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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
International Alliance Services, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
458875 10 1
-------------------------
(CUSP Number)
Jonathan L. Awner, Esq.
Akerman, Senterfitt & Eidson, P.A.
One Southeast Third Avenue
Miami, Florida 33131
Tel. No. (305) 374-5600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 30, 1996
------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
(Continued on following pages)
2
SCHEDULE 13D
- --------------------------- --------------------------------------------
CUSP NO. 458875 10 1
----------------
- --------------------------- --------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
H. Wayne Huizenga
- --------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
2
(b)[ ]
- --------------------------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
PF
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
5
- --------------------------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- --------------------------------------------------------------------------------------------------------------------------
SOLE VOTING POWER
7
8,444,444
----------------------------------------------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY -0-
OWNED BY ----------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 8,444,444
WITH ----------------------------------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- --------------------------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
8,444,444
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
12
- --------------------------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.1%
- --------------------------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- --------------------------------------------------------------------------------------------------------------------------
3
SCHEDULE 13D
- --------------------------- --------------------------------------------
CUSP NO. 458875 10 1
----------------
- --------------------------- --------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Huizenga Investments Limited Partnership
- --------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
2
(b)[ ]
- --------------------------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
5
- --------------------------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Nevada
- --------------------------------------------------------------------------------------------------------------------------
SOLE VOTING POWER
7
8,444,444
----------------------------------------------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY -0-
OWNED BY ----------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 8,444,444
WITH ----------------------------------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- --------------------------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
8,444,444
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
12
- --------------------------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.1%
- --------------------------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- --------------------------------------------------------------------------------------------------------------------------
4
SCHEDULE 13D
- --------------------------- --------------------------------------------
CUSP NO. 458875 10 1
----------------
- --------------------------- --------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Huizenga Investments, Inc.
- --------------------------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
2
(b)[ ]
- --------------------------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
5
- --------------------------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Nevada
- --------------------------------------------------------------------------------------------------------------------------
SOLE VOTING POWER
7
8,444,444
----------------------------------------------------------------------------------------------
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY -0-
OWNED BY ----------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 8,444,444
WITH ----------------------------------------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
-0-
- --------------------------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
8,444,444
- --------------------------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
12
- --------------------------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.1%
- --------------------------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- --------------------------------------------------------------------------------------------------------------------------
5
The reporting persons listed on the cover pages to this Schedule 13D
hereby make the following statement (this "Statement") pursuant to Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations promulgated thereunder. This Statement is an
amendment to the Schedule 13D filed by H. Wayne Huizenga dated October 18, 1996
(the "Original Schedule 13D"). For further information regarding any of the
items amended herein, reference is made to the Original Schedule 13D.
Capitalized terms used herein and not defined have the meanings ascribed to
them in the Original Schedule 13D.
ITEM 2. IDENTITY AND BACKGROUND.
Item 2 of the Original Schedule 13D is hereby amended in its
entirety as follows:
This Statement is being filed jointly by H. Wayne Huizenga
("Mr. Huizenga"), Huizenga Investments Limited Partnership, a Nevada limited
partnership ("HILP"), and Huizenga Investments, Inc., a Nevada corporation
("HII"). Mr. Huizenga's business address is 200 South Andrews Ave., 6th Floor,
Fort Lauderdale, Florida 33301 and the business address of HILP and HII is P.O.
Box 50102 Hendersen, Nevada, 89106. Mr. Huizenga is Chairman of the Board and
Co-Chief Executive Officer of Republic Industries, Inc., which is a holding
company with major business segments in vehicle rental, vehicle retailing,
integrated solid waste services, and electronic security services and which is
headquartered at 450 East Las Olas Blvd., Suite 1200, Fort Lauderdale, Florida
33301. Mr. Huizenga also is Chairman of Huizenga Holdings, Inc., a holding and
management company for certain investments by Mr. Huizenga in privately-owned
companies and businesses. Mr. Huizenga is the sole shareholder of HII. HII's
principal business is to serve as the sole general partner of HILP. HILP's
principal business is to make, hold, and manage certain of Mr. Huizenga's
investments in publicly traded and other companies. Mr. Huizenga is a citizen
of the United States of America.
6
The names, addresses and principal occupations of each
executive officer and director of HII, all of whom are United States citizens,
are as follows:
PRINCIPAL
NAME TITLE BUSINESS ADDRESS OCCUPATION
- ------------------- ----------------------- ------------------------ ----------------
Richard C. Rochon President and Director Huizenga Holdings, Inc. President of
200 South Andrews Ave. Huizenga
Ft. Lauderdale, FL 33301 Holdings, Inc.
Cris V. Branden Treasurer and Director Huizenga Holdings, Inc. Vice President of
200 South Andrews Ave. Huizenga
Ft. Lauderdale, FL 33301 Holdings, Inc.
William M. Pierce Secretary Huizenga Holdings, Inc. Vice President of
200 South Andrews Ave. Huizenga
Ft. Lauderdale, FL 33301 Holdings, Inc.
Monte Miller Director and Assistant Huizenga Investments, Inc. President of
Treasurer P.O. Box 50102 Nevada Holdings
Henderson, NV 89106 Services Corp., a
provider of
corporate
services
None of Mr. Huizenga, HII, HILP, or to the knowledge of the
reporting persons, any other person named in this Item 2 has, during the last
five years, (a) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) been a party to any civil proceeding
of a judicial or administrative body of competent jurisdiction, and as a result
of such proceeding was or is subject to a judgment, decree, or final order
enjoining future violations of, or prohibiting or mandating activities subject
to federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Original Schedule 13D is hereby amended by
adding the following paragraphs:
On December 24, 1996, Mr. Huizenga transferred the Shares and
the Warrants to HILP as a capital contribution to HILP.
On December 30, 1996, HILP acquired from the Issuer in a
private placement transaction for an aggregate purchase price of $1,999,998 (a)
222,222 shares of Common Stock (the "New Shares") and (b) a warrant to purchase
222,222 shares of Common Stock at an exercise
7
price of $11.00 per share, which is exercisable at any time until December 30,
1999 ( the "New Warrants"). Copies of the Form of Warrant Agreement and the
Form of Warrant Certificate representing the New Warrants are attached hereto
as Exhibits 5 and 6, respectively, and are incorporated herein by reference.
The description of the terms of the New Warrant set forth herein is qualified
in its entirety by the terms of the Warrant Agreement and Warrant Certificate.
HILP used working capital to purchase the New Shares and New Warrants. HILP's
source of funds for the exercise of the New Warrants is undetermined as of the
date hereof, but most likely will come from working capital.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Original Schedule 13D is hereby amended by
adding the following paragraph:
Mr. Huizenga, HII and HILP acquired the Shares, the Warrants,
the New Shares and the New Warrants for investment purposes and, except as set
forth in the Original Schedule 13D, none of the reporting persons or, to their
knowledge, any other person named in Item 2 above, have any plans or proposals
which relate to or would result in any of the events or transactions described
in Item 4(a)-(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Original Schedule 13D is hereby amended in its
entirety as follows:
(a) and (b) As of December 30, 1996, HILP may be deemed
to beneficially own 8,444,444 shares of Common Stock (which includes 6,222,222
shares of Common Stock issuable upon exercise of the Warrants and the New
Warrants) representing approximately 21.1% of the outstanding shares of Common
Stock, calculated in accordance with Rule 13d-3 under the Exchange Act (based
on 33,764,506 shares of Common Stock issued and outstanding as of December 30,
1996, plus the 6,222,222 shares of Common Stock issuable upon exercise of the
Warrants and the New Warrants which HILP may be deemed to beneficially own and
which are deemed outstanding for purposes of this computation). HILP has the
sole power to vote and the sole power to dispose of the 8,444,444 shares of
Common Stock which it may be deemed to beneficially own.
As of December 30, 1996, each of Mr. Huizenga and HII may be
deemed to beneficially own the 8,444,444 shares of Common Stock beneficially
owned by HILP described above. Mr. Huizenga and HII each has the sole power to
vote and the sole power to dispose of the 8,444,444 shares of Common Stock
which they may be deemed to beneficially own.
8
Because the persons listed in Item 2 above (other than the
reporting persons) are either officers or directors of HII, they each may be
deemed, pursuant to Rule 13d-3 under the Exchange Act, to be the beneficial
owner of the 8,444,444 shares of Common Stock beneficially owned by HILP
described above. Each of such persons disclaims beneficial ownership of any of
the 8,444,444 shares of Common Stock.
(c) Except with respect to the acquisition of the Shares,
the Warrants, the New Shares and the New Warrants described herein and in the
Original Schedule 13D, there have been no other transactions in any securities
of the Issuer affected by Mr. Huizenga, HII, HILP or, to the knowledge of the
reporting persons, any other person listed in Item 2 above during the past 60
days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Original Schedule 13D is hereby amended by
adding the following paragraphs:
Except as described herein and in the Original Schedule 13D,
none of Mr. Huizenga, HII, HILP or, to the knowledge of the reporting persons,
any other person listed in Item 2 above is a party to any contracts,
arrangements, understandings or relationships with any person with respect to
securities of the Issuer.
In connection with the private placement described in Item 3
above, the Issuer has agreed to register the New Shares and the shares of
Common Stock issuable upon exercise of the New Warrants pursuant to a
registration statement to be filed with the Securities and Exchange Commission.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A list of exhibits filed as part of this Statement is set
forth in the Exhibit Index at the end of this Statement which immediately
precedes such exhibits.
9
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
/s/ H. Wayne Huizenga
----------------------------------------
H. WAYNE HUIZENGA
Dated: January 10, 1997
10
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
HUIZENGA INVESTMENTS LIMITED
PARTNERSHIP, a Nevada limited partnership
By: Huizenga Investments, Inc., a Nevada
corporation, as general partner
By: /s/ Richard C. Rochon
-----------------------------------
Richard C. Rochon
President
Dated: January 10, 1997
11
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
HUIZENGA INVESTMENTS, INC., a Nevada
corporation
By: /s/ Richard C. Rochon
---------------------------------------
Richard C. Rochon
President
Dated: January 10, 1997
12
EXHIBIT INDEX
Exhibit 1: Stock Purchase Agreement, dated as of May 19, 1996, between H.
Wayne Huizenga and Republic Environmental Systems, Inc.
(incorporated by reference to Appendix II to the Issuer's
Schedule 14C Information Statement dated September 23, 1996).
Exhibit 2: Warrant to purchase 2,000,000 shares of Common Stock at an
exercise price of $2.625 per share [See Original Schedule 13D].
Exhibit 3: Warrant to purchase 2,000,000 shares of Common Stock at an
exercise price of $3.125 per share [See Original Schedule 13D].
Exhibit 4: Warrant to purchase 2,000,000 shares of Common Stock at an
exercise price of $3.875 per share [See Original Schedule 13D].
Exhibit 5: Form of Warrant Agreement, dated as of December 24, 1996,
between the Issuer and certain Investors named therein.
Exhibit 6: Form of Warrant Certificate to purchase 222,222 shares of
Common Stock at an exercise price of $11.00 per share.
13
EXHIBIT 5
WARRANT AGREEMENT
BY AND BETWEEN
INTERNATIONAL ALLIANCE SERVICES, INC.
AND
THE INVESTORS LISTED ON THE SIGNATURE PAGES HEREOF
DATED AS OF DECEMBER 24, 1996
Exh. 5-1
14
THIS WARRANT AGREEMENT AND THE SECURITIES PROVIDED FOR HEREIN HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE
RULES AND REGULATIONS PROMULGATED THEREUNDER, ANY SUCH STATE SECURITIES LAWS OR
THE PROVISIONS OF THIS WARRANT AGREEMENT.
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of the date set forth on the
signature page hereof (the "Agreement"), is entered into by and between
INTERNATIONAL ALLIANCE SERVICES, INC., a Delaware corporation ("Issuer"), and
the undersigned investor (collectively the "Investors" and individually as an
"Investor"). Issuer and Investor may hereinafter be referred to collectively
as the "Parties" or individually as a "Party".
W I T N E S S E T H :
WHEREAS, Issuer and Investors have entered into a Unit Purchase
Agreement dated as of even date herewith (the "Unit Purchase Agreement");
WHEREAS, the Unit Purchase Agreement provides for the issuance of
Warrants by Issuer to Investors;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the Parties hereby stipulate and agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by Issuer after the date hereof, other than Warrant Stock.
"Affiliate" shall mean as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
(including the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the power to direct or cause the direction of
the management and policies of such Person, directly or indirectly, whether
through the ownership
Exh. 5-2
15
of voting securities or by contract or otherwise; and the terms "controlled"
and "controlling" have the meanings correlative to the foregoing.
"Agreement" shall mean this Warrant Agreement.
"Appraised Value" shall mean, in respect of any share of Common Stock
on any date herein specified, the fair saleable value of such share of Common
Stock (determined without giving effect to the discount for (i) a minority
interest or (ii) any lack of liquidity of the Common Stock or to the fact that
Issuer may have no class of equity registered under the Exchange Act) as of the
last day of the most recent fiscal month to end within 60 days prior to such
date specified, based on the value of Issuer, as determined by an investment
banking firm (selected pursuant to the terms of Article XIII) in accordance
with such firm's customary practices (including, if appropriate, taking into
account the fact that Issuer is privately held), divided by the number of
outstanding shares of Common Stock, after giving pro forma effect to the
exercise or conversion of all exercisable or Convertible Securities (including
the Warrants) for Common Stock and the payment of the exercise or conversion
price therefor.
"Book Value" shall mean, in respect of any share of Common Stock on
any date herein specified, the consolidated book value of Issuer as of the last
day of any month immediately preceding such date, divided by the number of
outstanding shares of Common Stock, after giving pro forma effect to the
exercise or conversion of all exercisable or Convertible Securities (including
the Warrants) for Common Stock and the payment of the exercise or conversion
price therefor, as determined in accordance with GAAP by any firm of
independent certified public accountants of recognized national standing
selected by Issuer and reasonably acceptable to the Required Holders.
"Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks are required or permitted to be closed in the State of
Ohio.
"Closing Date" shall mean 10:00 a.m. New York, New York time on
December 23, 1996 or such other time, date or place as the Parties may mutually
agree.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
"Common Stock" shall mean the common stock, $.01 par value per share,
of Issuer, as constituted on the date hereof, and any capital stock into which
such Common Stock may thereafter be changed, and shall also include (i) capital
stock of Issuer of any other class (regardless of how denominated) issued to
the holders of shares of Common Stock upon any reclassification thereof which
is also not preferred as to dividends or assets over any other class of stock
of Issuer and which is not subject to redemption and (ii) shares of common
stock of any successor or acquiring corporation (as defined in Section 3.7)
received by or distributed to the holders of Common Stock of Issuer in the
circumstances contemplated by Section 3.7.
Exh. 5-3
16
"Convertible Securities" shall mean evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable, with
or without payment of additional consideration in cash or property, for
Additional Shares of Common Stock, either immediately or upon the occurrence of
a specified date or a specified event.
"Current Market Price" shall mean, in respect of any share of Common
Stock on any date herein specified, (a) if there shall then be a public market
for the Common Stock, the average of the daily market prices for 10 consecutive
Business Days commencing 25 days before such date; the daily market price for
each such Business Day being (i) the last sale price on such day on the Nasdaq
National Market or principal stock exchange on which such Common Stock is then
listed, (ii) if no sale takes place on such day on any such exchange, the
average of the last reported closing bid and asked prices on such day as
officially quoted which are on the Nasdaq National Market or the principal
exchange, (iii) if the Common Stock is not then listed or admitted to trading
on the Nasdaq National Market or any stock exchange, the average of the last
reported closing bid and asked prices on such day in the over-the-counter
market, as furnished by the quotation systems upon which the Common Stock is
then quoted, provided that such quotation systems are operated by the NASD or
its Affiliates or the National Quotation Bureau, Inc. or its Affiliates, (iv)
if none of such entities at the time is engaged in the business of reporting
such prices, as furnished by any similar firm then engaged in such business, or
(v) if there is no such firm, as furnished by any member of NASD selected by
Issuer; or (b) at any time that there is no public market for the Common Stock,
the fair market value per share of Common Stock on such date as determined
reasonably and in good faith by the board of directors of Issuer, such fair
market value to be determined by reference to the cash price that would be paid
between a fully informed buyer and seller under no compulsion to buy or sell,
provided that (x) if Current Market Price is being determined in connection
with an issuance of shares of Common Stock, solely to one or more Affiliates of
Issuer, then if so requested by the Required Holders, Current Market Price
shall be the Appraised Value and (y) Current Market Price shall never be less
than Book Value.
"Current Warrant Price" shall mean, in respect of a share of Common
Stock at any date herein specified, $11.00 per share of Common Stock (subject
to adjustment as provided in Article III).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period during which the Warrants are
exercisable pursuant to Section 2.2.
"Expiration Date" shall have the meaning set forth in Section 2.2.
Exh. 5-4
17
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"Investor" shall have the meaning ascribed thereto in the Preamble of
this Agreement.
"Issuer" shall have the meaning ascribed thereto in the Preamble of
this Agreement.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor thereto.
"Other Property" shall have the meaning set forth in Section 3.7
"Permitted Issuances" shall mean (i) the issuance of shares of Common
Stock upon exercise of the Warrants and as contemplated by the Offering
Memorandum of Issuer dated December 18, 1996, (ii) the issuance of shares of
Common Stock pursuant to the securities identified on Exhibit B hereto, (iii)
the issuance of shares relating to any benefit plan, stock option plan or any
other compensation plan or arrangement offered solely to the officers,
directors, employees and/or consultants of Issuer and its Affiliates, (iv) the
issuance of shares of Common Stock as consideration for the purchase of any
assets or securities from any Person who is not an Affiliate of Issuer
immediately prior to such transaction whether such shares are issued directly
by Issuer or an Affiliate of Issuer in connection with any merger,
consolidation or other business combination, (v) if there shall then be a
public market for the Common Stock, the issuance of shares of Common Stock upon
receipt by Issuer of the Current Market Price therefor as described in clause
(a) of the definition of "Current Market Price" and (vi) if there shall then be
no public market for the Common Stock, the issuance of shares of Common Stock,
warrants or Convertible Securities on terms that are at least as favorable to
Issuer as terms that could be obtained in an arm's length transaction with
third Persons not Affiliates of Issuer and for consideration equal to the fair
value of such shares as determined in good faith by a majority of disinterested
members of the board of directors of Issuer.
"Person(s)" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, limited liability company, incorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Required Holders" shall mean the Warrant Holders of Warrants
exercisable for an amount exceeding 50% of the aggregate number of shares of
Common Stock then purchasable upon exercise of the outstanding Warrants.
"Requirement of Law" shall mean, as to any Person, any requirement
contained in any certificate or articles of incorporation, bylaws, or other
organizational or governing documents of such Person, and any law, treaty, rule
or regulation or determination of an arbitrator or a court
Exh. 5-5
18
or other governmental authority, in each case applicable to or binding such
Person or any of the property or to which such Person or any of its property is
subject.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of a Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 3.1 of the
Unit Purchase Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the applicable time.
"Unit Purchase Agreement" shall have the meaning ascribed thereto in
the recitals of this Agreement.
"Warrant Certificate" shall mean a certificate evidencing one or more
Warrants, substantially in the form of Exhibit A hereto, with such changes
therein as may be required to reflect any adjustments made pursuant to Article
III.
"Warrant Holder" shall mean each Person in whose name the Warrants are
registered on the books of Issuer maintained for such purpose or each Person
holding any Warrant Stock.
"Warrant Price" shall mean, for any exercise of Warrants pursuant to
Section 2.2, an amount equal to (i) the number of shares of Common Stock being
purchased upon such exercise multiplied by (ii) the Current Warrant Price for
each share of Common Stock as of the date of such exercise.
"Warrant Stock" shall mean the shares of Common Stock purchased by the
Warrant Holders upon the exercise thereof.
"Warrants" shall mean the warrants issued pursuant to this Agreement
and all warrants issued upon transfer, division or combination of, or in
substitution for, such warrants. All Warrants shall at all times be identical
as to terms and conditions and date, except as to the number of shares of
Common Stock for which they may be exercised. One Warrant shall entitle the
record holder thereof to purchase from Issuer one share of Common Stock
(subject to adjustment as provided in Article II) at the exercise price equal
to the Current Warrant Price.
1.2 Other. Unless otherwise defined herein, all other terms used
herein with their initial letter capitalized shall have the meaning ascribed to
such term in the Unit Purchase Agreement.
Exh. 5-6
19
ARTICLE II
ISSUANCE AND EXERCISE OF WARRANTS
2.1 Issuance of Warrants. On the Closing Date under the Unit
Purchase Agreement, Issuer shall deliver Warrant Certificates to Investor
evidencing Warrants in the number to each Investor as indicated on Exhibit C.
2.2 Manner of Exercise.
(a) A Warrant Holder may, from and after the Closing Date
until 5:00 p.m., New York, New York time, on the third annual anniversary of
the Closing Date (the "Expiration Date"), exercise the Warrants evidenced by a
Warrant Certificate, on any Business Day, for all or part of the number of
shares of Common Stock purchasable thereunder; provided, however, any partial
exercise shall be in integral multiples of 1,000 shares.
(b) In order to exercise the Warrants, in whole or in
part, a Warrant Holder shall deliver to Issuer at its principal office at 10055
Sweet Valley Drive, Valley View, Ohio, 44125, Attention: Edward Feighan, or at
the office or agency designated by Issuer pursuant to Article XII, (i) a
written notice duly executed by the Warrant Holder or its agent or attorney,
substantially in the form of the form of election to purchase appearing at the
end of the Warrant Certificate as Exhibit A thereto, of such Warrant Holder's
election to exercise the Warrants, which notice shall specify the number of
shares of Common Stock to be purchased, (ii) payment of the Warrant Price in
the manner provided below, and (iii) the Warrant Certificate or Warrant
Certificates evidencing the Warrants. Upon receipt thereof, Issuer shall, as
promptly as practicable, and in any event within three Business Days
thereafter, execute or cause to be executed and deliver or cause to be
delivered to such Warrant Holder a certificate or certificates representing the
aggregate number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereinafter provided.
The stock certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as such Warrant Holder shall
request in the notice and shall be registered in the name of the Warrant Holder
or such other name as shall be designated in the notice. The Warrants shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and such Warrant Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the notice, the Warrant
Certificate or Warrant Certificates, together with payment of the Warrant
Price, are received by Issuer as described above and all taxes required to be
paid by such Warrant Holder, if any, pursuant to Section 2.3 prior to the
issuance of such shares have been paid. If the Warrants evidenced by a Warrant
Certificate shall have been exercised, Issuer shall, at the time of delivery of
the certificate or certificates representing Warrant Stock, deliver to Warrant
Holder a new Warrant Certificate evidencing the rights of Warrant Holder to
purchase the unpurchased shares of Common Stock represented by the old Warrant
Certificate, which new Warrant Certificate shall in all other respects be
identical to the old Warrant Certificate. Notwithstanding any provision herein
to the contrary, Issuer shall not be required to register shares in the name
Exh. 5-7
20
of any Person who acquired any Warrant or any Warrant Stock otherwise than in
accordance with this Agreement.
(c) Payment of the Warrant Price shall be made by wire
transfer in immediately available funds or by certified bank check.
2.3 Payment of Taxes. Issuer shall pay all expenses in connection
with, and all taxes and other governmental charges that may be imposed with
respect to, the issuance or delivery of Warrant Stock, unless such tax or
charge is imposed by law upon the Warrant Holder, in which case such taxes or
charges shall be paid by such Warrant Holder. Issuer shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Warrant Stock issuable
upon exercise of Warrants in any name other than that of Warrant Holder, and in
such case Issuer shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the satisfaction of Issuer that no such tax or other charge is
due.
2.4 Fractional Shares. Issuer shall not be required to issue a
fractional share of Common Stock upon the exercise of Warrants. As to any
fraction of a share which the Warrant Holder would otherwise be entitled to
purchase upon such exercise, Issuer shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the Current Market
Price per share of Common Stock on the date of exercise. If the determination
of Current Market Price for purposes of this Section 2.4 would otherwise
require an appraisal to be made by an investment banking firm, then Current
Market Price for purposes of this Section 2.4 only shall mean Book Value per
share of Common Stock on the date of exercise, unless a determination of
Appraised Value shall have been made within six (6) months prior to such date
in which case such Appraised Value shall be utilized for the purposes of
determining Current Market Price.
2.5 Continued Validity. A Warrant Holder of shares of Warrant
Stock (other than a holder who acquires such shares after the same have been
publicly sold pursuant to a registration statement filed under the Securities
Act) shall continue to be entitled with respect to such shares to all rights to
which it would have been entitled as Warrant Holder under Articles IX, X and XV
of this Agreement. Issuer will, at the time of each exercise of Warrants or
upon the request of the Warrant Holder of the shares of Warrant Stock issued
upon the exercise thereof, acknowledge in writing, in form reasonably
satisfactory to such Warrant Holder, its continuing obligation to afford to
such Warrant Holder all such rights; provided, however, that if such Warrant
Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of Issuer to afford to such Warrant Holder all such
rights.
ARTICLE III
ADJUSTMENTS
The number of shares of Warrant Stock for which Warrants are
exercisable, and the price at which such shares may be purchased upon exercise
of Warrants, shall be subject to adjustment
Exh. 5-8
21
from time to time as set forth in this Article III. Issuer shall give each
Warrant Holder notice of any event described below which requires an adjustment
pursuant to this Article III within a reasonable period of time after such
event.
3.1 Stock Dividends, Subdivisions and Combinations. If at any
time Issuer shall:
(a) take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock into
a larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then (i) the number of shares of Common Stock for which a Warrant is
exercisable immediately after the occurrence of any such event shall be
adjusted to equal the number of shares of Common Stock which a record holder of
the same number of shares of Common Stock for which a Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event and (ii) the Current Warrant Price
shall be adjusted to equal the Current Warrant Price multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock for which
a Warrant is exercisable immediately prior to the adjustment and the
denominator of which shall be the number of shares for which a Warrant is
exercisable immediately after such adjustment.
3.2 Issuance of Additional Shares of Stock.
(a) If at any time Issuer shall (except as hereinafter
provided) issue or sell any Additional Shares of Common Stock, other than
Permitted Issuances, for consideration in an amount per Additional Share of
Common Stock less than the Current Market Price, then the Current Warrant Price
shall be adjusted by multiplying the Current Warrant Price by a fraction, the
numerator of which shall be (i) an amount equal to the sum of (A) the number of
shares of Common Stock outstanding immediately prior to such issuance or sale
multiplied by the Current Market Price immediately prior to the first to occur
of (x) action by Issuer's board of directors authorizing such action or (y) the
public announcement of an intent to take such action, plus (B) the
consideration, if any, received by Issuer upon such issuance or sale, and the
denominator of which shall be (ii) the total number of shares of Common Stock
outstanding immediately after such issuance or sale multiplied by the Current
Market Price immediately prior to such issuance.
(b) The provisions of Section 3.2(a) shall not apply to
any issuance of Additional Shares of Common Stock for which an adjustment is
provided under Section 3.1. Any adjustments of the number of shares of Common
Stock for which a Warrant shall be exercisable
Exh. 5-9
22
that are made upon the issuance of any Additional Shares of Common Stock, which
Additional Shares are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any conversion
or exchange rights in any Convertible Securities, shall be made pursuant to
Section 3.3 or Section 3.4, as applicable.
3.3 Issuance of Warrants or Other Rights. If at any time Issuer
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Issuer is the surviving
corporation) issue or sell, any warrants or other rights to subscribe for or
purchase any Additional Shares of Common Stock or any Convertible Securities,
whether or not the rights to exchange or convert thereunder are immediately
exercisable, and if the price per share for which Common Stock is issuable upon
the exercise of such warrants or other rights or upon conversion or exchange of
such Convertible Securities shall be less than the Current Market Price in
effect immediately prior to the time of such distribution, issue or sale, then
the Current Warrant Price shall be adjusted as provided in Section 3.2(a) on
the basis that (i) the maximum number of Additional Shares of Common Stock
issuable pursuant to all such warrants or other rights or necessary to effect
the conversion or exchange of all such Convertible Securities shall be deemed
to be outstanding immediately following such issuance, (ii) the price per share
for such Additional Shares of Common Stock shall be deemed to be the lowest
possible price per share in any range of prices per share at which such
Additional Shares of Common Stock are available to such holders, and (iii)
Issuer shall be deemed to have received all of the consideration payable
therefor, if any, as of the date of the actual issuance of such warrants or
other rights. No further adjustments of the Current Warrant Price shall be
made upon the actual issuance of such Common Stock or of such other rights or
upon exercise of such warrants or other rights or upon the actual issuance of
such Common Stock upon such conversion or exchange of such Convertible
Securities.
3.4 Issuance of Convertible Securities. If at any time Issuer
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a distribution of, or shall in any manner (whether
directly or by assumption in a merger in which Issuer is the surviving
corporation) issue or sell, any Convertible Securities, whether or not the
rights to exchange or convert thereunder are immediately exercisable, and if
the price per share for which Common Stock is issuable upon such conversion or
exchange shall be less than the Current Market Price in effect immediately
prior to the time of such issue or sale of Convertible Securities, then the
Current Warrant Price shall be adjusted as provided in Section 3.2(a) on the
basis that (i) the maximum number of Additional Shares of Common Stock
necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to be outstanding immediately following such
issuance, (ii) the price per share of such Additional Shares of Common Stock
shall be deemed to be the lowest possible price in any range of prices at which
such Additional Shares of Common Stock are available to such holders, and (iii)
Issuer shall be deemed to have received all of the consideration payable
therefor, if any, as of the date of actual issuance of such Convertible
Securities. No adjustment of the Current Warrant Price shall be made under
this Section 3.4 upon the issuance of any Convertible Securities which are
issued pursuant to the exercise of any warrants or other subscription or
purchase rights therefor, if any
Exh. 5-10
23
such adjustment shall previously have been made upon the issuance of such
warrants or other rights pursuant to Section 3.3. No further adjustments of
the Current Warrant Price shall be made upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities and, if any
issue or sale of such Convertible Securities is made upon exercise of any
warrant or other right to purchase any such Convertible Securities for which
adjustments of the Current Warrant Price have been or are to be made pursuant
to other provisions of this Article III, no further adjustments of the Current
Warrant Price shall be made by reason of such issue or sale.
3.5 Superseding Adjustment. If, at any time after any adjustment
of the Current Warrant Price shall have been made pursuant to Section 3.3 or
Section 3.4 as the result of any issuance of warrants, options, rights or
Convertible Securities, and such warrants, options or rights, or the right of
conversion or exchange in such other Convertible Securities, shall expire, and
all or a portion of such warrants, options or rights, or the right of
conversion or exchange with respect to all or a portion of such other
Convertible Securities, as the case may be, shall not have been exercised, then
such previous adjustment shall be rescinded and annulled and, if applicable,
the Current Warrant Price shall be recalculated as if all such expired and
unexercised warrants, options, rights or Convertible Securities had never been
issued.
3.6 Other Provisions Applicable to Adjustments under this Section.
The following provisions shall be applicable to the making of adjustments of
the number of shares of Common Stock for which a Warrant is exercisable
provided for in this Article III:
(a) Computation of Consideration. To the extent that any
Additional Shares of Common Stock shall be issued for cash consideration, the
consideration received by Issuer therefor shall be the amount of the cash
received by Issuer therefor, or, if such Additional Shares of Common Stock are
sold to underwriters or dealers for public offering without a subscription
offering, the initial public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends, but not
subtracting any compensation, discounts or expenses paid or incurred by Issuer
for and in the underwriting of, or otherwise in connection with, the issuance
thereof). To the extent that such issuance shall be for a consideration other
than cash, then, except as herein otherwise expressly provided, the amount of
such consideration shall be deemed to be the fair value of such consideration
at the time of such issuance as determined reasonably and in good faith by a
majority of the disinterested members of the board of directors of Issuer.
(b) When Adjustments to Be Made. The adjustments
required by this Article III shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that any adjustment
to the number of shares for which the Warrants are exercisable that would
otherwise be required may be postponed (except in the case of a subdivision or
combination of shares of the Common Stock, as provided for in Section 3.1) up
to, but not beyond, the date and time of exercise of any Warrants if such
adjustment either by itself or with other adjustments not previously made adds
or subtracts less than 1% to the number of shares of
Exh. 5-11
24
Common Stock for which the Warrants initially issued pursuant to this Agreement
are exercisable immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount (except as
aforesaid) which is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Article III and
not previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments under
this Article III, fractional interests in Common Stock resulting from an
issuance of additional Warrants to any Warrant Holder pursuant to this Article
III shall be taken into account to the nearest 1/10th of a share subject to
Section 2.4.
(d) When Adjustment Not Required. If Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling then to
receive a dividend or distribution or subscription or purchase rights and
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.
(e) Escrow of Warrant Stock. If after any property
becomes distributable pursuant to this Article III by reason of taking of any
record of the holders of Common Stock, but prior to the occurrence of the event
for which such record is taken, any Warrant Holder exercises Warrants, any
Additional Shares of Common Stock issuable upon exercise of such Warrant by
reason of such adjustment shall be deemed the last shares of Common Stock for
which such Warrant is exercised (notwithstanding any other provision to the
contrary herein) and such shares or other property shall be held in escrow for
a Warrant Holder by Issuer to be issued to such Warrant Holder upon and to the
extent that the event actually takes place, upon payment of the balance, if
any, of the Warrant Price for such Warrant at such date (after taking into
account any overpayment of the Warrant Price made at the time of the initial
Warrant exercise). Notwithstanding any other provision to the contrary herein,
if the event for which such record was taken fails to occur or is rescinded,
then such escrowed shares shall be cancelled by Issuer and escrowed property
returned.
3.7 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case Issuer shall reorganize its capital, reclassify
its capital stock, consolidate or merge with and into another corporation
(where Issuer is not the surviving corporation or where there is a change in or
distribution with respect to the Common Stock of Issuer), or sell, transfer or
otherwise dispose of all or substantially all its property, assets or business
to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants
Exh. 5-12
25
or other subscription or purchase rights) in addition to or in lieu of common
stock of the successor or acquiring corporation ("Other Property"), are to be
received by or distributed to the holders of Common Stock of Issuer, then
Issuer shall, as a condition precedent to such transaction, cause effective
provisions to be made so that each Warrant Holder shall have the right
thereafter to receive, upon exercise of a Warrant, solely the number of shares
of common stock of the successor or acquiring corporation or of Issuer, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets, by a holder of the number of shares of Common Stock for which a
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, such provisions shall include the express assumption by the successor
or acquiring corporation (if other than Issuer) of the due and punctual
observance and performance of each and every covenant and condition of this
Agreement to be performed and observed by Issuer and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the board of directors of Issuer)
in order to provide for adjustments of shares of the Common Stock for which a
Warrant is exercisable which shall be as nearly equivalent as practicable to
the adjustments provided for in this Article III. For purposes of this Section
3.7, "common stock of the successor or acquiring corporation" shall include
stock of such corporation of any class which is not preferred as to dividends
or assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 3.7 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
ARTICLE IV
NOTICES TO WARRANT HOLDERS
4.1 Notice of Adjustments. Whenever the number of shares of
Common Stock for which a Warrant is exercisable, or whenever the price at which
a share of such Common Stock may be purchased upon exercise of the Warrants,
shall be adjusted pursuant to Article III, Issuer shall forthwith prepare a
certificate to be executed by the chief financial officer of Issuer setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis
on which the board of directors of Issuer determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights referred to in Article III),
specifying the number of shares of Common Stock for which a Warrant is
exercisable and (if such adjustment was made pursuant to Section 3.7)
describing the number and kind of any other shares of stock or Other Property
for which a Warrant is exercisable, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. Issuer shall
promptly cause a signed copy of such certificate to be delivered to each
Warrant Holder in accordance with Section 15.2. Issuer shall keep at its office
or agency designated pursuant to Article XII copies
Exh. 5-13
26
of all such certificates and cause the same to be available for inspection at
said office during normal business hours by any Warrant Holder or any
prospective purchaser of a Warrant designated by a Warrant Holder thereof.
4.2 Notice of Certain Corporate Action. Each Warrant Holder shall
be entitled to the same rights to receive notice of corporate action as any
holder of Common Stock.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Issuer and each Investor hereby represents and warrants that each of
the representations and warranties made by such Party in the Unit Purchase
Agreement is true and correct as of the date hereof as is fully set forth in
this Agreement.
ARTICLE VI
CERTAIN COVENANTS
6.1 No Impairment. Issuer shall not by any action including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of each Warrant Holder against impairment. Without limiting the
generality of the foregoing, Issuer will use reasonable good faith efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable
Issuer to perform its obligations under this Agreement.
Upon the request of a Warrant Holder, Issuer will, at any time during
the period this Agreement is in effect, acknowledge in writing, in form
satisfactory to such Warrant Holder, the continuing validity of this Agreement
and the obligations of Issuer hereunder.
6.2 Reservation and Authorization of Common Stock; Registration
with, or Approval of, any Governmental Authority. From and after the date
hereof, Issuer shall at all times reserve and keep available for issue upon the
exercise of Warrants such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all
outstanding warrants. All shares of Common Stock which shall be so issuable,
when issued upon exercise of any Warrants and payment therefor in accordance
with the terms of this Agreement, shall be duly and validly issued and fully
paid and nonassessable, and not subject to preemptive rights.
Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of
Exh. 5-14
27
the Warrants, Issuer shall take any corporate action which may be necessary in
order that Issuer may validly and legally issue fully paid and nonassessable
shares of such Common Stock at such adjusted Current Warrant Price.
Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which a Warrant is exercisable or in the
Current Warrant Price, Issuer shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
If any shares of Common Stock required to be reserved for issuance
upon exercise of Warrants require registration or qualification with any
governmental authority under any federal or state law (otherwise than as
provided in Article VIII) before such shares may be so issued, Issuer will in
good faith and as expeditiously as possible and at its expense endeavor to
cause such shares to be duly registered.
6.3 Holder of the Notes. From and after the date hereof, each
Warrant Holder agrees that, at all times that such Warrant Holder is a holder
of any Warrants and that there is outstanding principal or interest under such
Notes, such Warrant Holder will also be a holder of the Notes.
ARTICLE VII
TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by Issuer to the
holders of its Common Stock with respect to which any provision of Article III
refers to the taking of a record of such holders, Issuer will in each such case
take such a record as of the close of business on a Business Day. Issuer will
not at any time, except upon dissolution, liquidation or winding up of Issuer,
close its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrants.
ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY
The Warrants and the Warrant Stock shall be subject to the
restrictions on transferability set forth in Article III of the Unit Purchase
Agreement.
ARTICLE IX
REGISTRATION RIGHTS
The Warrant Stock shall be entitled to the registration rights
provided under Article VII of the Unit Purchase Agreement.
Exh. 5-15
28
ARTICLE X
SUPPLYING INFORMATION
Issuer shall cooperate with each Warrant Holder of a Warrant and each
Warrant Holder of Restricted Common Stock in supplying such information as may
be reasonably necessary for such Warrant Holder to complete and file any
information reporting forms presently or hereafter required by the Commission
as a condition to the availability of an exemption from the Securities Act for
the sale of any Warrant or Restricted Common Stock.
ARTICLE XI
LOSS OR MUTILATION
Upon receipt by Issuer from any Warrant Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of a certificate representing Warrants or Warrant Stock and
indemnity reasonably satisfactory to it (it being understood that the written
agreement of the Warrant Holder or an Affiliate thereof shall be sufficient
indemnity) and in case of mutilation upon surrender and cancellation hereof or
thereof, Issuer will execute and deliver in lieu hereof or thereof a new
Warrant or new stock certificate as the case may be, of like tenor to such
Warrant Holder; provided, in the case of mutilation, no indemnity shall be
required if the certificate representing Warrants or Warrant Stock in
identifiable form is surrendered to Issuer for cancellation.
ARTICLE XII
OFFICE OF ISSUER
As long as any of the Warrants remain outstanding, Issuer shall
maintain an office or agency (which may be the principal executive offices of
Issuer) where the Warrants may be presented for exercise, registration or
transfer, division or combination as provided in this Agreement.
ARTICLE XIII
APPRAISAL
The determination of the Appraised Value per share of Common Stock
shall be made by an investment banking firm of nationally recognized standing
selected by Issuer and acceptable to the Required Holders. If the investment
banking firm selected by Issuer is not acceptable to the Required Holders and
Issuer and the Required Holders cannot agree on a mutually acceptable
investment banking firm, then the Required Holders and Issuer shall each choose
one such investment banking firm and the respective chosen firms shall agree on
another investment banking firm which shall make the determination. Issuer
shall retain, at its sole cost, such investment banking firm as may be
necessary for the determination of Appraised Value required by the terms of
this Agreement.
Exh. 5-16
29
ARTICLE XIV
LIMITATION OF LIABILITY; NO RIGHTS AS STOCKHOLDER
No provision hereof, in the absence of affirmative action by any
Warrant Holder to purchase shares of Common Stock, and no enumeration herein of
the rights or privileges of any Warrant Holder, shall give rise to any
liability of such Warrant Holder for the purchase price of any Common Stock or
as a stockholder of Issuer, whether such liability is asserted by Issuer or by
creditors of Issuer. Except as may otherwise be provided by law or by separate
agreement between a Warrant Holder and Issuer, no Warrant Holder, as such,
shall be entitled to vote or be deemed the holder of Common Stock or any other
securities (other than Warrants) of Issuer which may at any time be issuable on
the exercise hereof, nor shall anything contained herein be construed to confer
upon any Warrant Holder the rights of a stockholder of Issuer or the right to
vote for the election of directors or upon any matters submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
stockholders (except as provided herein), or to receive dividends or otherwise,
until the Warrants shall have been exercised in accordance with the terms and
conditions hereof.
ARTICLE XV
MISCELLANEOUS
15.1 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission if such transmission is confirmed
by delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such Party shall
designate in writing to the other Party):
(a) if to Issuer to:
International Alliance Services, Inc.
10055 Sweet Valley Drive
Valley View, Ohio 44125
Attention: Edward Feighan
Telecopy: (216) 447-9137
Exh. 5-17
30
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, LLP
1900 Pennzoil Place - South Tower
711 Louisiana Street
Houston, Texas 77002
Attention: Rick L. Burdick, Esq.
Telecopy: (713) 236-0822
(b) if to Investor, at its last known address appearing
on the books of Issuer maintained for such purpose.
15.2 Loss or Mutilation. Upon receipt by Issuer from any Holder of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of a certificate representing, Warrants or Warrant
Stock and indemnity reasonably satisfactory to it (it being understood that the
written agreement of the Warrant Holder or an Affiliate thereof shall be
sufficient indemnity) and in case of mutilation upon surrender and cancellation
hereof or thereof, Issuer will execute and deliver in lieu hereof or thereof a
new Warrant or new stock certificate as the case may be, of like tenor to such
Warrant Holder; provided, in the case of mutilation, no indemnity shall be
required if the certificate representing Warrants or Warrant Stock in
identifiable form is surrendered to Issuer for cancellation.
15.3 Survival. Each representation, warranty, covenant and
agreement of the parties set forth in this Agreement is independent of each
other representation, warranty, covenant and agreement. Each representation
and warranty made by any Party in this Agreement shall survive the Closing
through the period ending on June 30, 1997.
15.4 Remedies.
(a) Each of Investor and Issuer acknowledge that the
other Party would not have an adequate remedy at law for money damages in the
event that any of the covenants or agreements of such Party in this Agreement
was not performed in accordance with its terms, and it is therefore agreed that
each of Investor and Issuer in addition to and without limiting any other
remedy or right such Party may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any
such breach and enforcing specifically the terms and provisions hereof, and
each of Investor and Issuer hereby waive any and all defenses such Party may
have on the ground of lack of jurisdiction or competence of the court to grant
such an injunction or other equitable relief.
(b) All rights, powers and remedies under this Agreement
or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise or beginning of the exercise
of any thereof by any Party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such Party.
Exh. 5-18
31
15.5 Entire Agreement. This Agreement (including the exhibits and
schedules attached hereto) and other documents delivered at the Closing
pursuant hereto, contain the entire understanding of the Parties in respect of
the subject matter hereof and supersede all prior agreements and understandings
between or among the Parties with respect to such subject matter. The exhibits
and schedules hereto constitute a part hereof as though set forth in full above.
15.6 Expenses; Taxes. Except as otherwise provided in this
Agreement, the Parties shall pay their own fees and expenses, including their
own counsel fees, incurred in connection with this Agreement or any transaction
contemplated hereby. Further, exceptions otherwise provided in this Agreement,
any sales tax, stamp duty, deed transfer or other tax (except taxes based on
the income of Investor) arising out of the sale of the Warrants by Issuer to
Investor and issuance of Warrant Stock upon exercise of the Warrants and
consummation of the transactions contemplated by this Agreement shall be paid
by Issuer.
15.7 Amendment. This Agreement may be modified or amended or the
provisions hereof waived with the written consent of Issuer and the Required
Holders, provided that no Warrant may be modified or amended to reduce the
number of shares of Common Stock for which such Warrant is exercisable or to
increase the price at which such shares may be purchased upon exercise of such
Warrant (before giving effect to any adjustment as provided herein) or to
accelerate the Expiration Date without the prior written consent of the Warrant
Holder thereof.
15.8 Waiver. No failure to exercise, and no delay in exercising,
any right, power or privilege under this Agreement shall operate as a waiver,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall
any waiver be implied from any course of dealing between the Parties. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights and
remedies of the Parties under this Agreement are in addition to all other
rights and remedies, at law or equity, that they may have against each other.
15.9 Binding Effect; Assignment. Subject to the provisions of
Article IX of the Unit Purchase Agreement, the rights and obligations of this
Agreement shall bind and inure to the benefit of the Parties and their
respective successors and legal assigns. The provisions of this Agreement are
intended to be for the benefit of all Holders from time to time of the Warrants
and Warrant Stock, and shall be enforceable by any such Warrant Holder.
15.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
Exh. 5-19
32
15.11 Headings. The headings contained in this Agreement are for
convenience of reference only and are not to be given any legal effect and
shall not affect the meaning or interpretation of this Agreement.
15.12 GOVERNING LAW; INTERPRETATION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE
STATE OF NEW YORK.
15.13 Severability. The parties stipulate that the terms and
provisions of this Agreement are fair and reasonable as of the date of this
Agreement. However, any provision of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If, moreover, any of those provisions shall
for any reason be determined by a court of competent jurisdiction to be
unenforceable because excessively broad or vague as to duration, geographical
scope, activity or subject, it shall be construed by limiting, reducing or
defining it, so as to be enforceable.
[The remainder of this page is intentionally left blank.]
Exh. 5-20
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of December 24, 1996.
INTERNATIONAL ALLIANCE SERVICES, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
INVESTOR:
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
Exh. 5-21
34
EXHIBIT 6
WARRANT CERTIFICATE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED,
UNLESS AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY
APPLICABLE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER, IS
AVAILABLE. SUCH SECURITIES ARE SUBJECT TO THE RESTRICTIONS AND PRIVILEGES
SPECIFIED IN THE UNIT PURCHASE AGREEMENT, DATED AS OF DECEMBER 24, 1996,
BETWEEN INTERNATIONAL ALLIANCE SERVICES, INC. AND THE INITIAL HOLDER OF
SECURITIES NAMED THEREIN, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF
INTERNATIONAL ALLIANCE SERVICES, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO
THE HOLDER HEREOF UPON WRITTEN REQUEST. THE HOLDER OF THIS CERTIFICATE AGREES
TO BE BOUND BY THE TERMS AND CONDITIONS OF SUCH UNIT PURCHASE AGREEMENT.
No. 25
WARRANT CERTIFICATE
INTERNATIONAL ALLIANCE SERVICES, INC.
This Warrant Certificate certifies that Huizenga Investments Limited
Partnership, or registered assigns thereof, is the restricted holder of 222,222
warrants (the "Warrants") to purchase shares of common stock of International
Alliance Services, Inc., a Delaware corporation ("Issuer"). Each Warrant
entitles the holder, subject to the conditions set forth herein and in the Unit
Purchase Agreement referred to below, to purchase from Issuer before 5:00 p.m.,
New York, New York time, on or before the Expiration Date, one fully paid and
nonassessable share of common stock of Issuer ("Warrant Stock") at a price (the
"Exercise Price") of $11.00 per share of Warrant Stock payable as set forth in
the Unit Purchase Agreement. The number of shares of Warrant Stock for which
each Warrant is exercisable and the Current Warrant Price are each subject to
adjustment prior to the Expiration Date upon the occurrence of certain events
as set forth in the Unit Purchase Agreement.
Issuer may deem and treat the registered holders of the Warrants
evidenced hereby as the absolute owner thereof (notwithstanding any notation of
ownership or other writing
Exh. 6-1
35
hereon made by anyone), for the purpose of any exercise hereof and of any
distribution to the holders hereof, and for all other purposes.
Warrant Certificates, when surrendered at the office of Issuer by the
registered holder hereof in person or by a legal representative duly authorized
in writing, may be exchanged, in the manner and subject to the limitations
provided in the Unit Purchase Agreement, but without payment of any service
charge, for another Warrant Certificate or Warrant Certificates of like tenor
evidencing in the aggregate a like number of Warrants.
Upon due presentment for registration of transfer of this Warrant
Certificate at the office of Issuer at 10055 Sweet Valley Drive, Valley View,
Ohio 44125, or such other address as Issuer may specify in writing to the
registered holder of the Warrants evidenced hereby, 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 in exchange for this
Warrant Certificate to the transferee(s) and, if less than all the Warrants
evidenced hereby are to be transferred, the registered holder hereof, subject
to the limitations provided in the Unit Purchase Agreement, without charge
except for any tax or other governmental charge imposed in connection
therewith.
This Warrant Certificate is one of the Warrant Certificates referred
to in the Unit Purchase Agreement, dated as of December 24, 1996, between
Issuer and the initial holder of Warrants party thereto (the "Unit Purchase
Agreement"). Such Unit Purchase 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 Issuer and the holders, and in the event of any
conflict between the terms of this Warrant Certificate and the provisions of
the Unit Purchase Agreement, the provisions of the Unit Purchase Agreement
shall control.
IN WITNESS WHEREOF, Issuer has caused this Warrant Certificate to be
duly executed.
Dated: December 31, 1996.
INTERNATIONAL ALLIANCE SERVICES, INC.
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
Exh. 6-2
36
Exhibit A To
Warrant Certificate
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrants]
The undersigned registered owner of this Warrant Certificate
irrevocably exercises Warrants for the purchase of shares of Common Stock of
International Alliance Services, Inc. and herewith makes payment therefor at
the price and on the terms and conditions specified in the Warrant Certificate
and the Unit Purchase Agreement, and requests that certificates for the shares
of Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of ___________________ and delivered
to __________________ whose address is _______________________________ and, if
such shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in the Warrant Certificate, that a new Warrant Certificate
of like tenor and date for the balance of the shares of Common Stock issuable
thereunder be delivered to the undersigned.
- ---------------------------------------------
(Name of Registered Owner)
- ---------------------------------------------
(Signature of Registered Owner)
- ---------------------------------------------
(Street Address)
- ---------------------------------------------
(City) (State) (Zip Code)
Exh. 6-3
37
Exhibit B To
Warrant Certificate
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of the attached
Warrant Certificate hereby sells, assigns and transfers unto the assignee named
below all of the rights of the undersigned under this Warrant Certificate, with
respect to the number of shares of Common Stock set forth below:
Name and Address of Assignee:
______________________________________
______________________________________
______________________________________
______________________________________
No. of Shares of
Common Stock:_______________________________
and does hereby irrevocably constitute and appoint _____________________________
attorney-in-fact to register such transfer on the books of International
Alliance, Inc. maintained for that purpose, with full power of substitution in
the premises.
By:
-------------------------------------
Printed Name:
---------------------------
Signature:
------------------------------
Witness:
--------------------------------
The assignee named above hereby agrees to purchase and take the
attached Warrant Certificate pursuant to and in accordance with the terms and
conditions of the Warrant Agreement, dated as of December _____, 1996, between
International Alliance Services, Inc. and the initial Holder named therein and
agrees to be bound thereby.
Dated:
----------------------------------
Printed Name:
---------------------------
Signature:
------------------------------
Title:
----------------------------------
Exh. 6-4
