WARRANT AGENCY AGREEMENT
AGREEMENT, dated this ____ day of _________________, 1996, between ORION
ACQUISITION CORP., I, a Delaware corporation (the "Company"), and AMERICAN STOCK
TRANSFER & TRUST COMPANY, a New York corporation, as Warrant Agent (the "Warrant
Agent").
W I T N E S S E T H:
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WHEREAS, in connection with (i) the offering to the public of 800,000 units
(the "Units"), each unit consisting of one share of the Company's common stock,
$.01 par value ("Common Stock"), one Class A Common Stock Purchase Warrant (the
"Class A Warrants") and 320,000 Class B Unit Purchase Warrants (the "Class B
Warrants" and collectively with the Class A Warrants, the "Warrants"), each
Class A Warrant entitling the registered holder thereof to purchase one (1)
share of Common Stock and each Class B Warrant entitling the registered holder
thereof to purchase one (1) Unit; (ii) the over allotment option granted to the
underwriter to purchase up to an additional 120,000 Units and 48,000 Class B
Warrants (the "Over allotment Options"); and (iii) the sale to H.J. Meyers &
Co., Inc. (the "Representative") and their representatives, successors and
assigns of warrants (the "Representative's Warrants") to purchase 80,000 Units
and 32,000 Class B Warrants, the Company will issue up to 1,500,000 Class A
Warrants (subject to increase as provided in the Representative's Warrant
Agreement) and up to 400,000 Class B Warrants; and
WHEREAS, the Company desires to provide for the issuance of certificates
representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing the
Warrants and the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrants and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company, the
Representatives, the holders of certificates representing the Warrants and the
Warrant Agent, the parties hereto agree as follows:
DEFINITIONS. As used herein, the following terms shall have the following
meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any class, whether
now or hereafter authorized, which has the right to participate in the voting
and in the distribution of earnings and assets of the Company without limit as
to amount or percentage.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business in New York,
shall be administered, which office is located on the date hereof at 40 Wall
Street, 46th Floor, New York, NY 10005.
(c) "Exercise Date" shall mean, subject to the provisions of Section 4(b)
hereof as to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder hereof or his
attorney duly authorized in writing, and (ii) payment in cash or by check made
payable to the Warrant Agent for the account of the Company, of the amount in
lawful money of the United States of America equal to the applicable Purchase
Price.
(d) "Initial Warrant Exercise Date" shall mean the date the Company
consummates a merger, exchange of capital, asset acquisition or other business
combination (a "Business Combination") with an operating business.
(e) "Initial Warrant Redemption Date" shall mean the date that the Company
consummates a Business Combination.
(f) "Applicable Purchase Price" shall mean, subject to modification and
adjustment as provided in Section 7, $9.00 for the Class A Warrants and $0.125
for the Class B Warrants and further subject to the Company's right, in its sole
discretion, to decrease the Applicable Purchase Price for a period of not less
than 30 days on not less than 30 days' prior written notice to the Registered
Holders.
(g) "Registered Holder" shall mean the person in whose name any
certificate representing the Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(h) "Registration Statement" shall mean the Registration on Form SB-2
filed by the Company with the Securities and Exchange Commission (the "SEC") on
December 20, 1995, as subsequently amended and declared effective by the SEC
with respect to the offering of the Units, the Common Stock and Warrants.
(i) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to elect
a majority of the Board of Directors of such corporation (regardless of whether
or not at the time stock of any other class or classes of such corporation shall
have or may have voting power by reason of the happening of any contingency) is
at the time directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
(j) "Transfer Agent" shall mean American Stock Transfer & Trust Company or
its authorized successor.
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(k) "Underwriting Agreement" shall mean the Underwriting Agreement, dated
[EFFECTIVE DATE], 1996, between the Company and the Representative, as
representative of the several underwriters listed therein, relating to the
purchase by the several Underwriters for resale to the public up to 920,000
Units and 368,000 Class B Warrants.
(l) "Representative's Warrant Agreement" shall mean the agreement, dated
as of [CLOSING DATE], 1996, between the Company and the Representatives relating
to and governing the terms and provisions of the Representative's Warrants.
(m) "Warrant Certificate" shall mean a certificate representing each of
the Class A Warrants and each of the Class B Warrants substantially in the form
annexed hereto as Exhibit A and Exhibit B, respectively.
(n) "Warrant Expiration Date" shall mean, unless the Warrants are redeemed
as provided in Section 8 hereof prior to such date, with respect to the Class A
Warrants, 5:00 p.m. (New York time) on [EFFECTIVE DATE], 2001, and with respect
to the Class B Warrants, 5:00 p.m. (New York time) on the date which is the
first anniversary of the date of the Business Combination, or, if such date
shall in the State of New York be a holiday or a day on which banks are
authorized to close, then 9:00 a.m. (New York time) on the next following day
which in the State of New York is not a holiday or a day on which banks are
authorized to close, subject to the Company's right, prior to the Warrant
Expiration Date, in its sole discretion, to extend such Warrant Expiration Date
on five business days prior written notice to the Registered Holders.
(o) "Warrant Agent" shall mean American Stock Transfer & Trust Company or
its authorized successor.
SECTION 1
WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Class A Warrant shall initially entitle the Registered Holder of
the Warrant Certificate representing such Warrant to purchase at the Applicable
Purchase Price therefor from the Initial Warrant Exercise Date until the Warrant
Expiration Date one share of Common Stock upon the exercise thereof, subject to
modification and adjustment as provided in Section 7. Each Class B Warrant
shall initially entitle the Registered Holder of the Warrant Certificate
representing such Warrant to purchase at the Applicable Purchase Price therefor
from the Initial Warrant Exercise Date until the Warrant Expiration Date one
Unit upon the exercise thereof, subject to modification and adjustment as
provided in Section 7.
(b) Upon execution of this Agreement, Warrant Certificates representing
800,000 Class A Warrants and 320,000 Class B Warrants to purchase up to an
aggregate of 1,120,000 shares of Common Stock (subject to modification and
adjustment as provided in Section 7) shall be executed by the Company and
delivered to the Warrant Agent.
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(c) Upon exercise of the Over-allotment Option, in whole or in part,
Warrant Certificates representing up to 120,000 Class A Warrants and 48,000
Class B Warrants to purchase up to an aggregate of 168,000 shares of Common
Stock (subject to modification and adjustment as provided in Section 7) shall be
executed by the Company and delivered to the Warrant Agent.
(d) Upon exercise of the Representative's Warrants as provided therein,
Warrant Certificates representing up to 80,000 Class A Warrants and up to 32,000
Class B Warrants to purchase up to an aggregate of 112,000 of Common Stock
(subject to modification and adjustment as provided in Section 7 hereof and in
the Representative's Warrant Agreement) shall be countersigned, issued and
delivered by the Warrant Agent upon written order of the Company signed by its
President or a Vice President and by its Treasurer or an Assistant Treasurer or
its Secretary or an Assistant Secretary.
(e) From time to time, up to the applicable Warrant Expiration Date, as
the case may be, the Warrant Agent shall countersign and deliver Warrant
Certificates in required denominations of one or whole number multiples thereof
to the person entitled thereto in connection with any transfer or exchange
permitted under this Agreement. Except as provided in Section 6 hereof, no
Warrant Certificates shall be issued except: (i) Warrant Certificates initially
issued hereunder; (ii) Warrant Certificates issued upon any transfer or exchange
of Warrants; (iii) Warrant Certificates issued in replacement of lost, stolen,
destroyed or mutilated Warrant Certificates pursuant to Section 6; (iv) Warrant
Certificates issued pursuant to the Representative's Warrant Agreement
(including Warrants in excess of the Representative's Warrants issued as a
result of the anti dilution provisions contained in the Representative's Warrant
Agreement); and (v) at the option of the Company, Warrant Certificates in such
form as may be approved by its Board of Directors, to reflect any adjustment or
change in the Applicable Purchase Price, the number of shares of Common Stock
purchasable upon exercise of the Warrants or the Redemption Price therefor made
pursuant to Section 7 hereof.
SECTION 2
FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A for the Class A Warrants and Exhibit B for the Class B
Warrants (the provisions of which are hereby incorporated herein) and may have
such letters, numbers or other marks of identification or designation and such
legends, summaries or endorsements printed, lithographed or engraved thereon as
the Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to usage. The
Warrant Certificates shall be dated the date of issuance thereof (whether upon
initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or
destroyed Warrant Certificates).
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(b) Warrant Certificates shall be executed on behalf of the Company by its
President or any Vice President and by its Treasurer or an Assistant Treasurer
or its Secretary or an Assistant Secretary, by manual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a facsimile of the
Company's seal. Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before the date of
issuance of the Warrant Certificates or before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates, nevertheless,
may be countersigned by the Warrant Agent, issued and delivered with the same
force and effect as though the person who signed such Warrant Certificates had
not ceased to be such officer of the Company.
SECTION 3
EXERCISE.
(a) Warrants in denominations of one or whole number multiples thereof may
be exercised commencing at any time on or after the Initial Warrant Exercise
Date, but not after the applicable Warrant Expiration Date, upon the terms and
subject to the conditions set forth herein (including the provisions set forth
in Sections 4 and 8 hereof and in the applicable Warrant Certificate). A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the Exercise Date, provided that the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing, together
with payment in cash or by check made payable to the Warrant Agent for the
account of the Company, of an amount in lawful money of the United States of
America equal to the Applicable Purchase Price has been received in good funds
by the Warrant Agent. The person entitled to receive the securities deliverable
upon such exercise shall be treated for all purposes as the holder of such
securities as of the close of business on the Exercise Date. If Warrants in
denominations other than one or whole number multiples thereof shall be
exercised at one time by the same Registered Holder, the number of full shares
of Common Stock which shall be issuable upon exercise thereof shall be computed
on the basis of the aggregate number of full shares of Common Stock issuable
upon such exercise. As soon as practicable on or after the Exercise Date and in
any event within three business days after such date, if any Warrants have been
exercised, the Warrant Agent on behalf of the Company shall cause to be issued
to the person or persons entitled to receive the same a Common Stock certificate
or certificates for the shares of Common Stock and Class A Warrants
Certificates, if applicable, deliverable upon such exercise, and the Warrant
Agent shall deliver the same to the person or persons entitled thereto. Upon
the exercise of any Warrants, the Warrant Agent shall promptly notify the
Company in writing of such fact and of the number of securities delivered upon
such exercise and, subject to subsection (b) below, shall cause all payments of
an amount in cash or by check made payable to the order of the Company, equal to
the Applicable Purchase Price, to be deposited promptly in the Company's bank
account.
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(b) At any time upon the exercise of any Warrants after the date hereof,
the Warrant Agent shall, on a daily basis, within two business days after such
exercise, notify the Representatives or their successors or assigns of the
exercise of any such Warrants and shall commencing one (1) year from the date
hereof, on a weekly basis (subject to collection of funds constituting the
tendered Applicable Purchase Price, but in no event later than five business
days after the last day of the calendar week in which such funds were tendered),
remit to the Representatives an amount equal to 10% of the Exercise Price for
each Warrant being then exercised which was solicited by the Representatives or
one of the underwriters participating in this offering, unless the
Representatives shall have notified the Warrant Agent that the payment of such
amount with respect to such Warrant is violative of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or the rules and regulations of the National Association
of Securities Dealers, Inc. ("NASD") or applicable state securities or "blue
sky" laws, or the Warrants are those underlying the Representative's Warrants or
the Cranbrooke Warrants, in which event, the Warrant Agent shall have to pay
such amount to the Company; provided, that the Warrant Agent shall not be
obligated to pay any amounts pursuant to this Section 3(b) during any week that
such amounts payable are less than $ 1,000 and the Warrant Agent's obligation to
make such payments shall be suspended until the amount payable aggregates $
1,000, and provided further, that, in any event, any such payment (regardless of
amount) shall be made not less frequently than monthly.
(c) The Company shall not be obligated to issue any fractional share
interests or fractional warrant interests upon the exercise of any Warrant or
Warrants, nor shall it be obligated to issue scrip or pay cash in lieu of
fractional interests. Any fraction equal to or greater than one-half shall be
rounded up to the next full share or Warrant, as the case may be, any fraction
less than one-half shall be eliminated.
SECTION 4
RESERVATION OF SHARES: LISTING: PAYMENT OF TAXES: ETC.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issue
upon exercise of Warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise
of the Warrants shall, at the time of delivery thereof, be duly and validly
issued and fully paid and non-assessable and free from all preemptive or similar
rights, taxes, liens and charges with respect to the issue thereof, and that
upon issuance such shares shall be listed on each securities exchange, if any,
on which the other shares of outstanding Common Stock of the Company are then
listed.
(b) The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or approval
of, any governmental authority under any federal securities law before such
securities may be validly issued or
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delivered upon such exercise, then the Company will file a registration
statement under the federal securities laws or a post effective amendment, use
its best efforts to cause the same to become effective, keep such registration
statement current while any of the Warrants are outstanding and deliver a
prospectus which complies with Section 10(a)(3) of the Securities Act of 1933,
as amended (the "Act"), to the Registered Holder exercising the Warrant (except,
if in the opinion of counsel to the Company, such registration is not required
under the federal securities law or if the Company receives a letter from the
staff of the Securities and Exchange Commission (the "Commission") stating that
it would not take any enforcement action if such registration is not effected).
The Company will use best efforts to obtain appropriate approvals or
registrations under state "blue sky" securities laws. With respect to any such
securities, however, Warrants may not be exercised by, or shares of Common Stock
issued to, any Registered Holder in any state in which such exercise would be
unlawful.
(c) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock are
to be delivered in a name other than the name of the Registered Holder of the
Warrant Certificate representing any Warrant being exercised, then no such
delivery shall be made unless the person requesting the same has paid to the
Warrant Agent the amount of transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock or other securities required upon exercise of the Warrants, and the
Company will comply with all such requisitions.
SECTION 5
EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants or may be transferred in
whole or in part. Warrant Certificates to be so exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and the Company shall execute and
the Warrant's Agent shall countersign, issue and deliver in exchange therefor
the Warrant Certificate or Certificates which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which, subject
to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and the transfer thereof Upon due presentment for registration of
transfer of any Warrant Certificate at such office, the Company shall execute
and the Warrant Agent shall issue and deliver to the transferee or transferees a
new Warrant Certificate or Certificates representing an equal aggregate number
of Warrants.
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(c) With respect to any Warrant Certificates presented for registration of
transfer, or for exchange or exercise, the subscription or exercise form, as the
case may be, on the reverse thereof shall be duly endorsed or be accompanied by
a written instrument or instruments of transfer and subscription, in form
satisfactory to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates. However, the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange
shall be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof of each Warrant represented
thereby (notwithstanding any notations of ownership or writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes and shall
not be affected by any notice to the contrary.
SECTION 6
LOSS OR MUTILATION. Upon receipt by the Company and the Warrant Agent of
evidence satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and (in the case of loss,
theft or destruction) of indemnity satisfactory to them, and (in case of
mutilation) upon surrender and cancellation thereof, the Company shall execute
and the Warrant Agent shall countersign and deliver in lieu thereof a new
Warrant Certificate representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe.
SECTION 7
ADJUSTMENT OF APPLICABLE PURCHASE PRICE AND NUMBER OF SHARES OF COMMON
STOCK DELIVERABLE.
(a) (i) Except as hereinafter provided, in the event the Company shall,
at any time or from time to time after the date hereof, issue any shares of
Common Stock as a stock dividend to the holders of Common Stock, or subdivide or
combine the outstanding shares of Common Stock into a greater or lesser number
of shares (any such issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter upon each further Change of Shares,
the Applicable Purchase Price for the Warrants (whether or not the same shall be
issued and outstanding) in effect immediately prior to such Change of Shares
shall be changed, as to each class of Warrants, to a price (including any
applicable fraction of a cent to the nearest cent) determined by dividing (i)
the sum of (a) the total number of shares of
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Common Stock outstanding immediately prior to such Change of Shares, multiplied
by the Applicable Purchase Price in effect immediately prior to such Change of
Shares, and (b) the consideration, if any, received by the Company upon such
issuance, subdivision or combination by (ii) the total number of shares of
Common Stock outstanding immediately after such Change of Shares; provided,
however, that in no event shall the Applicable Purchase Price be adjusted
pursuant to this computation to an amount in excess of the Applicable Purchase
Price in effect immediately prior to such computation, except in the case of a
combination of outstanding shares of Common Stock.
For the purposes of any adjustment to be made in accordance with this
Section 7(a) the following provisions shall be applicable:
(A) Shares or equivalents of Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the day following
the record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
(B) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined in good faith by the Board of Directors of the Company
on the basis of a record of values of similar property or services.
(C) The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number of shares
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(b) Upon each adjustment of the Applicable Purchase Price pursuant to this
Section 7, the number of shares of Common Stock purchasable upon the exercise of
each Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the Applicable
Purchase Price in effect prior to such adjustment and dividing the product so
obtained by the applicable adjusted Purchase Price.
(c) In case of any reclassification or change of outstanding shares of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of a subdivision or combination), or in case of any consolidation or
merger of the Company with or into another corporation (other than a merger with
a Subsidiary in which merger the Company is the continuing corporation and which
does not result in any reclassification or change of the then outstanding shares
of Common Stock or other capital stock issuable upon exercise of the Warrants
(other
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than a change in par value, or from par value to no par value, or from no par
value to par value or as a result of subdivision or combination)) or in case of
any sale or conveyance to another corporation of the property of the Company as
an entirety or substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be, shall
make lawful and adequate provision whereby the Registered Holder of each Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Warrant immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance and shall forthwith file at the Corporate Office of the Warrant Agent
a statement signed by its President or a Vice President and by its Treasurer or
an Assistant Treasurer or its Secretary or an Assistant Secretary evidencing
such provision. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 7(a) and (b). The above provisions of this Section 7(c) shall
similarly apply to successive reclassifications and changes of shares of Common
Stock and to successive consolidations, mergers, sales or conveyances.
(d) Irrespective of any adjustments or changes in the Applicable Purchase
Price or the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant Certificates
pursuant to Section l(f) hereof, continue to express the Applicable Purchase
Price per share and the number of shares purchasable thereunder as the
Applicable Purchase Price per share and the number of shares purchasable
thereunder were expressed in the Warrant Certificates when the same were
originally issued.
(e) After each adjustment of the Applicable Purchase Price pursuant to
this Section 7, the Company will promptly prepare a certificate signed by the
President, and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, of the Company setting forth: (i) the Applicable Purchase
Price as so adjusted, (ii) the number of shares of Common Stock purchasable upon
exercise of each Warrant, after such adjustment, and (iii) a brief statement of
the facts accounting for such adjustment. The Company will promptly file such
certificate with the Warrant Agent and cause a brief summary thereof to be sent
by ordinary first class mail to each Registered Holder at his last address as it
shall appear on the registry books of the Warrant Agent. No failure to mail
such notice nor any defect therein or in the mailing thereof shall affect the
validity thereof except as to the holder to whom the Company failed to mail such
notice, or except as to the holder whose notice was defective. The affidavit of
an officer of the Warrant Agent or the Secretary or an Assistant Secretary of
the Company that such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(f) No adjustment of the Applicable Purchase Price shall be made as a
result of or in connection with (A) the issuance or sale of shares of Common
Stock pursuant to options, warrants, stock purchase agreements and convertible
or exchangeable securities outstanding or
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in effect on the date hereof or granted upon the consummation of and in
connection with the first Business Combination (as defined in the Registration
Statement), or (B) the issuance or sale of shares of Common Stock for cash.
(g) No adjustment of the Applicable Purchase Price shall be made if the
amount of said adjustment shall be less than $ .10, provided, however, that in
such case, any adjustment that would otherwise be required then to be made shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment that shall amount, together with any adjustment so carried
forward, to at least $.10. In addition, Registered Holders shall not be
entitled to cash dividends paid by the Company prior to the exercise of any
Warrant or Warrants held by them.
SECTION 8
REDEMPTION.
(a) Commencing on the Initial Warrant Redemption Date, the Company may, on
30 days prior written notice redeem all the Warrants at $.05 per Warrant,
provided that the last sale price of Common Stock, if the Common Stock is listed
for trading on an exchange or inter-dealer quotation system which provides last
sale prices, or, the average of the closing bid and asked quotes, if the Common
Stock is listed for trading on an inter-dealer quotation system which does not
provide last sale prices, on all 10 of the trading days ending on the day
immediately prior to the day on which the Company gives notice of redemption,
has been $11.00 or higher (subject to proportionate adjustment for stock splits
and reverse stock splits of such Common Stock from and after the date of this
Agreement). Notwithstanding the foregoing, the Warrants underlying the
Representative's Warrants and the Cranbrooke Warrants are not subject to
redemption.
(b) In case the Company shall exercise its right to redeem all of the
Warrants, it shall give or cause to be given notice to the Registered Holders of
the Warrants, by mailing to such Registered Holders a notice of redemption,
first class, postage prepaid, at their last address as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given whether or not the
Registered Holder receives such notice. Not less than five business days prior
to the mailing to the Registered Holders of the Warrants of the notice of
redemption, the Company shall deliver or cause to be delivered to the
Representatives a notice telephonically and confirmed in writing together with a
list of the Registered Holders (including their respective addresses and number
of Warrants beneficially owned) to whom such notice of redemption has been or
will be given.
(c) The notice of redemption shall specify (i) the redemption price, (ii)
the date fixed for redemption, which shall in no event be less that thirty (30)
days after the date of mailing of such notice, (iii) the place where the Warrant
Certificate shall be delivered and the redemption price shall be paid, (iv) that
the Representatives are the Company's exclusive warrant solicitation agents and
shall receive the commission contemplated by Section 3(b) hereof, and
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(v) that the right to exercise the Warrant shall terminate at 5:00 p.m. (New
York time) on the business day immediately preceding the date fixed for
redemption. The date fixed for the redemption of the Warrants shall be the
Redemption Date. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity of the proceedings for such
redemption except as to a holder (a) to whom notice was not mailed or (b) whose
notice was defective. An affidavit of the Warrant Agent or the Secretary or
Assistant Secretary of the Company that notice of redemption has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts stated
therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. (New York
time) on the business day immediately preceding the Redemption Date. The
redemption price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
(e) The Company shall indemnify the underwriters and each person, if any,
who controls the underwriters within the meaning of Section 15 of the Act or
Section 20(a) of 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 Act, the Exchange Act or otherwise, arising from the
registration statement or prospectus referred to in Section 4(b) hereof to the
same extent and with the same effect (including the provisions regarding
contribution) as the provisions pursuant to which the Company has agreed to
indemnify the underwriters contained in Section I of the Underwriting Agreement.
(f) Five business days prior to the Redemption Date, the Company shall
furnish to the Representatives (i) an opinion of counsel to the Company, dated
such date and addressed to the Representatives, and (ii) a "cold comfort" letter
dated such date addressed to the Representatives, signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' 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 accountants'
letters delivered to underwriters in underwritten public offerings of
securities, including, without limitation, those matters covered in Sections
5(d) and (i) of the Underwriting Agreement.
(g) The Company shall as soon as practicable after the Redemption Date,
and in any event within 15 months thereafter, 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 11(a) of the Act
and covering a period of at least 12 consecutive months beginning after the
Redemption Date.
(h) The Company shall deliver within five business days prior to the
Redemption Date copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with
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respect to such registration statement and permit the Representatives to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as the Representatives shall reasonably request.
SECTION 9
CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company and the underwriters, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall not, by
issuing and delivering Warrant Certificates or by any other act hereunder, be
deemed to make any representations as to the validity or value or authorization
of the Warrant Certificates or the Warrants represented thereby or of any
securities or other property delivered upon exercise of any Warrant or whether
any stock issued upon exercise of any Warrant is fully paid and non-assessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Applicable Purchase Price provided in this Agreement, or
to determine whether any fact exists which may require any such adjustment, or
with respect to the nature or extent of any such adjustment, when made, or with
respect to the method employed in making the same. It shall not (i) be liable
for any recital or statement of fact contained herein or for any action taken,
suffered or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be responsible for
any failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or (iii)
be liable for any act or omission in connection with this Agreement except for
its own gross negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the President or any Vice President (unless other evidence in respect thereof is
herein specifically prescribed). The Warrant Agent shall not be liable for any
action taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction order or demand.
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(e) The Company agrees to pay the Warrant Agent reasonable compensation
for its services hereunder and to reimburse it for its reasonable expenses
hereunder; the Company further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and reasonable counsel fees, for anything done or omitted by
the Warrant Agent in the execution of its duties and powers hereunder except
losses, expenses and liabilities arising as a result of the Warrant Agent's
gross negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own gross negligence or willful misconduct), after giving
30 days' prior written notice to the Company. At least 15 days prior to the
date such resignation is to become effective, the Warrant Agent shall cause a
copy of such notice of resignation to be mailed to the Registered Holder of each
Warrant Certificate at the Company's expense. Upon such resignation the Company
shall appoint in writing a new warrant agent. If the Company shall fail to make
such appointment within a period of 30 days after it has been notified in
writing of such resignation by the resigning Warrant Agent, then the Registered
Holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any new warrant agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company having a capital and surplus, as shown by its last published report to
its stockholders, of not less than $10,000,000 or a stock transfer company doing
business in New York City. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, such new warrant agent shall
be vested with the same powers, rights, duties and responsibilities as if it has
been originally named herein as the warrant agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be necessary
or expedient to execute and deliver any further assurance, conveyable, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the resigning Warrant Agent. Not later
than the effective date of any such appointment the Company shall file notice
thereof with the resigning Warrant Agent and shall forthwith cause a copy of
such notice to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged, any corporation resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party shall be a
successor warrant agent under this Agreement without any further act, provided
that such corporation is eligible for appointment as successor to the Warrant
Agent under the provisions of the preceding paragraph. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed to the Company and to the Registered Holders of each Warrant
Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effect as though it were not Warrant Agent.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
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(i) The Warrant Agent shall retain for a period of two years from the date
of exercise any Warrant Certificate received by it upon such exercise.
SECTION 10
MODIFICATION OF AGREEMENT.
The Warrant Agent and the Company may by supplement a agreement make any
changes or corrections in this Agreement (i) that they shall deem appropriate to
cure any ambiguity or to correct any defective or inconsistent provision or
manifest mistake or error herein contained; or (ii) that they may deem necessary
or desirable and which shall not adversely affect the interests of the holders
of Warrant Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect except with the
consent in writing of the Registered Holders representing not less than 66-2/3%
of the Warrants then outstanding; provided, further, that no change in the
number or nature of the securities purchasable upon the exercise of any Warrant,
or the Applicable Purchase Price, therefor, shall be made without the consent in
writing of the Registered Holder of the Warrant Certificate, other than such
changes as are specifically prescribed by this Agreement as originally executed.
In addition, this Agreement may not be modified, amended or supplemented without
the prior written consent of the Representatives, other than to cure any
ambiguity or to correct any provision which is inconsistent with any other
provision of this Agreement or to make any such change that is necessary or
desirable and which shall not adversely affect the interests of the underwriters
and except as may be required by law.
SECTION 11
NOTICES.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made when delivered or mailed
certified mail, return receipt requested, or delivered to a recognized overnight
delivery service if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company at Orion Acquisition Corp. I, 150 East 52nd Street, New
York, NY 10022, Attention: President, or at such other address as may have been
furnished to the Warrant Agent in writing by the Company; and if to the Warrant
Agent, at its Corporate Office. Copies of any notice delivered pursuant to this
Agreement shall be delivered to H.J. Meyers & Co., Inc., 1895 Mount Hope Avenue,
Rochester, NY 14620, Attention: Michael S. Smith, and Northeast Securities, Inc.
at 1600 Stewart Avenue, Suite 300, Westbury, NY 11590, Attention: Mr. Stephen I.
Porn, President, or at such other address as may have been furnished to the
Company and the Warrant Agent in writing.
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SECTION 12
GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to conflicts of laws.
SECTION 13
BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and the
holders from time to time of Warrant Certificates or any of them. Except as
hereinafter stated, nothing in this Agreement is intended or shall be construed
to confer upon any other person any right, remedy or claim or to impose upon any
other person any duty, liability or obligation. The underwriters, acting
through either Representative, are, and shall at all times irrevocably be deemed
to be, third-party beneficiaries of this Agreement, with full power, authority
and standing to enforce the rights granted to them hereunder.
SECTION 14
COUNTERPARTS.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first date first above written.
[CORPORATE SEAL] AMERICAN STOCK TRANSFER
& TRUST COMPANY
As Warrant Agent
By:
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ORION ACQUISITION CORP. I
By:
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