AZUREL LTD.
AND
NETWORK 1 FINANCIAL SECURITIES, INC.
UNDERWRITER'S
WARRANT AGREEMENT
UNDERWRITER'S WARRANT AGREEMENT dated as of _____________, 1997 by
and between AZUREL LTD. (the "Company") and NETWORK 1 FINANCIAL SECURITIES,
INC. ("Underwriter").
Preliminary Statement
The Underwriter has agreed, pursuant to an underwriting
agreement (the "Underwriting Agreement") dated ______________, 1997, between the
Underwriter and the Company, to act as the underwriter in connection with the
Company's proposed initial public offering of 1,000,000 shares of the Company's
common stock, par value $0.001 per share (the "Common Stock") and 1,000,000
Redeemable Common Stock Purchase Warrants (the "Warrants"), at an initial public
offering price of $_____per share of Common Stock and $_____ per Warrant (the
"Initial Public Offering").
The Company proposes to issue to the Underwriter at the closing of
the Initial Public Offering as part of the Underwriter's compensation in
connection therewith, warrants (the "Underwriter's Warrants") to purchase an
aggregate of 100,000 shares of Common Stock and/or 100,000 Warrants. The
Warrants being offered in the Initial Public Offering and the Warrants
purchasable upon exercise of the Underwriter's Warrants will be identical in all
respects and will be issued pursuant to, and governed by, the provisions of a
Warrant Agreement among the Company, the Underwriter and North American Transfer
Co., as Warrant Agent (the "Warrant Agreement").
NOW, THEREFORE, in consideration of the premises, the payment by
the Underwriter to the Company of Ten Dollars ($10.00), the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Holders (as defined in Section 3 below) are
hereby granted the right to purchase, at any time from __________, 1998 until
5:00 p.m., New York time, on _________, 2002 an aggregate of 150,000 shares of
Common Stock and/or 150,000 Warrants, at an initial purchase price of $_____per
share of Common Stock (subject to adjustment as provided in Section 6 hereof)
and $_____ per Warrant (150% of the Initial Public Offering price of the Common
Stock and Warrants, respectively), subject to the terms and conditions of this
Agreement.
2. Warrant Certificates. The warrant certificates (the
"Underwriter's Warrant Certificates") to be delivered pursuant to this Agreement
shall be in the form set forth in Exhibit A attached hereto and made a part
hereof, with such appropriate insertions, omissions, substitutions and other
variations as required or permitted by this Agreement.
3. Exercise of Underwriter's Warrants. The Underwriter's
Warrants are exercisable during the term set forth in Section 1 hereof and the
Purchase Price (as hereinafter defined) is payable by certified or cashier's
check or money order payable in lawful money of the United States. Upon
surrender of an Underwriter's Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Purchase Price
for the shares of Common Stock or Warrants issuable upon exercise thereof (and
such other amounts, if any, arising pursuant to Section 4 hereof) at the
Company's principal office in New York (presently located at 509 Madison Avenue,
New York, New York 10022), the registered holder of an Underwriter's Warrant
Certificate ("Holders" or "Holders") shall be entitled to receive a certificate
or certificates for the shares of Common Stock or Warrants so purchased. The
purchase rights represented by each Underwriter's Warrant Certificate are
exercisable at the option of the Holders thereof, in whole or in part, as to
the whole number of shares of Common Stock or Warrants purchasable therewith
(but
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not as to fractions thereof). In the case of the purchase of less than all the
shares of Common Stock or Warrants purchasable upon the exercise of the
Underwriter's Warrants represented by an Underwriter's Warrant Certificate, the
Company shall cancel the Underwriter's Warrant Certificate represented thereby
upon the surrender thereof and shall execute and deliver a new Underwriter's
Warrant Certificate of like tenor for the number of Underwriter's Warrants
which have not been exercised.
4. Issuance of Certificates. Upon the exercise of the
Underwriter's Warrants and payment of the Purchase Price therefor, the issuance
of certificates representing the shares of Common Stock or Warrants issuable
upon exercise thereof, shall be made forthwith (and in any event within five (5)
business days thereafter) without further charge to the Holder thereof, and such
certificates shall (subject to the provisions of Sections 5 and 7 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder, and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The Underwriter's
Warrant Certificates and the certificates representing the shares of Common
Stock or Warrants (and such other securities, property or rights as may be
represented by certificates) issuable upon exercise thereof shall be executed on
behalf of the Company by the manual or facsimile signature of the then Chairman
or Vice Chairman of the Board of Directors, Chief Executive Officer, President
or Vice President of the Company under its corporate seal reproduced thereon,
attested to
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by the manual or facsimile signature of the then Secretary or
Assistant Secretary or Treasurer or Assistant Treasurer of the Company.
Underwriter's Warrant Certificates shall be dated the date of issuance thereof
by the Company upon initial issuance, transfer or exchange, or in lieu of
mutilated, lost, stolen or destroyed Underwriter's Warrant Certificates.
5. Restriction On Transfer of Underwriter's Warrants. The
Holder of an Underwriter's Warrant Certificate (and its Permitted Transferees,
as defined below), by its acceptance thereof, covenants and agrees that the
Underwriter's Warrants are being acquired as an investment and not with a view
to the distribution thereof; that the Underwriter's Warrants may be sold,
transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part, to any person (a "Permitted Transferee"), provided such transfer,
assignment, hypothecation or other disposition is made in accordance with the
provisions of the Securities Act of 1933, as amended (the "Act"); and provided,
further, that until ____________, 1998 [one year following the effective date of
the Initial Public Offering] only officers and partners of the Underwriter, or
any selling group member in the Initial Public Offering and their respective
officers and partners, shall be Permitted Transferees.
6. Purchase Price.
The initial purchase price of the Underwriter's Warrants shall
be $________ per share of Common Stock (the "Common Stock Purchase Price") and
$_______ per Warrant. The Common Stock Purchase Price shall be subject to
adjustment in accordance with the provisions of Section 9 of the Warrant
Agreement, which provisions are hereby incorporated by reference herein and
made a part hereof.
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7. Registration Rights.
(a) Registration Under the Securities Act of 1933. The
Underwriter's Warrants have not been registered under the Act. The Underwriter's
Warrant Certificates shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act"), and
may not be offered for sale or sold except pursuant to (i) an
effective registration statement under the Act, or (ii) an
opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from
registration under such Act is available.
(b) Demand Registration. (i) At any time commencing one (1)
year and expiring five (5) years after the effective date of the Company's
Registration Statement relating to the Initial Public Offering (the "Effective
Date"), the Holders of a majority (as hereinafter defined) of the shares of
Common Stock purchased and purchasable upon exercise of the Underwriter's
Warrants and the Warrants purchasable therewith shall have the right,
exercisable by written notice to the Company, to have the Company prepare and
file with the Securities and Exchange Commission (the "Commission"), solely on
one (1) occasion, a registration statement on Form SB-2 (or other appropriate
form), and such other documents, including a prospectus, as may be necessary in
the opinion of both counsel for the Company and counsel for the Holders, in
order to comply with the provisions of the Securities Act, so as to permit a
public offering and sale for a period of nine (9) months of the shares of Common
Stock and Warrants purchased or purchasable by such Holders and any other
Holders of the Underwriter's Warrants upon exercise of the Underwriter's
Warrants and the Warrants purchasable therewith ( such shares of Common Stock
and Warrants being hereinafter referred to as the "Registrable Securities").
The Holders of the Underwriter's Warrants may demand registration without
exercising the Underwriter's Warrants, and are never required to exercise same.
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The Company covenants and agrees to give written notice of any registration
request under this Section 7(b) to all other registered Holders of the
Underwriter's Warrants and the Registrable Securities within ten (10) days
from the date of the receipt of any such registration request and upon the
written request of any Holder within fifteen (15) days after receipt of such
notice to include in such registration statement, the Registrable Securities of
such Holder. As used herein, the term "Majority" in reference to the Holders
of the Underwriter's Warrants shall mean in excess of fifty percent (50%) of
the shares of Common Stock issued or issuable upon exercise of the
Underwriter's Warrants and the Warrants purchasable therewith that (i) are not
held by the Company, an affiliate, officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their family, persons
acting as nominees or in conjunction therewith, or (ii) have not been resold
to the public pursuant to a registration statement filed with the Commission
under the Act.
(c) Piggyback Registration. If, at any time within the period
commencing one (1) year and expiring five (5) years after the Effective Date,
the Company should file a registration statement with the Commission under the
Securities Act (other than in connection with a merger or other business
combination transaction or pursuant to Form S-8) it will give written notice by
registered mail, at least thirty (30) calendar days prior to the filing of each
such registration statement, to the Underwriter and to all other Holders of the
Underwriter's Warrants and the shares of Common Stock and Warrants purchased or
purchasable upon exercise thereof of its intention to do so. If the Holders of
the Registrable Securities notify the Company within twenty (20) calendar days
after receipt of any such notice of its or their desire to include any
Registrable Securities in such proposed registration statement, the Company
shall afford the Holders of the Registrable Securities the opportunity to have
such Registrable Securities included in such registration statement, unless
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the underwriter for each proposed objects to the inclusion of the Registrable
Securities in such registration statement. However, in such event, the
Company will, within six (6) months of completion of such underwritten
offering, file at the expense of the Company, a registration statement so
as to permit a public offering and sale of the Registrable Securities so
excluded for a period of nine (9) months, which shall be in addition to any
registration statement required to be filed pursuant to Section 7(b).
Notwithstanding the provisions of this Section 7(c) and the provisions of
Section 7(d), the Company shall have the right at any time after it shall have
given written notice pursuant to this Section 7(c) (irrespective of whether a
written request for inclusion of any such securities shall have been made) to
elect not to file any such proposed registration statement, or to withdraw the
same after the filing but prior to the effective date thereof.
d. Covenants of the Company With Respect to
Registration. In connection with any registrations under Sections 7(b) and
7(c) hereof, the Company covenants and agrees as follows:
(1) The Company shall use its best efforts to
file a registration statement within forty-five (45) calendar days of receipt
of any demand therefor pursuant to section 7(b); provided, however, that
the Company shall not be required to produce audited or unaudited financial
statements for any period prior to the date such financial statements are
required to be filed in a report on Form 10-KSB or Form 10-QSB, as the case may
be. The Company shall use its best efforts to have any registration statement
declared effective at the earliest possible time, and shall furnish each Holder
desiring to sell Registrable Securities such number of prospectuses as shall
reasonably be requested.
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(2) The Company shall pay all costs (excluding
fees and expenses of Holders' counsel and any underwriting discounts or
selling fees, expenses or commissions), fees and expenses in connection with
any registration statement filed pursuant to Sections 7(b) and 7(c) hereof
including, without limitation, the Company's legal and accounting fees,
printing expenses, blue sky fees and expenses. If the Company shall fail to
comply with the provisions of Section 7(d), the Company shall, in addition to
any other equitable or other relief available to the Holders, be liable for
any or all incidental and special damages and damages due to loss of profit
sustained by the Holders requesting registration of their Registrable
Securities.
(3) The Company will take all necessary action
which may be required to qualify or register the Registrable Securities included
in a registration statement for offering and sale under the securities or blue
sky laws of such states as reasonably are requested by the Holders, provided
that the Company shall not be obligated to execute or file any general consent
to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.
(4) The Company shall indemnify the Holders of
the Registrable Securities to be sold pursuant to any registration statement
and each person, if any, who controls such Holders within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement, but only to the same
extent and with the same effect as the provisions pursuant to which the Company
has
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agreed to indemnify the Underwriter contained in Section 8 of the
Underwriting Agreement, and the Holders shall indemnify the Company to the same
extent and with the same effect as the provisions pursuant to which the
Underwriter has agreed to indemnify the Company contained in Section 8 of the
Underwriting Agreement.
(5) The Holders of the Registrable Securities
to be sold pursuant to a registration statement, and their successors and
assigns, shall indemnify the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability to which they may become subject under
the Securities Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or assigns, for
specific inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in Section 8 of the Underwriting
Agreement pursuant to which the Underwriter has agreed to indemnify the Company.
(6) Nothing contained in this Agreement shall
be construed as requiring the Holders to exercise their Underwriter's Warrants
(or the Warrants purchasable upon exercise thereof) prior to the initial
filing of any registration statement or the effectiveness thereof.
(7) The Company shall not be entitled to
include any securities other than the Registrable Securities in any
registration statement filed pursuant to Section 7(b) hereof without the
prior written consent of the Holders of a Majority of the Registrable
Securities.
(8) The Company shall furnish to a designated
representative of the Holders participating in the offering and to each
underwriter, if any, a signed counterpart, addressed to such Holder or
underwriter of (i) an opinion of counsel to the Company, dated the
effective date
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of such registration statement (and if such registration relates to an
underwritten public offering, an opinion dated the date of the closing under
the underwriting agreement), and (ii) a "cold comfort" letter dated the
effective date of such registration statement (and, if such registration
relates to an underwritten public offering, a letter dated the date of the
closing under the underwriting agreement) signed by the independent public
accountants who have issued a report on the Company's financial statements
included in such registration statement (the "Accountants"), in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' "cold comfort" letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions of
issuer's counsel and in "cold comfort" letters, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in "cold comfort" letters
delivered to underwriters in underwritten public offerings of securities.
(9) The Company shall as soon as practicable
after the effective date of the registration statement make "generally
available to its security holders" (within the meaning of Rule 158 under the
Act) an earnings statement (which need not be audited) complying with Section
ll(a) of the Securities Act and covering a period of at least 12 consecutive
months beginning after the effective date of the registration statement.
(10) The Company shall deliver promptly to each
Holder participating in the offering requesting the correspondence described
below and any managing underwriter copies of all correspondence between the
Commission and the Company, its counsel or Accountants with respect to the
registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the
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registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and representatives of the Accountants, all to such reasonable
extent and at such reasonable times and as often as any such Holder shall
reasonably request.
(11) The Company shall enter into an underwriting
agreement with the managing underwriter selected for such underwriting by
Holders holding a Majority of the Registrable Securities requested to be
included in such underwriting; provided, however, that (i) such managing
underwriter shall be reasonably acceptable to the Company, except that in
connection with an offering for which the Holders have piggyback rights, the
Company shall have the sole right to select the managing underwriter, and (ii)
the Holders shall be responsible for any selling fees or commissions in
connection with such underwriting. Such underwriting agreement shall be
satisfactory in form and substance to the Company, a Majority of such Holders
and such managing underwriters, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily
contained in agreements of that type used by the managing underwriter. The
Holders shall be parties to any underwriting agreement relating to an
underwritten sale of their Registrable Securities and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made to and
for the benefit of such Holders. Such Holders shall not be required to make
any representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
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e. Further Registrations. The Company will cooperate with the
Holders of the Registrable Securities in preparing and signing any registration
statement, in addition to the registration statements discussed above, required
in order to sell or transfer the Underwriter's Securities and will supply all
information required therefor, but such additional registration statement
expenses or offering statement expenses will be prorated between the Company and
the Holders of the Registrable Securities according to the aggregate sales price
of the securities being issued. The provisions of Section 7(d) shall apply to
any such registration statement.
8. Exchange and Replacement of Warrant Certificates. Each
Underwriter's Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holders at the principal executive office of
the Company, for a new Underwriter's Warrant Certificate of like tenor and date
representing in the aggregate the right to purchase the same number of shares of
Common Stock and/or Warrants in such denominations as shall be designated by the
Holders thereof at the time of such surrender. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Underwriter's Warrant Certificate, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Underwriter's Warrant Certificates, if
mutilated, the Company will make and deliver a new Underwriter's Warrant
Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Underwriter's Warrants, nor shall it be required
to issue scrip or pay cash in lieu of fractional
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interests; provided, however, that if a Holder exercises all Underwriter's
Warrants held of record by such Holder, the fractional interests shall be
eliminated by rounding any fraction up to the nearest whole number of shares
of Common Stock.
10. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Underwriter's
Warrants, such number of shares of Common Stock or other securities, properties
or rights as shall be issuable upon the exercise thereof. The Company covenants
and agrees that, upon exercise of Underwriter's Warrants and payment of the
Purchase Price therefor, all the shares of Common Stock and other securities
issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any stockholder. The
Company further covenants and agrees that as long as the Underwriter's Warrants
shall be outstanding, the Company shall use its best efforts to cause the Common
Stock and Warrants to be listed (subject to official notice of issuance) on
all securities exchanges on which the Common Stock and the Warrants issued
in the Initial Public Offering may then be listed or quoted.
11. Notices to Underwriter's Warrant Holders. Nothing
contained in this Agreement shall be construed as conferring upon the Holders
the right to vote or to consent or to receive notice as a stockholder in respect
of any meetings of stockholders for the election of directors or any other
matter, or as having any rights whatsoever as a stockholder of the Company. If,
however, at any time prior to the expiration of the Underwriter's Warrants and
their exercise, any of the following events shall occur:
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(a) the Company shall take a record of the
holders of its shares of Common Stock for the purpose of entitling them to
receive a dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders
of its Common Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of
the Company (other than in connection with a consolidation or merger) or a
sale of all or substantially all of its property, assets and business as an
entirety shall be proposed; then, in any one or more of said events, the
Company shall give written notice of such event at least fifteen (15) days
prior to the date fixed as a record date or the date of closing the transfer
books for the determination of the stockholders entitled to such dividend,
distribution, convertible or exchangeable securities or subscription rights, or
entitled to vote on such proposed dissolution, liquidation, winding up or sale.
Such notice shall specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend, or the issuance of any convertible
or exchangeable securities, or subscription rights, options or warrants, or
any proposed dissolution, liquidation, winding up or sale.
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12 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:
(a) If to the registered Holders of the
Underwriter's Warrants, to the address of such Holders as shown on the books
of the Company; or
(b) If to the Company to the address set
forth in Section 3 hereof or to such other address as the Company may
designate by notice to the Holders.
13. Supplements and Amendments. The Company and the
Underwriter may from time to time supplement or amend this Agreement without
the approval of any Holders of Underwriter's Warrant Certificates (other than
the Underwriter) in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
provisions herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem shall not
adversely affect the interests of the Holders of Underwriter's Warrant
Certificates.
14. Successors. All the covenants and provisions of
this Agreement shall be binding upon and inure to the benefit of the Company,
the Underwriter, the Holders and their respective successors and assigns
hereunder.
15 Termination. This Agreement shall terminate at the close of
business on _____________, 2002. Notwithstanding the foregoing, the
indemnification provisions of Section 7 shall survive such termination until the
close of business on the expiration of any applicable statute of limitations.
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16. Governing Law: Submission to Jurisdiction. This Agreement
and each Underwriter's Warrant Certificate issued hereunder 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 the laws of said state without giving
effect to the rules of said state governing the conflicts of laws. The Company,
the Underwriter and the Holders hereby agree that any action, proceeding or
claim against it arising out of, or relating in any way to, this Agreement shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. The Company, the
Underwriter and the Holders hereby irrevocably waive any objection to such
exclusive jurisdiction or inconvenient forum. Any such process or summons to be
served upon any of the Company, the Underwriter and the Holders (at the option
of the party bringing such action, proceeding or claim) may be served by
transmitting a copy thereof, by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in
Section 12 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action, proceeding or claim.
17 Entire Agreement; Modification. This Agreement (including
the Underwriting Agreement, to the extent portions thereof are referred to
herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and thereof. Subject to Section 13, this
Agreement may not be modified or amended except by a writing duly signed by the
Company and the Holders of a Majority of the Registrable Securities.
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18. Severability. If any provision of this Agreement
shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this Agreement.
19. Captions. The caption headings of the Sections of
this Agreement are for convenience of reference only and are not intended, nor
should they be construed as, a part of this Agreement and shall be given no
substantive effect.
20. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the Underwriter and any other registered Holders of the Underwriter's
Warrant Certificates or Registrable Securities any legal or equitable right,
remedy or claim under this Agreement, and this Agreement shall be for the sole
and exclusive benefit of the Company and the Underwriter and any other Holders
of the Underwriter's Warrant Certificates or Registrable Securities.
21. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
22. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Company, the Underwriter and their respective
successors and assigns and the Holders from time to time of the Underwriter's
Warrant Certificates.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
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AZUREL LTD.
By: /s/ Gerard Semhon, Chief Executive Officer
Gerard Semhon, Chief Executive Officer
NETWORK 1 FINANCIAL SECURITIES, INC.
By:
Name:
Title:
18
EXHIBIT A
AZUREL LTD.
WARRANT CERTIFICATE
THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT
REFERRED TO HEREIN.
EXERCISABLE COMMENCING______________, 1998 THROUGH
5:00 P.M., NEW YORK TIME ON_____________, 2002
No. UW-1 150,000 Warrants
This Warrant Certificate certifies that _____________, or registered
assigns, is the registered holder of 150,000 Warrants to purchase initially, at
any time from _____________, 1998 until 5:00 p.m., New York time on
________________ (the "Expiration Date"), 150,000 fully paid and non-assessable
shares of Common Stock, $.001 par value (the "Common Stock"), of Azurel Ltd., a
Delaware corporation (the "Company") at a purchase price of $______ per share
(the "Common Stock Purchase Price"), and/or 150,000 Redeemable Common Stock
Purchase Warrants ("Warrants") of the Company at the purchase price of $_______
per Warrant (the "Warrant Purchase Price"), upon the surrender of this Warrant
Certificate and payment of the applicable Purchase Price at an office or agency
of the Company, but subject to the conditions set forth herein and in the
warrant agreement dated as of _______________, 1997 (the "Warrant Agreement")
between the Company and Network 1 Financial Securities, Inc. (the
"Underwriter"). Payment of the applicable Purchase Price shall be made by
certified or cashier's check or money order payable to the order of the Company.
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No Warrant may be exercised after 5 :00 p.m., New York time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants issued pursuant to the Warrant Agreement
between the Company and the Underwriter, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the respective Purchase Prices and the type and/or number of the
Company's securities issuable upon the exercise of this Warrant, may, subject to
certain conditions, be adjusted. In such event, the Company will, at the request
of the holder, issue a new Warrant Certificate evidencing the adjustment in the
Purchase Price and the number and/or type of securities issuable upon the
exercise of the Warrants; provided, however, that the failure of the Company to
issue such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange as provided herein,
without any charge except for any tax or other governmental charge imposed in
connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by
this Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this certificate
this ____ day of _____________________, 1997.
AZUREL LTD.
By: /s/ Gerard Semhon, Chief Executive Officer
Gerard Semhon, Chief Executive Officer
ATTEST
By:
Secretary
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant
Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint his or its attorney-in-fact
to transfer the within Warrant Certificate on the books of Azurel Ltd., with
full power of substitution.
Dated:
Signature
(Signature must conform in all
respects to the name of holder
as specified on the face of the
Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right represented by
this Warrant Certificate to purchase:
___________shares of Common Stock
___________Redeemable Common Stock Warrants
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of Azurel Ltd. in the amount of $ ,
all in accordance with the terms hereof. The undersigned requests that
certificates for such securities be registered in the name of whose address is
and that such certificates be delivered to_____________________________________
whose address is______________________________________________________________.
Dated:
Signature
(Signature must conform in all
respects to the name of holder
as specified on the face of the
Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)