Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Registration Statement 93 448K
2: EX-1 Form of Underwriting Agreement 61 179K
3: EX-1.1 Form of Escrow Agreement 13 23K
4: EX-1.2 Underwriter's Warrant Agreement 39 99K
5: EX-5 Opinion of Doros & Brescia, P.C. 1 8K
7: EX-10.11 Share Exchange Agreement 17 34K
6: EX-10.7 Stock Option Plan 20 59K
8: EX-22.1 Consent of Eichler, Bergsman & Co., LLP 1 6K
9: EX-22.2 Consent of Lilling & Company 1 6K
10: EX-22.3 Consent of Hagan & Burns CPAs, Pc 1 6K
UNDERWRITER'S WARRANT AGREEMENT dated as of __________, 1998
between UNITED STATES FINANCIAL GROUP, INCORPORATED, a Delaware corporation
(the "COMPANY") and KLEIN MAUS AND SHIRE, INC., its successors, designees and
assigns (hereinafter referred to as the "UNDERWRITER").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Klein Maus and
Shire, Inc. warrants (the "UNDERWRITER'S WARRANTS") entitling the holder to
purchase up to an aggregate of 300,000 shares of the Company's common stock,
$.0001 par value per share (the "COMMON STOCK"), at a purchase price of $.0001
per Underwriter's Warrant (the Underwriter's Warrants and the underlying Common
Stock being collectively referred to as the "WARRANT SECURITIES"); and
WHEREAS, the Underwriter has agreed pursuant to the
underwriting agreement (the "UNDERWRITING AGREEMENT") dated as of the date
hereof among the Underwriter and the Company to act as to act as the exclusive
agent for the Company, on a best efforts basis, in connection with the
Company's proposed public offering of up to 500,000 shares of Common Stock at a
public offering price of $15.00 per share of Common Stock (the "PUBLIC
OFFERING"); and
WHEREAS, the Underwriter's Warrants to be issued pursuant to
this Agreement will be issued on the Closing Date and Option Closing Date (s)
(as such term's are defined in the Underwriting Agreement) by the Company to
the Underwriter in consideration for, and as part of
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the Underwriter's compensation in connection with, and pursuant to the
Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment
by the Underwriter to the Company of an aggregate thirty dollars ($30.00), 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 Underwriter is hereby granted the right to
purchase, at any time from ____________, 1999 until 5:00 P.M., New York time,
on _______________, 2003, up to an aggregate of 300,000 shares of Common Stock
(the "SHARES") at an initial exercise price (subject to adjustment as provided
in Section 8 hereof) of $24.00 per share of Common Stock subject to the terms
and conditions of this Agreement. Except as set forth herein, the Shares
issuable upon exercise of the Underwriter's Warrants are in all respects
identical to the shares of Common Stock being sold by the Underwriter 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.
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3.1 Method of Exercise. The Underwriter's Warrants initially
are exercisable at an aggregate initial exercise price (subject to adjustment
as provided in Section 8 hereof) per share of Common Stock 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 of
a Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Warrant Securities purchased at the Company's principal offices
(presently located at 110 Wall Street, New York, New York 10005) 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 so
purchased. The purchase rights represented by each Warrant Certificate are
exercisable at the option of the Holders thereof, in whole or part (but not as
to fractional shares of the Common Stock). In the case of the purchase of less
than all of the Common Stock purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Warrant Securities purchasable thereunder.
3.2 Exercise by Surrender of Warrant. In addition to the
method of payment set forth in Section 3.1 and in lieu of any cash payment
required thereunder, the Holder(s) of the Underwriter's Warrants shall have the
right at any time and from time to time to exercise the Underwriter's Warrants
in full or in part by surrendering the Warrant Certificate in the manner
specified in Section 3.1. The number of shares of Common Stock to be issued
pursuant to this Section 3.2 shall be equal to the difference between (a) the
number of shares of Common Stock in respect of which the Underwriter's Warrants
are exercised and (b) a fraction, the numerator of which shall be the number of
shares of Common Stock in respect of which the Underwriter's Warrants are
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exercised multiplied by the Exercise Price (as hereinafter defined) and the
denominator of which shall be the Market Price.
3.3 Definition of Market Price. As used herein, the phrase
"Market Price" at any date shall be deemed to be (i) when referring to the
Common Stock, the last reported sale price, or, in case no such reported sale
takes place on such day, the average of the last reported sale prices for the
last three (3) trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted
to trading or by the Nasdaq National Market ("NNM"), or, if the Common Stock is
not listed or admitted to trading on any national securities exchange or quoted
by NNM, the average closing bid price as furnished by the National Association
of Securities Dealers, Inc. ("NASD") through Nasdaq or similar organization
including the NASD Electronic Bulletin Board if Nasdaq is no longer reporting
such information, or if the Common Stock is not quoted on Nasdaq, or such
similar organization as determined in good faith by resolution of the Board of
Directors of the Company, based on the best information available to it.
Notwithstanding the foregoing, for purposes of Section 8, the Market Price of a
share of Common Stock shall be determined by reference to the relevant
information set forth above during the thirty (30) trading days immediately
preceding the date of the event requiring the determination of the Market Price
(except that, in the event of a public offering of shares of Common Stock, the
Market Price of a share of Common Stock shall be determined by reference to the
trading day immediately preceding the effective date of the public offering and
not such thirty (30) trading day period).
4. Issuance of Certificates. Upon the exercise of the
Underwriter's Warrants, the issuance of certificates for shares of Common Stock
and/or other securities, properties or rights
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underlying such Underwriter's Warrants, shall be made forthwith (and in any
event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance thereof, and such certificates shall (subject to the provisions
of Sections 5 and 7 hereof) be issued in the name of, or in such names as may
be directed by, the Holder thereof; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.
The Warrant Certificates and the certificates representing
the Shares (and/or other securities, property or rights issuable upon the
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. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
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5. Restriction On Transfer of Warrants. The Holder of a
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 distribution thereof; 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 hereof, except to officers or
partners of the Underwriters and members of the selling group and/or their
officers or partners.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each Underwriter
Warrant shall be $24.00 per share of Common Stock. 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.
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.
7.1 Current Registration Under the Securities Act of 1933.
The Underwriter's Warrants and the Shares of Common Stock issuable upon
exercise of the Underwriter's Warrants have been registered under the
Securities Act of 1933, as amended (the "ACT"), pursuant to the
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Company's Registration Statement on Form S-1 (Registration No. 333-48165) (the
"REGISTRATION STATEMENT"). The Company covenants and agrees to use its best
efforts to maintain the effectiveness of the Registration Statement for a
period of five (5) years from its effective date.
7.2 Contingent Registration Rights. In the event that, for
any reason whatsoever, the Company shall fail to maintain the effectiveness of
the Registration Statement for a period of five (5) years from its effective
date and, in any event, from and after the fifth (5th) anniversary of the
effective date of the Registration Statement, the Underwriter and other Holders
shall have, commencing the date of any such occasion, the contingent
registration rights ("REGISTRATION RIGHTS") set forth in Sections 7.3 and 7.4
hereof.
7.3 Piggyback Registration. (1) If, at any time commencing
after the effective date of the Registration Statement and expiring on the
seventh (7th) anniversary of the effective date of the Registration Statement,
the Company proposes to register any of its securities under the Act, either
for its own account or the account of any other security holder or holders of
the Company possessing registration rights ("OTHER STOCKHOLDERS") (other than
pursuant to Form S-4, Form S-8 or comparable registration statement), it shall
give written notice, at least thirty (30) days prior to the filing of each such
registration statement, to the Underwriter and to all other Holders of
Underwriter's Warrants and/or Shares of Common Stock issuable upon exercise of
the Underwriter's Warrants (collectively the "REGISTRABLE SECURITIES") of its
intention to do so. If the Underwriter or other Holders of Registrable
Securities notify the Company within twenty-one (21) days after the receipt of
any such notice of its or their desire to include any such securities in such
proposed registration statement, the Company shall afford the Underwriter and
such other Holders of such securities the opportunity to have any such
securities registered under such registration statement.
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(2) If the registration of which the Company
gives notice is for a registered public offering involving an underwriting,
the Company shall so advise the Underwriter and such other Holders as part
of the written notice given pursuant to Section 7.3(a) hereof. The
right of the Underwriter or any such other Holders to registration pursuant to
this Section 7.3 shall be conditioned upon their participation in such
underwriting and the inclusion of their Registrable Securities in the
underwriting to the extent hereinafter provided. The Underwriter and all other
Holders proposing to distribute their securities through such underwriting
shall (together with the Company and any officers, directors or other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the Underwriter of the
underwriter or underwriters selected by the Company. Notwithstanding any other
provision of this Section 7.3, if the Underwriter of the underwriter or
underwriters advises the Company in writing that marketing factors require a
limitation or elimination of the number of shares of Common Stock or other
securities to be underwritten, the Underwriter may limit the number of shares
of Common Stock or other securities to be included in the registration and
underwriting. The Company shall so advise the Underwriter and all other Holders
of Registrable Securities requesting registration, and the number of shares of
Common Stock or other securities that are entitled to be included in the
registration and underwriting shall be allocated among the Underwriter and
other Holders requesting registration, in each case, in proportion, as nearly
as practicable, to the respective amounts of securities which they had
requested to be included in such registration at the time of filing the
registration statement.
(3) Notwithstanding the provisions of this
Section 7.3, the Company shall have the right at any time after it
shall have given written notice pursuant to Section 7.3(a) hereof (irrespective
of whether a written request for inclusion of any such securities shall have
been made)
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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.
7.4 Demand Registration. (1) At any time commencing after the
effective date of the Registration Statement and ending on the fifth (5th)
anniversary of the effective date of the Registration Statement, the Holders of
Registrable Securities representing a "Majority" (as hereinafter defined) of
such securities (assuming the exercise of all of the Underwriter's Warrants)
(the "INITIATING HOLDERS") shall have the right (which right is in addition to
the registration rights under Section 7.3 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 Holders, in order to comply with the provisions
of the Act, so as to permit a public offering and sale of their respective
Registrable Securities for up to two hundred and seventy (270) days by such
Holders and any other Holders of Registrable Securities, as well as any other
security holders possessing similar registration rights, who notify the Company
within twenty-one (21) days after receiving notice from the Company of such
request.
(2) The Company covenants and agrees to give
written notice of any registration request under this Section 7.4 by any Holder
or Holders to all other registered Holders of Registrable Securities, as well
as any other security holders possessing similar registration rights, within
ten (10) days after the date of the receipt of any such registration request.
(3) If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 7.4(a) hereof. The right of any Holder to registration
pursuant
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to this Section 7.4 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent and subject to the
limitations provided herein. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities it holds.
(4) The Company shall (together with all
Holders, officers, directors and other stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting
agreement in customary form with the Underwriter of the underwriters selected
for such underwriting by the Initiating Holders, which underwriter(s) shall be
reasonably acceptable to the Underwriter. Notwithstanding any other provision
of this Section 7.4, if the Underwriter of the underwriter or underwriters
advises the Initiating Holders in writing that marketing factors require a
limitation or elimination of the number of shares of Common Stock or other
securities to be underwritten, the Underwriter may limit the number of shares
of Preferred Stock or other securities to be included in the registration and
underwriting. The Company shall so advise the Underwriter and all Holders of
Registrable Securities requesting registration, and the number of shares of
Common Stock or other securities that are entitled to be included in the
registration and underwriting shall be allocated among the Underwriter and
other Holders requesting registration, in each case, in proportion, as nearly
as practicable, to the respective amounts of securities which they had
requested to be included in such registration at the time of filing the
registration statement. If the Company or any Holder of Registrable Securities
who has requested inclusion in such registration as provided above disapproves
of the terms of any such underwriting, such person may elect to withdraw its
securities therefrom by written notice to the Company, the underwriter and the
Initiating Holders. Any securities so excluded shall be withdrawn from such
registration. No securities excluded from such registration by reason of such
underwriters' marketing limitations shall be included in such
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registration. To facilitate the allocation of shares in accordance with this
Section 7.4(d), the Company or underwriter or underwriters selected as provided
above may round the number of securities of any holder which may be included in
such registration to the nearest 100 shares.
(5) In the event that the Initiating Holders
are unable to sell all of the Registrable Securities for which they have
requested registration due to the provisions of Section 7.4(d) hereof and if,
at that time, the Initiating Holders are not permitted to sell Registrable
Securities under Rule 144(k), the Initiating Holders shall be entitled to
require the Company to afford the Initiating Holders an opportunity to effect
one additional demand registration under this Section 7.4.
(6) In addition to the registration rights
under Section 7.3 and subsection (a) of Section 7.4 hereof, at any time
commencing on the date hereof and expiring five (5) years thereafter any Holder
of Registrable Securities 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 270 days by any such Holder of its Registrable Securities provided,
however, that the provisions of Section 7.5(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 Holder's making such request.
(7) Notwithstanding anything to the contrary
contained herein, if the Company shall not have filed a registration statement
for the Registrable Securities of the Initiating Holders or the Holder(s)
referred to in Section 7.5(f) above (the "PAYING HOLDERS"), within the time
period specified in Section 7.5(a) below, the Company shall upon the written
notice of election of the Initiating Holders or the Paying Holders, as the case
may be, repurchase (i) any and all Shares of Common Stock at the higher of the
Market Price per share of Common Stock on (x) the date of the notice sent to
the Company under Section 7.4(a) or (f), as the case may be, or (y) the
expiration
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of the period specified in Section 7.5(a) and (ii) any and all Warrants at such
Market Price less the Exercise Price of such Warrant. Such repurchase shall be
in immediately available funds and shall close within five (5) business days
after the expiration of the period specified in Section 7.5(a).
7.5 Covenants of the Company With Respect to Registration. In
connection with any registration under Sections 7.3 and 7.4 hereof, the Company
covenants and agrees as follows:
(1) The Company shall use its best efforts to
file a registration statement within sixty (60) days of receipt of any demand
therefor, shall use its best efforts to have any registration statements
declared effective at the earliest possible time, and shall furnish each Holder
desiring to sell Registrable Securities such number of prospectuses as shall
reasonably be requested.
(2) 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 7.3 and 7.4 hereof including, without limitation,
the Company's legal and accounting fees, printing expenses, blue sky fees and
expenses. If the Company shall fail to comply with the provisions of Section
7.5(a), the Company shall, in addition to any other equitable or other relief
available to the Holder(s), extend the exercise period of the Underwriter's
Warrants by such number of days as shall equal the delay caused by the
Company's failure.
(3) The Company will take all necessary action
which may be required in qualifying or registering the Registrable Securities
included in a registration statement for offering and sale under the securities
or blue sky laws of such states as reasonably are requested by the 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
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jurisdiction.
(4) The Company shall indemnify the Holder(s)
of the Registrable Securities to be sold pursuant to any registration statement
and each person, if any, who controls such Holders within the meaning of
Section 15 of the 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 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.
(5) The Holder(s) of the Registrable Securities
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.
(6) For a period of one hundred eighty (180)
days after the effectiveness of any registration statement filed pursuant to
Section 7.4 hereof, the Company shall not permit any other registration
statement (other than (1) a registration statement relating to the securities
for which
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the Company has granted demand registration rights, as described in the
Prospectus included in the Registration Statement, (2) a registration statement
relating to the securities for which the Company has granted piggyback
registration rights, as described in the Prospectus included in the
Registration Statement and (3) a registration statement filed on Forms S-4 or
S-8 to be or remain effective during the effectiveness of a registration
statement filed pursuant to Section 7.4 hereof, without the prior written
consent of the Holders of the Registrable Securities representing a Majority of
such securities.
(7) The Company shall furnish upon request 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 accountants' letters delivered to underwriters in underwritten
public offerings of securities.
(8) The Company shall as soon as practicable
after the effective date of any registration statement filed pursuant to
Sections 7.3 and 7.4 hereof, and in any event within 15 months thereafter, make
"generally available to its security holders" (within the meaning of Rule 158
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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.
(9) The Company shall deliver promptly to
each Holder participating in the offering requesting the correspondence and
memoranda described below and to the managing underwriters, copies of all
written 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
underwriters to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable securities laws or
rules of the NASD. Such investigation shall include access to books, records
and properties and opportunities to discuss the business of the Company with
its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder or underwriter shall
reasonably request.
(10) With respect to any registration unde
Section 7.4 hereof, the Company shall enter into an underwriting agreement with
the managing underwriter selected for such underwriting by the Initiating
Holders or the Paying Holders, as the case may be. 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
Registrable Securities and may, at their option, require that any or all the
representations, warranties and covenants of the Company to or for the benefit
of such underwriters
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shall also be made to and for the benefit of such Holders. Such Holders shall
not be required to make any representations or warranties to or agreements with
the Company or the underwriters, except as they may relate to such Holders
and their intended methods of distribution.
(11) For purposes of this Agreement, the term
"Majority" in reference to the Holders of Registrable Securities, shall mean in
excess of fifty percent (50%) of the then outstanding Underwriter's Warrants
and/or Shares of Common Stock issued upon exercise of the Underwriter's
Warrants that (i) are not held by the Company, an affiliate, officer, creditor,
employee or agent thereof or any of their respective affiliates, members of
their family, persons acting as nominees or in conjunction therewith and (ii)
have not been resold to the public pursuant to a registration statement filed
with the Commission under the Act.
(12) 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.
(13) In addition to the Registrable Securities,
upon the written request therefor, by any Holder(s), the Company shall include
in the registration statement any other securities of the Company held by such
Holder(s) as of the date of filing of such registration statement, including
without limitation restricted shares of Common Stock, options, warrants or any
other securities convertible into shares of Common Stock.
7.6 Restrictive Legends. In the event that the Company fails
to maintain the effectiveness of the Registration Statement, such that the
exercise, in part or in whole, of the Underwriter's Warrants are not, at the
time of such exercise, registered under the Act, any certificates representing
the Shares underlying the Underwriter's Warrants, the Underlying Warrants and
any of
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the other securities issuable upon exercise of the Underwriter's Warrants shall
bear the following restrictive legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("ACT"), and may not be
offered or sold except pursuant to (i) an effective registration statement
under the Act, (ii) to the extent applicable, Rule 144 under the 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 to the issuer, that an exemption from registration under such Act is
available.
8. Adjustments to Exercise Price and Number of
Securities.
8.1 Computation of Adjusted Exercise Price. Except as
hereinafter provided, in the event the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 8.7 hereof), including shares held in the
Company's treasury and shares of Common Stock issued upon the exercise of any
options, rights or warrants to subscribe for shares of Common Stock and shares
of Preferred Stock issued upon the direct or indirect conversion or exchange of
securities for shares of Common Stock, for a consideration per share less than
the Market Price in effect immediately prior to the issuance or sale of such
shares, or without consideration, then forthwith upon such issuance or sale,
the Exercise Price shall (until another such issuance or sale) be reduced to
the price (calculated to the nearest full cent) equal to the quotient derived
by dividing (i) an amount equal to the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to the issuance or sale of such
shares, multiplied by the Exercise Price in effect immediately prior to such
issuance or sale, and (b) the aggregate of the amount of all consideration, if
any, received by the Company upon such issuance
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or sale, by (ii) the total number of shares of Common Stock outstanding
immediately after such issuance or sale; provided, however, that in no event
shall the Exercise Price be adjusted pursuant to this computation to an amount
in excess of the Exercise Price in effect immediately prior to such
computation, except in the case of a combination of outstanding shares of
Common Stock, as provided by Section 8.3 hereof.
For the purposes of this Section 8 the term Exercise Price
shall mean the Exercise Price per share of Common Stock set forth in Section 6
hereof, as adjusted from time to time pursuant to the provisions of this
Section 8.
For the purposes of any computation to be made in accordance
with this Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of
Common Stock for a consideration part or all of which shall be cash, the amount
of the cash consideration therefor shall be deemed to be the amount of cash
received by the Company for such shares (or, if shares of Common Stock are
offered by the Company for subscription, the subscription price, or, if either
of such securities shall be sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or other performing
similar services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale (other than as
a dividend or other distribution on any stock of the Company) of shares of
Common Stock for a consideration part or all of which shall be other than cash,
the amount of the consideration therefor other than cash shall be deemed to be
the value of such consideration as determined in good faith by the Board of
Directors of the Company and shall include any amounts payable to security
holders or any affiliates
- 18 -
thereof, including without limitation, pursuant to any employment agreement,
royalty, consulting agreement, covenant not to compete, earnout or contingent
payment right or similar arrangement, agreement or understanding, whether oral
or written; all such amounts being valued for the purposes hereof at the
aggregate amount payable thereunder, whether such payments are absolute or
contingent, and irrespective of the period or uncertainty of payment, the rate
of interest, if any, or the contingent nature thereof; provided, however, that
if any Holder(s) does not agree with such evaluation, a mutually acceptable
independent appraiser shall make such evaluation, the cost of which shall be
borne by the Company.
(iii) Shares of Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the day following
the record date for the determination of stockholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued without
consideration.
(iv) The reclassification of securities of the
Company other than shares of Common Stock into securities including shares of
Common Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders entitled
to receive such shares, and the value of the consideration allocable to such
shares of Common Stock shall be determined as provided in subsection (ii) of
this Section 8.1.
(v) The number of shares of Common Stock at any
one time outstanding shall include the aggregate number of shares issued or
issuable (subject to readjustment upon the actual issuance thereof) upon the
exercise of options, rights, warrants and upon the conversion or exchange of
convertible or exchangeable securities.
- 19 -
8.2 Options, Rights, Warrants and Convertible and
Exchangeable Securities. In case the Company shall at any time after the date
hereof issue options, rights or warrants to subscribe for shares of Common
Stock, or issue any securities convertible into or exchangeable for shares of
Common Stock, for a consideration per share less than the Market Price in
effect immediately prior to the issuance of such options, rights or warrants,
or such convertible or exchangeable securities, or without consideration, the
Exercise Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 8.1 hereof, provided that:
(1) The aggregate maximum number of shares of
Common Stock, as the case may be, issuable under such options, rights or
warrants shall be deemed to be issued and outstanding at the time such options,
rights or warrants were issued, and for a consideration equal to the minimum
purchase price per share provided for in such options, rights or warrants at
the time of issuance, plus the consideration (determined in the same manner as
consideration received on the issue or sale of shares in accordance with the
terms of the Underwriter's's Warrants), if any, received by the Company for
such options, rights or warrants.
(2) The aggregate maximum number of shares of
Common Stock issuable upon conversion or exchange of any convertible or
exchangeable securities shall be deemed to be issued and outstanding at the
time of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the
issue or sale of shares of Common Stock in accordance with the terms of the
Underwriter's Warrants) received by the
- 20 -
Company for such securities, plus the minimum consideration, if
any, receivable by the Company upon the conversion or exchange thereof.
(3) If any change shall occur in the price per
share provided for in any of the options, rights or warrants referred to in
subsection (a) of this Section 8.2, or in the price per share at which the
securities referred to in subsection (b) of this Section 8.2 are convertible or
exchangeable, such options, rights or warrants or conversion or exchange
rights, as the case may be, shall be deemed to have expired or terminated on
the date when such price change became effective in respect of shares not
theretofore issued pursuant to the exercise or conversion or exchange thereof,
and the Company shall be deemed to have issued upon such date new options,
rights or warrants or convertible or exchangeable securities at the new price
in respect of the number of shares issuable upon the exercise of such options,
rights or warrants or the conversion or exchange of such convertible or
exchangeable securities.
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.
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 Warrant Securities issuable upon the exercise at the adjusted exercise price
of each Underwriter's Warrant 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 Warrant Securities issuable upon exercise of
the Underwriter's Warrants immediately prior to such adjustment and dividing
the product so obtained by the adjusted
- 21 -
Exercise Price.
8.5 Definition of Common Stock. For the purpose of this
Agreement, the term "COMMON STOCK" shall mean (i) the class of designated as
Common Stock in the Certification of Incorporation of the Company as may be
amended as of the date hereof, or, (ii) any other class of stock resulting from
successive changes or reclassifications of 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 that event that the Company shall after the date hereof issue
securities 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 Underwriter's Warrant either shares of Common Stock or a
like number of such securities with greater or superior voting rights.
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
the Holder a supplemental warrant agreement providing that the holder of each
Underwriter's Warrant then outstanding or to be outstanding shall have the
right thereafter (until the expiration of such Underwriter's 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 Underwriter's Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be identical to the
- 22 -
adjustments provided in Section 8. The above provision of this subsection shall
similarly apply to successive consolidations or mergers.
8.7 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the Exercise Price shall be made:
(1) Upon the issuance or sale of the
Underwriter's Warrants or the shares of Common Stock issuable upon the
exercise of the Underwriter's Warrants; or
(2) If the amount of said adjustment shall be less
than two cents (2(cent)) per Warrant Security, 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 (2(cent)) per Warrant Security.
8.8 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 Preferred
Stock), whether issued by the Company or by another, or any other 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 such dividend or
distribution. At the time of any such dividend or distribution, the Company
shall make
- 23 -
appropriate reserves to ensure the timely performance of the provisions of this
subsection 8.8.
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 Warrant Securities 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 fractional shares of Common Stock upon the exercise of
Underwriter's Warrants. Underwriter's Warrants may only be exercised in such
multiples as are required to permit the issuance by the Company of one or more
whole shares of Common Stock. If one or more Underwriter's Warrants shall be
presented for exercise in full at the same time by the same Holder, the number
of whole shares of Common Stock which shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of shares of
Common Stock purchasable on exercise of the Underwriter's Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions provided herein, be issuable on the exercise of any Underwriter's
Warrant (or specified portion thereof), the Company shall pay an amount in cash
equal to such
- 24 -
fraction multiplied by the then current market value of a share of Preferred
Stock, determined as follows:
(1) If the Common Stock is listed or admitted to unlisted
trading privileges on the NYSE or the AMEX, or is traded on the NNM, the
current market value of a share of Common Stock shall be the closing sale price
of the Common Stock at the end of the regular trading session on the last
business day prior to the date of exercise of the Underwriter's Warrants on
whichever of such exchanges or NNM had the highest average daily trading volume
for the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to unlisted
trading privileges, on either the NYSE or the AMEX and is not traded on NNM,
but is quoted or reported on Nasdaq, the current market value of a share of
Common Stock, shall be the average of the Underwriter closing bid and asked
prices (or the last sale price, if then reported by Nasdaq) of the Common Stock
at the end of the regular trading session on the last business day prior to the
date of exercise of the Underwriter's Warrants as quoted or reported on Nasdaq,
as the case may be; or
(3) If the Common Stock is not listed, or admitted to
unlisted trading privileges, on either of the NYSE or the AMEX, and is not
traded on NNM or quoted or reported on Nasdaq, but is listed or admitted to
unlisted trading privileges on the BSE or another national securities exchange
(other than the NYSE or the AMEX), the current market value of a share of
Common Stock shall be the closing sale price of the Common Stock at the end of
the regular trading session on the last business day prior to the date of
exercise of the Underwriter's Warrants on whichever of such exchanges has the
highest average daily trading volume for the Common Stock on such day; or
- 25 -
(4) If the Common Stock is not listed or admitted to unlisted
trading privileges on any national securities exchange, or listed for trading
on NNM or quoted or reported on Nasdaq, but is traded in the over-the-counter
market, the current market value of a share of Common Stock shall be the
average of the last reported bid and asked prices of the Preferred Stock
reported by the National Quotation Bureau, Inc. on the last business day prior
to the date of exercise of the Underwriter's Warrants; or
(5) If the Common Stock is not listed, admitted to unlisted
trading privileges on any national securities exchange, or listed for trading
on NNM or quoted or reported on Nasdaq, and bid and asked prices of the Common
Stock are not reported by the National Quotation Bureau, Inc., the current
market value of a share of Common Stock shall be an amount, not less than the
book value thereof as of the end of the most recently completed fiscal quarter
of the Company ending prior to the date of exercise, determined in accordance
with generally acceptable accounting principles, consistently applied.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the
Underwriter's Warrants, such number of shares of Preferred 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 payment of the Exercise Price therefor, all shares
of Common Stock and other securities, if any, 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
- 26 -
Underwriter's Warrants 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.
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:
(1) the Company shall take a record of the holders of its
shares of Preferred Stock for the purpose of entitling them to receive a
dividend or distribution payable other than in cash, or a cash dividend or
distribution payable other 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
(2) 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
(3) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such
- 27 -
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 book, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend, or the issuance of any
convertible or exchangeable securities, or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.
13. Underwriter's Warrants.
The form of the certificate representing Underwriter's
Warrants (and the form of election to purchase shares of Common Stock upon the
exercise of Underwriter's Warrants and the form of assignment printed on the
reverse thereof) shall be substantially as set forth in Exhibit "A" to the
Warrant Agreement. Each Underwriter's Warrant shall entitle the Holder to
purchase one fully paid and non-assessable share of Common Stock at an initial
purchase price of $24.00 per share from ______________, 1999 until 5:00 P.M.
New York time on _____________, 2003 at which time the Underwriter's Warrants
shall expire. The exercise price of the Underwriter's Warrants and the number
of shares of Common Stock issuable upon the exercise of the Underwriter's
Warrants are subject to adjustment, whether or not the Underwriter's Warrants
have been exercised, in the manner and upon the occurrence of the events set
forth in Section 8 of the Warrant Agreement, which is hereby incorporated
herein by reference and made a part hereof as if set forth in its entirety
herein. Subject to the provisions of this Agreement and upon issuance of the
Underwriter's Warrants, each registered holder of such Underwriter's Warrant
shall have the right to purchase from the Company (and the Company shall issue
to such registered holders) up to the number of fully paid
- 28 -
and non-assessable shares of Common Stock (subject to adjustment as provided
herein and in the Warrant Agreement), free and clear of all preemptive rights
of stockholders, provided that such registered holder complies with the terms
governing exercise of the Underwriter's Warrant set forth in the Warrant
Agreement, and pays the applicable exercise price, determined in accordance
with the terms of the Warrant Agreement. Upon exercise of the Underwriter's
Warrants, the Company shall forthwith issue to the registered holder of any
such Underwriter's Warrant in his name or in such name as may be directed by
him, certificates for the number of shares of Common Stock so purchased. Except
as otherwise provided herein and in Section 6.1 hereof, the Underwriter's
Warrants shall be governed in all respects by the terms of the Warrant
Agreement. The Underwriter's Warrants shall be transferable in the manner
provided in the Warrant Agreement, and upon any such transfer, a new
Underwriter's Warrant Certificate shall be issued promptly to the transferee.
The Company covenants to, and agrees with, the Holder(s) that without the prior
written consent of the Holder(s), which will not be unreasonably withheld, the
Warrant Agreement will not be modified, amended, canceled, altered or
superseded, and that the Company will send to each Holder, irrespective of
whether or not the Underwriter's Warrants have been exercised, any and all
notices required by the Warrant Agreement to be sent to holders of the
Underwriter's Warrants.
14. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:
(1) 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
- 29 -
(2) 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.
15. 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 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.
16. 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.
17. 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 ___________, 2008.
18. 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 ____________ and for all purposes shall be
construed in accordance with the laws of said State of __________________
without giving effect to the rules of said State of New York governing the
conflicts of laws.
- 30 -
The Company, the Underwriter and any other registered 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 ________________ or of the United States of America for
the __________________, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company, the Underwriter and any other
registered Holders hereby irrevocably waive any objection to such exclusive
jurisdiction or inconvenient forum. Any such process or summons to be served
upon any of the Company, the Underwriter and the Holders (at the option of the
party bringing such action, proceeding or claim) may be served by transmitting
a copy thereof, by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in Section 14 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 any other registered 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.
19. Entire Agreement; Modification. This Agreement (including
the Underwriting Agreement and the Warrant 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.
20. Severability. If any provision of this Agreement shall be
held to be invalid
- 31 -
or unenforceable, such invalidity or unenforceability shall not affect any
other provision of this Agreement.
21. 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.
22. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the Underwriter and any other registered Holder(s) of the Warrant
Certificates or Warrants Securities any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole benefit of
the Company and the Underwriter and any other registered Holders of Warrant
Certificates or Warrant Securities.
23. 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.
- 32 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
[SEAL] UNITED STATES FINANCIAL GROUP,
INCORPORATED
By:
------------------------------
Mohammad Ali Khan, President
ATTEST:
----------------------------
Asim S. Kohli, Secretary
KLEIN MAUS AND SHIRE, INC.
By:
---------------------------------
Mohammed Ali Khan, President
- 33 -
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE 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 WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, _______________, 2003
No. RW-101 Warrants to Purchase
300,000 Shares of Common Stock
- 34 -
WARRANT CERTIFICATE
This Warrant Certificate certifies that Klein Maus and Shire,
Inc., or registered assigns, is the registered holder of Warrants to purchase
initially, at any time from _________, 1999 until 5:00 p.m. New York time on
___________, 2003 (the "EXPIRATION DATE"), up to 300,000 fully-paid and
non-assessable shares of Common Stock, $.0001 par value per share ("COMMON
STOCK") of United States Financial Group, Incorporated, a Delaware corporation
(the "COMPANY"), at the initial exercise price, subject to adjustment in
certain events (the "EXERCISE PRICE"), of $24.00 per share of Common Stock 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 ________________, 1998
between the Company and Klein Maus and Shire, Inc. (the "UNDERWRITER'S WARRANT
AGREEMENT"). Payment of the Exercise Price shall be made by certified or
official bank check in New York Clearing House funds payable to the order of
the Company or by surrender of this Warrant Certificate.
No Warrant may be exercised after 5:00 p.m., New York time,
on the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants issued pursuant to the Underwriter's
Warrant Agreement, which Underwriter's Warrant Agreement is hereby incorporated
by reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Underwriter's Warrant Agreement provides that upon the
occurrence of certain events the Exercise Price and the type 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
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 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 Warrants evidenced
by this Warrant Certificate, the Company shall forthwith issue to the holder
hereof a new Warrant Certificate representing such numbered unexercised
Warrants.
- 35 -
The Company may deem and treat the registered holder(s)
hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected by
any notice to the contrary.
All terms used in this Warrant Certificate which are defined
in the 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 ____________, 1998
[SEAL] UNITED STATES FINANCIAL GROUP,
INCORPORATED
By:
--------------------------------
Mohammad Ali Khan, President
ATTEST:
-----------------------------------------
Asim S. Kohli, Secretary
- 36 -
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
Warrant Securities
--------
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 United
States Financial Group, Incorporated in the amount of $ , all in accordance
with the terms of Section 3.1 of the Underwriter's Warrant Agreement dated as
of ___________________, 1998 between United States Financial Group,
Incorporated and Klein Maus and Shire, Inc. The undersigned request that a
certificate for such Warrant Securities be registered in the name of whose
address is and that such Certificate be delivered to whose address is .
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)
- 37 -
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
__________ unto
_____________________________________
(Please print name and address of transferee)
_______ Warrant Certificate, together with all right, title and interest
therein, and does hereby reasonably constitute and appoint ________________, as
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Date: _____________________ 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 Assignee)
- 38 -
UNITED STATES FINANCIAL GROUP, INCORPORATED
AND
KLEIN MAUS AND SHIRE, INC.
____________________________________
UNDERWRITER'S
WARRANT AGREEMENT
DATED AS OF _______________, 1998
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Filing Submission 0000950136-98-001346 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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