THIS WARRANT AND THE WARRANT SHARES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS, AND MAY NOT BE
PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS SO REGISTERED OR AN EXEMPTION THEREFROM IS AVAILABLE.
WARRANT TO PURCHASE COMMON STOCK
OF XXXXXX, INC.
THIS CERTIFIES THAT, for value received, XXXXXX, INC., a Delaware corporation
(the "Company"), promises to issue to Zatpack, Inc. ("Zatpack"), or registered
assigns (Zatpack or any assignee, collectively the "Holder"), an aggregate
number of duly authorized, validly issued, fully paid and nonassessable shares
of common stock, par value $0.001 per share, of the Company ("Common Stock"),
equal to the Adjusted Share Amount (as defined below), upon the payment by the
Holder to the Company of the Warrant Price (as defined below) set forth herein
and to deliver to the Holder a certificate or certificates representing the
Common Stock purchased. The number of shares of Common Stock purchasable upon
exercise of this Warrant and the Warrant Price shall be subject to adjustment
from time to time as provided herein. The initial Warrant Price (the "Warrant
Price") per share of Common Stock shall be $0.01 per share, subject to
adjustment as provided herein. For purposes of this Warrant,
(A) the term "Common Stock" shall mean (i) the class of stock designated as
the Common Stock of the Company at the date of this Warrant, or (ii) any other
class or classes of stock resulting from successive changes or reclassifications
of such class of stock,
(B) the term "Business Day" shall mean any day other than a Saturday or
Sunday or a day on which commercial banks in New York City, New York or Boulder,
Colorado are required or authorized to be closed,
(C) the term "Adjusted Share Amount" shall mean 865,630, and
(D) "Warrant Shares" means all shares of Common Stock issued or issuable
upon exercise of the Warrants; for purposes of the Warrants, Warrant Shares
shall be deemed issued and outstanding on any date of determination of ownership
of Warrant Shares hereunder, and such shares shall cease to be Warrant Shares at
the time (i) sold in a public offering pursuant to an effective registration
statement filed under the Securities Act or (ii) sold pursuant to, or in
brokers' transactions as permitted by, Rule 144 thereafter.
Section 1. Term of Warrant, Exercise of Warrant. (a) Subject to the terms of
this Warrant, including, but not limited to, Section 2.2., the Holder shall have
the right, at its option, which may be exercised in whole or in part, at any
time, and from time to time, commencing at the time of the issuance of this
Warrant and expiring at 5:00 p.m. Eastern Time on December 7, 2009, to purchase
from the Company the number of fully paid and nonassessable shares of Common
Stock which the Holder may at the time be entitled to purchase upon exercise of
this Warrant ("Warrant Shares"). Notwithstanding the foregoing, if the Holder
shall have given the Company written notice of its intention to exercise this
Warrant on or before 5:00 p.m. Eastern Time on
December 7, 2009, the Holder may exercise this Warrant at any time through (and
including) the Business Day next following the date that all applicable required
regulatory holding periods have expired and all applicable required governmental
approvals have been obtained in connection with such exercise of this Warrant by
the Holder, if such Business Day is later than on December 7, 2009 (December 7,
2009 or such later date being herein referred to as the "Warrant Expiration
Date"); provided, however, if the exercise of this Warrant is subject to the
terms set forth in Section 2.2.(b) herein, then the Warrant Expiration Date
shall be extended for a period of 61 days to give effect to Section 2.2.(b).
After the Warrant Expiration Date, this Warrant will be null and void and of no
force or effect.
(b) The purchase rights evidenced by this Warrant shall be exercised by the
Holder surrendering this Warrant, together with the form of subscription
attached hereto as Exhibit A, duly executed by the Holder, to the Company at its
office in Boulder, Colorado, accompanied by payment of an amount (the "Exercise
Payment") equal to the Warrant Price multiplied by the number of Warrant Shares
being purchased pursuant to such exercise, payable as follows: (i) by (x)
payment to the Company in cash, by certified or official bank check, or by wire
transfer of the Exercise Payment, or (y) cancellation of all or any part of the
unpaid principal amount of indebtedness of the Company held by the Holder, if
any, in an amount equal to the Exercise Payment, (ii) by surrender to the
Company for cancellation of securities of the Company having a Market Price (as
defined below) on the date of exercise equal to the Exercise Payment; or (iii)
by a combination of the methods described in clauses (x) and (y) above. In lieu
of exercising the Warrant, the Holder may elect to receive a payment equal to
the difference between (i) the Market Price multiplied by the number of Warrant
Shares as to which the payment is then being elected and (ii) the exercise price
with respect to such Warrant Shares, payable by the Company to the Holder only
in shares of Common Stock valued at the Market Price on the date of exercise.
For purposes hereof, the term "Market Price" shall mean the average closing
price of a share of Common Stock or other security for which this Warrant is
then exercisable for the 15 consecutive trading days preceding such day on the
principal national securities exchange on which the shares of Common Stock or
such securities are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange, the average of the reported bid
and asked prices during such 15 trading day period on the Nasdaq National Market
or, if the shares are not listed on the Nasdaq National Market, in the
over-the-counter market or, if the shares of Common Stock or such securities are
not publicly traded, the Market Price for such day shall be the fair market
value thereof determined jointly and in good faith by the Company and the
Holder; provided, however, that if such parties are unable to reach agreement
within a reasonable period of time, the Market Price shall be determined in good
faith by an independent investment banking firm selected jointly and in good
faith by the Company and the Holder or, if that selection cannot be made within
15 days, by an independent investment banking firm selected by the American
Arbitration Association in accordance with its rules. All reasonable costs and
expenses incurred in connection with the determination of Market Price shall be
borne by the Company.
(c) Upon exercise of this Warrant, the Company shall issue and cause to be
delivered with all reasonable dispatch, but in any event within three (3)
Business Days, to or upon the written order of the Holder and, subject to
Section 3, in such name or names as the Holder may designate to the Company in
writing, a certificate or certificates representing the number of full Warrant
Shares issuable upon such exercise together with such other property, including
cash,
2
which may be deliverable upon such exercise. If fewer than all of the Warrant
Shares represented by this Warrant are purchased, a new Warrant of the same
tenor as this Warrant, evidencing the Warrant Shares not so purchased will be
issued and delivered by the Company, at the Company's expense, to the Holder
together with the issue of the certificates representing the Warrant Shares then
being purchased. All Warrants surrendered upon exercise shall be canceled by the
Company.
Section 2. Warrant Register, Registration of Transfers
Section 2.1. Warrant Register. The Company shall keep at its principal
office in Boulder, Colorado or, if such office is no longer located in Boulder,
Colorado, at its principal office in the United States, a register (the "Warrant
Register") in which the Company shall record the name and address of the Holder
from time to time and all transfers and exchanges of this Warrant. The Company
shall give the Holder prior written notice of any change of the address at which
such register is kept.
Section 2.2. Registration of Transfers, Exchanges or Assignment of Warrants. (a)
Subject to Section 2.2.(b) below and the restrictions contained in the legend
set forth on the first page of this Warrant, the Holder shall be entitled to
assign its interest in this Warrant in whole or in part to any person upon
surrender thereof accompanied by a written instrument or instruments of transfer
in the form of assignment attached hereto as Exhibit B duly executed by the
Holder. This Warrant may also be exchanged or combined with warrants of like
tenor at the option of the Holder for another Warrant or Warrants of like tenor
and representing in the aggregate the right to purchase a like number of Warrant
Shares upon presentation thereof to the Company as its principal office in
Boulder, Colorado, together with a written notice signed by the Holder
specifying the denominations in which the new Warrant is or the new Warrants are
to be issued.
(b) If the Holder assigns its interest in this Warrant or any part thereof,
then the assignee of the Warrant shall only be entitled to exercise this Warrant
upon 61 days from the date that written notice of such exercise is received by
the Company (the "Exercise Notice Period"). The Company agrees that for long as
the Exercise Notice Period is in effect (and has not been waived by the
Company), the Company shall not set a record date for either (i) the taking of
any special meeting by its stockholders or (ii) a dividend or other distribution
to be paid to the holders of Common Stock.
(c) Upon surrender for transfer or exchange of this Warrant to the Company
at its principal office in Boulder, Colorado, in accordance with this Section 2,
the Company shall, without charge (subject to Section 3), execute and deliver a
new Warrant or Warrants of like tenor and of a like aggregate amount of Warrant
Shares in the name of the assignee named in such instrument of assignment and,
if the Holder's entire interest is not being assigned, in the name of the Holder
with respect to that portion not transferred, and this Warrant shall promptly be
canceled.
Section 3. Payment of Taxes. The Company shall pay all documentary stamp taxes,
if any, attributable to the initial issuance of any Warrant Shares upon the
exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any Warrant or certificate
3
for Warrant Shares in a name other than that of the Holder as such name is then
shown on the books of the Company.
Section 4. Certain Representations and Covenants.
Section 4.1. Reservation of Warrant Shares. There have been reserved and the
Company shall at all times keep reserved, out of its authorized but unissued
Common Stock, free from any preemptive rights, rights of first refusal or other
restrictions (other than pursuant to the Securities Act of 1933, as amended (the
"Act")) that number of shares of Common Stock sufficient to provide for the
exercise of the purchase rights represented by this Warrant. The transfer agent,
if any, for the Common Stock, and every subsequent transfer agent for any shares
of the Company's Common Stock issuable upon the exercise of any of the purchase
rights as set out in this Warrant, shall be irrevocably authorized and directed
at all times to reserve such number of authorized shares as shall be requisite
for such purpose.
Section 4.2. No Impairment. The Company shall not by any action, including,
without limitation, amending its Certificate of Incorporation, 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 shall 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 to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company shall take all such action as may be necessary or
appropriate in order that the Company may validly issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant at the
then Warrant Price therefor.
Section 4.3. Notice of Certain Corporate Action. In case the Company shall
propose (a) to offer to the holders of its Common Stock rights to subscribe for
or to purchase any shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (b) to effect any reclassification of
its Common Stock (other than a reclassification involving only the subdivision
or combination of outstanding shares of Common Stock), or (c) to effect any
capital reorganization, or (d) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its property,
assets or business, or (e) to effect the liquidation, dissolution or winding up
of the Company or (f) to offer to the holders of its Common Stock the right to
have their shares of Common Stock repurchased or redeemed or otherwise acquired
by the Company, or (g) to take any other action which would require the
adjustment of the Warrant Price and/or the number of Warrant Shares issuable
upon exercise of this Warrant, then in each such case (but without limiting the
provisions of Section 5), the Company shall give to the Holder a notice of such
proposed action, which notice shall specify the date on which a record is to be
taken for purposes of such dividend, distribution or offer of rights, or the
date on which such reclassification, reorganization, consolidation, merger,
sale, transfer, disposition, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of Common Stock, if
any such date is to be fixed, and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such action
on the Common Stock. Such notice shall be so given at least ten (10) Business
Days prior to the record date for determining holders of the Common Stock for
purposes of participating in or voting on such action, or at least ten (10)
Business Days prior to the date of the taking of such proposed
4
action or the date of participation therein by the holders of Common Stock,
whichever shall be the earlier. Such notice shall specify, in the case of any
subscription or repurchase rights, the date on which the holders of Common Stock
shall be entitled thereto, or the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon any reorganization, reclassification, consolidation,
merger, sale or other action, as the case may be. Such notice shall also state
whether the action in question or the record date is subject to the
effectiveness of a registration statement under the Act or to a favorable vote
of security holders, if either is required, and the adjustment of the Warrant
Price and/or number of Warrant Shares issuable upon exercise of this Warrant as
a result of such reorganization, reclassification, consolidation, merger, sale
or other action. No such notice shall be required to be given if the Company
reasonably determines that the giving of such notice would require disclosure of
material information which the Company has a bona fide purpose for preserving as
confidential or the disclosure of which would not be in the best interests of
the Company.
Section 5. Adjustment
Section 5.1. Adjustment of Common Stock Issuable Upon Exercise.
Upon each adjustment of the Adjustment Factor (as defined below) as a
result of the calculations made in this Section 5, this Warrant shall thereafter
evidence the right to receive, at the Warrant Price then in effect, that number
of shares of Common Stock obtained by dividing (i) the product of the aggregate
number of shares covered by this Warrant immediately prior to such adjustment
and the Adjustment Factor in effect immediately prior to such adjustment of the
Adjustment Factor by (ii) the Adjustment Factor in effect immediately after such
adjustment of the Adjustment Factor. For purposes of this Warrant, (x) the term
"Adjustment Factor" shall mean initially 1.00 per share of Common Stock, subject
to adjustment and readjustment from time to time as provided in Section 5, and,
as so adjusted or readjusted, shall remain in effect until a further adjustment
or readjustment thereof is required by Section 5, and (y) the term "Additional
Shares of Common Stock" shall mean all shares (including treasury shares) of
Common Stock issued or sold (or, pursuant to Section 5.3 or 5.4, deemed to be
issued) by the Company after the date hereof, whether or not subsequently
reacquired or retired by the Company (excluding shares of Common Stock issued
upon (a) the conversion or exchange of any existing preferred stock of the
Company and (b) the exercise or exchange of any existing option, warrant,
debenture or similar agreement, in each case to the extent that such shares do
not exceed the number of shares issuable pursuant to existing rights), other
than:
(A) shares issued upon the exercise of the Warrants;
(B) such additional number of shares as may become issuable upon the
exercise of any of the securities referred to in the foregoing clause (A) by
reason of adjustments required pursuant to anti- dilution provisions applicable
to such securities as in effect on the date hereof, in order to reflect any
subdivision or combination of Common Stock, by reclassification or otherwise, or
any dividend on Common Stock payable in Common Stock; and
(C) shares issued pursuant to a transaction described in Sections 5.2.2 or
5.6 hereof.
5
Section 5.2. Adjustment of Adjustment Factor.
Section 5.2.1. Issuance of Additional Shares of Common Stock. In case the
Company at any time or from time to time after the date hereof shall issue or
sell Additional Shares of Common Stock (including Additional Shares of Common
Stock deemed to be issued pursuant to Section 5.3 or Section 5.4) without
consideration or for a consideration per share less than the greater of the
Current Market Price (as defined below) and the Warrant Price immediately prior
to such issue or sale, then, and in each such case, subject to Section 3.8, such
Adjustment Factor shall be decreased, concurrently with such issue or sale, to a
number (calculated to the nearest .00001) determined by multiplying such
Adjustment Factor by a fraction:
(a) the numerator of which shall be the sum of (i) the number of shares of
Common Stock outstanding immediately prior to such issue or sale and (ii) the
number of shares of Common Stock which the aggregate consideration received by
the Company for the total number of such Additional Shares of Common Stock so
issued or sold would purchase at the greater of such Current Market Price and
the Warrant Price; and
(b) the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such issue or sale, provided that, for the
purposes of this Section 5.2.1, (x) immediately after any Additional Shares of
Common Stock are deemed to have been issued pursuant to Section 5.3 or 5.4, such
Additional Shares shall be deemed to be outstanding, and (y) treasury shares
shall not be deemed to be outstanding.
For purposes of this Warrant, the term, "Current Market Price" shall mean, on
any date specified herein, the average of the daily Market Price during the 10
consecutive trading days commencing 15 trading days before such date, except
that, if on any such date the shares of Common Stock are not listed or admitted
for trading on any national securities exchange or quoted in the over- the-
counter market, the Current Market Price shall be the Market Price on such date.
Section 5.2.2. Extraordinary Dividends and Distributions. In case the Company at
any time or from time to time after the date hereof shall declare, order, pay or
make a dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or property or
Options by way of dividend or spin- off, reclassification, recapitalization or
similar corporate rearrangement) on the Common Stock, then, in each such case,
the Company shall pay to the Holder of this Warrant, upon the exercise of this
Warrant, an amount equal to the product of (i) the number of shares of Common
Stock that the Holder would be entitled to purchase upon exercise of this
Warrant after consideration of all prior adjustments and readjustments pursuant
to Section 5.1, and (ii) the aggregate amount at such time of such dividend or
distribution (as determined in good faith by the Board of Directors of the
Company) applicable to the shares of Common Stock issuable upon such exercise by
such Holder.
Section 5.3. Treatment of Options and Convertible Securities. In case the
Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options (as defined
below) or Convertible Securities (as defined below), then, and in each such
case, the maximum number of Additional Shares of Common Stock (as set forth in
the instrument relating thereto, without regard to any provisions contained
therein for a subsequent
6
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities shall be deemed to be Additional Shares of Common
Stock issued as of the time of such issue, sale, grant or assumption or, in case
such a record date shall have been fixed, as of the close of business on such
record date (or, if the Common Stock trades on an ex- dividend basis, on the
date prior to the commencement of ex-dividend trading), provided that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to Section 5.5) of such shares
would be less than the greater of the Current Market Price and the Warrant Price
in effect on the date of and immediately prior to such issue, sale, grant or
assumption or immediately prior to the close of business on such record date
(or, if the Common Stock trades on an ex- dividend basis, on the date prior to
the commencement of ex- dividend trading), as the case may be, and provided,
further, that in any such case in which Additional Shares of Common Stock are
deemed to be issued.
(a) no further adjustment of the Adjustment Factor shall be made upon the
subsequent issue or sale of Convertible Securities or shares of Common Stock
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, except in the case of any such Options or Convertible
Securities which contain provisions requiring an adjustment, subsequent to the
date of the issue or sale thereof, of the number of Additional Shares of Common
Stock issuable upon the exercise of such Options or the conversion or exchange
of such Convertible Securities by reason of (x) a change of control of the
Company, (y) the acquisition by any Person or group of Persons of any specified
number or percentage of the voting securities of the Company or (z) any similar
event or occurrence, each such case to be deemed hereunder to involve a separate
issuance of Additional Shares of Common Stock, Options or Convertible
Securities, as the case may be;
(b) if such Options or Convertible Securities by their terms provide, with
the passage of time or otherwise, for any increase in the consideration payable
to the Company, or decrease in the number of Additional Shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof (by change of rate
or otherwise), the Adjustment Factor computed upon the original issue, sale,
grant or assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex- dividend trading, as the case may be, with
respect thereto), and any subsequent adjustments based thereon, shall, upon any
such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease insofar as it affects such Options, or the rights of
conversion or exchange under such Convertible Securities, which are outstanding
at such time;
(c) upon the expiration (or purchase by the Company and cancellation or
retirement) of any such Options which shall not have been exercised or the
expiration of any rights of conversion or exchange under any such Convertible
Securities which (or purchase by the Company and cancellation or retirement of
any such Convertible Securities the rights of conversion or exchange under
which) shall not have been exercised, the Adjustment Factor computed upon the
original issue, sale, grant or assumption thereof (or upon the occurrence of the
record date, or date prior to the commencement of ex- dividend trading, as the
case may be, with respect thereto), and any subsequent adjustments based
thereon, shall, upon such expiration (or such cancellation or retirement, as the
case may be), be recomputed as if:
7
(i) in the case of Options for Common Stock or Convertible Securities, the
only Additional Shares of Common Stock issued or sold were the Additional Shares
of Common Stock, if any, actually issued or sold upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
Company for the issue, sale, grant or assumption of all such Options, whether or
not exercised, plus the consideration actually received by the Company upon such
exercise, or for the issue or sale of all such Convertible Securities which were
actually converted or exchanged, plus the additional consideration, if any,
actually received by the Company upon such conversion or exchange; and
(ii) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon the exercise of
such Options were issued at the time of the issue or sale, grant or assumption
of such Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the Company (pursuant to Section 3.5) upon the
issue or sale of such Convertible Securities with respect to which such Options
were actually exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above shall have the
effect of increasing the Adjustment Factor by an amount in excess of the amount
of the adjustment thereof originally made in respect of the issue, sale, grant
or assumption of such Options or Convertible Securities; and
(e) in the case of any such Options which expire by their terms not more
than 30 days after the date of issue, sale, grant or assumption thereof, no
adjustment of the Adjustment Factor shall be made until the expiration or
exercise of all such Options, whereupon such adjustment shall be made in the
manner provided in subdivision (c) above.
For purposes of this Warrant, the terms (x) "Convertible Securities" shall mean
any evidences of indebtedness, shares of stock (other than Common Stock) or
other securities directly or indirectly convertible into or exchangeable for
Additional Shares of Common Stock, and (y) "Options" shall mean any rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Additional Shares of Common Stock or Convertible Securities.
Section 5.4. Treatment of Stock Dividends, Stock Splits, etc. In case the
Company at any time or from time to time after the date hereof shall declare or
pay any dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
Section 5.5. Computation of Consideration. For the purposes of this Section 5,
8
(a) the consideration for the issue or sale of any Additional Shares of
Common Stock shall, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, be computed at the gross amount of cash
received by the Company, without deducting any expenses paid or incurred by the
Company or any commissions or compensations paid or concessions or discounts
allowed to underwriters, agents, dealers or others performing similar services
in connection with such issue or sale,
(ii) insofar as it consists of property (including securities) other than
cash, be computed at the fair value thereof at the time of such issue or sale,
as determined in good faith by the Board of Directors of the Company, and
(iii) in case Additional Shares of Common Stock are issued or sold together
with other stock or securities or other assets of the Company for a
consideration which covers both, be the portion of such consideration so
received, computed as provided in clauses (i) and (ii) above, allocable to such
Additional Shares of Common Stock, all as determined in good faith by the Board
of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been issued pursuant
to Section 5.3, relating to Options and Convertible Securities, shall be deemed
to have been issued for a consideration per share determined by dividing
(i) the total amount, if any, received and receivable by the Company as
consideration for the issue, sale, grant or assumption of the Options or
Convertible Securities in question, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration to protect against dilution) payable to the Company upon the
exercise in full of such Options or the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, in each case computing such
consideration as provided in the foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such number to protect against dilution) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been issued pursuant
to Section 5.4, relating to stock dividends, stock splits, etc., shall be deemed
to have been issued for no consideration.
Section 5.6. Adjustments for Combinations, etc. In case the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Adjustment Factor
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
9
Section 5.7. Dilution in Case of Other Securities. In case any Other Securities
(as defined below) shall be issued or sold or shall become subject to issue or
sale upon the conversion or exchange of any stock (or Other Securities) of the
Company (or any issuer of Other Securities or any other Person referred to in
Section 6) or to subscription, purchase or other acquisition pursuant to any
Options issued or granted by the Company (or any such other issuer or Person)
for a consideration such as to dilute, on a basis consistent with the standards
established in the other provisions of this Section 5, the purchase rights
granted by this Warrant, then, and in each such case, the computations,
adjustments and readjustments provided for in this Section 5 with respect to the
Warrant Price and the number of shares purchasable upon Warrant exercise shall
be made as nearly as possible in the manner so provided and applied to determine
the amount of Other Securities from time to time receivable upon the exercise of
the Warrants, so as to protect the holders of the Warrants against the effect of
such dilution. For purposes of this Warrant, the term "Other Securities" shall
mean any stock (other than Common Stock) and other securities of the Company or
any other Person (corporate or otherwise) which the holders of the Warrants at
any time shall be entitled to receive, or shall have received, upon the exercise
of the Warrants, in lieu of or in addition to Common Stock, or which at any time
shall be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 6 or otherwise.
Section 5.8. De Minimis Adjustments. If the amount of any adjustment of the
Adjustment Factor per share required pursuant to this Section 5 would be less
than one- tenth (1/10) of one percent (1%) of the Adjustment Factor in effect at
such time, such amount shall be carried forward and adjustment with respect
thereto made at the time of and together with any subsequent adjustment which,
together with such amount and any other amount or amounts so carried forward,
shall aggregate a change in the Adjustment Factor of at least one-tenth (1/10)
of one percent (1%) of such Adjustment Factor.
Section 5.9. Abandoned Dividend or Distribution. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution (which results in an adjustment to the
Adjustment Factor under the terms of this Warrant) and shall, thereafter, and
before such dividend or distribution is paid or delivered to stockholders
entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Adjustment Factor and number of
shares of Common Stock purchasable upon Warrant exercise by reason of the taking
of such record shall be reversed, and any subsequent adjustments, based thereon,
shall be recomputed.
Section 5.10. Grant, Issue or Sale of Options, Convertible Securities, or
Rights. If at any time or from time to time the Company shall grant, issue or
sell any Options, Convertible Securities, rights to purchase property or
evidences of indebtedness (the "Purchase Rights") to the holders of its shares
of Common Stock generally and such grants, issuances or sales do not otherwise
result in an adjustment of the Adjustment Factor under this Section 5 (or
otherwise entitle the Holder to receive the Purchase Rights), then the Holder of
this Warrant shall be entitled to acquire (within 30 days after the later to
occur of the initial exercise date of such Purchase Rights or receipt by such
Holder of the notice concerning Purchase Rights to which such Holder shall be
entitled under Section 10) and upon the terms applicable to such Purchase Rights
either:
10
(i) the aggregate Purchase Rights which such Holder could have acquired if
it had held the number of shares of Common Stock acquired upon exercise of this
Warrant immediately before the grant, issuance or sale of such Purchase Rights;
provided that if any Purchase Rights were distributed to holders of Common Stock
without the payment of additional consideration by such holders, corresponding
Purchase Rights shall be distributed to the exercising Holder of this Warrant as
soon as possible after such exercise and it shall not be necessary for the
exercising Holder of this Warrant specifically to request delivery of such
rights; or
(ii) in the event that any such Purchase Rights shall have expired or shall
expire prior to the end of such 30 day period, the number of shares of Common
Stock or the amount of property which such Holder could have acquired upon such
exercise at the time or times at which the Company granted, issued or sold such
expired Purchase Rights.
Section 6. Consolidation, Merger, etc.
Section 6.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification resulting in the issue
of Additional Shares of Common Stock for which adjustment in the Adjustment
Factor is provided in Section 5.2.1 or 5.2.2), then, and in the case of each
such transaction, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder, upon the exercise
hereof at any time after the consummation of such transaction, shall be entitled
to receive (at the aggregate Adjustment Factor in effect at the time of such
consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock or
Other Securities issuable upon such exercise prior to such consummation, the
highest amount of securities, cash or other property to which such Holder would
actually have been entitled as a stockholder upon such consummation if such
Holder had exercised this Warrant immediately prior thereto, subject to
adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in Sections 5 through 7, provided that if a
purchase, tender or exchange offer shall have been made to and accepted by the
holders of more than 50% of the outstanding shares of Common Stock, and if the
Holder so designates in a notice given to the Company on or before the date
immediately preceding the date of the consummation of such transaction, the
Holder upon the exercise of the Warrants shall be entitled to receive the
highest amount of securities, cash or other property to which it would actually
have been entitled as a stockholder if such Holder had exercised such Warrants
immediately prior to the expiration of such purchase, tender or exchange offer
and accepted such offer, subject to adjustments (from and after the consummation
of such purchase, tender or exchange offer) as nearly equivalent as possible to
the adjustments provided for in Sections 5 through 7.
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Section 6.2. Assumption of Obligations. Notwithstanding anything contained in
the Warrant to the contrary, the Company shall not effect any of the
transactions described in clauses (a) through (d) of Section 6.1 unless, prior
to the consummation thereof, each Person (other than the Company) which may be
required to deliver any stock, securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument delivered
to, and in form and substance reasonably satisfactory to, the Holder, (a) the
obligations of the Company under this Warrant (and if the Company shall survive
the consummation of such transaction, such assumption shall be in addition to,
and shall not release the Company from, any continuing obligations of the
Company under this Warrant), and (b) the obligation to deliver to the Holder
such shares of stock, securities, cash or property as, in accordance with the
foregoing provisions of this Section 6, the Holder may be entitled to receive
and such Person shall have similarly delivered to the Holder an opinion of
counsel for such Person, which counsel shall be reasonably satisfactory to the
Holder, stating that this Warrant shall thereafter continue in full force and
effect and the terms hereof (including, without limitation, all of the
provisions of this Section 6) shall be applicable to the stock, securities, cash
or property which such Person may be required to deliver upon any exercise of
this Warrant or the exercise of any rights pursuant hereto.
Section 7. Other Dilutive Events. In case any event shall occur as to which the
provisions of Section 5 or Section 6 hereof are not strictly applicable or if
strictly applicable would not fairly protect the purchase rights of the Holder
in accordance with the essential intent and principles of such Sections, then,
in each such case, the Board of Directors of the Company shall in good faith
make an adjustment in the application of such provisions, in accordance with
such essential intent and principles, so as to preserve, without dilution, the
purchase rights represented by this Warrant.
Section 8. No Dilution or Impairment. The Company shall not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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
against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (a) shall not permit the par value of any shares of stock
receivable upon the exercise of this Warrant to exceed the amount payable
therefor upon such exercise, (b) shall take all 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, free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges on the exercise of the
Warrants from time to time outstanding and (c) shall not take any action which
results in any adjustment of the Adjustment Factor if the total number of shares
of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
Section 9. Accountants' Report as to Adjustments. In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities) issuable
upon the exercise of this Warrant, the Company at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms of this
Warrant and cause independent certified public
12
accountants of recognized international standing (which may be the regular
auditors of the Company) selected by the Company to verify such computation
(other than any computation of the fair value of property as determined in good
faith by the Board of Directors of the Company) and prepare a report setting
forth such adjustment or readjustment and showing in reasonable detail the
method of calculation thereof and the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or to be received by the Company for any Additional Shares of Common Stock
issued or sold or deemed to have been issued, (b) the number of shares of Common
Stock outstanding or deemed to be outstanding, and (c) the Adjustment Factor in
effect immediately prior to such issue or sale and as adjusted and readjusted
(if required by Section 3) on account thereof. The Company shall forthwith mail
a copy of each such report to each Holder and shall, upon the written request at
any time of any Holder, furnish to such holder a like report setting forth the
Adjustment Factor at the time in effect and showing in reasonable detail how it
was calculated. The Company shall also keep copies of all such reports at its
principal office and shall cause the same to be available for inspection at such
office during normal business hours by any Holder or any prospective purchaser
of a Warrant designated by the Holder thereof.
Section 10. Intentionally Omitted.
Section 11. Registration Rights
Section 11.1. Requested Registrations. At any time, but no more frequently than
twice, (i) after the exercise of the Warrant pursuant to Section 2, the Holder
may, upon written request, require the Company, and the Company shall be
obligated, to register such Warrant Shares under the Securities Act as requested
by such Holder (referred to herein as a "Requested Registration"), all in
accordance with the provisions of this Section 11. If the Company shall be
requested by the Holder to effect such a registration pursuant to this Section
11.1, the Company shall promptly give written notice of such proposed
registration to all Holders, and shall include in such registration such other
Warrant Shares that Holders have, within 30 days after the Company has given
notice of the Requested Registration, requested the Company to register.
Section 11.2. Piggyback Registrations. (a) If the Company at any time proposes
to register, or is required in any way to register, any of its securities (as
defined in the Act) under the Act (other than on Form S-8 or other similar forms
providing for the registration of employee benefit plan securities or on a form
used in connection with a transaction of the type described in rule 145 under
the Act), it will at each such time give written notice to the Holder of its
intention so to do and, upon the written request of any Holder, given within 30
days after receipt of any such notice, the Company will cause each Warrant Share
that the Company has been requested to register by such Holder to be registered
under the Act at the same time as the Company's proposed registration, all to
the extent required to permit the sale or other disposition by such Holder of
the Warrant Shares so registered; provided, however, that (i) if such
registration involves an underwritten offering, the Holders must sell their
Warrant Shares to the underwriters selected by the Company on the same terms and
conditions as apply to the Company and/or any other selling stockholder, (ii)
if, at any time after giving written notice of its intention to register any
securities pursuant to this Section 11.2 and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company
shall give written notice to the Holders and
13
thereupon shall be relieved of its obligation to register any Warrant Shares in
connection with such registration, and (iii) if such registration involves an
underwritten offering, the Company shall not be required to include any Warrant
Shares in such underwriting unless the Holders accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it, and then only such quantity of Warrant Shares, if any, as shall not, in the
opinion of the underwriters, have an adverse effect on the offering by the
Company.
Section 11.3. [Reserved].
Section 11.4. Company's Obligations in Registration. Whenever the Company is
obligated by the provisions of this Section 11 to effect the registration of any
Warrant Shares under the Act, as expeditiously as possible the Company will:
(a) prepare and file with the Securities and Exchange Commission (or any
successor agency having jurisdiction to enforce the Act) (the "Commission") a
registration statement with respect to such Warrant Shares and use reasonable
efforts to cause such registration statement to become effective;
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statements effective for a period of
not less than 180 days or such shorter period in which the disposition of all
securities in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement shall be completed
and to comply with the provisions of the Act (to the extent applicable to the
Company) with respect to such disposition;
(c) furnish to the Holders for whom such Warrant Shares are registered or
are to be registered such amount of copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such amount of copies of the prospectus included in such registration
statement (including each preliminary prospectus), in conformity with the
requirements of the Act and such other documents, as such Holders may reasonably
request in order to facilitate the disposition of such Warrant Shares;
(d) use reasonable efforts to register or qualify the Warrant Shares
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as any Holder reasonably requests, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the Warrant
Shares owned by such Holder, except the Company will not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subparagraph
(d) be obliged to be qualified, to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) provide a transfer agent and registrar for all Warrant Shares covered
by such registration statement not later than the effective date of such
registration statement;
(f) notify each Holder of such Warrant Shares at any time when a prospectus
relating hereto is required to be delivered under the Act, of the happening of
any event as a result of
14
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements
therein not misleading, and, at the request of any Holder, the Company will
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Warrant Shares, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(g) cause all such Warrant Shares to be listed on each securities exchange
or securities quotation system on which the same class of securities issued by
the Company is then
(h) obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters in such transactions;
(i) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as reasonably
required in order to expedite or facilitate the disposition of such Warrant
Shares;
(j) make available for inspection by any Holder for whom Warrant Shares are
registered or to be registered, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement; and
(k) furnish to the Holder for whom such Warrant Shares are registered or
are to be registered at the time of the disposition of such Warrant Shares an
opinion of counsel for the Company, in form and substance identical to that
given to the underwriters, if an underwritten offering, or if not an
underwritten offering, an opinion of counsel of the type generally provided to
underwriters in such transactions.
Section 11.5. Payment of Registration Expenses. The costs and expenses incurred
by the Company in complying with this Section 11 shall be paid by the Company,
including without limitation all registration and filing fees, printing
expenses, state securities or blue sky filing fees, fees and disbursements of
counsel to the Company and expenses of any special audits or other accounting
services incident to or required in connection with any such registration, but
excluding all underwriters' discounts and commissions applicable to the Warrant
Shares, which will be borne by the Holders.
Section 11.6. Company's Indemnification. In the event of any registration under
the Act of any Warrant Shares pursuant to this Section 11, the Company hereby
agrees to indemnify and hold harmless each Holder disposing of such Warrant
Shares, each officer, director and employee of such Holder, and each other
person, if any, who controls such Holder within the meaning of the Act
(collectively, the "Indemnified Parties") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Parties may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect
15
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement pursuant
to which such Warrant Shares were registered under the Act, in any prospectus
contained therein, or in any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and will
reimburse such Indemnified Parties for any reasonable legal or any other
expenses incurred by such Indemnified Parties in connection with investigating
or defending any such loss, claim, damage, liability or proceeding; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, said prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Indemnified Parties, as the case may be, specifically for
use therein.
If any action or claim shall be brought or asserted against any Indemnified
Party in respect of which indemnity may be sought from the Company, the
Indemnified Party shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel and the
payment of all reasonable expenses relating thereto. The Indemnified Party shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Party unless (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed
to assume the defense and employ counsel or (iii) the named parties to any such
action (including any impleaded parties) include both the Indemnified Party and
the Company, and the Indemnified Party shall have been advised by such counsel
that there may be one or more legal defenses available to it that are different
from or in addition to those available to the Company (in which case, if the
Indemnified Party notifies the Company in writing that it would like to employ
separate counsel at the expense of the Company, the Company shall assume the
expenses relating thereto and shall not have the right to assume the defense of
such action on behalf of the Indemnified Party. The Indemnified Party, as a
condition of such indemnity, shall use its best efforts to cooperate with the
Company in the defense of any such action or claim. The Company shall not be
liable for any settlement of any such action effected without its written
consent, but if there be a final judgment for the plaintiff in any such action,
the Company agrees to indemnify and hold harmless the Indemnified Party from and
against any loss or liability by reason of such judgment.
Section 11.7. Holder's Indemnification. By accepting this Warrant, each Holder
for whom Warrant Shares are to be registered pursuant to this Section 11 agrees
to indemnify and hold harmless the Company, its officers, directors, employees
and each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities, joint or several, arising
out of or based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such Warrant
Shares were registered under the Act, in any prospectus contained therein or in
any amendment or supplement thereto, or arising out of or based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, that
in each such case has been made in or omitted from such registration statement,
said prospectus or said amendment or supplement in reliance upon and in
conformity with
16
written information furnished to the Company by such Holder. Company shall be
limited to an amount equal to the proceeds received by such Holder upon the sale
of the Warrant Shares pursuant to such registration statement.
If any action or claim shall be brought or asserted against the Company or its
directors or officers (or any such controlling person) in respect of which
indemnity may be sought against a Holder, such Holder shall have the rights and
duties given to the Company and the Company shall, and its officers and
directors (and such controlling person) shall have, the rights and duties given
to such Holder by Section 11.6 hereof.
Section 11.8. Contribution. If the indemnification provided for in this Section
11 is unavailable to an Indemnified Party under Section 11.6 or 11.7 hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Company on the
one hand and of the Holder on the other in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses. The relative fault of the Company on the one hand and of the Holder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of the material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Holder, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company on the one hand and the Holder on the other agree that it would not
be just and equitable if contribution pursuant to this Section 11.8 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages, liabilities and expenses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with defending any such action or claim.
Notwithstanding the provisions of this Section 11.8, the Holder shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Warrant Shares were offered to the public exceeds the amount
of any damages that the Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the foregoing, no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 11.9. Effect of Indemnity and Contribution. The indemnity and
contribution agreements contained in this Section 11 and the representations and
warranties of the Company set forth in this Warrant shall remain operative and
in full force and effect, regardless of (i) any investigation made by or on
behalf of the Holder or any person controlling the Holder or by or on behalf of
the Company, or its directors or officers (or any person controlling the
Company), (ii) acceptance of any Warrant Shares and payment therefor hereunder
and (iii) any termination of this Warrant. Any successor of the Holder or of the
Company or of their directors or officers (or
17
of any person controlling the Holder or the Company) shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 11.
Section 11.10. Public Information. The Company covenants and agrees that if and
for so long as the Common Stock shall be registered under Section 12 of the
Securities and Exchange Act of 1934 (as amended from time to time, the "Exchange
Act"), at any time when any Holder so entitled desires to make sales of any
Warrant Shares in reliance on Rule 144 under the Act either (i) there will be
available adequate current public information with respect to the Company as
required by Rule 144, or (ii) if such information is not available the Company
will use its reasonable best efforts to make such information available without
delay. Without limiting the foregoing, after the time of any such registration
the Company will timely file with the Commission all reports required to be
filed under Sections 13 and 15(d) of the Exchange Act and will promptly furnish
to any Holder so requesting a written statement that the Company has complied
with all such reporting requirements.
Section 11.11. [Reserved].
18
Section 12. No Rights as a Stockholder; Notice to Holder. Nothing contained in
this Warrant shall be construed as conferring upon the Holder the right to vote
or to consent or to receive notice as a Stockholder in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as a stockholder of the Company.
Section 13. Replacement of Warrant. Upon 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) upon delivery of an
indemnity agreement in a form and substance reasonably satisfactory to the
Company (together with, in the case of a Holder which is not a qualified
institutional buyer within the meaning of Rule 144A under the Act, surety), or
(in the case of mutilation) upon surrender and cancellation thereof, the Company
will issue, in lieu thereof, a new Warrant of like tenor.
Section 14. Notices. All notices and other written communications provided for
hereunder shall be given in writing and delivered in person or sent by overnight
delivery service (with charges prepaid) or by facsimile transmission, if the
original of such facsimile transmission is sent by overnight delivery service
(with charges prepaid) by the next succeeding Business Day and (i) if to the
Holder, addressed to it at the address or fax number specified for such Holder
in the Warrant Register or at such other address or fax number as the Holder
shall have specified to the Company in writing in accordance with this Section
14, and (ii) if to the Company, addressed to it at 0000 Xxxxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Secretary, Fax No. (000) 000-0000 or at such
other address or fax number as the Company shall have specified to the Holder in
writing in accordance with this Section 14. Notice given in accordance with this
Section 14 shall be effective upon the earlier of the date of delivery or the
second Business Day at the place of delivery after dispatch.
Section 15. Applicable Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
principles of conflict of laws.
Section 16. Severability. In the event that any part or parts of this Warrant
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not effect the remaining
provisions of this Warrant which shall remain in full force and effect.
Section 17. Successors. This Warrant shall inure to the benefit of and be
binding upon the successors of each of the Company and the Holder.
Section 18. Captions. The captions of the Sections and subsections of this
Warrant have been inserted for convenience only and shall have no substantive
effect.
19
IN WITNESS WHEREOF, the undersigned have executed this Warrant as of the 7th day
of December, 2001.
XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
20
Exhibit A
---------
[To be signed only upon exercise of Warrant]
To Xxxxxx, Inc.:
The undersigned, the holder of the within Warrant (the "Holder"), hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, shares of Common Stock of Xxxxxx, Inc. and
herewith [makes payment of $ ___________ therefor in full payment of the
Exercise Payment][tenders securities having a Market Price of $_____ in full
payment of the Exercise Payment ] or [elects to receive a payment equal to the
difference between (i) the Market Price (as defined in the Warrant) multiplied
by (the number of Warrant Shares as to which the payment is being elected) and
(ii) ___________, which is the exercise price with respect to such Warrant
Shares, in full payment of the Exercise Payment, payable by the Company to the
Holder only in shares of Common Stock valued at the Market Price in accordance
with the terms of the Warrant], and requests that the certificates for such
shares be issued in the name of, and be delivered to , whose address is.
Dated:
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
Address
Exhibit B
---------
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the
right represented by the within Warrant to purchase shares of the Common Stock
of Xxxxxx, Inc. to which the within Warrant relates, and appoints
__________________ as the attorney-in-fact to transfer said right on the books
of Xxxxxx, Inc. with full power of substitution in the premises.
Dated:
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)
Address
In the presence of
