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TTR, INC.
AND
FIRST METROPOLITAN SECURITIES, INC.
___________
UNDERWRITER'S
WARRANT AGREEMENT
DATED AS OF ______________, 1996
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UNDERWRITER'S WARRANT AGREEMENT dated as of ____________, 1996 among TTR,
Inc., a New York corporation (the "Company") and First Metropolitan Securities,
Inc., a Delaware corporation (hereinafter referred to variously as the "Holder"
or the "Underwriter").
W I T N E S S E T H :
WHEREAS, the Company proposes to issue to the Underwriter warrants to
purchase up to an aggregate of 127,500 shares of common stock, par value $.001
per share, of the Company ("Common Stock") and 60,000 Redeemable Common Stock
Purchase Warrant (the "Warrants" or "Redeemable Warrants"), each Warrant
exercisable for one share of Common Stock at $7.20, collectively referred to as
the "Underwriter's Warrants"; and
WHEREAS, the Underwriter has agreed pursuant to the underwriting agreement
(the "Underwriting Agreement") dated as of the date hereof between the
Underwriter and the Company and certain selling securityholders, to underwrite
the Company's proposed public offering of 1,275,000 shares of Common Stock
(1,200,000 shares by the Company and 75,000 shares by certain selling
securityholders) and 600,000 Redeemable Warrants, at a public offering price of
between $5.00 and $6.00 per share and $.25, respectively (the "Public
Offering"); and
WHEREAS, the Underwriter's Warrants to be issued pursuant to this Agreement
will be issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Underwriter in consideration for, and as part
of the compensation in connection with the Public Offering;
NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriter to the Company of an aggregate 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 Holder is hereby granted the right to purchase, at any time
from ___________, 1997 until 5:30 P.M., New York time, on _______________, 2002,
up to an aggregate 127,500 shares of Common Stock and 60,000 Warrants at an
initial exercise price (subject to adjustment as provided in Section 8 hereof)
of $_.__ (120% of the initial public offering price) and $.30, respectively,
subject to the terms and conditions of this Agreement. Except as set forth
herein, the Common Stock and Warrants issuable upon exercise of the
Underwriter's Warrants are in all respects identical to the shares of Common
Stock and Warrants being purchased by the Underwriter for resale to the public
pursuant to the terms and provisions of the Underwriting Agreement.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and 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 Warrant. The Warrants initially are exercisable at an
aggregate initial exercise price (subject to adjustment as
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provided in Section 8 hereof) as set forth in Section 6 hereof payable by
certified or official bank check in New York Clearing House funds, subject to
adjustment as provided in Section 8 hereof. Upon surrender at the Company's
principal offices in New York (presently located at 16/8 Hatam Sofer Street,
Immanuel, Israel, 44845), of a Warrant Certificate with the annexed Form of
Election to Purchase duly executed, together with payment of the Purchase Price
(as hereinafter defined) for the shares of Common Stock and/or Warrants, the
registered holder of a Warrant Certificate ("Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the shares of Common Stock
and Warrants so purchased. The purchase rights represented by each Underwriter's
Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the Common Stock). In the
case of the purchase of less than all the shares and Warrants purchasable under
any Warrant Certificate, the Company shall cancel the Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the securities purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Underwriter's
Warrants, the issuance of certificates for the Common Stock and Warrants or
other securities, properties or rights underlying such Underwriter's Warrants,
shall be made forthwith (and in any event within three (3) business days
thereafter) without charge to the Holder thereof including, without limitation,
any tax which may be payable in respect of the issuance thereof,
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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
Underwriter 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 Common Stock and Warrants issuable upon exercise of the Underwriter's
Warrants shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant Secretary of the Company. Underwriter's Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of the Underwriter's Warrants. The Holder of a
Underwriter's Warrant Certificate, 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
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distribution thereof; and that the Underwriter's Warrants may not be sold,
transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part, for a period of one (1) year from the date of the Public Offering, except
to officers or partners of the Underwriter or members of the selling group
and/or their officers and partners.
6. Exercise Price.
ss.6.1 Initial and Adjusted Exercise Price. Except as otherwise provided in
Section 8 hereof, the initial exercise price of each of the shares of Common
Stock and Redeemable Warrants underlying the Underwriter's Warrants shall be
$____ (120% of the initial public offering prices) and $.30, respectively. The
adjusted exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in accordance with
the provisions of Section 8 hereof.
ss.6.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
ss.7.1 Registration Under the Securities Act of 1933. The Underwriter's
Warrants, the shares of Common Stock and Warrants issuable upon exercise of the
Underwriter's Warrants have been registered pursuant to a registration statement
on form SB-2 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act").
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ss.7.2 Piggyback Registration. If, at any time commencing after
____________, 1997, through and including ____________, 2003 (84 months from the
Effective Date), the Company proposes to register any of its securities under
the Act (other than in connection with a merger or pursuant to Form S-8) it will
give written notice by registered mail, at least thirty (30) days prior to the
filing of each such registration statement, to the Underwriter and to all other
Holders of the Underwriter's Warrants and/or the Common Stock and Warrants
underlying same of its intention to do so. If any of the Underwriter or other
Holders of the Underwriter's Warrants and/or Common Stock and Warrants
underlying same notify the Company within twenty (20) days after receipt of any
such notice of its or their desire to include any such securities in such
proposed registration statement, the Company shall afford each of the
Underwriter and such Holders of the Underwriter's Warrants and/or Common Stock
and Warrants underlying same the opportunity to have any such Common Stock and
Warrants underlying same registered under such registration statement.
Notwithstanding the provisions of this Section 7.2, the Company shall have
the right at any time after it shall have given written notice pursuant to this
Section 7.2 (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.
ss.7.3 Demand Registration.
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(a) At any time commencing after ______________, 1997 (12 months from the
Effective Date) through and including ______________, 2001 (60 months from the
Effective Date), the Holders of the Underwriter's Warrants and/or Common Stock
and Warrants underlying same representing a "Majority" (as hereinafter defined)
of such securities (assuming the exercise of all of the Underwriter's Warrants)
shall have the right (which right is in addition to the registration rights
under Section 7.2 hereof), exercisable by written notice to the Company, to have
the Company prepare and file with the Commission, on one occasion, a
registration statement and such other documents, including a prospectus, as may
be necessary in the opinion of both counsel for the Company and counsel for the
Underwriter and Holders, in order to comply with the provisions of the Act, so
as to permit a public offering and sale of their respective Common Stock and
Warrants underlying same for nine (9) consecutive months by such Holders and any
other Holders of the Underwriter's Warrants and/or Common Stock and Warrants
underlying same who notify the Company within ten (10) days after receiving
notice from the Company of such request.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Underwriter's Warrants and the Common Stock and
Warrants underlying same within ten (10) days from the date of the receipt of
any such registration request.
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(c) In addition to the registration rights under Section 7.2 and subsection
(a) of this Section 7.3, at any time commencing after ______________, 1997 (12
months from the Effective Date) through and including ______________, 2001 (60
months from the Effective Date), any Holder or Holders of a Majority of
Underwriter's Warrants and/or shares of Common Stock and Warrants underlying
same shall have the right, exercisable by written request to the Company, to
have the Company prepare and file, on one occasion, with the Commission a
registration statement so as to permit a public offering and sale for nine (9)
consecutive months by any such Holder or Holders, provided, however, that the
provisions of Section 7.4(b) hereof shall not apply to any such registration
request and registration and all costs incident thereto shall be at the expense
of the Holder or Holders making such request.
(d) Notwithstanding anything to the contrary contained herein, if the
Company shall not have filed a registration statement for the shares of Common
Stock, Warrants and shares of Common Stock underlying the Underwriter's Warrants
within the time period specified in Section 7.4(a) hereof pursuant to the
written notice specified in Section 7.3(a) of a Majority of the Holders of the
Underwriter's Warrants and/or shares of Common Stock and Warrants underlying
same, the Company agrees that upon the written notice of election of a Majority
of the Holders of the Underwriter's Warrants and/or Common Stock and Warrants
underlying same it shall repurchase (i) any and all Common Stock and Warrants
underlying the
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Underwriter's Warrants at the higher of the Market Price per share of Common
Stock on (x) the date of the notice sent pursuant to Section 7.3(a) or (y) the
expiration of the period specified in Section 7.4(a) and (ii) any and all
Warrants at such Market Price less the exercise prices of such Warrant. Such
repurchase shall be in immediately available funds and shall close within two
(2) days after the later of (i) the expiration of the period specified in
Section 7.4(a) or (ii) the delivery of the written notice of election specified
in this Section 7.3(d).
ss.7.4 Covenants of the Company With Respect to Registration. In connection
with any registration under Section 7.2 or 7.3 hereof, the Company covenants and
agrees as follows:
(a) The Company shall use its best efforts to file a registration statement
within thirty (30) days of receipt of any demand therefor, 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 Common Stock
and/or Warrants underlying the Underwriter's Warrants, such number of
prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses of
Holder(s) counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses.
The
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Holder(s) will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c). If the Company shall
fail to comply with the provisions of Section 7.4(a), the Company shall, in
addition to any other equitable or other relief available to the Holder(s), be
liable for any or all incidental, special and consequential damages and damages
due to loss of profit sustained by the Holder(s) requesting registration of
their Warrant Shares.
(c) The Company will take all necessary action which may be required in
qualifying or registering the Common Stock and Warrants underlying the
Underwriter's Warrants 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 Holder(s), 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.
(d) The Company shall indemnify the Holder(s) of the Common Stock and
Warrants underlying same 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 Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("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
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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
agreed to indemnify the Underwriter contained in Section 7 of the Underwriting
Agreement.
(e) The Holder(s) of the Common Stock and Warrants underlying the
Underwriter's Warrants to be sold pursuant to a registration statement, and
their successors and assigns, shall severally, and not jointly, indemnify the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage or expense or liability (including
all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the 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 7 of the Underwriting Agreement pursuant to
which the Underwriter has agreed to indemnify the Company.
(f) Nothing contained in this Agreement shall be construed as requiring the
Holder(s) to exercise their Underwriter's Warrants prior to the initial filing
of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other than
the Common Stock and Warrants underlying the
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Underwriter's Warrants to be included in any registration statement filed
pursuant to Section 7.3 hereof, or permit any other registration statement to be
or remain effective during the effectiveness of a registration statement filed
pursuant to Section 7.3 hereof, without the prior written consent of the Holders
of the Underwriter's Warrants and Common Stock and Warrants underlying same
representing a Majority of such securities.
(h) The Company shall furnish to each Holder 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 of such registration statement (and, if such registration includes 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 includes 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, 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
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accountants' letters delivered to underwriters in underwritten public offerings
of securities.
(i) The Company shall as soon as practicable after the effective date of
the registration statement, and in any event within 15 months thereafter, have
made "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 effective date of the registration statement.
(j) The Company shall deliver promptly to each Holder participating in the
offering requesting the correspondence and memoranda described below, and the
managing underwriters, 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 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
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 independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.
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(k) The Company shall enter into an underwriting agreement with the
managing underwriters selected for such underwriting by Holders holding a
Majority of the Common Stock and Warrants underlying same requested to be
included in such underwriting. Such agreement shall be satisfactory in form and
substance to the Company, each Holder 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 Common Stock and Warrants underlying same 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, their
intended methods of distribution, and except for matters related to disclosures
with respect to such Holders, contained or required to be contained, in such
registration statement under the Act and the rules and regulations thereunder.
(1) For purposes of this Agreement, the term "Majority" in reference to the
Holders of Underwriter's Warrants, shall mean in excess of fifty percent (50%)
of the then outstanding Underwriter's Warrants assuming full exercise thereof,
and shares of Common Stock underlying the Warrants, underlying the Underwriter's
Warrants that
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(i) are not held by the Company, an affiliate, officer, creditor, employee or
agent thereof or any of their respective affiliates, members of their families,
persons acting as nominees or in conjunction therewith or (ii) have not been
resold to the public pursuant to Rule 144 under the Act or a registration
statement filed with the Commission under the Act.
8. Adjustments to Exercise Price and Number of Securities.
ss.8.1 Intentionally Omitted.
ss.8.2 Intentionally Omitted.
ss.8.3 Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
ss.8.4 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 8, the number of
shares of Common Stock underlying the Underwriter's Warrants shall be adjusted
to the nearest full amount by multiplying a number equal to the Exercise Price
in effect immediately prior to such adjustment by the number of shares of Common
Stock underlying same issuable upon exercise of the Underwriter's Warrants
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
ss.8.5 Definition of Common Stock. For the purpose of this Agreement,
the term "Common Stock" shall mean (i) the class of stock designated as Common
Stock in the Certificate of
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Incorporation of the Company as amended as of the date hereof, or (ii) any other
class of stock resulting from successive changes or reclassifications of such
Common Stock, consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that the Company
shall after the date hereof issue a class of Common Stock with greater or
superior voting rights than the shares of Common Stock outstanding as of the
date hereof, the Holder, at its option, may receive upon exercise of any Warrant
either shares of Common Stock or a like number of such securities with greater
or superior voting rights.
ss.8.6 Merger or Consolidation. In case of any consolidation of the Company
with, or merger of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to each Holder
a supplemental warrant agreement providing that each Holder shall have the right
thereafter (until the expiration of such Warrant) to receive, upon exercise of
such Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such Warrant might have been
exercised immediately prior to such consolidation or merger. Such supplemental
warrant agreement shall provide for adjustments which shall be identical to the
adjustments provided in Section 8.
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The above provision of this subsection shall similarly apply to successive
consolidations or mergers.
ss.8.7 No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made:
(a) Upon the issuance or sale of the Underwriter's Warrants or
the shares of Common Stock issuable upon the exercise of (i) the
Underwriter's Warrants, (ii) the Warrants underlying the Underwriter's
Warrants, (iii) the options and warrants outstanding on the date hereof
and described in the prospectus relating to the Public Offering or (iv)
up to an aggregate of 450,000 shares issuable upon the exercise of
options granted under the Company's 1996 Stock Option Plan; or
(b) If the amount of such adjustment shall be less than two
cents ($.02) per share, provided, however, that in such case any
adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to at least two cents ($.02) per share.
ss.8.9 Dividends and Other Distributions. In the event that the
Company shall at any time prior to the exercise of all Underwriter's Warrants
declare a dividend (other than a dividend consisting solely of shares of Common
Stock) or otherwise distribute to its stockholders any assets, property, rights,
evidences of indebtedness, securities (other than shares of Common Stock),
whether issued by the Company or by another, or any other
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thing of value, the Holders of the unexercised Underwriter's Warrants shall
thereafter be entitled, in addition to the shares of Common Stock or other
securities and property receivable upon the exercise thereof, to receive, upon
the exercise of such Underwriter's Warrants, the same property, assets, rights,
evidences of indebtedness, securities or any other thing of value that they
would have been entitled to receive at the time of such dividend or distribution
as if the Underwriter's Warrants had been exercised immediately prior to the
record date for such dividend or distribution. At the time of any such dividend
or distribution, the Company shall make appropriate reserves to ensure the
timely performance of the provisions of this subsection 8.9.
ss.8.10 Adjustment of the Redeemable Warrants.
Notwithstanding this Section 8, any adjustment of the exercise price and/or
the number of shares of Common Stock purchasable upon the exercise of the
Redeemable Warrants underlying the Underwriter's Warrants shall be determined
solely by the anti- dilution and other adjustment provisions provided for by the
terms of a certain Warrant Agreement date ___________, 1996 between the Company
and North American Transfer Co. (the "Warrant Agreement") provided however, that
the term "Warrant Price" as used in said Warrant Agreement shall be deemed to be
$_____ when applied to the Common Stock issued pursuant to the Warrants
hereunder, and not by the provisions of this Section 8, and notice thereof shall
be given as provided in said Warrant Agreement to the holders of the Warrants.
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9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of shares of Common Stock and Warrants
underlying same in such denominations as shall be designated by the Holder
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 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
Warrants, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
10. 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 or Warrants underlying same, nor shall it
be required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.
11. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized
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shares of Common Stock, solely for the purpose of issuance upon the exercise of
the Underwriter's Warrants and Warrants underlying same, 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 the Underwriter's Warrants and Warrants underlying same and payment of the
exercise prices therefor, all 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. As
long as the Underwriter's Warrants shall be outstanding, the Company shall use
its best efforts to cause all shares of Common Stock issuable upon the exercise
of the Underwriter's Warrants and Warrants underlying same to be listed (subject
to official notice of issuance) on all securities exchanges on which the Common
Stock issued to the public in connection herewith may then be listed and/or
quoted on NASDAQ.
12. Notices to 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:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to
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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 such 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
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of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding
up or sale
13. 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 Holder of the Underwriter's Warrants, to
the address of such Holder 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.
14. 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 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
Warrant Certificates.
22
15. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holders and their
respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of business
on ___________, 2003. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on ____________, 2006.
17. Governing Law: Submission to Jurisdiction. This Agreement and each
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 such 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
23
mail, return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 3 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. The Company, the Underwriter and the Holders agree that the prevailing
party(ies) in any such action or proceeding shall be entitled to recover from
the other party(ies) all of its/their reasonable legal costs and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.
18. 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 may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought.
19. 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.
20. 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.
21. Benefits or this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than
24
the Company and the Underwriter and any other registered Holder(s) of the
Warrant Certificates or Common Stock and Warrants underlying same 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 Holder(s) of the Warrant Certificates or Warrant Shares.
22. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
[SEAL] TTR, Inc.
By
------------------------------------
Marc Tokayer
President
Attest:
- -----------------------------------
Secretary
FIRST METROPOLITAN SECURITIES, INC.
By
-------------------------------------
Name:
Title:
25
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE UNDERWRITER'S WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER
SECURITIES ISSUABLE UPON EXERCISE THEREOF 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 UNDERWRITER'S WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME , 2001
No. W- __________ Underwriter's Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ___________, or registered
assigns, is the registered holder of ___________ Underwriter's Warrants to
purchase initially, at any time from ___________, 1996 [one year from the
effective date of the Registration Statement] until 5:30 p.m. New York time
on , 2000 [four years from the effective date of the Underwriting Agreement]
("Expiration Date"), up to 127,500 fully-paid and non-assessable share of
common stock, par value $.001 per share ("Common Stock") and 60,000 redeemable
Common Stock purchase warrant ("Warrants") of TTR, Inc., a New York corporation
(the "Company"), at the initial exercise prices, subject to adjustment in
certain events (the "Exercise Prices"), of $_______ and $.30, respectively,
upon surrender of this Warrant Certificate and payment of the Exercise Price
at an office or agency of the Company, but subject to the conditions set forth
herein and in the Underwriter's warrant agreement dated as of ___________, 1996
between the Company and First Metropolitan Securities, Inc. (the
"Underwriter's Warrant Agreement"). Payment of the Exercise Prices
1
shall be made by certified or official bank check in New York Clearing House
funds payable to the order of the Company.
No Underwriter's Warrant may be exercised after 5:30 p.m., New York
time, on the Expiration Date, at which time all Underwriter's Warrants evidenced
hereby, unless exercised prior thereto, hereby shall thereafter be void.
The Underwriter's Warrants evidenced by this Warrant Certificate are
part of a duly authorized issue of shares of Common Stock and Warrants pursuant
to the Underwriter's Warrant Agreement, which 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
Underwriter's Warrants.
The Underwriter's Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and/or number of the Company's securities
issuable thereupon 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 Exercise Price and the number
and/or type of securities issuable upon the exercise of the Underwriter's
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 Underwriter's 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 Underwriter's Warrants shall be issued to the transferee(s) in exchange for
this Warrant Certificate, subject to the limitations provided herein and in the
Underwriter's Warrant Agreement, 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 Underwriter's Warrants
evidenced by this Certificate, the Company shall forthwith issue to the holder
hereof a new Warrant Certificate representing such numbered unexercised
Underwriter's 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.
2
All terms used in this Warrant Certificate which are defined in the
Underwriter's Warrant Agreement shall have the meanings assigned to them in the
Underwriter's Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of __________________, 1996
TTR, Inc.
[SEAL] By
---------------------------------
Name:
Title: President
Attest:
- --------------------------------
Secretary
3
[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 and _____________ Warrants, underlying the Underwriter's Warrants,
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of TTR, Inc. in the
amount of $_________, all in accordance with the terms hereof. The undersigned
requests that a certificates for such securities be registered in the name of
_______________ whose address is _______________________________ and that such
Certificate be delivered to _________________ whose address is ______________.
Dated:
Signature ___________________
(Signature must conform in
all respects to name of
holder as specified on the
face of the Warrant
Certificate.)
_____________________________
Insert Social Security or
Other Identifying Number of
Holder)