EXHIBIT 99.4
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
NO. G-2
WARRANT TO PURCHASE COMMON STOCK
OF
XXXXXXXXXXX.XXX, INC.
In consideration of the sum of ten dollars ($10.00) previously paid to
XXXXXXXXXXX.XXX, INC., a Nevada corporation (the "Company"), receipt and
sufficiency of which are hereby acknowledged, this certifies that, for value
received, Gateway Companies, Inc. or its registered assigns ("Holder") is
entitled, subject to the terms and conditions set forth below, to purchase from
the Company, in whole or in part that number of fully paid and non-assessable
shares of the common stock, par value $0.01 per share, of the Company (the
"Warrant Shares") as set forth in Section 2 below and at a purchase price per
share (the "Exercise Price") as set forth in Section 2 below. The term "Warrant"
as used herein shall mean this Warrant, and any warrants delivered in
substitution or exchange therefor as provided herein.
1. Term of Warrant; Purpose; Vesting.
---------------------------------
(a) Subject to the terms and conditions set forth herein, this Warrant
shall be exercisable in accordance with the provisions contained
in Section 3 hereof until 5:00 p.m., Pacific time, September 30,
2001 (the "Exercise Period"), and shall be void thereafter.
(b) This Warrant is issued as payment for the performance by the
initial Holder under a Training and Marketing Services Agreement
between the Company and initial Holder, dated September 29, 2000
("Agreement") pursuant to which the initial Holder has agreed to
perform certain Phase II Training Services and Phase II Marketing
Services for the Company, as such terms are defined in the
Agreement. This Warrant is referred to in the Agreement as the
Phase II Warrant.
(c) The right to purchase Warrant Shares pursuant to this Warrant
shall vest and become exercisable in accordance with the following
schedule: (i) the
right to purchase seventy-four thousand six hundred eighty-six
(74,686) Warrant Shares pursuant to this Warrant is immediately
vested and exercisable, and (ii) the right to purchase the
remaining five hundred thousand (500,000) Warrant Shares pursuant
to this Warrant shall vest and become exercisable on October 31,
2000.
2. Number of Shares, Exercise Price.
--------------------------------
(a) This Warrant shall be exercisable for up to five hundred seventy-
four thousand six hundred eighty-six (574,686) shares of common
stock of the Company vested in accordance with Section 1(c).
(b) Warrant Shares vested pursuant to Section 1(c) shall be
exercisable at any exercise price equal to $59.50 per share (the
"Exercise Price"), as adjusted to reflect any stock dividend,
stock split or other conversion of the number of shares of the
Company into a different number of shares, however denominated.
3. Exercise of Warrant.
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(a) This Warrant may be exercised by the Holder by the surrender of
this Warrant to the Company, with the Notice of Exercise annexed
hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company)
during the Exercise Period and: (x) the delivery of payment to the
Company, for the account of the Company, by cash, wire transfer of
immediately available funds to a bank account specified by the
Company, or by certified or bank cashier's check, of the Exercise
Price for the number of Warrant Shares specified in the Exercise
Form in lawful money of the United States of America or (y)
pursuant to a net issuance election in accordance with Section
3(b) hereof. The number of Warrant Shares shall be adjusted to
reflect any cash or stock dividend, stock split or other
conversion of the number of shares of the Company into a different
number of shares, however denominated as provided in Exhibit A
attached.
(b) In lieu of exercising this Warrant pursuant to Section 3(a), the
Holder may elect to receive, without the payment by the Holder of
any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or
such portion to the Company, with the Net Issue Election Notice
annexed hereto duly executed, at the office of the Company.
Thereupon, the Company shall issue to the Holder such number of
fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
2
X = Y (A-B)
--------
A
where
X = the number of shares to be issued to the Holder pursuant to
this Section 3(b).
Y = the number of shares of Common Stock otherwise issuable
under this Warrant (as adjusted to the date of such
calculation).
A = the closing stock price of one share of the Company's common
stock as reported by the Nasdaq National Market the business
day immediately prior to the Exercise Date (as defined
below).
B = the Exercise Price in effect under this Warrant at the time
the net issue election is made pursuant to this Section
3(b).
This Warrant shall automatically by deemed to be exercised
in full pursuant to the provisions of this Section 3,
without any further action on behalf of the Holder,
immediately prior to the time this Warrant would otherwise
expire pursuant to the terms of this Warrant.
(c) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for
exercise as provided above (the "Exercise Date"), and the person
entitled to receive the shares of common stock issuable upon such
exercise shall be treated for all purposes as the holder of record
of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event
within three (3) business days thereafter, the Company at its
expense shall issue and deliver to the person or persons entitled
to receive the same a certificate or certificates for the number
of shares issuable upon such exercise. In the event that this
Warrant is exercised in part, the Company at its expense will
execute and deliver a new Warrant of like tenor exercisable for
the number of shares for which this Warrant may then be exercised
4. No Impairment. The Company will not, by amendment of its Certificate of
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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 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 action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment. Without
limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of stock receivable on the exercise
of this Warrant above the amount payable therefor on such exercise, and
(b) will take all
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such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of
stock on the exercise of this Warrant. Upon the request of a Holder at
any time during the period that this Warrant is outstanding, the Company
will acknowledge in writing, in form reasonably satisfactory to such
Holder, the continued validity of this Warrant and the Company's
obligations hereunder.
5. Payment Of Taxes. The issuance of certificates for Warrant Shares shall
----------------
be made without charge to the Holder for any stock transfer or other
issuance tax in respect thereto; provided, however, that the Holder shall
be responsible for the payment of any and all taxes which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificates for Warrant Shares in a name other than that of the then
Holder as reflected upon the books of the Company.
6. Divisibility Of Warrant. This Warrant may be divided into warrants
-----------------------
representing one Warrant Share or multiples thereof, upon surrender at
the principal office of the Company on any business day, without charge
to any Holder, except as provided below. Upon any such division, and if
permitted by Section 10, the Warrants may be transferred of record to a
name other than that of the Holder of record; provided, however, that the
Holder shall be responsible for payment of any and all transfer taxes
with respect thereto.
7. No Fractional Shares or Scrip. No fractional shares or scrip representing
-----------------------------
fractional shares shall be issued upon the exercise of this Warrant. In
lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise
Price multiplied by such fraction.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to
----------------------
the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the
Company or, in the case of mutilation, on surrender and cancellation of
this Warrant, the Company at its expense shall execute and deliver, in
lieu of this Warrant, a new warrant of like tenor and amount.
9. Rights of Stockholders. The Holder of this Warrant shall not be entitled
----------------------
to vote or receive dividends or be deemed the holder of common stock nor
shall anything contained herein be construed to confer upon the Holder,
as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to
any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock
to no par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription
rights or otherwise util the Warrant shall have been exercised as
provided herein.
10. Transfer of Warrant.
-------------------
4
(a) Warrant Register. The Company will maintain a register (the
----------------
"Warrant Register") containing the names and addresses of the
Holders or Holders. Any Holder of this Warrant or any portion
thereof may change his address as shown on the Warrant Register by
written notice to the Company requesting such change. Any notice
or written communication required or permitted to be given to the
Holder may be delivered or given by mail to such Holder as shown
on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant
Register of the Company, the Company may treat the Holder as shown
on the Warrant Register as the absolute owner of this Warrant for
all purposes, notwithstanding any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
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appoint an agent for the purpose of maintaining the Warrant
Register referred to in Section 10(a) above, issuing the common
stock, exchanging this Warrant, replacing this Warrant, or any or
all of the foregoing. Thereafter, any such registration, issuance,
exchange, or replacement, as the case may be, shall be made at the
office of such agent.
(c) Transferability and Non-negotiability of Warrant. This Warrant may
------------------------------------------------
not be transferred or assigned in whole or in part, without
compliance with all applicable federal and state securities laws
by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably
satisfactory to the Company, if such are requested by the
Company). Notwithstanding the foregoing, no investment
representation letter or opinion of counsel shall be required for
any transfer of this Warrant (or any portion thereof) or any
shares of common stock issued upon exercise hereof (i) in
compliance with Rule 144 or Rule 144A of the Act, or (ii) by gift,
will or intestate succession by the Holder to his or her spouse or
lineal descendants or ancestors or any trust for any of the
foregoing, provided that in each of the foregoing cases the
transferee agrees in writing to be subject to the terms of this
Section 10(c). In addition, if the holder of the Warrant (or any
portion thereof) or any common stock issued upon exercise hereof
delivers to the Company an unqualified opinion of counsel that no
subsequent transfer of such Warrant or common stock shall require
registration under the Act, the Company shall, upon such
contemplated transfer, promptly deliver new documents/certificates
for such Warrant or common stock that do not bear the legend set
forth in Section 10(e)(ii) below. Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of
1933, as amended (the "Act"), title to this Warrant may be
transferred by endorsement (by the Holder executing the Assignment
Form annexed hereto) and delivery in the same manner as a
negotiable instrument transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant
-----------------------------------
for exchange, properly endorsed on the Assignment Form and subject
to the
5
provisions of this Warrant with respect to compliance with the Act
and with the limitations on assignments and transfers and
contained in this Section 10, the Company at its expense shall
issue to or on the order of the Holder a new warrant or warrants
of like tenor, in the name of the Holder or as the Holder (on
payment by the Holder of any applicable transfer taxes) may
direct, for the number of shares issuable upon exercise hereof.
(e) Compliance with Securities Laws.
-------------------------------
(i) The initial Holder of this Warrant represents and warrants
to the Company that it is an accredited investor under the
Act. The initial Holder represents and warrants to the
Company that it has all of the information necessary for it
to evaluate an investment in the Company's securities.
(ii) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of common
stock to be issued upon exercise hereof are being acquired
solely for the Holder's own account and not as a nominee for
any other party, and for investment, and that the Holder
will not offer, sell or otherwise dispose of this Warrant or
any shares of common stock to be issued upon exercise hereof
except under circumstances that will not result in a
violation of the Act or any applicable state securities
laws.
(iii) This Warrant and all shares of common stock issued upon
exercise hereof shall be stamped or imprinted with a legend
in substantially the following form (in addition to any
legend required by state securities laws):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES AND ANY
SECURITIES OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT,
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY
OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES."
(iv) The Company agrees to remove promptly, upon the request of
the holder of this Warrant and Securities issuable upon
exercise of the Warrant, the legend set forth in Section
10(e)(iii) above from the documents/certificates for such
securities upon full compliance
6
with this Agreement Rules 144 and 145 or upon resale in
accordance with an effective registration statement.
11. Reservation and Listing of Shares. All Warrant Shares which are issued
---------------------------------
upon the exercise of the rights represented by this Warrant shall, upon
issuance and payment of the Exercise Price, be validly issued, fully paid
and nonassessable and free from all taxes, liens, security interests,
charges and other encumbrances with respect to the issue thereof other
than taxes in respect of any transfer occurring contemporaneously with
such issuance. During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and reserved,
and keep available free from preemptive rights, a sufficient number of
shares of Warrant Shares to provide for the exercise of this Warrant, and
shall at its expense procure such listing thereof (subject to official
notice of issuance) as then may be required on all stock exchanges on
which the Common Stock is then listed, if any. The Company from time to
time shall take all such action as may be required to assure that the par
value per share of the Warrant Shares is equal to or less than the
Exercise Price. The Company agrees that its issuance of this 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 shares of common stock upon the exercise of this
Warrant.
12. Registration Rights; Company Registration.
-----------------------------------------
(a) If the Company shall determine to register any of its securities
for its own account, other than a registration relating solely to
employee benefit plans, or a registration relating solely to a
Rule 145 transaction, or a registration on any registration form
that does not permit secondary sales, the Company will:
(i) promptly give to Holder written notice thereof; and
(ii) use its best efforts to include in such registration (and
any related qualification under blue sky laws or other
compliance), except as set forth in Section 12(b) below, and
in any underwriting involved therein, all or any part (in
minimum increments of 100,000 Shares) of the Warrant Shares
specified in a written request or requests, made by Holder
and received by the Company within twenty (20) days after
the written notice from the Company described in clause (i)
above is mailed or delivered by the Company. Such written
request may specify all or a part of Holder's Warrant
Shares.
(b) Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an
underwriting, the Company shall so advise Holder as a part of the
written notice given pursuant to Section 12(a)(i). In such event,
the right of Holder to registration pursuant to this Section 12
shall be conditioned upon Holder's participation in such
underwriting and the inclusion of Holder's Warrant Shares in the
7
underwriting to the extent provided herein. A Holder proposing to
distribute its securities through such underwriting shall
(together with the Company and the other holders of securities of
the Company with registration rights to participate therein
distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the
Company. If any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice
from the Company or the underwriter. Any Warrant Shares or other
securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
Notwithstanding any other provision of this Section 12, if the
representative of the underwriters advises the Company, in good
faith, in writing, that marketing factors require a limitation on
the number of shares to be underwritten, (i) the representative
may (subject to the limitations set forth below) exclude all
Warrant Shares from, or limit the number of Warrant Shares to be
included in the registration and underwriting, or (ii) the Company
may limit, to the extent so advised by the underwriters, the
amount of securities to be included in the registration by the
Company's stockholders (including the Holder), to be apportioned
pro rata among the holders of registrable securities, including
Warrant Shares, according to the total amount of securities
entitled to be included therein owned by each holder of
registrable securities, including Warrant Shares, and subject in
all respects to the rights of holders of registrable securities
other than Holder affecting the ability of such representative or
the Company, as applicable, to limit the number of registrable
securities of such holder or holders to be included in such
registration and underwriting.
If registrable securities are withdrawn from the registration as a
result of the holder failing to agree to the terms of any such
underwriting and the number of registrable securities to be
included in such registration was previously reduced as a result
of marketing factors, the Company shall then offer to all persons
who have retained the right to include registrable securities in
the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares
so withdrawn, apportioned pro rata among the holders of
registrable securities, including Warrant Shares, according to the
total amount of securities entitled to be included therein owned
by each holder of registrable securities, including Warrant
Shares, and subject in all respects to the rights of holders of
registrable securities other than Holder affecting the ability of
such representative or the Company, as applicable, to limit the
number of registrable securities of such holder or holders to be
included in such registration and underwriting.
13. Registration on Form S-3.
------------------------
8
(a) Provided the Company is qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of
Section 12, Holder shall have the right to request one or more
registrations on Form S-3 (such requests shall be in writing and
shall state the number of shares of Warrant Shares to be disposed
of and the intended methods of disposition of such shares by
Holder), provided, however, that the Company shall not be
obligated to effect any such registration if (i) Holder proposes
to sell Warrant Shares on Form S-3 at an aggregate price to the
public of less than $500,000, or (ii) in the event the Company
shall furnish the certification described in paragraph 13(d)(ii)
(but subject to the limitations set forth therein), or (iii) the
Company has, within the six (6) month period preceding the date of
such request already effected on registration on Form S-3 for
Holder pursuant to this Section 13.
(b) If a request complying with the requirements of Section 13(a)
hereof is delivered to the Company, the provisions of Section
12(a)(i) and (ii) and Section 13(c) hereof shall apply to such
registration. If the registration is for an underwritten offering,
the provisions of Sections 12(b) hereof shall apply to such
registration.
(c) The Company shall not be obligated to effect, or to take any
action to effect, any such registration pursuant to this Section
13:
(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process
in effecting such registration, qualification, or
compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the
Act;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180)
days after the effective date of, a Company-initiated
registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such
registration statement to become effective.
(d) Subject to the limitations set forth in this Section 13, the
Company shall file a registration statement covering the Warrant
Shares so requested to be registered as soon as practicable after
receipt of the request of Holder; provided, however, that if (i)
in the good faith judgment of the Board of Directors of the
Company, such registration would be seriously detrimental to the
Company and the Board of Directors of the Company concludes, as a
result, that it is essential to defer the filing of such
registration statement at such time, and (ii) the Company shall
furnish to Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the
Company for such registration
9
statement to be filed in the near future and that it is,
therefore, essential to defer the filing of such registration
statement, then the Company shall have the right to defer such
filing for the period during which such disclosure would be
seriously detrimental, provided that (except as provided in clause
(c) above) the Company may not defer the filing for a period of
more than one hundred eighty (180) days after receipt of the
request of Holder, and, provided further, that the Company shall
not defer its obligation in this manner more than once in any
twelve (12) month period.
14. Expenses of Registration. All Registration Expenses (as defined herein)
------------------------
incurred in connection with any registration, qualification or compliance
pursuant to Sections 12 and 13 hereof and reasonable fees of one counsel
for Holder shall be borne by the Company. All Selling Expenses (as
defined herein) relating to securities so registered shall be borne by
the holders of such securities pro rata on the basis of the number of
shares of securities so registered on their behalf. "Registration
Expenses" shall mean all expenses incurred in effecting any registration
pursuant to this Warrant, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, fees and
disbursements of one special counsel for the selling stockholders, blue
sky fees and expenses, accounting fees and expenses of any regular or
special audits incident to or required by any such registration, but
shall not include Selling Expenses and fees and disbursements of
additional counsel for the stockholders. Registration Expenses do not
include the compensation of regular employees of the Company, which shall
be paid in any event by the Company. "Selling Expenses" shall mean all
underwriting discounts and selling commissions applicable to the sale of
Warrant Shares and fees and disbursements of counsel for any Holder
(other than the fees and disbursements of counsel included in
Registration Expenses).
15. Amendments. This Warrant and any term hereof may be changed, waived,
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discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought.
16. Miscellaneous.
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(a) This Warrant shall be governed by the laws of the State of Nevada
as applied to agreements entered into in the State of Nevada by
and among residents of the State of Nevada.
(b) In the event of a dispute with regard to the interpretation of
this Warrant, the prevailing party may collect the cost of
attorney's fees, litigation expenses or such other expenses as may
be incurred in the enforcement of the prevailing party's rights
hereunder.
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(c) The rights to cause the Company to register securities granted to
a Holder by the Company under Sections 13 and 14 may be
transferred or assigned by Holder only to a transferee or assignee
of not less than 100,000 Warrant Shares, provided that the Company
is given written notice at the time of or within a reasonable time
after such transfer or assignment, stating the name and address of
the transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or
assigned, and, provided further, that the transferee or assignee
of such rights assumes the obligations of such Holder under this
Warrant.
(d) This Warrant shall be exercisable as provided for herein, except
that in the event that the expiration date of this Warrant shall
fall on a Saturday, Sunday or United States federally recognized
holiday, this expiration date for this Warrant shall be extended
to 5:00 p.m. Pacific standard time on the business day following
such Saturday, Sunday or recognized holiday.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officers thereunto duly authorized.
Dated: September 29, 2000.
COMPANY:
XXXXXXXXXXX.XXX, INC., a Nevada
corporation
By: ________________________________
Xxxxxxxxxxx X. Carton
President
INITIAL HOLDER:
GATEWAY COMPANIES, INC., a
Delaware corporation
By: _________________________________
Name: _________________________________
Title:_________________________________
11
EXHIBIT A
ADJUSTMENTS
The Exercise Price at which Warrant Shares may be purchased and the number of
Warrant Shares to be purchased upon exercise of this Warrant are subject to
change or adjustment as follows:
(e) General. If the Company (i) pays a dividend in shares of Common Stock or
makes a distribution in shares of Common Stock, (ii) subdivides its
outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issues by reclassification
of its shares of Common Stock other securities of the Company (including
any such reclassification in connection with a consolidation or merger in
which the Company is the surviving corporation), the number of Warrant
Shares purchasable upon exercise of this Warrant shall be adjusted so that
the Holder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company that the Holder would have owned
or have been entitled to receive after the happening of any of the events
described above, had this Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An
adjustment made pursuant to this Exhibit A shall become effective
immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(f) Adjustment For Capital Reorganization. If at any time there shall be a
capital reorganization of the Company or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets, then, as part of
such reorganization, merger, consolidation, or sale, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive on exercise of this Warrant during the period specified in this
Warrant and on payment of the Exercise Price then in effect, the number of
shares of stock or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation, to which
a holder of the Common Stock deliverable on exercise of this Warrant would
have been entitled on such capital reorganization, merger, consolidation,
or sale if this Warrant had been exercised immediately before that capital
reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder of
this Warrant after the reorganization, merger, consolidation, or sale to
the end that the provisions of this Warrant (including adjustment of the
number of shares purchasable on exercise of this Warrant) shall be
applicable after that event, as near as reasonably may be, in relation to
any shares or other securities or property deliverable after that event on
exercise of this Warrant. Upon any reorganization, consolidation, merger
or transfer (and any dissolution following any transfer) referred to in
this paragraph (b), this Warrant shall continue in full force and effect
and the terms hereof shall be applicable to the shares of stock and other
securities property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the
effective date of dissolution following any such transfer, as the case may
be, and shall
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binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in Section 7.
(g) Certificate Of Adjustments. Upon the occurrence of each adjustment
or readjustment pursuant to this Exhibit A, the Company at its
expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each Holder a
certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon the written
request, at any time, of any Holder, furnish or cause to be
furnished to such Holder, a like certificate setting forth: (i)
such adjustments and readjustments; (ii) the Exercise Price at the
time in effect; and (iii) the number of shares of Common Stock and
the amount, if any, of other property that at the time would be
received upon the exercise of the Warrant.
(h) Notices Of Record Date. In the event of any taking by the Company
of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to
receive any dividend (other than a cash dividend that is the same
as cash dividends paid in previous quarters) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or any capital
reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any
voluntary or involuntary dissolution, liquidation or winding-up of
the Company, then and in each such event the Company will mail or
cause to be mailed to the holder of this Warrant a notice
specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or
right, and stating the amount and character of such dividend,
distribution or right, and (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer,
consolidation, dissolution, liquidation or winding-up is to take
place, and the time, if any is to be fixed, as of which the
holders of record of any class of securities shall be entitled to
exchange their shares of securities for securities or other
property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, dissolution,
liquidation or winding-up. Such notice shall be mailed to the
Holder at the same time it is sent to stockholders.
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