recitals contained herein and in the
Warrants shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such
as describe the Warrant Agent or actions taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of
the Warrants except as herein expressly provided.
B. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
C. The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and the Warrant Agent shall incur
no liability or responsibility to the Company or to any holder of any Warrant
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion or the written advice of such
counsel.
D. The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument
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reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
E. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution
of this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including
judgments, costs and reasonable counsel fees, for anything done or omitted by
the Warrant Agent in the execution of this Agreement except as a result of the
Warrant Agent's negligence or bad faith.
F. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrants shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment shall be
for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
G. The Warrant Agent and any stockholder, director, officer, partner
or employee of the Warrant Agent may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any other legal
entity.
H. The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence or bad faith.
I. The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder
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either itself or by or through its attorneys, agents or employees, and the
Warrant Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys, agents, or employees or for any
loss to the Company resulting from such neglect or misconduct, provided
reasonable care has been exercised in the selection and continued employment
thereof.
J. Any request, direction, election, order or demand of the Company
shall be sufficiently evidenced by an instrument signed in the name of the
Company by its President or a Vice President or its Secretary or an Assistant
Secretary or its Treasurer or an Assistant Treasurer (unless other evidence in
respect thereof be herein specifically prescribed); and any resolution of the
Board of Directors of the Company may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.
SECTION 17. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company
notice in writing, and to the holders of the Warrants notice by mailing such
notice to holders at their addresses appearing on the Warrant register, of
such resignation, specifying a date when such resignation shall take effect.
The Warrant Agent may be removed by like notice to the Warrant Agent from the
Company and by like mailing of notice to the holders of the Warrants. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the
registered holder of a Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Any successor warrant agent, whether
appointed by the Company or by such court, shall be a bank, or trust company
or active transfer agent, in good standing, incorporated under the laws of a
state of the United States of America. After appointment, the successor
warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer
to the successor warrant agent all cancelled Warrants, records and property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to file or mail any
notice provided by this Section, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be.
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SECTION 18. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment of
any Transfer Agent for the Common Shares or of any subsequent transfer agent
for Common Shares or other shares of the Company's capital stock issuable upon
exercise of the rights of purchase represented by the Warrants, the Company
will file with the Warrant Agent a statement setting forth the name and
address of such Transfer Agent. The Warrant Agent hereby acknowledges that it
is, at the time of execution hereof, the Transfer Agent, and waives any
statement required herein with respect thereto.
SECTION 19. NOTICES. Any notice pursuant to this Agreement to be given or
made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
Euro Tech Holdings Company Limited
c/o Euro Tech (Far East) Limited
00/X Xxx Xxxxx Xxxx Xxxxxx
00 Xxxx Xxxx Xxxx Xxxx
Xxxx Xxxx
Attn: X.X. Xxxxx, Chief Executive Officer
With a copy to:
Xxxxxx Xxxxx, Esq.
Gusrae, Xxxxxx & Xxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any notice pursuant to this Agreement to be given or made by the Company
or by the registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: _________________
SECTION 20. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent
may from time to time supplement or amend this Agreement without the approval
of any holders of Warrants in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not
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be inconsistent with the provisions of the Warrants and which shall not
adversely affect the interests of the holders of Warrants.
SECTION 21. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 22. NEW YORK CONTRACT. This Agreement shall be deemed to be a
contract made under the laws of the State of New York and for all purposes
shall be construed in accordance with laws of said state.
SECTION 23. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Warrant Agent and the
registered holders of the Warrants.
SECTION 24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each such counterparts shall be considered an original.
SECTION 25. EFFECTIVENESS. This Agreement shall be deemed binding, and,
therefore, in effect, as of and subject to the effective date of the
Registration Statement for the Public Offering.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
EURO TECH HOLDINGS COMPANY LIMITED
(Corporate Seal)
By:
-------------------------------
X.X. Xxxxx,
Chief Executive Officer
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Attest:
--------------------------------
, Secretary
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:
-------------------------------
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ADDENDUM
WARRANT AGREEMENT BY AND BETWEEN
EURO TECH HOLDINGS COMPANY LIMITED AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
(THE "AGREEMENT")
The terms set forth below, for the purposes of the Agreement to which
this Addendum is attached, shall have the meanings specified:
The term "EFFECTIVE DATE" shall mean the date(s) the Commission declares
effective the Company's registration statement under Commission File Number
333-16277 or any other registration statement required to be filed by the
Company pursuant to the Agreement.
The term "TRANSFER AGENT" shall mean American Stock Transfer & Trust
Company.
The term "WARRANT PRICE" shall mean the sum of money specified in Section
10 of the Agreement, as may be adjusted from time to time pursuant to Section
11 of the Agreement.
The term "WARRANT CERTIFICATES" shall mean typed or printed renditions of
the Warrants, specifying the names of the holders thereof and the number of
shares of the Company's Common Stock purchasable thereunder.
