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EXHIBIT 4.8
WARRANT CERTIFICATE
THE WARRANT REPRESENTED BY THIS CERTIFICATE (THE "WARRANT") HAS BEEN (I)
ACQUIRED FOR INVESTMENT AND (II) ISSUED AND SOLD IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
APPLICABLE STATE SECURITIES LAWS. THE WARRANT, AND THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF, CANNOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED, OTHER THAN
PURSUANT TO (I) AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION THAT
IS OTHERWISE IN COMPLIANCE WITH THE ACT AND (II) EVIDENCE REASONABLY
SATISFACTORY TO THE ISSUER OF COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL
SECURITIES LAWS. THE ISSUER SHALL BE ENTITLED TO RELY UPON AN OPINION OF COUNSEL
SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH SUCH LAWS.
NO. 2 JUNE 16, 1999
VOID AFTER 5:00 P.M. EASTERN STANDARD TIME
ON JUNE 30, 2009
(THE "EXPIRATION DATE")
PROACTIVE TECHNOLOGIES, INC.
WARRANT CERTIFICATE
THIS CERTIFIES THAT, for value received, GALLAND, KHARASCH, GREENBERG,
FELLMAN AND SWIRSKY, P.C., is the owner of a Warrant that, subject to the terms
of this Warrant Certificate, entitles the Holder to purchase up to Four Hundred
Thousand (400,000) fully paid and non-assessable shares (the "Shares") of the
common stock, $0.04 par value per share (the "Common Stock"), of Proactive
Technologies, Inc., a Delaware corporation (the "Company"), as described in
paragraph 6 below, at the purchase price of seventy-five cents ($0.75) per share
(the "Exercise Price") upon presentation and surrender of this Warrant
Certificate with the Form of Election to Purchase attached hereto, duly
executed, at any time prior to the Expiration Date.
1. REGISTRATION. The Warrant has been numbered and registered in
a warrant register (the "Warrant Register"). The Company shall treat the Holder
of the Warrant as set forth in the Warrant Register as the owner in fact thereof
for all purposes. The Company is not liable for any registration or transfer of
any Warrant that is registered or any Warrant that will become registered in the
name of a fiduciary or its nominee unless the Company has actual knowledge that
a fiduciary or its nominee is committing a breach of trust by requesting such
registration or transfer or has actual knowledge of such facts that its
participation therein amounts to bad faith.
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2. RIGHT TO PIGGYBACK. If the Company shall determine to register
any of its securities either for its own account or the account of a security
holder or holders exercising their respective demand registration rights, other
than a registration relating solely to employee benefit plans, or a registration
relating solely to a Rule 145 transaction, or a registration on any registration
form that does not permit secondary sales, the Company will:
(a) promptly give to the Holder written notice thereof, including
notice deadlines; and
(b) use its best efforts to include in such registration (and any
related filing or qualification under applicable blue sky
laws), except as set forth in Section 3 below, and in any
underwriting involved therein, all the securities granted
under this Warrant Certificate ("Unregistered Securities")
specified in a written request or requests, made by the Holder
and received by the Company within seven (7) days after the
written notice from the Company described in clause (a) above
is mailed or delivered by the Company. Such written request
may specify all or a part of the Holder's Unregistered
Securities granted but no less than 25% of the Holder's
Unregistered Securities.
3. UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holder as a part of the written notice given
pursuant to Section 2(a). In such event, the right of the Holder to registration
pursuant to this Section 3 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Unregistered Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 3, if the
representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all
Unregistered Securities from, or limit the number of Unregistered Securities to
be included in, the registration and underwriting. The Company shall so advise
the Holder of securities if requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated first to the Company for securities being sold for its own
account and thereafter in proportionate fractions to the number of shares
presented by all holders. If any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from the Company
or the underwriter. Any Unregistered Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
If shares are so withdrawn from the registration and if the number of
shares of securities to be included in such registration was previously reduced
as a result of marketing factors, the Company shall then offer to all persons
who have retained the right to include securities in the registration the right
to include additional securities in the registration in an aggregate amount
equal to the number of shares so withdrawn, with such shares to be allocated
among the persons
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requesting additional inclusion in proportionate fractions to the number of
shares presented by all holders.
4. EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
Section 3 hereof shall be borne by the Company. All Selling Expenses relating to
securities so registered shall be borne by the Holder and other holders of such
securities pro rata on the basis of the number of shares of securities so
registered on their behalf.
5. TRANSFER OF WARRANT. The Warrant is transferable on the books
of the Company only upon delivery of the Warrant to the Company, duly endorsed
by the Holder or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or an official certified copy thereof, shall be
deposited with the Company. Should an executor, administrator, guardian or other
legal representative of a Holder effect such a transfer, then duly authenticated
evidence of its authority must be produced and may be required to be deposited
with the Company in its discretion. Upon any registration of transfer, the
Company agrees to deliver a new Warrant or Warrants to the persons entitled
thereto. Notwithstanding the foregoing, the Company has no obligation to
transfer the name of the Holder on its books to any person, unless the Holder
furnishes the Company evidence of compliance with the Act, in accordance with
the provisions of Section 9 hereof.
6. PERIOD OF EXERCISE. The Exercise Price and the number of
Shares issuable upon exercise of the Warrant are subject to adjustment upon the
occurrence of certain events, pursuant to the provisions of Section 11 hereof.
No rights to purchase Shares hereunder shall arise until the Board of Directors
of the Company approves the grant of this Warrant and, after such approval, this
Warrant shall be exercisable for the Shares up to the Expiration Date. This
Warrant shall expire and no longer be exercisable on and after 5:00 p.m., June
30, 2009.
7. EXERCISE OF WARRANT. The rights represented by this Warrant
may be exercised by the Holder in whole or in part (but not as to a fractional
Share), by surrendering the Warrant to the Company or its duly authorized agent,
with the Form of Election to Purchase, a copy of which is attached hereto, duly
completed and signed, and upon paying to the Company the Exercise Price, as may
be adjusted in accordance with the provisions of Section 11 hereof, for the
number of Shares for which this Warrant is exercised. Payment of such Exercise
Price may be made (a) in cash; or (b) by certified check, bank draft or drawn
postal, express money order payable to the order of the Company. Upon the
surrender of this Warrant, payment of the Exercise Price as described above and
payment of all tax obligations as described in Section 8 below, the Company
agrees to cause to be issued and delivered with all reasonable dispatch to or
upon the written order of the registered Holder and (subject to receipt of
evidence of compliance with the Act in accordance with the provisions of Section
12 hereof) in such name or names as such registered Holder may designate, a
certificate or certificates for the number of full Shares so purchased upon the
exercise of such Warrant, together with cash, as provided in Section 13 hereof,
in respect of any fractional Share otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Shares as of the date of surrender of this Warrant, payment of
the Exercise Price as described above and payment of all tax obligations as
described in Section 8 hereof; provided, however, that if, at the date of
surrender of this Warrant and payment of the Exercise Price and taxes the
transfer books for the
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Common Stock or other class of stock purchasable upon the exercise of this
Warrant shall be closed, the certificates for the Shares for which this Warrant
is exercised shall be issuable as of the date on which such books shall next be
opened (whether before, on or after the Expiration Date) and until such date the
Company shall be under no duty to deliver any certificates for such Shares; and
provided further, however, that the transfer books shall not be closed at any
one time for a period longer than twenty (20) consecutive calendar days unless
otherwise required by law.
8. PAYMENT OF TAXES. The Holder agrees to pay all documentary
stamp taxes (whether federal, state or local) attributable to the exercise of
this Warrant and the issuance of Shares upon such exercise by delivery of cash
or a certified check payable to the Company in the amount of all such taxes. In
addition, as a condition to the exercise of the Warrant, the Company may require
the Holder to pay or reimburse the Company for any taxes which the Company
determines are required to be withheld in connection with the grant or any
exercise of this Warrant. Such payment or reimbursement shall be in the manner
set forth in this Section 8.
9. MUTILATED OR MISSING WARRANTS. Should this Warrant be
mutilated, lost, stolen or destroyed, the Company may, in its discretion, issue
and deliver in exchange and substitution for, and upon cancellation of, the
mutilated Warrant, or in lieu of and substitution for the lost, stolen or
destroyed Warrant, a new Warrant of like tenor representing an equivalent right
or interest. The Company shall issue and deliver such new Warrant only upon
receipt of evidence reasonably satisfactory to the Company, if requested, of
such loss, theft or destruction of such Warrant and a reasonable indemnity.
Applicants for such substitute Warrants also shall comply with such other
reasonable regulations and pay such other reasonable charges as the Company may
prescribe.
10. RESERVATION OF COMMON STOCK, ETC. The Company has reserved out
of the authorized and unissued shares of the Common Stock a number of shares
sufficient to provide for the exercise of the rights of purchase represented by
this Warrant. The transfer agent for the Common Stock (the "Transfer Agent") and
every subsequent Transfer Agent for any shares of the Common Stock issuable upon
the exercise of any of the rights of purchase aforesaid are hereby irrevocably
authorized and directed at all times until the Expiration Date to reserve such
number of authorized and unissued shares of the Common Stock as shall be
required for such purpose. The Company will supply such Transfer Agent with duly
executed stock certificates for such purposes. Any Warrant surrendered in the
exercise of the rights hereby evidenced shall be cancelled, and such cancelled
Warrant shall constitute sufficient evidence of the number of Shares that have
been issued upon the exercise of such Warrant. No shares of Common Stock shall
be subject to reservation concerning any Warrant not exercised on or prior to
the Expiration Date.
11. ADJUSTMENTS OF WARRANT PRICE AND NUMBER AND KIND OF SHARES.
The Exercise Price and the number and kind of securities purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of the following events subsequent to the date hereof.
(a) In case the Company shall (i) pay a dividend in shares of its
capital stock or make a distribution in shares of its capital
stock (whether of the Common Stock or of any other class of
capital stock), (ii) subdivide its outstanding Common Stock
into a greater number of shares or (iii) combine its
outstanding Common Stock into a smaller number of shares, then
the number of Shares (calculated immediately
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prior to such change) shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease
in the total number of shares of Common Stock of the Company
by reason of such change, and the Exercise Price of the Shares
after such change shall, in the case of an increase in the
number of shares of Common Stock, be proportionately reduced,
and, in case of a decrease in the total number of shares of
Common Stock, be proportionately increased. An adjustment made
pursuant to this Paragraph (a) of this Section 11 shall become
effective immediately after the record date for determining
stockholders entitled to receive such dividend or distribution
in the case of a dividend or distribution in shares of the
Company's capital stock and shall become effective immediately
after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an
adjustment made pursuant to this Paragraph (a) of this Section
11, the Holder shall become entitled to receive shares of two
or more classes of capital stock of the Company, the Board of
Directors of the Company (whose determination shall be
conclusive) shall in good faith determine the allocation of
the adjusted exercise price between or among shares of such
classes of capital stock.
(b) No adjustment in the Exercise Price shall be required unless
and until such adjustments would require an increase or
decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments that by reason of this
Paragraph (b) of this Section 11 are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest whole
Share, as the case may be.
(c) If at any time as a result of any adjustment made pursuant to
Paragraph (a) of this Section 11, the Holder of this Warrant
shall become entitled to receive any shares of the Company's
capital stock other than Common Stock, then the number of such
other shares receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
concerning the Common Stock contained in Paragraphs (a)
through (c), inclusive, of this Section 11.
(d) Irrespective of any adjustments in the Exercise Price or the
number or kind of Shares or shares of other capital stock of
the Company or of others purchasable upon exercise of this
Warrant, any warrants theretofore or thereafter issued may
continue to express the same price and number and kind of
Shares or shares of other capital stock of the Company as are
stated in such warrants when initially issued.
12. REGISTRATION UNDER THE SECURITIES ACT OF 1933. Neither this
Warrant nor the Shares have been registered under the Act in reliance on
exemption from such registration requirements provided by Section 4(2) of the
Act and Regulation D promulgated thereunder, and under exemptions provided by
applicable state securities laws. The Holder, by its acceptance hereof,
covenants and agrees that it will not transfer or dispose of this Warrant or any
of the Shares except pursuant to (a) an effective registration statement filed
under the Act or (b) an opinion of counsel, reasonably satisfactory to counsel
for the Company, that an exemption from
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the registration requirements under the Act and applicable state securities laws
is available and otherwise in accordance with the conditions set forth in
Section 5 hereof.
13. FRACTIONAL INTERESTS. No fractional shares of the Common Stock
will be issued upon the exercise of this Warrant or any future Warrants issued
in replacement hereof, but in lieu thereof a cash payment will be made to the
Holder.
14. RIGHTS OF WARRANT HOLDERS. No Holder of this Warrant
Certificate shall be entitled to vote or receive dividends or be deemed the
Holder of Common Stock or any other securities of the Company that may at any
time be issuable upon the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the Holder hereof, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issue of stock, reclassification of stock, change of par
value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise, until
this Warrant shall have been exercised and the Common Stock purchasable upon the
exercise hereof shall have become deliverable to such Holder.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
under seal and delivered as of the date and year first written above.
PROACTIVE TECHNOLOGIES, INC.
BY: /s/ C.B. Lance
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PRESIDENT
[CORPORATE SEAL]
Attest: /s/ Judy Gordon
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Secretary
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FORM OF ELECTION TO PURCHASE
TO: Proactive Technologies, Inc.
3343 Peachtree Road, N.E.
Suite 530
Atlanta, Georgia 30326
Pursuant to the Warrant Certificate (herein called the "Certificate"),
dated as of June 16, 1999, granted by Proactive Technologies, Inc. (the
"Company") to Galland, Kharasch, Greenberg, Fellman and Swirsky, P.C.("GKGFS").
GKGFS hereby gives notice that it elects to exercise the warrant granted under
the Certificate with respect to ______ shares of the common stock of the Company
as of the date on which this notice is delivered to the Company, and accordingly
hereby agrees to purchase such shares at the price and on the terms established
under the Certificate. Full payment for such shares is enclosed. Such payment
consists of:
__________ Cash
__________ Check
GKGFS hereby represents and warrants that it is purchasing such shares
for investment purposes only and not with a view to distribution or resale.
GKGFS hereby agrees that the warrant granted under the Certificate
shall be deemed to have been exercised to the extent specified in this notice on
the exercise date below the authorizing signature, and GKGFS hereby warrants
that on such date this notice was delivered to the Company.
Sincerely,
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Title:
DATED:
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