Exhibit 4.1
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WARRANT AGREEMENT
WARRANT AGREEMENT (this "AGREEMENT"), made as of April 19, 2002, by and
between MAXCOR FINANCIAL GROUP INC., a Delaware corporation ("MAXF"), on the one
hand, and Xxxxx Xxxxxxx, Xxxx Xxxxxx and Xxxxxxx Xxxxxxxx (collectively, the
"BANKERS"), on the other hand.
WHEREAS, Maxcor Financial Inc., a New York corporation and a wholly
owned subsidiary of MAXF ("MAXCOR"), has hired the Bankers to help create and
operate at Maxcor a leveraged finance investment banking group with respect to
below investment grade companies (the "GROUP"); and
WHEREAS, as an inducement to the Bankers' willingness to be employed by
Maxcor, MAXF has agreed to make available to the Bankers, for issuance to
employees of the Group (including the Bankers), a number of common stock
purchase warrants, exercisable upon and otherwise subject to the terms and
conditions set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. OBLIGATION TO ISSUE WARRANTS. Subject to the terms and conditions
of this Agreement, MAXF shall issue to the Bankers and other employees of the
Group up to a total of one million (1,000,000) common stock purchase warrants
(the "WARRANTS"), each exercisable for one share of the common stock of MAXF,
par value $.001 per share (the "COMMON STOCK"). Concurrent with the execution
and delivery of this Agreement by MAXF, on the one hand, and the Bankers, on the
other hand (the "FIRST CLOSING"), MAXF shall make available to the Bankers an
aggregate of five hundred thousand (500,000) of the Warrants (the "INITIAL
WARRANTS"). At the Second Closing (as defined below), MAXF shall make available
to the Bankers an aggregate of an additional two hundred fifty thousand
(250,000) Warrants (the "SECONDARY WARRANTS"). At the Third Closing (as defined
below), MAXF shall make available to the Bankers an aggregate of an additional
two hundred fifty thousand (250,000) Warrants (the "FINAL WARRANTS"). All
Warrants shall, at the relevant Closing or thereafter, be allocated and granted
by the Bankers, and issued by MAXF, to employees of the Group (including
themselves) (collectively, "EMPLOYEES") as and when the Bankers may from time to
time recommend and specify in writing to MAXF; provided, however, that all such
recommended grants and related issuances shall be subject to the prior approval
of the senior management of MAXF, which shall not be unreasonably withheld or
delayed.
2. EXERCISE PRICE OF WARRANTS. Subject to the adjustments specified
herein, the exercise price per Warrant that must be paid by the Registered
Holder thereof (as hereinafter defined) in order to purchase and receive one
share of the Common Stock shall be equal to the higher of (i) the Fair Market
Value of a share of the Common Stock as of the date of grant of the Warrant to
the Employee (the "GRANT DATE") and (ii) either (A) in the case of the initial
Warrants, $5.75, or (B) in the case of all other Warrants, Maxcor's best
estimation of the book value per share of Common Stock as of the applicable
Grant Date. For purposes hereof, "FAIR MARKET VALUE" per share as of a
particular date shall mean (x) if the shares of Common Stock are then listed on
a national securities exchange, the closing sales price per share of Common
Stock on the national securities exchange on which the Common Stock is
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principally traded for the last preceding trading day on which there was a sale
of such Common Stock on such exchange, or (y) if the shares of Common Stock are
then traded in an over-the-counter market, the average of the closing bid and
asked prices for the shares of Common Stock in such market for the last
preceding trading day on which there was a sale of such Common Stock in such
market, or (z) if the shares of Common Stock are not then listed on a national
securities exchange or traded in an over-the-counter market, such value as the
Board of Directors of MAXF, in its good faith and reasonable discretion, shall
determine. The Bankers each agree that they will not, directly or indirectly,
effect or cause to be effected, and will receive a representation to similar
effect from any Employee who is receiving a grant of Warrants hereunder,
transactions in the Common Stock (or derivatives thereof) either on, or at any
time in the last five trading days preceding, the trading day referenced above
in clauses (x) and (y) that is used for determining Fair Market Value.
3. VESTING OF WARRANTS. (a) Each grant of Warrants shall vest at the
rate of (i) one-half of the grant at the end of the second anniversary of the
specific Grant Date related to such grant and (ii) one-fourth of the grant at
the end of each of the third and fourth anniversaries, respectively, of the
specific Grant Date related to such grant. Notwithstanding the foregoing, if the
employment with Maxcor of the initial Registered Holder of a grant of Warrants
is terminated for any reason, the rights of the then-Registered Holder or
Holders of such Warrants, with respect to any portion thereof that have not at
such time already vested, shall immediately lapse and expire and such unvested
Warrants shall be forfeited.
(b) In the event of a Change in Control (as hereinafter defined),
the portion of each grant of Warrants that is then outstanding but not yet
vested shall thereupon become fully vested. For purposes hereof "CHANGE IN
CONTROL" shall mean the occurrence of the event set forth in any of the
following paragraphs:
(i) any Person (as defined below) is or becomes the
Beneficial 0wner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of
securities of MAXF (not including in the securities beneficially owned
by such Person any securities acquired directly from MAXF or its
subsidiaries) representing 50% or more of the combined voting power of
MAXF's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in
clauses (A) or (C) of paragraph (ii) below; or
(ii) there is consummated a merger or consolidation of
MAXF with any other corporation other than (A) a merger or
consolidation which would result in the voting securities of MAXF
outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the voting
securities of MAXF or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, (B) a
merger or consolidation effected to implement a re-capitalization of
MAXF (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of MAXF (not
including in the securities Beneficially Owned by such Person any
securities acquired directly from MAXF) representing 50% or more of the
combined voting power of MAXF's then outstanding securities, or (C) a
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merger or consolidation which would result in any individual, entity or
group which includes, is affiliated with or is wholly or partly
controlled by the Chief Executive Officer of MAXF being the Beneficial
Owner of at least 50% of the combined voting power of the voting
securities of MAXF, the entity surviving such merger or consolidation
or any parent thereof outstanding immediately after such merger or
consolidation; or
(iii) the stockholders of MAXF approve a plan of complete
liquidation or dissolution of MAXF or there is consummated an agreement
for the sale or disposition by MAXF of all or substantially all of
MAXF's assets, other than a sale or disposition by MAXF of all or
substantially all of MAXF's assets to an entity at least 50% of the
combined voting power of the voting securities of which are owned by
Persons in substantially the same proportions as their ownership of
MAXF immediately prior to such sale.
(c) For purposes of the foregoing, "PERSON" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i)
MAXF or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of MAXF or any of its subsidiaries,
(iii) an underwriter temporarily holding securities pursuant to an offering of
such securities, (iv) a corporation owned, directly or indirectly, by the
stockholders of MAXF in substantially the same proportions as their ownership of
stock of MAXF, or (v) any individual, entity or group which includes, is
affiliated with or is wholly or partly controlled by the Chief Executive Officer
of MAXF.
4. EXPIRATION DATE. Each Warrant shall expire and become void, and
no longer be exercisable, and all rights in respect thereof under this Agreement
and any Warrant Certificates shall cease, at 5:00 p.m. on the day preceding the
tenth anniversary of the First Closing, or such earlier time as is set forth in
the balance of this Section 4 (the "EXPIRATION DATE"). Notwithstanding the
foregoing, if the employment with Maxcor of the initial Registered Holder of a
grant of Warrants is terminated for any reason, then the then-Registered Holder
or Holders of such Warrants shall have only up to and including a maximum of
sixty (60) days, from the date of such termination, to exercise any portion of
the Warrants that were already vested as of the date of such termination, after
which period the right to exercise such vested Warrants shall lapse and expire
and such vested Warrants shall become void and forfeited.
5. OTHER CLOSINGS. The Secondary Warrants shall automatically be
made available (the "SECOND CLOSING"), without further actions required of
either the Bankers or MAXF, the first time (if any) that the Group, for any
annual (or shorter) period ending on December 31 (a "MEASUREMENT PERIOD"),
achieves at least $5 million in pre-tax profits, as reasonably determined by
MAXF using MAXF's internal accounting principles applied on a consistent basis,
but in any event after deducting all direct and indirect expenses incurred by or
on behalf of the Group ("PRE-TAX PROFITS"). The Final Warrants shall
automatically be made available (the "THIRD CLOSING"), without further actions
required of either the Bankers or MAXF, the first time (if any) that the Group,
for any Measurement Period (which can be the same or a subsequent Measurement
Period as the Measurement Period that triggers the Second Closing), achieves at
least $8.5 million in Pre-Tax Profits. Availability of the Secondary and Final
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Warrants for distribution to Employees shall commence on (and at any time after)
the January 1st of the year immediately following the year in which the relevant
Pre-Tax Profit threshold is met.
6. WARRANT CERTIFICATES. Each certificate representing one or more
Warrants (each a "WARRANT CERTIFICATE") shall be issued in registered form only,
shall be in substantially the form of Exhibit A hereto, shall be signed by the
President, Chief Operating Officer or Chief Financial Officer of MAXF, and shall
bear a facsimile of MAXF's corporate seal. Each Warrant Certificate shall also
be countersigned by the initial Registered Holder to whom it is issued, with a
copy returned to MAXF promptly following the time of issuance. No Warrant
Certificate shall be valid or may be presented for exercise unless it is so
signed, sealed and countersigned as provided herein. Each Warrant Certificate
shall state: (i) the aggregate number of Warrants represented by the Warrant
Certificate; (ii) the Grant Date of the Warrants; (iii) the vesting schedule of
the Warrants; (iv) the Exercise Price per share of the Warrants; and (v) the
Expiration Date of the Warrants, in each case subject to and consistent with the
terms and conditions of this Agreement.
7. ISSUANCE OF WARRANTS. MAXF shall cause a duly authorized officer
to sign and seal a Warrant Certificate upon the occurrence of the events
described in this Section 7. If (i) consistent with the terms and conditions of
this Agreement as to the circumstances in which Warrants are available for
issuance, Xx. Xxxxxxx or, in his absence, Xx. Xxxxxx, gives MAXF a written
recommendation as to issuance that includes the number of Warrants being
granted, the Employee to whom they are being granted and, if either the
Secondary Warrants and/or the Final Warrants are available at such time for
issuance, from which group (or combination) the grant is being made, and (ii)
consistent with the obligations of MAXF under this Agreement not unreasonably to
withhold or delay its consent, MAXF's Chief Executive Officer or, in his
absence, Chief Operating Officer, countersigns the recommendation. The Grant
Date of a Warrant shall be the date that the Corporate Secretary of MAXF
receives such a written and countersigned recommendation. In addition, a Warrant
Certificate shall be issued in exchange or substitution for one or more
previously countersigned Warrant Certificates, as hereinafter provided,
including upon partial exercise of the Warrants represented by such Warrant
Certificate(s).
8. REGISTRATION. MAXF shall maintain books (the "WARRANT REGISTER")
for the registration of original issuance and the registration of transfer of
the Warrant Certificates. Upon the initial issuance of a Warrant Certificate,
MAXF shall issue and register the Warrant Certificate in the name of the
respective holders thereof in such denominations and otherwise in accordance
with instructions, complying with this Agreement, delivered to MAXF by the
Bankers. Prior to due presentment for registration of transfer of any Warrant
Certificate, MAXF may deem and treat the person in whose name such Warrant
Certificate shall be registered upon the Warrant Register (the "REGISTERED
HOLDER") as the absolute owner of such Warrant Certificate and of each Warrant
represented thereby for the purpose of any exercise thereof, and for all other
purposes, and MAXF shall not be affected by any notice to the contrary.
9. EXERCISE OF WARRANTS. A Warrant may not be exercised unless the
initial Registered Holder to whom it was issued is then in the employ of Maxcor.
Exercisability of a Warrant under this Agreement shall not be affected by any
change in duties or position of the Registered Holder as long as he or she
continues to be employed by Maxcor. Notwithstanding the foregoing, in the event
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that the employment of the Registered Holder shall terminate, all Warrants held
by such Registered Holder or his or her Permitted Transferees that are
exercisable at the time of such termination may, unless earlier terminated in
accordance with their terms, be exercised within sixty (60) days after the date
of such termination. Warrants that are not otherwise exercisable on the date of
termination of employment shall be forfeited as of such date. Warrants shall be
exercisable by the Registered Holder, commencing upon the applicable vesting
date set forth in the related Warrant Certificate for up to the number of shares
of Common Stock set forth opposite such vesting date, and ending at 5:00 p.m.,
New York Time, on the Expiration Date, by the surrender of such Warrant
Certificate and the notice of exercise attached thereto (the "NOTICE OF
EXERCISE"), duly executed by the Registered Holder, to the Corporate Secretary
at the principal corporate offices of MAXF (or such other office or agency of
MAXF as it may designate by notice in writing to the Registered Holder at the
address of the Registered Holder appearing on the books of MAXF), and upon
payment in lawful money of the United States in cash, to the order of MAXF (by
wire transfer or other immediately available funds), of the Exercise Price per
share (subject to adjustment as provided elsewhere herein), multiplied by the
number of shares specified in the Notice of Exercise, together with taxes, if
any, required to be paid or withheld by MAXF, on behalf of the Registered
Holder, in connection therewith.
10. ISSUANCE OF SHARES. Certificates for shares of Common Stock
purchased pursuant to the exercise of Warrants shall be delivered to the
Registered Holder by MAXF's transfer agent at MAXF's expense as soon as
practicable after the date on which any of the Warrants shall have been
exercised in accordance with the terms hereof. Each certificate so delivered
shall be in such denominations as may be reasonably requested by the Registered
Holder hereof and shall be registered in the name of the Registered Holder or,
subject to applicable laws (including payment of any applicable transfer taxes
by the Registered Holder), other name as shall be requested by the Registered
Holder. MAXF agrees that the shares so issued shall be deemed to be issued to
the Registered Holder as the record owner of such shares as of the close of
business on the business day immediately following the date on which this
Warrant Certificate shall have been surrendered to MAXF in connection with the
Warrants being exercised, together with full payment of the Exercise Price
therefor, in accordance with the terms hereof. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of any
Warrants. In case a Warrant Certificate is surrendered for exercise with respect
to less than all of the Warrants represented hereby, MAXF will issue or cause to
be issued a new signed Warrant Certificate or Certificates following such
surrender for the number of Warrants represented thereby which were not so
exercised, and the Registered Holder will countersign and return a copy of same
to MAXF.
11. REPRESENTATIONS OF MAXF. In connection with the execution of this
Agreement, MAXF hereby represents to the Bankers as follows: (i) MAXF is a
corporation duly organized and validly existing under the laws of Delaware; (ii)
the authorized capital of MAXF is accurately set forth in its annual report on
Form 10-K for the year ending December 31, 2001, on file with the Securities and
Exchange Commission; (iii) the execution, delivery and performance of this
Agreement do not, and the consummation of the transactions contemplated hereby
will not, constitute or result in a breach or violation of, or a default under
(x) the restated certificate of incorporation or bylaws of MAXF or (y) any
agreement, lease, license, contract, note, mortgage, indenture or other
obligation binding upon MAXF, except, in the case of clause (y) only, for those
breaches, violations or defaults that would not, individually or in the
aggregate, have a material adverse effect on the business or financial condition
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of MAXF and its subsidiaries taken as a whole or on MAXF's ability to enter into
or perform its obligations under this Agreement, and (iv) all corporate action
on the part of MAXF that is necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of MAXF
hereunder, and the authorization, issuance (or reservation for issuance), and
delivery of the Common Stock issuable upon exercise of the Warrants has been
taken, and this Agreement constitutes a valid and legally binding obligation of
MAXF, enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally and as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies. In addition, MAXF hereby represents to the Bankers
that the Common Stock issuable upon exercise of the Warrants, when issued, sold
and delivered in accordance with the terms of this Agreement, the Restated
Certificate of Incorporation of MAXF, and the Warrant Certificates for the
consideration expressed therein, will be duly authorized, validly issued, fully
paid and nonassessable, and will be free of restrictions on transfer other than
restrictions under applicable state and federal securities laws.
12. REPRESENTATIONS OF BANKERS. In connection with the execution of
this Agreement and any issuance of the Initial Warrants to him, each Banker
hereby represents to MAXF that (i) he is an "ACCREDITED INVESTOR" as such term
is defined in Rule 501(a) promulgated under the Securities Act of 1933, as
amended (the "SECURITIES ACT") and (ii) (A) such Banker's financial situation is
such that he can afford to bear the economic risk of holding the Warrants for an
indefinite period of time, (B) such Banker can afford to suffer complete loss of
his investment in the Warrants, (C) such Banker's knowledge and experience in
financial and business matters are such that he is capable of evaluating the
merits and risks of his investment in the Warrants, and (D) such Banker
understands and has taken cognizance of all the risks related to acquisition of
the Warrants, and (ii) he is acquiring the Warrants for investment for his own
account and not with a view to, or for resale in connection with, any
distribution thereof, and he has no present intention of selling or distributing
the Warrants. Such Banker understands that the Warrants have not been registered
under the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent as expressed herein. Until the
Registration Statement described in Section 13 below is filed and effective, the
Bankers agree that they will not make any grants of the Warrants to any
Employees who do not, concurrently with the grant, in writing make and deliver
to MAXF the representations set forth in this Section 12.
13. COVENANTS OF MAXF. MAXF agrees to register under the Securities
Act all of the Warrants issuable under this Agreement, and all of the shares of
Common Stock issuable upon exercise of the Warrants, on an appropriate shelf
registration statement (e.g., Form S-8 or S-3) under the Securities Act (the
"REGISTRATION STATEMENT") no later than three hundred sixty (365) days after the
First Closing and shall use its reasonable best efforts to cause such
Registration Statement to become effective. MAXF will at all times during the
period in which any Warrants are outstanding reserve and keep available, solely
for issuance and delivery upon the exercise of the Warrants, all shares of
Common Stock issuable from time to time upon such exercise. MAXF will perform
its obligations under this Agreement in good faith.
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14. CERTAIN ADJUSTMENTS. (a) If after the date hereof, and subject to
the balance of the provisions of this Section 14, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of
Common Stock, or by a stock split or other reclassification applicable to all
outstanding shares of Common Stock, then, on the effective date of such stock
dividend, stock split or reclassification, the number of shares of Common Stock
issuable upon exercise of each Warrant shall be increased in proportion to such
increase in outstanding shares and the Exercise Price shall be correspondingly
decreased. If after the date hereof, and subject to the balance of the
provisions of this Section 14, the number of outstanding shares of Common Stock
is decreased by a combination, reverse stock split or other reclassification
applicable to all outstanding shares of Common Stock, then, on the effective
date of such combination, reverse stock split or other reclassification, the
number of shares of Common Stock issuable upon exercise of each Warrant shall be
decreased in proportion to such decrease in outstanding shares and the Exercise
Price shall be correspondingly increased.
(b) If after the date hereof (i) any consolidation, merger or
other business combination of MAXF with another Person occurs in which all of
the Common Stock is converted or exchanged for cash or securities of such other
corporation, or (ii) MAXF shall, by reclassification or otherwise, convert or
exchange all of the Common Stock into the same or a different number of
securities of any other class or classes of securities of MAXF, then, as a
condition of such transaction, lawful and fair provision shall be made whereby
the Registered Holders of all Warrants shall thereafter have the right to
purchase and receive, in lieu of the shares of Common Stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, such amount of cash or number and kind of securities as
would have been issuable in respect of the Common Stock (or other securities
which were subject to the purchase rights under the Warrants immediately prior
to such transaction) as the result of such transaction if this Warrant had been
exercised in full for cash immediately prior to such transaction.
(c) For the avoidance of doubt, nothing in this Section 14 shall
require any adjustment for (i) cash dividends, (ii) issuances of MAXF securities
in connection with acquisitions, benefit or compensation plans or arrangements,
underwritings or private placements or other corporate purposes or (iii)
repurchases or retirements of MAXF securities in connection with corporate
repurchase programs.
(d) Upon every adjustment of the Exercise Price or the number or
type of securities issuable upon exercise of a Warrant, MAXF shall give prompt
written notice thereof to each Registered Holder; provided, however, that
failure to give such notice, or any defect therein, shall not affect the
legality or validity of the event giving rise to the adjustment. Any fractional
shares of Common Stock or other securities resulting from any such adjustment
shall be eliminated.
15. CERTAIN FORFEITURES. (a) Notwithstanding any provision to the
contrary contained herein or in a Warrant Certificate, if the initial Registered
Holder's employment with MAXF or a subsidiary thereof is terminated under
circumstances constituting Cause (as defined below) or if the Registered Holder
commits Injurious Conduct (as defined below), then, unless otherwise determined
by the Chairman of MAXF (the "CHAIRMAN"): (i) all outstanding Warrants held by
the Registered Holder (and/or, if applicable, any Permitted Transferees) as of
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the date of such termination or the discovery of such conduct shall terminate
and be forfeited, whether or not theretofore vested; (ii) the Registered Holder
(and/or, if applicable, any Permitted Transferees) shall (a) sell back to MAXF
all shares of Common Stock that are held, as of the date of such termination or
the discovery of such conduct, by the Registered Holder (and/or, if applicable,
any Permitted Transferees) and that were acquired upon exercise of the Warrants
on or after the date which is 365 days prior to the date of such termination or
the discovery of such conduct (shares of Common Stock so acquired, the "ACQUIRED
SHARES"), for a per share price equal to the per share Exercise Price of the
Warrants, and (b) to the extent such Acquired Shares have previously been sold
or otherwise disposed of by the Registered Holder (and/or, if applicable, by any
Permitted Transferees), repay to MAXF the excess of the aggregate Fair Market
Value of such Acquired Shares on the date of such sale or disposition over the
aggregate per share Exercise Price with respect to the Acquired Shares. For
purposes of the preceding clause (ii)(b) of this Section 15(a), the amount of
the repayment described therein shall not be affected by whether the Registered
Holder (and/or, if applicable, any Permitted Transferees) received such Fair
Market Value with respect to such sale or other disposition, and repayment may,
without limitation, be effected, at the discretion of MAXF, by means of offset
against any amount owed by MAXF or a subsidiary thereof to the Registered Holder
or, if applicable, any Permitted Transferees.
(b) For purposes hereof, the term "CAUSE" shall mean either (i)
if the Registered Holder has an employment agreement with MAXF or a subsidiary
thereof that has a definition of Cause, the conduct described in such
definition, or (ii) if there is no such employment agreement, the Registered
Holder's (1) failure to act substantially in accordance with any lawful and
reasonable direction of the Chairman, Chief Operating Officer or Board or
Directors of Maxcor (or any designee of the foregoing), (2) commission of a
felony, (3) a material act of fraud, disloyalty, misappropriation or dishonesty
in connection with his or her employment, (4) alcohol or drug abuse that has a
material adverse effect upon the Registered Holder's job performance, (5) a
material or repeating failure to comply with the applicable internal policies or
procedures of Maxcor or the Group (including obtaining and maintaining all
necessary regulatory licenses) or (6) violation in any material respect of any
material statute, rule or regulation governing Maxcor or the Group.
(c) For purposes hereof, the term "INJURIOUS CONDUCT" shall mean
either (i) if the Registered Holder has an employment agreement with MAXF or a
subsidiary thereof, the Registered Holder's breach in any material respect of
any post-employment non-competition or non-solicitation covenants to which he or
she is subject pursuant thereto, or (ii) if there is no such employment
agreement, the Registered Holder's engaging in any conduct, within the twelve
month period following his or her termination of employment with Maxcor, that is
in material competition with Maxcor or the Group and that is materially
injurious (monetarily or otherwise) to Maxcor or the Group. Injurious Conduct
shall not be deemed to exist until MAXF has delivered to the Registered Holder a
copy of a resolution duly adopted by its Board of Directors, after affording the
Registered Holder and his or her counsel a reasonable opportunity to be heard,
finding that the Registered Holder was guilty of any conduct constituting
Injurious Conduct and specifying the particulars thereof in reasonable detail.
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16. LIMITED TRANSFERABILITY. The Warrants (and the Warrant
Certificates representing them) shall not be transferable except (i) by will or
the laws of descent and distribution, or (ii) as specifically provided in this
Section 16. The Registered Holder may transfer some or all of the Warrants to
members of his or her Immediate Family (as hereinafter defined) if the
Registered Holder does not receive any consideration for the transfer and the
transferee agrees to be bound by the Warrant Agreement (including the Warrant
Certificate). "IMMEDIATE FAMILY" means children, grandchildren and spouse of the
Registered Holder or one or more trusts for the benefit of such family members
or partnerships in which such family members are the only partners. During the
lifetime of the Registered Holder, the Warrants may be exercised only by the
Registered Holder, the guardian or legal representative of the Registered
Holder, or a permitted transferee under this Section 16 (such persons, together
with any beneficiaries and the estate of the Registered Holder, the "PERMITTED
TRANSFEREES"). In the event that a Warrant granted hereunder shall be exercised
by the legal representatives of a deceased or former Registered Holder, written
notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative to
exercise such Warrant.
17. TRANSFERS AND EXCHANGES. MAXF shall register the transfer, from
time to time, of any outstanding Warrant Certificate upon the Warrant Register,
upon surrender of such Warrant Certificate to MAXF at the above-mentioned office
or agency of MAXF, for transfer, properly endorsed and accompanied by a written
request and appropriate instructions for transfer that comply with the transfer
restrictions set forth in this Agreement and such Warrant Certificate. Upon any
such transfer, a new Warrant Certificate of like tenor representing an equal
aggregate number of Warrants shall be issued and the old Warrant Certificate
shall be cancelled by MAXF. Warrant Certificates may also be surrendered to MAXF
at such office or agency, together with a written request for exchange, and
thereupon MAXF shall issue to the Registered Holder in exchange therefor one or
more new Warrant Certificates of like tenor representing an equal aggregate
number of Warrants, as requested by the Registered Holder of the Warrant
Certificates so surrendered, and the old Warrant Certificates shall be cancelled
by MAXF. Notwithstanding anything to the contrary in this Section 17, if a
Warrant Certificate surrendered for registration of transfer or exchange bears a
restrictive legend, MAXF shall not cancel such Warrant Certificate and issue new
Warrant Certificates for transfer or in exchange therefor until MAXF has
received an opinion of counsel reasonably acceptable in form and substance to
MAXF stating that such transfer may be made without registration under the
Securities Act, including indicating whether the new Warrant Certificates must
also bear a restrictive legend. MAXF shall not be required to effect any
registration of transfer or exchange which will result in the issuance of a
Warrant Certificate for a fraction of a Warrant.
18. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. (i) Upon
receipt by MAXF of (x) evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of a Warrant Certificate, and (y) in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
MAXF, and (ii) upon reimbursement to MAXF of all reasonable expenses incidental
thereto, and (iii) upon surrender and cancellation of such Warrant Certificate,
if mutilated, MAXF will make and deliver a new Warrant Certificate of like tenor
and dated as of such cancellation, in lieu of and substitution for such lost,
stolen, destroyed or mutilated Warrant Certificate.
Page 14 of 26 Pages
19. NO RIGHTS AS STOCKHOLDER OR EMPLOYEE. Nothing in this Agreement
or any Warrant Certificate shall confer upon the Registered Holder (i) any
rights of a stockholder of MAXF whatsoever, including, without limitation, the
right to vote, consent or receive notice of meetings of stockholders or the
right to receive dividends or other distributions, with respect to the shares of
Common Stock issuable upon exercise of the Warrants held by the Registered
Holder, unless and until the Registered Holder is issued a Common Stock
certificate for such shares, or (ii) any right to continue in the employ of, or
as a member of the board of directors of, MAXF or any subsidiary thereof or to
be entitled to any remuneration or benefits not set forth in this Agreement or
the Warrant Certificate or to interfere with or limit in any way the right of
MAXF or any such subsidiary to terminate the Registered Holder's employment or
service.
20. COMPLIANCE WITH LAW. The obligation of MAXF to sell and deliver
any shares of Common Stock upon the exercise of the Warrants represented hereby
is specifically subject to all applicable laws, rules, regulations and
governmental approvals. Until such time as MAXF has registered under the
Securities Act, pursuant to its obligations under this Agreement, all shares of
Common Stock or other securities issued or issuable in respect of the Warrants,
each certificate representing the Common Stock or other securities issued or in
respect of the Warrants shall be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under
applicable state securities laws):
"These securities have not been registered under the Securities
Act of 1933, as amended (the "ACT"), or any state securities laws. They
may not be sold, offered for sale, pledged, hypothecated or otherwise
transferred in the absence of a registration statement in effect with
respect to the securities under the Act or an opinion of counsel
reasonably satisfactory to the company that such registration is not
required, or unless sold pursuant to an exemption to the Act."
21. BUSINESS DAYS. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein or in a Warrant
Certificate shall not be a business day, then such action may be taken or such
right may be exercised on the next succeeding day that is a business day.
22. SUCCESSORS. The terms and conditions of this Agreement and the
Warrant Certificates shall inure to the benefit of, and be binding upon, MAXF
and its successors and assigns, on the one hand, and each of the Bankers and the
other Registered Holders of the Warrants, as they exist at any time, and the
respective heirs, executors and Permitted Transferees, if any, of the Bankers
and such other Registered Holders, on the other hand.
23. BENEFICIARIES. Nothing expressed or implied in either this
Agreement or any Warrant Certificate is intended, or shall be construed, to
confer upon, or give to, any person or entity other than MAXF, the Bankers and
the other Registered Holders of the Warrants, as they may exist at any time, and
the respective permitted successors and assigns of the foregoing, any right,
remedy or claim under or by reason of this Agreement or any Warrant Certificate
or of any covenant, condition, stipulation, promise or agreement herein or
therein.
Page 15 of 26 Pages
24. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Chairman and the Bankers. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities issued or purchased under this Agreement at the time
outstanding (including securities into which such securities are convertible),
each future holder of all such securities, and MAXF.
25. NOTICES. All notices required under this Agreement shall be
deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to MAXF shall be sent to the
attention of the General Counsel at the principal office of MAXF (or at such
other place as MAXF shall notify the Bankers in writing). Notices to each Banker
shall be sent to his address on the books of MAXF (or at such other place as the
Banker shall notify MAXF in writing).
26. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS. The
representations, warranties and other agreements of each of MAXF and the
Bankers, respectively, included or provided for in this Agreement shall survive
the execution and delivery of this Agreement, the Second Closing and the Third
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of MAXF or the Bankers.
27. CAPTIONS. The section and subsection headings of this Agreement
are inserted for convenience only and shall not constitute a part of this
Agreement in construing or interpreting any provision hereof.
28. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
29. EXAMINATION OF THE AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal office of MAXF for inspection
by the Registered Holder of any Warrant Certificate. MAXF may require any such
holder to submit his or her Warrant Certificate for inspection by it.
30. GOVERNING LAW. THIS AGREEMENT, EACH WARRANT CERTIFICATE AND EACH
WARRANT REPRESENTED THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE THEREIN AND TO
BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Page 16 of 26 Pages
IN WITNESS WHEREOF, the parties have executed this Warrant Agreement as
of the date first above written.
MAXCOR FINANCIAL GROUP INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board,
President and Chief Executive
Officer
BANKERS
BY: /s/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx
BY: /s/ XXXX XXXXXX
-------------------------------------
Xxxx Xxxxxx
BY: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Xxxxxxx Xxxxxxxx
Page 17 of 26 Pages
Exhibit A
---------
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED,
OR UNLESS SOLD PURSUANT TO AN EXEMPTION TO THE ACT.
COMMON STOCK PURCHASE WARRANT
of
MAXCOR FINANCIAL GROUP INC.
Date of Warrant Grant: _______________________________________________________
Total Warrants Granted: _______________________________________________________
Vesting Schedule of Warrants: ____________ Warrants on ____________;
____________ Warrants on ____________; and
____________ Warrants on ____________;
Exercise Price of Warrants Granted: $___________ per share of Common Stock
("EXERCISE PRICE")
Expiration Date of Warrants: ______________________ (or such earlier date as
specified in the Warrant Agreement in the event of
an earlier termination of employment) ("EXPIRATION
DATE")
Page 18 of 26 Pages
THIS CERTIFIES THAT, for value received
[INSERT FULL NAME OF EMPLOYEE]
(the "REGISTERED HOLDER") has been granted the number of Common Stock Purchase
Warrants ("WARRANTS") of Maxcor Financial Group Inc., a Delaware corporation
(the "COMPANY"), specified above. Each Warrant initially entitles the Registered
Holder to purchase, subject to the terms and conditions set forth in this
Warrant Certificate and in the Warrant Agreement (as hereinafter defined), one
fully paid and nonassessable share of the Common Stock, par value $.001 per
share ("COMMON STOCK"), of the Company.
1. EXERCISE OF WARRANTS. The purchase rights represented by the
Warrants represented by this Warrant Certificate are exercisable by the
Registered Holder, commencing upon the applicable vesting date set forth above
for up to the number of shares of Common Stock set forth opposite such vesting
date, and ending at 5:00 p.m., New York Time, on the Expiration Date, by the
surrender of this Warrant Certificate and the notice of exercise attached hereto
(the "NOTICE OF EXERCISE"), duly executed by the Registered Holder, to the
Corporate Secretary at the principal corporate offices of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Registered Holder at the address of the Registered Holder appearing on
the books of the Company), and upon payment in lawful money of the United States
in cash, to the order of the Company (by wire transfer or other immediately
available funds), of the Exercise Price per share (subject to adjustment as
provided in the Warrant Agreement), multiplied by the number of shares specified
in the Notice of Exercise, together with taxes, if any, required to be paid or
withheld by the Company, on behalf of the Registered Holder, in connection
therewith.
2. WARRANT AGREEMENT. This Warrant Certificate and each Warrant
represented hereby are issued pursuant to and are subject in all respects to the
terms set forth in the Warrant Agreement ("WARRANT AGREEMENT"), dated as of
April 19, 2002, by and between the Company and the three individuals named
therein (the "BANKERS"), to all the terms and provisions of which the Registered
Holder, by acceptance of this Warrant Certificate, hereby assents. In the event
of certain contingencies provided for in the Warrant Agreement, (i) the Exercise
Price and the number of shares of Common Stock subject to purchase upon the
exercise of each Warrant represented hereby are subject to modification or
adjustment and/or (ii) the vesting schedule of the Warrants is subject to
acceleration. Reference is made to the Warrant Agreement for a more complete
statement of the rights and limitations of the Registered Holder thereunder and
the rights and obligations of the Company thereunder. The Registered Holder
hereby acknowledges receipt of a copy of the Warrant Agreement.
3. ISSUANCE OF SHARES. Certificates for shares of Common Stock
purchased hereunder shall be delivered to the Registered Holder by the Company's
transfer agent at the Company's expense as soon as practicable after the date on
which any of the Warrants represented hereby shall have been exercised in
accordance with the terms hereof. Each certificate so delivered shall be in such
denominations as may be reasonably requested by the Registered Holder hereof and
shall be registered in the name of the Registered Holder or, subject to
applicable laws (including payment of any applicable transfer taxes by the
Registered Holder), other name as shall be requested by the Registered Holder.
Page 19 of 26 Pages
The Company agrees that the shares so issued shall be deemed to be issued to the
Registered Holder as the record owner of such shares as of the close of business
on the business day immediately following the date on which this Warrant
Certificate shall have been surrendered to the Company in connection with the
Warrants being exercised, together with full payment of the Exercise Price
therefor, in accordance with the terms hereof. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of any
Warrants. In case this Warrant Certificate is surrendered for exercise with
respect to less than all of the Warrants represented hereby, the Company will
issue or cause to be issued a new signed Warrant Certificate or Certificates
following such surrender for the number of Warrants represented hereby which
were not so exercised, and the Registered Holder will countersign and return a
copy of same to the Company.
4. NO RIGHTS AS A STOCKHOLDER OR OF CONTINUED EMPLOYMENT. Nothing in
the Warrant Agreement or this Warrant Certificate shall confer upon the
Registered Holder (i) any rights of a stockholder of the Company whatsoever,
including, without limitation, the right to vote, consent or receive notice of
meetings of stockholders or the right to receive dividends or other
distributions, with respect to the shares of Common Stock issuable upon exercise
of the Warrants represented hereby, unless and until the Registered Holder is
issued a Common Stock certificate for such shares, or (ii) any right to continue
in the employ of, or as a member of the board of directors of, the Company or
any subsidiary thereof or to be entitled to any remuneration or benefits not set
forth in the Warrant Agreement or this Warrant Certificate or to interfere with
or limit in any way the right of the Company or any such subsidiary to terminate
the Registered Holder's employment or service.
5. LIMITED TRANSFERABILITY. This Warrant Certificate, and the
Warrants represented hereby shall not be transferable except (i) by will or the
laws of descent and distribution, or (ii) as specifically provided in this
Section 5. The Registered Holder may transfer some or all of the Warrants to
members of his or her Immediate Family (as hereinafter defined) if the
Registered Holder does not receive any consideration for the transfer and the
transferee agrees to be bound by the Warrant Agreement and this Warrant
Certificate. "IMMEDIATE FAMILY" means children, grandchildren and spouse of the
Registered Holder or one or more trusts for the benefit of such family members
or partnerships in which such family members are the only partners. During the
lifetime of the Registered Holder, the Warrants represented hereby may be
exercised only by the Registered Holder, the guardian or legal representative of
the Registered Holder, or a permitted transferee under this Section 5 (such
persons, together with any beneficiaries and the estate of the Registered
Holder, the "PERMITTED TRANSFEREES").
6. REGISTRY. The Company shall maintain at the above-mentioned
office or agency of the Company a registry showing the name and address of the
Registered Holder. Prior to the due presentment to the Company for registration
of transfer of this Warrant Certificate, the Company may deem and treat the
Registered Holder as the absolute holder hereof and each Warrant represented
hereby for all purposes, and the Company shall not be affected by any notice to
the contrary.
7. CONSEQUENCES OF EMPLOYMENT TERMINATION. In the event of certain
terminations of the initial Registered Holder's employment with the Company or a
subsidiary thereof, (i) the continued vesting of unvested Warrants is subject to
Page 20 of 26 Pages
termination and/or (ii) the continued ability to exercise already vested
Warrants is subject to time limitations, in each case as specified in the
Warrant Agreement.
8. CERTAIN FORFEITURES. Notwithstanding any provision to the
contrary contained herein or in the Warrant Agreement, if the initial Registered
Holder's employment with the Company or a subsidiary thereof is terminated under
circumstances constituting Cause (as defined in the Warrant Agreement) or if the
Registered Holder commits Injurious Conduct (as defined in the Warrant
Agreement), then, unless otherwise determined by the Chairman of the Company
(the "CHAIRMAN"):
(i) all outstanding Warrants held by the Registered Holder
(and/or, if applicable, any Permitted Transferees) as of the date of
such termination or the discovery of such conduct shall terminate and
be forfeited, whether or not theretofore vested;
(ii) the Registered Holder (and/or, if applicable, any Permitted
Transferees) shall (a) sell back to the Company all shares of Common
Stock that are held, as of the date of such termination or the
discovery of such conduct, by the Registered Holder (and/or, if
applicable, any Permitted Transferees) and that were acquired upon
exercise of the Warrants on or after the date which is 365 days prior
to the date of such termination or the discovery of such conduct
(shares of Common Stock so acquired, the "ACQUIRED SHARES"), for a per
share price equal to the per share Exercise Price of the Warrants, and
(b) to the extent such Acquired Shares have previously been sold or
otherwise disposed of by the Registered Holder (and/or, if applicable,
by any Permitted Transferees), repay to the Company the excess of the
aggregate Fair Market Value (as defined in the Warrant Agreement) of
such Acquired Shares on the date of such sale or disposition over the
aggregate per share Exercise Price with respect to the Acquired Shares.
For purposes of the preceding clause (ii)(b) of this Section 7,
the amount of the repayment described therein shall not be affected by
whether the Registered Holder (and/or, if applicable, any Permitted
Transferees) received such Fair Market Value with respect to such sale
or other disposition, and repayment may, without limitation, be
effected, at the discretion of the Company, by means of offset against
any amount owed by the Company or a subsidiary thereof to the
Registered Holder or, if applicable, any Permitted Transferees.
9. Compliance with Law. The obligation of the Company to sell and
deliver any shares of Common Stock upon the exercise of the Warrants represented
hereby is specifically subject to all applicable laws, rules, regulations and
governmental approvals. Until such time as the Company has registered under the
Act, pursuant to its obligations under the Warrant Agreement, all shares of
Common Stock or other securities issued or issuable in respect of the Warrants
represented hereby, each certificate representing the Common Stock or other
securities issued or in respect of the Warrants represented hereby shall be
stamped or otherwise imprinted with a legend substantially in the following form
(in addition to any legend required under applicable state securities laws):
Page 21 of 26 Pages
"These securities have not been registered under the Securities
Act of 1933, as amended (the "ACT"), or any state securities laws. They
may not be sold, offered for sale, pledged, hypothecated or otherwise
transferred in the absence of a registration statement in effect with
respect to the securities under the Act or an opinion of counsel
reasonably satisfactory to the company that such registration is not
required, or unless sold pursuant to an exemption to the Act."
10. BUSINESS DAYS. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
business day, then such action may be taken or such right may be exercised on
the next succeeding day that is a business day.
11. SUCCESSORS. The terms and conditions of this Warrant Certificate
and the Warrant Agreements shall inure to the benefit of, and be binding upon,
the Registered Holder and the heirs, executors and Permitted Transferees, if
any, of the Registered Holder.
12. AMENDMENTS AND WAIVERS. Any term of this Warrant Certificate may
be amended and the observance of any terms of this Warrant Certificate may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Chairman and the Registered
Holder.
13. NOTICES. All notices required under this Warrant shall be deemed
to have been given or made for all purposes (i) upon personal delivery, (ii)
upon confirmation receipt that the communication was successfully sent to the
applicable number if sent by facsimile; (iii) one day after being sent, when
sent by professional overnight courier service, or (iv) five days after posting
when sent by registered or certified mail. Notices to the Company shall be sent
to the attention of the General Counsel at the principal office of the Company
(or at such other place as the Company shall notify the Registered Holder hereof
in writing). Notices to the Registered Holder shall be sent to the address of
the Registered Holder on the books of the Company (or at such other place as the
Holder shall notify the Company in writing).
14. CAPTIONS. The section and subsection headings of this Warrant
Certificate are inserted for convenience only and shall not constitute a part of
this Warrant Certificate in construing or interpreting any provision hereof.
15. GOVERNING LAW. THIS WARRANT CERTIFICATE AND EACH WARRANT
REPRESENTED HEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE THEREIN AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
This Warrant Certificate is executed and delivered pursuant and subject
to the provisions of the Warrant Agreement, and all of the provisions of the
Warrant Agreement are also provisions of this Warrant Certificate. By signing
this Warrant Certificate, the Registered Holder accepts and agrees to all of the
Page 22 of 26 Pages
foregoing terms and provisions and to all of the terms and provisions of the
Warrant Agreement incorporated herein by reference and confirms that he or she
has received a copy of the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be executed by a duly authorized representative and the Registered Holder has
hereunto set his or her hand as of the date of grant first set forth above.
MAXCOR FINANCIAL GROUP INC.
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxx
Chairman
Agreed:
_________________________________________
[Name of Registered Holder]
Page 23 of 26 Pages
NOTICE OF EXERCISE OF WARRANT CERTIFICATE
TO: MAXCOR FINANCIAL GROUP INC.
The undersigned hereby exercises, according to the terms and conditions
thereof, the right to purchase shares of Common Stock, evidenced by the
within Warrant Certificate, and herewith makes payment of the purchase price in
full, together with taxes, if any, required to be paid or withheld by the
Company, on behalf of the undersigned, in connection therewith.
NAME: _____________________________ ________________________________________
TOTAL PAYMENT ENCLOSED
ADDRESS: __________________________
____________________________________ ________________________________________
Social Security No. of Registered Holder
____________________________________
Please issue a certificate representing the number of shares specified
above in the name of the undersigned or in such other name, and deliver to such
other address, as is specified below:
_______________________________________________________________________
(Name)
_______________________________________________________________________
(Address)
DATED: _______________ SIGNATURE: __________________________________________
(Must match name on Warrant Certificate)
Page 24 of 26 Pages
