1
EXHIBIT 10.9
WARRANT EXERCISE FEE AGREEMENT
AGREEMENT dated as of the ____ day of _________, 1997, by and among
Biltmore Securities, Inc., ("Biltmore")CASCO INTERNATIONAL, INC.(the "Company")
and American Stock Transfer & Trust Co. (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with a public offering of 750,000 Units,(a
maximum of 862,500 Units including the over-allotment option), each Unit
consisting of one share of the Company's Common Stock ("Common Stock"), and two
(2) Class A Common Stock Purchase Warrants (the "Warrants"), the Company
proposes to issue, in accordance with an agreement dated as of __________, 1997
by and between the Company and the Warrant Agent (the "Warrant Agreement"),
Warrants to purchase shares of Common Stock; and
WHEREAS, the parties hereto wish to provide Biltmore, a member of the
National Association of Securities Dealers, Inc. ("NASD") with certain rights
on an exclusive basis in connection with the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
Section 1. Description of the Warrants. The Company's Warrants may be
exercised on or after ___________, 1998 and expire at 5:00 p.m. New York time
on __________, 2002 (the "Expiration Date"), subject to (i) the Company's right
to extend the Expiration Date, at which time all rights evidenced by the
Warrants shall cease and the Warrants shall become void and (ii) certain
redemption rights commencing on or after ____________, 1998. In accordance with
the provisions of the Warrant Agreement, the holder of each Warrant shall have
the right to purchase from the Company, and the Company shall issue and sell to
such holders of Warrants, one fully paid and non-assessable share of the
Company's Common Stock for every Warrant exercised at an Exercise Price of
$5.50, subject to adjustment as provided in the Warrant Agreement.
Section 2. Notification of Exercise. Within five (5) days of the last
day of each month commencing __________, 1998 (one year
2
from the date of the Company's Prospectus), the Warrant Agent or the Company
will notify Biltmore of each Warrant certificate which has been properly
completed and delivered for exercise by holders of Warrants during each such
month, the determination of the proper completion to be in the sole and
absolute reasonable discretion of the Company and the Warrant Agent. The
Company or the Warrant Agent will provide Biltmore with such information, in
connection with the exercise of each Warrant, as Biltmore shall reasonably
request.
Section 3. Payment to Biltmore. The Company hereby agrees to pay to
Biltmore an amount equal to four (4%) percent of the exercise price for each
Warrant exercised (the "Exercise Fee") a portion of which may be allowed by
Biltmore to the dealer who solicited the exercise (which may also be Biltmore)
provided that:
(a) such Warrant is exercised on or after __________, 1998, which
represents one year from the effective date of the Company's Registration
Statement;
(b) at the time of exercise, the market price of the Company's Common
Stock is higher than the applicable Exercise Price of the Warrant being
exercised;
(c) the holders of Warrants being exercised have indicated in
writing, either in the Form of Election contained on the specimen Warrant
Certificate attached hereto as Exhibit A, or by written documents signed and
dated by the holders and specifically stating that the exercise of such
Warrants were solicited by Biltmore or another member of the NASD; and
(d) Biltmore, and/or the member of the NASD which solicited the
exercise of Warrants delivers a certificate to the Company within five (5)
business days of receipt of information relating to such exercised Warrants
from the Company or the Warrant Agent in the form attached hereto as Exhibit B,
stating that:
(1) the Warrants exercised were not held in a
discretionary account;
(2) Biltmore or the member of the NASD which solicited the
exercise of Warrants did not, (unless granted an exemption by the Securities
and Exchange Commission from the provisions thereof), within the applicable
number of business days under Rule 10b-6 immediately preceding the date of
exercise of the Warrant bid
3
for or purchase the Common Stock of the Company or any securities of the
Company immediately convertible into or exchangeable for the Common Stock
(including the Warrants) or otherwise engage in any activity that would be
prohibited by Regulation M under the Securities Exchange Act of 1934, as
amended, with one engaged in a distribution of the Company's securities; and
(3) in connection with the solicitation, it disclosed the
compensation it would receive upon exercise of the Warrant.
Section 4. Payment of the Exercise Fee. The Company hereby agrees to
pay over to Biltmore within two (2) business days after receipt by the Company
of the certificate described in Section 3(d) above, the Exercise Fee out of the
proceeds it received from the applicable Exercise Price paid for the Warrants
to which the certificate relates.
Section 5. Inspection of Records. Biltmore may at any time during
business hours, at its expense, examine the records of the Company and the
Warrant Agent which relate to the exercise of the Warrants.
Section 6. Termination. Biltmore shall be entitled to terminate this
Agreement prior to the exercise of all Warrants at any time upon five (5)
business days' prior notice to the Company and the Warrant Agent.
Notwithstanding any such termination notice, Biltmore shall be entitled to
receive an Exercise Fee for the exercise of any Warrant for which it has
already delivered to the Company prior to any such termination the certificate
required by Section 3(d) of this Agreement.
Section 7. Notices. Except as otherwise expressly provided in this
Agreement, (A) whenever notice is required by the provisions hereof to be given
to the Company, such notice shall be given in writing, by certified mail,
return receipt requested, addressed to the Company at 0000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxx, XX 00000, copy to Johnson, Blakely, Pope, Bokor, Xxxxxx &
Xxxxx, P.A., 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, X.X. Xxx 0000, Xxxxx, XX
00000-0000, Attention: Xxxxxx X. Xxxxxxxx, Esq.; and (B) whenever notice is
required by the provisions hereof to be given to the Underwriters, such notice
shall be in writing addressed to the Representative at 0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, copy to Xxxxxxx X.
Xxxxxxxxx, Esq., Xxxxxxxxx & Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000, telecopier (000) 000-0000; and (C) if to the Warrant Agent at
3
4
American Transfer & Trust Company, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
such other address as such party shall have given notice to other parties
hereto in accordance with this Section. All such notices or other
communications shall be deemed given three (3) business days after mailing, as
aforesaid.
Section 8. Supplements and Amendments. The Company, the Warrant Agent
and Biltmore may from time-to-time supplement or amend this Agreement by a
written instrument signed by the party to be charged, without the approval of
any holders of Warrants in order to cure any ambiguity or to correct or
supplement any provisions contained herein or to make any other provisions in
regard to matters or questions arising hereunder which the Company, the Warrant
Agent and Biltmore may deem necessary or desirable and which do not adversely
affect the interests of the holders of Warrants.
Section 9. Assignment. This Agreement may not be assigned by any party
without the express written approval of all other parties, except that Biltmore
may assign this Agreement to its successors.
Section 10. Governing Law. This Agreement will be deemed made under
the laws of the State of New York with respect to matters of contract law and
for all purposes shall be governed by and construed in accordance with the
internal laws of said State, without regard to the conflicts of laws provisions
thereof.
Section 11. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give any person or corporation other than the Company,
the Warrant Agent and Biltmore any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of, and be binding upon, the Company, the Warrant Agent and Biltmore
and their respective successors and permitted assigns.
Section 12. Descriptive Headings. The descriptive headings of the
sections of this Agreement are inserted for convenience only and shall not
control or affect the meanings or construction of any of the provisions hereof.
Section 13. Superseding Agreement. This Agreement supersedes any and
all prior agreements between the parties with respect to the subject matter
hereof.
4
5
Section 14. Exclusive Agreement. It is understood that this agreement
is on an exclusive basis to solicit the exercise of the Warrants and that the
Company may not engage other broker-dealers to solicit the exercise of Warrants
without the consent of Biltmore.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
CASCO INTERNATIONAL, INC.
By:
--------------------------------
BILTMORE SECURITIES, INC.
By:
--------------------------------
AMERICAN STOCK TRANSFER & TRUST CO.
By:
--------------------------------
5
6
CERTIFICATE
The undersigned, being the ________________ of Biltmore Securities Inc.
("Biltmore") pursuant to Section 3(d) of the Warrant Exercise Fee Agreement
relating to the exercise of Warrants dated ____________, 1997 between CASCO
INTERNATIONAL, INC. (the "Company") and American Stock Transfer & Trust Co.
(the "Warrant Agent") hereby certifies that:
1. The Company or the Warrant Agent has notified Biltmore
that ______________ Warrants (as defined in the Agreement) have been exercised
during _____________, 199___.
2. The exercise of ______________ of such Warrants was
solicited by Biltmore.
3. Such Warrants were not held in a discretionary account.
4. ______________ did not, within _____ business days immediately
preceding _______________ 199___, bid for or purchase the Common Stock of the
Company or any securities of the Company immediately convertible into or
exchangeable for the Common Stock (including Warrants) or otherwise engage in
any activity that would be prohibited by Regulation M under the Securities
Exchange Act of 1934, as amended, to one engaged in a distribution of the
Company's securities.
5. In connection with the solicitation of the exercise of
the Warrants, _____________ disclosed the compensation it will
receive to holders of the Warrants.
DATED:__________________, 199___
BILTMORE SECURITIES, INC.
By:
--------------------------------
6
