Attached files
file | filename |
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8-K - American Standard Energy Corp. | v209782_8k.htm |
EX-99.1 - American Standard Energy Corp. | v209782_ex99-1.htm |
EX-10.3 - American Standard Energy Corp. | v209782_ex10-3.htm |
EX-10.1 - American Standard Energy Corp. | v209782_ex10-1.htm |
THE OFFER
AND SALE OF THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED THAT IN
CONNECTION WITH ANY FORECLOSURE OR TRANSFER OF THE SECURITIES, THE TRANSFEROR
SHALL COMPLY WITH THE PROVISIONS HEREIN, IN THE SECURITIES PURCHASE AGREEMENT
AND THE REGISTRATION RIGHTS AGREEMENT, AND UPON FORECLOSURE OR TRANSFER OF THE
SECURITIES, SUCH FORECLOSING PERSON OR TRANSFEREE SHALL COMPLY WITH ALL
PROVISIONS CONTAINED HEREIN, IN THE SECURITIES PURCHASE AGREEMENT AND THE
REGISTRATION RIGHTS AGREEMENT.
AMERICAN
STANDARD ENERGY CORP.
SERIES
A WARRANT TO PURCHASE COMMON STOCK
Series
A Warrant No. 2011-[_______]
|
|
Original
Issue Date: January __, 2011
|
American
standard Energy Corp., a Delaware corporation (the “Company”), hereby certifies
that, for value received, ___________ or its permitted registered assigns (the
“Holder”), is entitled
to purchase from the Company up to a total of __________ shares of common stock,
$0.001 par value per share (the “Common Stock”), of the
Company (each such share, a “Series A Series A Warrant Share” and
all such shares, the “Series A
Warrant Shares”) at an exercise price per share equal to $5.00 per share
(as adjusted from time to time as provided in Section 9 herein, the
“Exercise Price”), at
any time and from time to time on or after the date hereof (the “Original Issue Date”) and
through and including 5:30 P.M., New York City time, on the five (5) year
anniversary of the Issue Date (the “Expiration Date”), and
subject to the following terms and conditions:
This
Series A Warrant (this “Series
A Warrant”) is one of a series of similar Series A Warrants issued
pursuant to that certain Securities Purchase Agreement, dated January __, 2011
by and among the Company and the Purchasers identified therein (the “Purchase
Agreement”). All such Series A Warrants are referred to
herein, collectively, as the “Series A
Warrants.”
1. Definitions. In
addition to the terms defined elsewhere in this Series A Warrant, capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the Purchase Agreement.
2. Registration of Series A
Warrants. The Company shall register this Series A Warrant,
upon records to be maintained by the Company for that purpose (the “Series A Warrant Register”),
in the name of the record Holder (which shall include the initial Holder or, as
the case may be, any registered assignee to which this Series A Series A Warrant
is permissibly assigned hereunder) from time to time. The Company may
deem and treat the registered Holder of this Series A Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.
3. Registration of
Transfers. Subject to the restrictions on transfer set forth in Section
4.1 of the Purchase Agreement and compliance with all applicable securities
laws, the Company shall register the transfer of all or any portion of this
Series A Warrant in the Series A Warrant Register, upon surrender of this Series
A Warrant, with the Form of Assignment attached as Schedule 2 hereto
duly completed and signed, to the Company at its address specified in the
Purchase Agreement and (x) delivery, at the request of the Company, of an
opinion of counsel reasonably satisfactory to the Company to the effect that the
transfer of such portion of this Series A Warrant may be made pursuant to an
available exemption from the registration requirements of the Securities Act and
all applicable state securities or blue sky laws and (y) delivery by the
transferee of a written statement to the Company certifying that the transferee
is an “accredited investor” as defined in Rule 501(a) under the Securities Act
and making the representations and certifications set forth in Sections 3.2 of
the Purchase Agreement, to the Company at its address specified in the Purchase
Agreement. Upon any such registration or transfer, a new Series A
Warrant to purchase Common Stock in substantially the form of this Series A
Warrant (any such new Series A Warrant, a “New Series A Warrant”)
evidencing the portion of this Series A Warrant so transferred shall be issued
to the transferee, and a New Series A Warrant evidencing the remaining portion
of this Series A Warrant not so transferred, if any, shall be issued to the
transferring Holder. The acceptance of the New Series A Warrant by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations in respect of the New Series A Warrant that the
Holder has in respect of this Series A Warrant. The Company shall prepare, issue
and deliver at its own expense any New Series A Warrant under this Section
3.
4. Exercise and Duration of
Series A Warrants.
(a) All
or any part of this Series A Warrant shall be exercisable by the registered
Holder in any manner permitted by Section 10 of this
Series A Warrant at any time and from time to time on or after the Original
Issue Date and through and including 5:30 P.M., New York City time, on the
Expiration Date, subject to the conditions and restrictions contained in this
Series A Warrant. At 5:30 P.M., New York City time, on the Expiration
Date, the portion of this Series A Warrant not exercised prior thereto shall be
and become void and of no value and this Series A Warrant shall be terminated
and no longer outstanding.
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(b) The
Holder may exercise this Series A Warrant by delivering to the Company (i) an
exercise notice, in the form attached as Schedule 1 hereto
(the “Exercise
Notice”), completed and duly signed, and (ii) payment of the
Exercise Price for the number of Series A Warrant Shares as to which this Series
A Warrant is being exercised (. The date on which the Exercise Notice is
delivered to the Company (as determined in accordance with the notice provisions
hereof) is an “Exercise
Date.” Within two (2) days following the delivery of the Exercise Notice
(the “Payment
Deadline”), the Holder shall make payment with respect to the Exercise
Price for the number of Series A Warrant Shares as to which this Series A
Warrant is being exercised; provided that the Company’s obligations to deliver
such Series A Warrant Shares shall be delayed on a day-for-day basis each day
after the Payment Deadline such payment of the Exercise Price is not paid. The
delivery by (or on behalf of) the Holder of the Exercise Notice and the
applicable Exercise Price, as provided above shall constitute the Holder’s
certification to the Company that its representations contained in Sections
3.2(a), (b), (d), (f), (g), (k), (l) and (q) of the Purchase Agreement are true
and correct as of the Exercise Date as if remade in their entirety (or, in the
case of any transferee Holder that is not a party to the Purchase Agreement,
such transferee Holder’s certification to the Company that such representations
are true and correct as to such transferee Holder as of the Exercise
Date). The Holder shall not be required to physically surrender this
Series A Warrant to the Company until the Holder has purchased all of the Series
A Warrant Shares available hereunder and the Series A Warrant has been exercised
in full, in which case, the Holder shall surrender this Series A Warrant to the
Company for cancellation within three (3) Trading Days of the date the final
Exercise Notice is delivered to the Company. Execution and delivery
of the Exercise Notice shall have the same effect as cancellation of the
original Series A Warrant and issuance of a New Series A Warrant evidencing the
right to purchase the remaining number of Series A Warrant Shares, if
any.
(c) Subject
to the provisions of this Section 4(c), if at any time following the Original
Issue Date, (i) the Closing Sale Price (as defined in Section 10) of the
Common Stock for each of the 10 consecutive Trading Days immediately prior to
delivery of a Call Notice (as defined below) is greater than $7.00(subject to
equitable adjustment as a result of stock splits, reverse stock splits or other
adjustments to capitalization occurring after the Original Issue Date),
(ii) the average daily trading volume of the Common Stock during the entire
10 Trading Day period referenced in (i) above as reported by Bloomberg L.P. (the
“Call Condition
Period”) shall be at least [______] shares (subject to equitable
adjustment as a result of intervening stock splits and reverse stock splits),
(iii) the Series A Warrant Shares are either registered for resale pursuant
to an effective registration statement naming the Holder as a selling
stockholder thereunder (and the prospectus thereunder is available for use by
the Holder as to all Series A Warrant Shares) or freely transferable without
volume or manner of sale restrictions pursuant to Rule 144 promulgated
under the Securities Act during the entire Call Condition Period, (iv) the
Company shall have complied in all material respects with its obligations under
this Series A Warrant, and the Purchase Agreement to which this Series A Warrant
is an Exhibit and the related Registration Rights Agreement, and (v) the
Common Stock shall at all times be listed or quoted on a Trading Market during
the Call Condition Period, then the Company, in its sole discretion, may elect
to require the exercise of all (but not less than all) of the then unexercised
portion of this Series A Warrant, on the date (the “Call Date”) that is the fifth
(5th)
calendar day after written notice thereof (a “Call Notice”) is received by
the Holder; provided,
that the conditions to giving such notice must be in effect at all times during
the Call Condition Period or any such Call Notice shall be null and void. The
Company and the Holder agree that, if and to the extent Section 13 of this
Series A Warrant would restrict the ability of the Holder to exercise this
Series A Warrant in the event of a delivery of a Call Notice, then
notwithstanding anything to the contrary set forth in the Call Notice, the Call
Notice shall be deemed automatically amended to apply only to such portion of
this Series A Warrant as may be exercised by the Holder by the Call Date in
accordance with such Section as then in effect. The Holder will promptly (and,
in any event, prior to the Call Date) notify the Company in writing following
receipt of a Call Notice if Section 11 would restrict its exercise of the Series
A Warrant, specifying therein the number of Series A Warrant Shares so
restricted. The Company covenants and agrees that it will honor all Exercise
Notices tendered through 5:30 P.M., New York City time, on the Call
Date. For purposes of clarification, the exercise of this Series A
Warrant on a Call Date pursuant to a Call Notice shall be done only by means of
a cash exercise.
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5. Delivery of Series A Warrant
Shares.
(a) Subject
to Section
4(b), upon exercise of this Series A Warrant, the Company shall promptly
(but in no event later than 5:30 P.M., New York City time, on the third (3rd)
Trading Day after the Exercise Date (or the fourth (4th)
Trading Day if the last of the Exercise Notice, the Exercise Price (if
applicable) and opinion of counsel referred to below in this Section 5(a) (if
applicable) is delivered after 5:00 P.M., New York City time, on the Exercise
Date) (such time, the “Delivery Deadline”) issue or
cause to be issued and cause to be delivered to or upon the written order of the
Holder and in such name or names as the Holder may designate (provided that, if
the Registration Statement is not effective and the Holder directs the Company
to deliver a certificate for the Series A Warrant Shares in a name other than
that of the Holder or an Affiliate of the Holder, it shall deliver to the
Company on the Exercise Date an opinion of counsel reasonably satisfactory to
the Company to the effect that the issuance of such Series A Warrant Shares in
such other name may be made pursuant to an available exemption from the
registration requirements of the Securities Act and all applicable state
securities or blue sky laws), (i) a certificate for the Series A Warrant Shares
issuable upon such exercise, free of restrictive legends, or (ii) an electronic
delivery of the Series A Warrant Shares to the Holder’s account at the
Depository Trust Company (“DTC”) or a similar
organization, unless in the case of clause (i) and (ii) a registration statement
covering the resale of the Series A Warrant Shares and naming the Holder as a
selling stockholder thereunder is not then effective or the Series A Warrant
Shares are not freely transferable without volume and manner of sale
restrictions pursuant to Rule 144 under the Securities Act, in which case such
Holder shall receive a certificate for the Series A Warrant Shares issuable upon
such exercise with appropriate restrictive legends. The Holder, or
any Person permissibly so designated by the Holder to receive Series A Warrant
Shares, shall be deemed to have become the holder of record of such Series A
Warrant Shares as of the Exercise Date with respect thereto. If the
Series A Warrant Shares can be issued without restrictive legends, the Company
shall, upon the written request of the Holder, use its commercially reasonable
efforts to deliver, or cause to be delivered, Series A Warrant Shares hereunder
electronically through DTC or another established clearing corporation
performing similar functions, if available.
(b) If
by the Delivery Deadline, the Company has failed to comply with Section 5(a), and if
after such Delivery Deadline and prior to the receipt of such Series A Warrant
Shares, the Holder purchases (in an open market transaction) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Series A Warrant
Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall, within three (3) Trading Days after the Company receives the Holder’s
written request and in the Holder’s sole discretion, either (1) pay in cash to
the Holder an amount equal to the Holder’s total purchase price (including
brokerage commissions, if any, that are reasonably documented in Holder’s
written request) for the shares of Common Stock so purchased, at which point the
Company’s obligation to deliver and issue such Series A Warrant Shares shall
terminate or (2) promptly honor its obligation to deliver to the Holder such
Series A Warrant Shares and pay cash to the Holder in an amount equal to the
excess (if any) of Holder’s total purchase
price (including brokerage commissions, if any, that are reasonably
documented in Holder’s written request) for the
shares of Common Stock so purchased in the Buy-In over the product of (A) the number of shares of Common
Stock purchased in the Buy-In, times
(B) the Closing Bid Price of a share of Common Stock on the Exercise
Date.
(c) To
the extent permitted by law, the Company’s obligations to issue and deliver
Series A Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same.
Nothing herein shall limit the Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver the Series A Warrant Shares upon exercise of
the Series A Warrant as required pursuant to the terms hereof.
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6. Charges, Taxes and
Expenses. Issuance and delivery of the Series A Warrant Shares upon
exercise of this Series A Warrant shall be made without charge to the Holder for
any issue or transfer tax, transfer agent fee or other incidental tax or expense
in respect of the issuance of the Series A Warrant Shares, all of which taxes
and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of Series A Warrant Shares or the
Series A Warrants in a name other than that of the Holder or an Affiliate
thereof. The Holder shall be responsible for all other tax liabilities that may
arise as a result of holding or transferring this Series A Warrant or receiving
Series A Warrant Shares upon exercise hereof.
7. Replacement of Series A
Warrant. If this Series A Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Series A Warrant, a New Series A Warrant, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction (in such case) and, in each case, a customary and reasonable
indemnity and surety bond, if requested by the Company. Applicants for a New
Series A Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable third-party
costs as the Company may prescribe. If a New Series A Warrant is requested as a
result of a mutilation of this Series A Warrant, then the Holder shall deliver
such mutilated Series A Warrant to the Company as a condition precedent to the
Company’s obligation to issue the New Series A Warrant.
8. Reservation of Series A
Warrant Shares. The Company covenants that it will at all times reserve
and keep available out of the aggregate of its authorized but unissued and
otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Series A Warrant Shares upon exercise of this Series A Warrant as herein
provided, the number of Series A Warrant Shares that are initially issuable and
deliverable upon the exercise of this entire Series A Warrant, free from
preemptive rights or any other contingent purchase rights of persons other than
the Holder (taking into account the adjustments and restrictions of Section 9). The
Company covenants that all Series A Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable. The Company will take all commercially reasonable
actions as may be necessary to assure that such shares of Common Stock may be
issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any securities exchange or automated quotation system
upon which the Common Stock may be listed.
9. Certain Adjustments.
The Exercise Price and number of Series A Warrant Shares issuable upon exercise
of this Series A Warrant are subject to adjustment from time to time as set
forth in this Section
9.
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(a) Stock Dividends and
Splits. If the Company, at any time while this Series A Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides its outstanding shares of Common Stock into a larger
number of shares, or (iii) combines its outstanding shares of Common Stock into
a smaller number of shares, then in each such case, the Exercise Price shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately before such event and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
after such event. Any adjustments made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
(b) Pro Rata
Distributions. If the Company, at any time while this Series A
Warrant is outstanding, distributes to all holders of Common Stock for no
consideration (i) evidences of its indebtedness, (ii) any security (other than a
distribution of Common Stock covered by the preceding paragraph) or (iii) rights
or Series A Warrants to subscribe for or purchase any security, or (iv) any
other asset, including cash dividends (in each case, “Distributed Property”), then,
upon any exercise of this Series A Warrant that occurs after the record date
fixed for determination of stockholders entitled to receive such distribution,
the Holder shall be entitled to receive, in addition to the Series A Warrant
Shares otherwise issuable upon such exercise (if applicable), the Distributed
Property that such Holder would have been entitled to receive in respect of such
number of Series A Warrant Shares had the Holder been the record holder of such
Series A Warrant Shares immediately prior to such record date without regard to
any limitation on exercise contained therein. Notwithstanding
anything herein to the contrary, the foregoing provisions in this Section 9(b) shall
not apply to, or be triggered by, any rights issued by the Company (either
separately or that attach to any securities of the Company) in connection with
any stockholders rights agreement, poison pill or other similar anti-takeover
provision under the Company’s certificate of incorporation, bylaws or other
documents.
(c) Fundamental
Transactions.
(i) It
shall be a condition to the Company’s entry into a Fundamental Transaction that
(i) if the Successor Entity (or the Successor Entity’s Parent Entity) is a
publicly traded entity whose common stock is quoted on or listed for trading on
an U.S. national securities exchange, the Successor Entity (or Parent Entity, if
applicable) assumes in writing (or remains bound by) all of the obligations of
the Company under this Series A Warrant in accordance with the provisions of
this Section 9(c), including agreements (if necessary) to deliver to each holder
of the Series A Warrants in exchange for such Series A Warrants a security of
the Successor Entity (or Parent Entity, if applicable) evidenced by a written
instrument substantially similar in form and substance to this Series A Warrant,
including, without limitation, an adjusted (if necessary) exercise price equal
to the value for the shares of Common Stock reflected by the terms of such
Fundamental Transaction, and exercisable for a corresponding number of shares of
capital stock equivalent to the shares of Common Stock acquirable and receivable
upon exercise of this Series A Warrant (without regard to any limitations on the
exercise of this Series A Warrant) prior to such Fundamental Transaction, and
(ii) if the Successor Entity is not a publicly traded entity whose common
stock is quoted on or listed for trading on an U.S. national securities
exchange, the Successor assumes in writing (or remains bound by) all of the
obligations of the Company under this Series A Warrant pursuant to written
agreements, including (if necessary) agreements to deliver to each holder of
Series A Warrants in exchange for such Series A Warrants a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Series A Warrant exercisable for the consideration that
would have been issuable in the Fundamental Transaction in respect of the Series
A Warrant Shares had this Series A Warrant been exercised immediately prior to
the consummation of the Fundamental Transaction. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity (or Parent Entity, if
applicable) shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Series A Warrant
referring to the “Company” shall refer instead to the Successor Entity (or
Parent Entity, if applicable)), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this Series
A Warrant with the same effect as if such Successor Entity (or Parent Entity, if
applicable) had been named as the Company herein. The provisions of this
paragraph (c) shall similarly apply to subsequent Fundamental
Transactions.
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(ii) Notwithstanding
the foregoing, in the event of a Fundamental Transaction (other than a merger,
consolidation or other transaction effected solely to change the Company’s
jurisdiction of organization), at the written request of the Holder delivered
before the 30th day
after the consummation of such Fundamental Transaction, the Company (or the
Successor Entity) shall purchase this Series A Warrant from the Holder by paying
to the Holder on the effective date of the Fundamental Transaction (or within
five (5) Business Days after such request if delivered after the effective
date), cash in an amount equal to the Black Scholes Value of the remaining
unexercised portion of this Series A Warrant on the date of such Fundamental
Transaction.
(iii) For
purposes of this Section 9(c), the following definitions shall
apply:
“Black Scholes Value” means
the value of this Series A Warrant based on the Black and Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg determined as of the day
of the closing of the applicable Fundamental Transaction for pricing
purposes and reflecting (i) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of this Series A Warrant
as of such date of request, (ii) an expected volatility equal to the greater of
(A) 100% and (B) the 100 day volatility obtained from the HVT function on
Bloomberg as of the day immediately following the public announcement of the
applicable Fundamental Transaction, and (iii) the underlying price per share
used in such calculation shall be the sum of the price per share being offered
in cash, if any, plus the value of any non cash consideration, if any, being
offered in the Fundamental Transaction.
"Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.
“Fundamental Transaction”
means that (A) the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into (whether or not the Company
is the surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties or
assets of the Company to another Person, or (iii) another Person completes a
purchase, tender or exchange offer that is accepted by the holders of more than
the 50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or
party to, such stock purchase agreement or other business combination), or (v)
reorganize, recapitalize or reclassify its Common Stock (other than as a result
of a subdivision or combination of shares of Common Stock covered by Section 9(a) above)
or (B) any "person" or "group" (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) is or shall become the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock.
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"Parent Entity" of a Person
means an entity that, directly or indirectly, controls the applicable Person and
whose common shares or common stock or equivalent equity security is quoted or
listed on a Trading Market (as defined in the Purchase Agreement), or, if there
is more than one such Person or Parent Entity, the Person or Parent Entity with
the largest public market capitalization as of the date of consummation of the
Fundamental Transaction.
“Person” means an individual,
a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.
"Successor Entity" means, if
applicable, the Person formed by, resulting from or surviving any Fundamental
Transaction or, for the purposes of Section 9(c)(ii), the Person with which such
Fundamental Transaction shall have been entered into.
(d) Number of Series A Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) of this Section 9, the number
of Series A Warrant Shares that may be purchased upon exercise of this Series A
Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased number of Series A Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.
(e) Calculations. All
calculations under this Section 9 shall be
rounded down to the nearest whole cent or the nearest whole share, as
applicable.
(f) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the
Company at its expense will, at the written request of the Holder, promptly
compute such adjustment, in good faith, in accordance with the terms of this
Series A Warrant and prepare a certificate setting forth such adjustment,
including a statement of the adjusted Exercise Price and adjusted number or type
of Series A Warrant Shares or other securities issuable upon exercise of this
Series A Warrant (as applicable), describing the transactions giving rise to
such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each
such certificate to the Holder and to the Company’s transfer agent.
8
(g) Notice of Corporate
Events. If, while this Series A Warrant is outstanding, the Company (i)
declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including, without limitation, any
granting of rights or Series A Warrants to subscribe for or purchase any capital
stock of the Company, (ii) enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then, except if such notice and the contents thereof shall be deemed to
constitute material non-public information, the Company shall deliver to the
Holder a notice of such transaction at least five (5) Trading Days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company
or any of its subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form
8-K.
10. Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds by wire transfer to an account designated by the Company.
11. Company-Elected
Conversion. The Company shall provide to the Holder prompt written notice
if after the Original Issue Date the Company is unable to issue the Series A
Warrant Shares without restrictive legend, because the Commission has issued a
stop order with respect to, or the Commission or Company has otherwise suspended
or withdrawn, a Registration Statement covering the resale of the Series A
Warrant Shares, either temporarily or permanently, or otherwise (each a “Restrictive Legend Event”).
To the extent that (A) a Restrictive Legend Event occurs, (B) at such time the
Series A Warrant Shares would be saleable under Rule 144 without compliance with
the manner of sale or volume restrictions, (C) the Company has delivered the
notice described in the immediately preceding sentence, and (D) the Holder
attempts to exercise the Series A Warrant after receipt of such notice by paying
cash, the Company shall (i) if the Fair Market Value (as calculated above) of
the Series A Warrant Shares is greater than the Exercise Price, provide written
notice to the Holder that the Company will deliver that number of Series A
Warrant Shares to the Holder as should be delivered upon payment of the Exercise
Price in accordance with Section 10, or return
to the Holder all consideration paid to the Company in connection with the
Holder’s attempted exercise of this Series A Warrant (a “Company-Elected
Conversion”).
12. Rule 144. For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Series A Warrant Shares
issued upon exercise shall be deemed to have been acquired by the
Holder, and the holding period for the Series A Warrant Shares shall be deemed
to have commenced, on the date this Series A Warrant is exercised.
9
13. Limitations on
Exercise. Notwithstanding anything to the contrary contained herein, the
number of Series A Warrant Shares that may be acquired by the Holder upon any
exercise of this Series A Warrant (or otherwise in respect hereof) shall be
limited to the extent necessary to ensure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by the Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.99% (the “Maximum Percentage”) of the
total number of then issued and outstanding shares of Common Stock (including
for such purpose the shares of Common Stock issuable upon such exercise). For
purposes of the foregoing sentence, the aggregate number of shares of Common
Stock beneficially owned by the Holder and its affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Series A Warrant
with respect to which the determination of such sentence is being made, but
shall exclude shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Series A Warrant beneficially
owned by such Person and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by the Holder and its affiliates (including, without
limitation, any convertible notes or convertible preferred stock or Series A
Warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein; provided that in no event shall the aggregate
number of shares beneficially owned by the Holder and its affiliates, calculated
in accordance with Section 13(d) of the Exchange Act, exceed 9.99%). Except as
set forth in the preceding sentence (other than the proviso thereto), for
purposes of this paragraph (including the proviso in the immediately preceding
sentence), beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act; it being acknowledged
by the Holder that the Company is not representing to such Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and such
Holder is solely responsible for any schedules required to be filed
in accordance therewith. To the
extent that the limitation contained in this Section 13 applies, the determination of whether this Series A
Warrant is exercisable (in relation to other securities owned by such Holder)
and of which a portion of this Series A
Warrant is exercisable shall be in the sole discretion of a Holder, and the
submission of a Notice of Exercise shall be deemed to be the Holder’s determination of
whether this Series A Warrant is exercisable (in relation to other securities
owned by such Holder) and of which portion of this Series A Warrant
is exercisable, in each case subject to such aggregate percentage limitation,
and the Company shall have no obligation to verify or confirm the accuracy of
such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 13, in determining the number of outstanding
shares of Common Stock, the Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may
be, (y) a more recent public announcement by the Company or (z) any other
notice
by the Company or the Transfer Agent setting forth the number of shares of
Common Stock outstanding. Upon the written request of the Holder, the
Company shall within one (1) Trading Day confirm in writing to such Holder the
number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including the Series A Warrants, by the Holder and its affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may from time
to time increase or decrease the Maximum Percentage to any other percentage not
in excess of 9.99% specified in such notice; provided that (i) any such increase
will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of Series A
Warrants. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section 13 to correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation.
14. No Fractional Shares.
No fractional Series A Warrant Shares will be issued in connection with any
exercise of this Series A Warrant. In lieu of any fractional shares
that would otherwise be issuable, the number of Series A Warrant Shares to be
issued shall be rounded down to the next whole number and the Company shall pay
the Holder in cash the fair market value (based on the Closing Sale Price) for
any such fractional shares.
10
15. Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 P.M., New York City time, on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
P.M., New York City time, on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, and (iv) upon actual receipt by the
Person to whom such notice is required to be given, if by hand delivery. The
address and facsimile number of a Person for such notices or communications
shall be as set forth in the Purchase Agreement unless changed by such Person by
three (3) Trading Days’ prior written notice to the other Persons in accordance
with this Section
15.
16. Series A Warrant
Agent. The Company shall serve as Series A Warrant agent under this
Series A Warrant. Upon fifteen (15) days’ notice to the Holder, the Company may
appoint a new Series A Warrant agent. Any corporation into which the Company or
any new Series A Warrant agent may be merged or any corporation resulting from
any consolidation to which the Company or any new Series A Warrant agent shall
be a party or any corporation to which the Company or any new Series A Warrant
agent transfers substantially all of its corporate trust or shareholders
services business shall be a successor Series A Warrant agent under this Series
A Warrant without any further act. Any such successor Series A
Warrant agent shall promptly cause notice of its succession as Series A Warrant
agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder’s last address as shown on the Series A Warrant Register.
17. Miscellaneous.
(a) No Rights as a
Stockholder. The Holder, solely in such Person's capacity as a
holder of this Series A Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Series A Warrant be construed to
confer upon the Holder, solely in such Person's capacity as the Holder of this
Series A Warrant, any of the rights of a stockholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Series A Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Series A Warrant. In addition, nothing
contained in this Series A Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (except upon exercise of
this Series A Warrant) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the
Company.
(b) Authorized Shares.
(i) The Company covenants that during the period the Series A Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of the Series A Warrant
Shares upon the exercise of any purchase rights under this Series A
Warrant. The Company further covenants that its issuance of this
Series A Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the Series A Warrant Shares upon the exercise of the purchase
rights under this Series A Warrant. The Company will take all
commercially reasonable actions as may be necessary to assure that such Series A
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed. The Company covenants that all
Series A Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Series A Warrant will, upon exercise of the purchase
rights represented by this Series A Warrant in accordance herewith, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue thereof
(other than taxes in respect of any transfer occurring contemporaneously with
such issue).
11
(ii) Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate or
articles 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 Series A Warrant, 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 Holder as set forth in
this Series A Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any Series A Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Series A Warrant Shares upon the exercise of
this Series A Warrant, and (c) use commercially reasonable efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Series A Warrant.
(c) Successors and
Assigns. Subject to the restrictions on transfer set forth in this
Series A Warrant and in Section 4.1 of the Purchase Agreement, and compliance
with applicable securities laws, this Series A Warrant may be assigned by the
Holder. This Series A Warrant may not be assigned by the Company without the
written consent of the Holder except to a Successor Entity in the event of a
Fundamental Transaction. This Series A Warrant shall be binding on and inure to
the benefit of the Company and the Holder and their respective successors and
permitted assigns. Subject to the preceding sentence, nothing in this Series A
Warrant shall be construed to give to any Person other than the Company and the
Holder any legal or equitable right, remedy or cause of action under this Series
A Warrant.
(d) Amendment and
Waiver. Except as otherwise provided herein and subject the
restrictions sent forth in the last sentence of Section 6.4 of the Purchase
Agreement, the provisions of the Series A Warrants may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Holder of this Series A Warrant.
(e) Acceptance. Receipt
of this Series A Warrant by the Holder shall constitute acceptance of and
agreement to all of the terms and conditions contained herein.
(f) Governing Law;
Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS SERIES A WARRANT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE
COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE STATE AND FEDERAL COURTS SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK,
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH
ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT
TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF
THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
(WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED
HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY.
12
(g) Headings. The
headings herein are for convenience only, do not constitute a part of this
Series A Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
(h) Severability. In
case any one or more of the provisions of this Series A Warrant shall be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Series A Warrant shall not in any way be
affected or impaired thereby, and the Company and the Holder will attempt in
good faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Series A Warrant.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
13
IN
WITNESS WHEREOF, the Company has caused this Series A Warrant to be duly
executed by its authorized officer as of the date first indicated
above.
AMERICAN
STANDARD ENERGY CORP.
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By:
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Name:
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Scott
Feldhacker
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Title:
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Chief
Executive Officer
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SCHEDULE
1
FORM OF
EXERCISE NOTICE
[To be
executed by the Holder to purchase shares of Common Stock under the Series A
Warrant]
Ladies
and Gentlemen:
(1) The
undersigned is the Holder of Series A Warrant No. __________ (the “Series A Warrant”) issued by
American Standard Energy., a Delaware corporation (the “Company”). Capitalized
terms used herein and not otherwise defined herein have the respective meanings
set forth in the Series A Warrant.
(2) The
undersigned hereby exercises its right to purchase __________ Series A Warrant
Shares pursuant to the Series A Warrant.
(3) The
Holder intends that payment of the Exercise Price shall be made as:
€ Cash
Exercise
(4) The
Holder shall pay the sum of $___________ in immediately available funds to the
Company in accordance with the terms of the Series A Warrant.
(5) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder Series A
Warrant Shares determined in accordance with the terms of the Series A
Warrant.
(6) By
its delivery of this Exercise Notice, the undersigned represents and Series A
Warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 13 of the
Series A Warrant to which this notice relates.
Dated:_______________________________
Name of
Holder: ______________________
By:__________________________________
Name:
_______________________________
Title: _______________________________
(Signature
must conform in all respects to name of Holder as specified on the face of the
Series A Warrant)
SCHEDULE
2
FORM OF
ASSIGNMENT
[To be
completed and executed by the Holder only upon transfer of the Series A
Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
(the “Transferee”) the
right represented by the within Series A Warrant to purchase
shares of Common Stock of American Standard Energy Corp. (the “Company”) to which the within
Series A Warrant relates and appoints
attorney to transfer said right on the books of the Company with full power of
substitution in the premises. In connection therewith, the undersigned
represents, Series A Warrants, covenants and agrees to and with the Company
that:
(a)
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the
offer and sale of the Series A Warrant contemplated hereby is being made
in compliance with Section 4(1) of the United States Securities Act of
1933, as amended (the “Securities Act”) or
another valid exemption from the registration requirements of Section 5 of
the Securities Act and in compliance with all applicable securities laws
of the states of the United States;
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(b)
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the
undersigned has not offered to sell the Series A Warrant by any form of
general solicitation or general advertising, including, but not limited
to, any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or
radio, and any seminar or meeting whose attendees have been invited by any
general solicitation or general
advertising;
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(c)
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the
undersigned has read the Transferee’s investment letter included herewith,
and to its actual knowledge, the statements made therein are true and
correct; and
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(d)
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the
undersigned understands that the Company may condition the transfer of the
Series A Warrant contemplated hereby upon the delivery to the Company by
the undersigned or the Transferee, as the case may be, of a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the
Securities Act and under applicable securities laws of the states of the
United States.
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Dated:
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(Signature
must conform in all respects to name of holder as specified on the face of
the Series A Warrant)
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Address
of Transferee
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In
the presence of:
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