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REPRESENTATIVE'S WARRANT EXHIBIT 1.3
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT MADE UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT
AND SUCH LAWS.
Void after 4:00 P.M. New York Time, on______________2002
REPRESENTATIVE'S WARRANT TO PURCHASE UNITS
[71,875] Units (each unit consisting of two common shares,
no par value ("Common Share") and one redeemable common share purchase
warrant ("Warrant") to purchase one Common Share at an
exercise price of $4.80
of
SURREY, INC.
This is to Certify that, for VALUE RECEIVED,
STUART, COLEMAN & CO., INC.
or registered assigned ("Holder") is entitled to purchase, subject to the
provisions of this Representative's Warrant, from Surrey, Inc., a Texas
corporation ("Company"), at any time on or after 10:00 A.M., ___________1998
and not later than 4:00 P.M. New York Time, on 2002, a date which does not
exceed five (5) years from Effective Date of the Registration Statement on Form
SB-2 File No._____________ (the "Warrant Exercise Term"), [71,875] Units at a
purchase price per Unit of $.0005. The exercise price of a Unit in effect at
any time and as such may be adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price". Prior to the application, if any, of the
anti-dilution provisions contained herein, the Exercise Price relative to one
Unit or to a combination of two (2) shares and one (1) Warrant shall be $9.70
as such amount may be adjusted in accordance herewith. This Representative's
Warrant is one of a series of warrants identical in form issued by the Company
to purchase up to a maximum of [71,875] Units and the term "Representative's
Warrants" as used herein means all such representative's warrants (including
this Representative's Warrant).
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The Representative's Warrants referred to herein shall be
delivered to Stuart, Coleman & Co., Inc. in increments of thousand Units
Representative's Warrant certificates.
(a) Exercise of Representative's Warrant. Subject to the
provisions of Section (k) hereof, this Representative's Warrant may be
exercised in whole or in part at any time or from time to time on or
after___________1998 but not later than 4:00 P.M, on ___________2002, or if
2002 is a day on which banking institutions are authorized by law to close,
then on the next succeeding day which shall not be such a day, by presentation
and surrender hereof to the Company or at the office of its Transfer Agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by
payment of the Exercise Price for the number of Units, or the underlying
securities of the Units, as the case may be, specified in such form. The
Company shall bear the entire cost of all federal and state taxes (other than
any income taxes) as well as all transfer taxes relating to the exercise of the
Representative's Warrants referred to herein. If this Representative's Warrant
should be exercised in part only, the Company shall, upon surrender of this
Representative's Warrant for cancellation, execute and deliver a new
Representative's Warrant evidencing the right of the Holder to purchase the
balance of the Units, or the underlying securities, as the case may be,
purchasable hereunder. Upon receipt by the Company during the Warrant Exercise
Period of this Representative's Warrant at the office or agency of the Company,
in proper form for exercise with the Exercise Price, the Holder shall be deemed
to be the holder of record of the Units, or the underlying securities, as the
case may be, issuable upon such exercise, notwithstanding that the transfer
books of the Company shall then be closed or that certificates representing
such Units, or the underlying securities, as the case may be, shall not then be
actually delivered to the Holder.
(b) Reservation of Units. The Company hereby agrees that
at all times there shall be reserved for issuance and/or delivery upon exercise
of this Representative's Warrant such number of Common Shares [143,750] as
shall be required for issuance or delivery upon exercise of this
Representative's Warrant and an additional [71,875] Common Shares upon the
exercise of the Warrant included in the Units.
(c) Fractional Units. No fractional Units or Common Shares
or scrip representing fractional Units or Common Shares shall be issued
upon the exercise of this Representative's Warrant. With respect to any
fraction of a Unit called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the
current market value of such fractional Unit or Common Shares, determined as
follows:
(1) If the Unit or Common Shares are listed on a
national securities exchange or admitted to unlisted trading
privileges on such exchange or listed for trading in the NASDAQ
quotation system, the current value shall be the last reported sale
price of the Unit or Common Shares on such exchange or system on the
last business day prior to the date of exercise of this
Representative's Warrant
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or if no such sale is made on such day, the average of the closing bid
and asked prices for such day on such exchange or system; or
(2) If the Unit or Common Shares are not listed or
admitted to unlisted trading privileges, the current value shall be
the mean of the last reported bid and asked prices reported by the
National Quotation Bureau, Inc. on the last business day prior to the
date of the exercise of this Representative's Warrant, or
(3) If the Unit or Common Shares are not so listed
or admitted to unlisted trading privileges and bid and asked prices
are not so reported, the current value shall be an amount determined
in such reasonable manner as may be prescribed by the Board of
Directors of the Company, such determination to be final and binding
on the Holder.
(d) Exchange, Assignment or Loss of Representative's
Warrant. This Representative's Warrant is exchangeable, without expense, at
the option of the Holder, upon presentation and surrender hereof to the Company
or at the office of its transfer agent, if any, for other Representative's
Warrants of different denominations entitling the Holder thereof to purchase in
the aggregate the same number of Units, or underlying securities, as the case
may be, purchasable hereunder. The Representative's Warrant may not be sold,
hypothecated, transferred or assigned for one (1) year following the effective
date, except that it may be (i) assigned in whole or in part to or among the
officers of Stuart, Coleman & Co., Inc., (ii) transferred by operation of law
as a result of the death of any transferee, (iii) transferred to any successor
in business of Stuart, Coleman & Co., Inc., and (iv) assigned to any
broker-dealer or officers of any broker-dealer directly involved in the Selling
Group of this public offering for the Company. Any such assignment shall be
made by surrender of this Representative's Warrant to the Company or at the
office of its transfer agent, if any, with the Assignment Form annexed hereto
duly executed. All funds required to pay taxes (other than any income tax or
stock transfer tax) shall be paid by the Company. Thereupon, the Company
shall, without charge, execute and deliver a new Representative's Warrant in
the name of the assignee named in such instrument of assignment and this
Representative's Warrant shall promptly be canceled. This Representative's
Warrant may be divided or combined with other Representative's Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its transfer agent, if any, together with a written notice
specifying the names and denominations in which new Representative's Warrants
are to be issued and signed by the Holder hereof. The term "Representative's
Warrant" as used herein includes any Representative's Warrants issued in
substitution for or replacement of this Representative's Warrant, or into which
this Representative's Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of loss, theft, destruction or
mutilation of this Representative's Warrant, and (in the 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 this Representative's Warrant, if mutilated,
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the Company will execute and deliver a new Representative's Warrant of like
tenor and date in lieu of this Representative's Warrant.
(e) Rights of the Holder. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at
law or equity, and the rights of the Holder are limited to those expressed in
the Representative's Warrant and are not enforceable against the Company except
to the extent set forth herein.
(f) Anti-Dilution Provisions.
(1) Adjustments of Exercise Price. If the Company
should at any time or from time to time within 60 months from the
date hereof, issue or sell any Units or Common Shares or Warrants
included in the Units (other than as may be reflected in or
contemplated by the Registration Statement filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Act"), on Form SB-2 File No.__________(and any future
Registration Statement of Statements which may be filed with respect to
the securities initially issued pursuant thereto) and other than any
outstanding options or future options which may be duly granted to
employees of the Company pursuant to the 1997 Long Term Incentive Plan,
or to directors under the 1997 Non-Employee Directors' Stock Option
Plan and any Common Shares which may be issued pursuant thereto or upon
exercise of the Warrants included in the Units), without consideration
or for a consideration per Unit (or Common Shares pursuant thereto or
upon exercise of the Warrants included in the Units) less than the
lower of the Exercise Price in effect immediately prior to the time of
such issue or sale or the then current fair market value, then
forthwith upon such issue or sale, the Exercise Price shall be adjusted
to a price (computed to the nearest cent) determined by dividing (i)
the sum of the number of Common Shares (including the Common Shares and
the Warrants in all Units) outstanding immediately prior to such issue
or sale multiplied by the Exercise Price in effect immediately prior to
such issue or sale, plus the consideration, if any, received by the
Company upon such issue or sale, by (ii) the total number of Common
Shares (including the Common Shares and the Warrants in all Units)
outstanding immediately after such issue or sale. For purposes of this
subsection (f)(1), the following provisions (A) to (E) shall also be
applicable:
(A) Options. In case at any time hereafter
during the term of this Representative's Warrant the Company
shall in any manner grant any right to subscribe for or
to purchase, or any option for the purchase of (other than
as reflected in or contemplated by the aforementioned
Registration Statements, as amended, and other than the Common
Shares and the Warrants included in the Units which may be
purchased under the Representative's Warrants and other than
any outstanding options or future options which may be duly
granted to employees of the Company pursuant to
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the 1997 Long Term Incentive Plan, or to directors under the
1997 Non-Employee Directors' Stock Option Plan, and any Common
Shares which may be issued pursuant thereto) Common Shares or
any stock or other securities convertible into or exchangeable
for Common Shares (such convertible or exchangeable stock
or securities being hereinafter referred to as "Convertible
Securities") other than the Representative's Warrants, without
consideration or if the minimum price per share for which
Common Shares are issuable, pursuant to such rights or options
or upon conversion or exchange of such Convertible Securities
(determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the granting
of such rights or options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the
exercise of such rights or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the conversion
or exchange thereof, by (ii) the total maximum number of Common
Shares issuable pursuant to such rights or options or upon the
conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such
rights or options) shall be less than the proportional per
share Exercise Price in effect immediately prior to the time of
the granting of such rights or options, then the total maximum
number of Common Shares issuable pursuant to such rights or
options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the
exercise of such rights or options shall (as of the date of
granting of such rights or options) be deemed for purposes of
subsection (f)(1)(ii) to be outstanding and to have been issued
for said price per share as so determined; provided, that no
further adjustment of the Exercise Price shall be made upon the
actual issue of the Common Shares so deemed to have been
issued; and further provided, that, upon the expiration of such
rights (including rights to convert or exchange) or options,
(a) the number of Common Shares deemed to have been issued and
outstanding by reason of the fact that they were issuable
pursuant to such rights or options (including rights to convert
or exchange) which were not exercised, shall no longer be
deemed to be issued and outstanding, and (b) the Exercise Price
shall forthwith be adjusted to the price which would have
prevailed had all adjustments been made on the basis of the
issue only of the Common Shares actually issued upon the
exercise of such rights or options or upon conversion or
exchange of such Convertible Securities.
(B) Convertible Securities. In case the
Company shall at any time hereafter during the term of the
Representative's Warrants in any manner issue or sell any
Convertible Securities, and the minimum price per Common Share
issuable upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount
received or receivable
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by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon
the conversion or exchange thereof, by (ii) the total
maximum number of Common Shares issuable upon the conversion or
exchange of all such Convertible Securities) shall be less than
the proportional per share Exercise Price in effect immediately
prior to the time of such issue or sale, then the total maximum
number of Common Shares issuable upon conversion or exchange of
such Convertible Securities shall (as of the date of the issue
or sale of such Convertible Securities) be deemed for purposes
of subsection (f)(1)(ii) to be outstanding and to have been
issued for said price per share as so determined; provided,
that no further adjustment of the Exercise Price shall be made
upon the actual issue of Common Shares deemed to have been
issued; and, further provided, that if any such issue or sale
of such Convertible Securities is made upon exercise of any
right to subscribe for or to purchase or any option to purchase
any such Convertible Securities for which an adjustment of the
Exercise Price has been or is to be made pursuant to other
provisions of this subsection (f)(1) no further adjustment of
the Exercise Price shall be made by reason of such issue or
sale; and, further provided, that, upon the termination of the
right to convert or to exchange such Convertible Securities for
Common Shares, (a) the number of Common Shares deemed to have
been issued and outstanding by reason of the fact that they
were issuable upon conversion or exchange of any such
Convertible Securities which were not so converted or
exchanged, shall no longer be deemed to be issued and
outstanding, and (b) the Exercise Price shall forthwith be
adjusted to the price which would have prevailed had all
adjustments been made on the basis of the issue only of the
number of Common Shares actually issued upon conversion or
exchange of such Convertible Securities.
(C) Determination of Issue Price. In case
any Common Shares or Convertible Securities or any rights
or options to purchase any such stock or securities shall be
issued for cash, the consideration received therefor, after
deducting therefrom any commission or other expenses paid or
incurred by the Company for any underwriting of, or otherwise
in connection with, the issuance thereof, shall be deemed to be
the amount received by the Company therefor. In case any
Common Shares or Convertible Securities or any rights or
options to purchase any such stock or securities shall be
issued for a consideration part or all of which shall be other
than cash, then, for the purpose of this subsection (f)(1), the
Board of Directors of the Company shall make a good faith
determination of the fair market value of such consideration,
irrespective of accounting treatment, and such Common Shares,
Convertible Securities, rights or options shall be deemed to
have been issued for an amount of cash equal to the value so
determined by the
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Board of Directors. The reclassification of securities other
than Common Shares into securities including Common Shares
shall be deemed to involve the issuance for a consideration
other than cash of such Common Shares immediately prior to the
close of business on the date fixed for the determination of
security holders entitled to receive such Common Shares. In
case any Common Shares or Convertible Securities or any rights
or options to purchase any such stock or other securities shall
be issued together with other stock or securities or other
assets of the Company for a consideration which includes both,
the Board of Directors of the Company shall determine what part
of the consideration so received is to be deemed to be
consideration for the issue of such Common Shares, Convertible
Securities, rights or options.
(D) Determination of Date of Issue. In
case the Company shall take a record of the holders of
any Common Shares for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common
Shares or in Convertible Securities, or (ii) to subscribe for
or purchase Common Shares or Convertible Securities, then such
record date shall be deemed to be the date of the issue or sale
of the Common Share deemed to have been issued or sold upon the
declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(E) Treasury Shares. For the purpose of
this subsection (f)(1), Common Shares, including the Common
Shares and the Warrants in all Units, at any relevant time
owned or held by, or for the account of, the Company shall not
be deemed outstanding.
(2) No Adjustment for Small Amounts. Anything in
this Section (f) to the contrary notwithstanding, the Company shall not
be required to give effect to any adjustment in the Exercise Price
unless and until the net effect of one or more adjustments, determined
as above provided, shall have required a change of the Exercise Price
by at least five cents, but when the cumulative net effect of more
than one adjustment so determined shall be to change the actual
Exercise Price by at least five cents, such change in the Exercise
Price shall thereupon be given effect.
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(3) Number of Units Adjusted. Upon any adjustment
of the Exercise Price other than pursuant to subsection (f)(1), the
Holder of this Representative's Warrant shall thereafter (until another
such adjustment) be entitled to purchase, at the new Exercise Price, the
number of Units, calculated to the nearest full Unit, obtained by
multiplying the number Units initially issuable upon exercise of this
Representative's Warrant, by the Exercise Price in effect on the date
hereof and dividing the product so obtained by the new Exercise Price.
(4) Common Shares Defined. Whenever reference is
made in this Section (f) to the issue or sale of Common Shares,
the term "Common Shares" shall mean the Common Shares of the Company of
the class authorized as of the date hereof and any other class of stock
ranking on a parity with such Common Shares. However, subject to
the provisions of Section (i) hereof, shares issuable upon exercise
hereof shall include only shares of the class designated as Common
Shares of the Company as of the date hereof.
(g) Officer's Certificate. Whenever the Exercise Price
shall be adjusted as required by the provisions of Section (f) hereof or the
number of Units underlying the Representative's Warrants increased pursuant to
the provisions of subsection (f)(3), the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office, and
with its Transfer Agent, if any, an officer's certificate showing both the
adjusted number of Units and the adjusted Exercise Price determined as herein
provided and setting forth in reasonable detail the facts requiring such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder and the Company shall, forthwith
after each such adjustment, deliver a copy of such certificate to the Holder.
Such certificate shall be conclusive as to the correctness of such adjustment.
(h) Notices to Representative's Warrant Holders. So long
as this Representative's Warrant or any of the series of Representative's
Warrants shall be outstanding and unexercised (i) if the Company shall pay any
dividend or make any distribution upon the Common Shares or (ii) if the Company
shall offer to the holders of Common Shares for subscription or purchase by
them any shares of stock of any class or any other rights or (iii) if any
capital reorganization of the Company, reclassification of the capital stock of
the Company, consolidation or merger of the Company with or into another
corporation, sale, lease or transfer of all or substantially all of the
property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then, in any such case, the Company shall cause to be delivered to
the Holder, at least ten days prior to the date notice is given to the
shareholders, a notice containing a brief description of the proposed action
and stating the date on which (i) a record is to be taken for the purpose of
such dividend, distribution or rights, or (ii) such reclassification,
reorganization, consolidation, merger, conveyance, lease, dissolution,
liquidation or winding up is to take place and the date, if any, is to be
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fixed, as of which the holders of Common Shares of record shall be entitled to
exchange their Common Shares for securities or other property deliverable upon
such reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(i) Reclassification, Reorganization or Merger. In case
of any reclassification, capital reorganization or other change of outstanding
Common Shares of the Company (other than a change in par value, or as a result
of an issuance of Common Shares by way of dividend or other distribution or 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, capital reorganization or other change of
outstanding Common Shares of the class issuable upon exercise of this
Representative's Warrant) 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, the Company shall cause effective provision to be made so that the
Holder shall have the right thereafter, by exercising this Representative's
Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance which
such Holder would have owned or have been entitled to receive immediately after
such reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance had this Representative's Warrant been converted
immediately prior to the effective date of such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Representative's Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event that in any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional Common
Shares shall be issued in exchange, conversion, substitution or payment, in
whole or in part, for or of a security of the Company other than Common Shares,
any such issue shall be treated as an issue of Common Shares covered by the
provisions of subsection (f)(1) hereof with the amount of the consideration
received upon the issue thereof being determined by the Board of Directors of
the Company, such determination to be final and binding on the Holder.
(j) Spin-Offs. In the event the Company spins-off a
subsidiary by distributing to the shareholders of the Company as a dividend or
otherwise the stock of the subsidiary, the Company shall reserve for the life
of the Representative's Warrant shares of the subsidiary to be delivered to the
Holders of the Representative's Warrants upon exercise of such Representative's
Warrant upon exercise of such Representative's Warrant to the same extent as if
such Holders were shareholders of record of the company on the record date for
payment of the shares of the subsidiary.
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(k) Registration under the Securities Act of 1933.
(1) In the event the Company files a registration
statement (defined herein to include a Notification under Regulation A
under the Act and the Offering Circular included therein), which
relates to a current offering of securities of the Company (except in
connection with an offering to employees or by a Form S-4 or any
successor forms thereto or such other form as would not allow the
registration of such securities), the Company will use its best efforts
to include in such registration statement and prospectus included
therein, at the written request to the Company by the Holders of
Representative's Warrants or Representative's Warrant Units, or the
underlying securities, as the case may be, as hereinafter defined,
acquired upon exercise of the Representative's Warrants and/or which
may be acquired upon exercise of the Representative's Warrants
(collectively referred to as the "Representative's Warrant Units"), the
securities underlying the Representative's Warrants so as to permit the
public sale thereof in compliance with the Act; provided, however, that
the Company is not required to include such securities in any
underwritten portion of such offering; and further provided, if a
greater number of securities is offered for participation in the
proposed offering than in the reasonable opinion of the managing
underwriter of the proposed offering can be accommodated without
adversely affecting the proposed offering, then the amount of the
securities underlying the Representative's Warrant proposed to be
offered by such Holders for registration, as well as the number of
securities of any other selling holders participating in the
registration, shall be proportionately reduced to a number deemed
satisfactory by the managing underwriter. The Company shall give
written notice by Certified mail to the Holders of its intention to
file a registration statement under the Act relating to a current
offering of the aforesaid securities of the Company, 30 or more days
prior to the filing of such registration statement, and the written
request provided for in the first sentence of this subsection (which
request shall specify the number and interest in the Representative's
Warrant Units intended to be sold or disposed of by such Holder and
describe the nature of any proposed sale or other disposition thereof)
shall be made by the owners 20 or more days prior to the date specified
in the notice as the date on which it is intended to file such
registration statement. Neither the delivery of such notice by the
Company nor of such request by the Holders shall in any way obligate
the Company to file such registration statement and notwithstanding the
filing of such registration statement, the Company may, at any time
prior to the effective date thereof, determine not to offer the
securities to which such registration statement relates, without
liability to the Holders. The foregoing provisions of this
subparagraph (1) shall apply only with respect to registration
statement(s) filed in the period commencing on____________ 1998 and
ending four years thereafter.
(2) In addition, on one occasion, at the sole
expense of the Company, upon the written notice at any time after
____________1998, and on or
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before four years thereafter from the Representative that it
contemplates the transfer of all or any of its Representative's
Warrants and/or the Representative's Warrant Units under such
circumstances that a public offering, within the meaning of the Act, of
the Representative's Warrants and/or the Representative's Warrant Units
will be involved, the Company, as promptly as possible after receipt of
such notice, shall file a new registration statement or, if available,
a Notification under Regulation A under the Act, with respect to the
offering and sale or other disposition of the Representative's Warrants
and/or the Representative's Warrant Units with respect to which it
shall have received such notice. Within ten (10) days after receiving
any such notice, the Company shall give notice to the other Holders of
the Representative's Warrants advising that the Company is proceeding
with such registration statement or Notification and offering to
include therein Representative's Warrants and/or the Representative's
Warrant Units of such Holders. The Company shall not be obligated to
any such other Holder unless such other Holder shall accept such offer
by notice in writing to the Company within ten days thereafter. The
Company shall pay the costs and expenses thereof, for one time only,
which costs and expenses shall include "Blue Sky" filing fees to
qualify the Representative's Warrants and/or the Representative's
Warrant Units in those jurisdictions reasonably requested by the
Representative.
(3) In each instance in which pursuant to
subsections (1) and (2) of this Section, the Company shall take
any action to permit a public offering or sale or other distribution
of the Representative's Warrants and/or the Representative's Warrant
Units, the Company shall:
(A) Supply to Stuart, Coleman & Co., Inc.
as Representative of the Holders intending to make a
public distribution of the securities thereof (the Holder by
its receipt of this Representative's Warrant hereby
acknowledging its appointment of Stuart, Coleman & Co., Inc. as
the representative for purposes of this Representative's
Warrant), two executed copies of each registration statement or
Notification and a reasonable number of copies of the
preliminary, final and other prospectus or offering circular in
conformity with requirements of the Act and the Rules and
Regulations promulgated thereunder and such other documents as
Stuart, Coleman & Co., Inc. shall reasonably request.
(B) Cooperate in taking such action as may
be necessary to register or qualify said securities under such
other securities acts or blue sky laws of such jurisdictions as
the Representative shall reasonably request and to do any and
all other acts and things which may be necessary or advisable
to enable the Holders thereof to consummate such proposed sale
or other disposition of the such securities in any such
jurisdiction; provided, however, that in no event shall the
Company be obligated, in connection therewith, to
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qualify to do business or to file a general consent to service
of process in any jurisdiction where it shall not then be
qualified.
(C) Keep effective for a period of not less
than ninety (90) days after the initial effectiveness thereof
all such registrations or Notifications under the Act and
cooperate in taking such action as may be necessary to keep
effective such other registrations and qualifications, and do
any and all other acts and things for such period - not to
exceed ninety (90) days - as may be necessary to permit the
public sale or other disposition of such securities by such
Holders.
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(D) Indemnify and hold harmless each such
Holder and the Representative, within the meaning of the Act,
who may purchase from or sell for any such Holder, such
securities, from and against any and all losses, claims,
damages and liabilities (including, but not limited to, any and
all expenses whatsoever reasonably incurred in
investigating, preparing, defending or settling any claim)
arising from (i) any untrue statement of a material fact
contained in any registration statement or Notification
furnished pursuant to Clause (A) of this subsection, or any
prospectus or offering circular included therein or (ii) any
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading (unless such untrue statement or omission was based
upon information furnished or required to be furnished in
writing to the Company by such Holder or Representative or
several Underwriters expressly for use therein), which
indemnification shall include each person, if any, who controls
any such Holder or Representative or several Underwriters
within the meaning of the Act; provided, however, that the
Company shall not be so obligated to indemnify any such Holder
or Representative or several Underwriters or controlling person
unless such Holder and Representative or several Underwriters
shall at the same time indemnify the Company, its directors,
each officer signing any registration statement or Notification
or any amendment to any registration statement or Notification
and each person, if any, who controls the Company within the
meaning of the Act, from and against any and all losses,
claims, damages and liabilities (including, but not limited to,
any and all expenses whatsoever reasonably incurred in
investigating, preparing, defending or settling any claim)
arising from (iii) any untrue statement of a material fact or
any amendment to any registration statement or Notification or
prospectus or offering circular furnished pursuant to Clause
(A) of this subsection, or (iv) any omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, but the indemnity
of such Holder, Representative or several Underwriters or
controlling person shall be limited to liability based upon
information furnished, or required to be furnished, in writing
to the Company by such Holder or Representative or several
Underwriters or controlling person expressly for use therein.
The indemnity agreement of the Company herein shall not inure
to the benefit of any such Representative or Holder or several
Underwriters (or to the benefit of any person who controls such
Representative or Holder or several Underwriters) on account of
any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arising from the sale of any of
such securities by such Representative or Holder or several
Underwriters to any person if such Representative or Holder or
several Underwriters failed to send or give a copy of the
prospectus or offering circular furnished pursuant to Clause
(A)
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of this subsection, as the same may then be supplemented or
amended if such supplement or amendment shall have been
furnished to Stuart, Coleman & Co., Inc. pursuant to said
Clause (A)), to such person with or prior to the written
confirmation of the sale involved.
The Company's obligation under this subsection (k)
shall be conditioned as to such public offering, upon a timely receipt
by the Company in writing of:
(A) Information as to the terms of such
public offering furnished by or on behalf of each Holder
intending to make a public distribution of his, her or its
Representative's Warrants or Representative's Warrant Units;
and
(B) Such other information as the Company
may reasonably require from such Holders, or the Representative
or the several Underwriters, for inclusion in such registration
statement or Notification or post effective amendment.
The Company's agreements with respect to the
Representative's Warrants or Representative's Warrant Units in
this Section will continue in effect regardless of the exercise
or surrender of this Representative's Warrant.
(4) Any notices or certificates by the Company to
the Holder and by the Holder to the Company shall be deemed
delivered if in writing and delivered personally or sent by certified
mail: (i) if to the Holder, addressed to him or her in care of Stuart,
Coleman & Co., Inc. or, if the Holder has designated, by notice in
writing to the Company, any other address, to such other address; and,
(ii) if to the Company, addressed to it, Mr. John van der Hagen,
President, Surrey, Inc., 13110 Trails End Road, Leander, Texas 78641.
The Company may change its address by written notice to the
Representative. Notwithstanding the foregoing, the Company shall not be
required to include in any registration statement any securities which
may then be sold, without limitation, by the Holder without
registration pursuant to Rule 144 under the Act or any successor rules
or regulations.
(l) Transfer to Comply with the Securities Act of 1933.
(1) This Representative's Warrant or
Representative's Warrant Units or any other security issued or issuable
upon exercise of this Representative's Warrant may not be offered or
sold or otherwise transferred except in conformity with the Act and
applicable state securities laws (in the opinion of counsel
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satisfactory to the Company), and then only against receipt by the
Company of an agreement of such person to whom such offer of sale or
transfer is made to comply with the provisions of this Section (l) with
respect to any resale or other disposition of such securities.
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(2) The Company may cause the following legend to
be set forth on each Representative's Warrant and certificate
representing Representative's Warrant Units or any other security
issued or issuable upon exercise of this Representative's Warrant not
theretofore distributed to the public or sold to underwriters for
distribution to the public pursuant to Section (k) hereof, unless
counsel for the Company is of the opinion as to any such certificate
that such legend is unnecessary:
The securities represented by this certificate and
certificates may not be offered for sale, sold or otherwise
transferred except pursuant to an effective Registration
Statement made under the Securities Act of 1933 (the "Act")
and applicable state securities laws, or pursuant to an
exemption from registration under the Act, if available, and
such laws.
(m) Applicable Law. This Representative's Warrant shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SURREY, INC.
By:___________________________________
John van der Hagen, President
Date:
Attest
___________________________
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PURCHASE FORM
Dated ______________________, 19__
The undersigned hereby irrevocably elects to exercise the within
Representative's Warrant to the extent of purchasing ________ Units and hereby
makes payment of $____________________ in payment of the actual exercise price
thereof.
_____________
INSTRUCTIONS FOR REGISTRATION OF UNITS
Name _____________________________
Address __________________________
Signature ________________________
_____________
ASSIGNMENT FORM
FOR VALUE RECEIVED, _________________
hereby sells, assigns and transfers unto
Name ____________________________
Address _________________________
the right to purchase Units represented by this Representative's Warrant to the
extent of ______________ Units as to which such right is exercisable and does
hereby irrevocably constitute and appoint ___________________________________,
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Signature _____________________________
Dated _________________________, 19__.
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