EXHIBIT 7
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER
ANY SUCH APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS
WARRANT.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 22, 2002.
THIS WARRANT ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN SEMX CORPORATION AND CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, AS RIGHTS AGENT, DATED AS OF JUNE 15, 1999, AS AMENDED
ON THE DATE HEREOF AND AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO TIME (THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
SEMX CORPORATION AND AVAILABLE FOR INSPECTION BY THE HOLDER OF THIS WARRANT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL
BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
WARRANT. SEMX CORPORATION WILL MAIL TO THE HOLDER OF THIS WARRANT A COPY OF THE
RIGHTS AGREEMENT WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN
REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY "PERSON" WHO IS, WAS OR BECOMES AN "ACQUIRING
PERSON" OR ANY "AFFILIATE" OR "ASSOCIATE" THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. IN NO EVENT MAY THE RIGHTS BE EXERCISED AFTER JUNE 29, 2009.
WARRANT
To Purchase Common Stock of
SEMX CORPORATION
Issuance Date: August 22, 2002
Issued To: ACI Capital America Fund, LP
No. of Shares of Common Stock: 225,000
ACI WARRANT
TABLE OF CONTENTS
Page
1. DEFINITIONS........................................................................................... 2
2. CURRENT WARRANT PRICE .............................................................................. 7
2.1. Initial Warrant Price........................................................................ 7
3. EXERCISE OF WARRANT................................................................................... 8
3.1. Manner of Exercise........................................................................... 8
3.2. Payment of Taxes............................................................................. 9
3.3. Fractional Shares............................................................................ 9
3.4. Continued Validity........................................................................... 9
3.5. NASD Rule.................................................................................... 9
4. TRANSFER, DIVISION AND COMBINATION.................................................................... 10
4.1. Transfer..................................................................................... 10
4.2. Division and Combination..................................................................... 10
4.3. Expenses..................................................................................... 10
4.4. Maintenance of Books......................................................................... 10
5. ADJUSTMENTS........................................................................................... 10
5.1. Subdivisions and Combinations................................................................ 11
5.2. Issuance of Additional Shares of Common Stock................................................ 11
5.3. Issuance of Warrants or Other Rights......................................................... 12
5.4. Issuance of Convertible Securities........................................................... 12
5.5. Superseding Adjustment....................................................................... 13
5.6. Other Provisions Applicable to Adjustments Under This Section................................ 14
5.7. Reorganization, Reclassification, Liquidation, Dissolution, Merger, Consolidation
or Disposition of Assets..................................................................... 16
5.8. Other Action Affecting Common Stock.......................................................... 17
5.9. Certain Limitations.......................................................................... 17
6. NOTICES TO WARRANT HOLDERS............................................................................ 18
6.1. Notice of Adjustments........................................................................ 18
6.2. Notice of Certain Corporate Action........................................................... 18
7. NO IMPAIRMENT......................................................................................... 18
8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY........................................................ 19
WPD ACI WARRANT
i
Page
9. TAKING OF A RECORD; STOCK AND WARRANT TRANSFER BOOKS.................................................. 19
10. RESTRICTIONS ON TRANSFERABILITY....................................................................... 20
10.1. Restrictive Legends.......................................................................... 20
10.2. Notice of Proposed Transfers; Requests for Registration...................................... 21
10.3. No Transfer to Competitor.................................................................... 21
10.4. Termination of Restrictions.................................................................. 21
11. SUPPLYING INFORMATION................................................................................. 22
12. LOSS OR MUTILATION.................................................................................... 22
13. OFFICE OF THE COMPANY................................................................................. 22
14. [INTENTIONALLY OMITTED]............................................................................... 23
15. REGISTRATION RIGHTS................................................................................... 25
16. LIMITATION OF LIABILITY............................................................................... 25
17. [INTENTIONALLY OMITTED]............................................................................... 25
18. RIGHTS PLAN........................................................................................... 26
18.1. Issuance of Rights........................................................................... 26
18.2. Return of Rights............................................................................. 27
19. MISCELLANEOUS......................................................................................... 27
19.1. Nonwaiver and Expenses....................................................................... 27
19.2. Notice Generally............................................................................. 27
19.3. Indemnification.............................................................................. 28
19.4. Successors and Assigns....................................................................... 28
19.5. Amendment.................................................................................... 28
19.6. Severability................................................................................. 28
19.7. Headings..................................................................................... 28
19.8. Governing Law................................................................................ 29
19.9. Arbitration.................................................................................. 29
ACI WARRANT
ii
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE
SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, OR OTHERWISE TRANSFERRED, IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND UNDER
ANY SUCH APPLICABLE STATE LAWS, OR IN VIOLATION OF THE PROVISIONS OF THIS
WARRANT.
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 22, 2002.
THIS WARRANT ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS
SET FORTH IN A RIGHTS AGREEMENT BETWEEN SEMX CORPORATION AND CONTINENTAL STOCK
TRANSFER & TRUST COMPANY, AS RIGHTS AGENT, DATED AS OF JUNE 15, 1999, AS AMENDED
ON THE DATE HEREOF AND AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO TIME (THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
SEMX CORPORATION AND AVAILABLE FOR INSPECTION BY THE HOLDER OF THIS WARRANT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL
BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
WARRANT. SEMX CORPORATION WILL MAIL TO THE HOLDER OF THIS WARRANT A COPY OF THE
RIGHTS AGREEMENT WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF A WRITTEN
REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY "PERSON" WHO IS, WAS OR BECOMES AN "ACQUIRING
PERSON" OR ANY "AFFILIATE" OR "ASSOCIATE" THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. IN NO EVENT MAY THE RIGHTS BE EXERCISED AFTER JUNE 29, 2009.
Warrant Number: 8 Date of Issuance: August 22, 2002
No. of Shares of Common Stock: 225,000
WARRANT
To Purchase Common Stock of
SEMX CORPORATION
THIS IS TO CERTIFY THAT ACI Capital America Fund, LP or its
registered assigns, is entitled, at any time during the Exercise Period (as
hereinafter defined), to purchase from SEMX Corporation, a Delaware corporation
(the "Company"), two hundred twenty five thousand (225,000) shares of Common
Stock (as hereinafter defined and subject to adjustment as
ACI WARRANT
1
provided herein), in whole or in part, including fractional parts, at an initial
purchase price of $3.00 per share (subject to adjustment as set forth herein),
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the
respective meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Company after the Issuance Date, other than Warrant
Stock or June 2000 Warrant Stock, whether now authorized or not.
"Affiliate" of any Person shall mean a Person that directly or
indirectly, through one or more intermediaries, controls or is controlled by or
is under common control with, such Person.
"ASP" shall mean American Silicon Products, Inc., a Rhode
Island corporation.
"ASP Common Stock" shall mean the Common Stock of ASP.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be closed in the
State of New York.
"Closing Date" shall mean June 1, 2000.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act and other
federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, $.10 par value, of the Company as constituted on
the Issuance Date, and any capital stock into which such Common Stock may
thereafter be changed, and shall also include (i) capital stock of the Company
of any other class (regardless of how denominated) issued to the holders of
shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to redemption and (ii) shares of common stock of any
successor or acquiring corporation (as defined in Section 5.7) received by or
distributed to the holders of Common Stock of the Company in the circumstances
contemplated by Section 5.7.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable,
with or without payment of additional consideration in cash or property, for
Additional Shares of Common Stock, either immediately or upon the occurrence of
a specified date or a specified event.
XXX XXXXXXX
0
"Xxxxxxx Xxxxxx Price" shall mean, in respect of any share of
Common Stock (or Other Common Stock, as the case may be) on any date herein
specified, the average of the Daily Market Prices for the 20 consecutive Trading
Days immediately preceding such date.
"Current Warrant Price" shall mean, in respect of a share of
Common Stock at any date herein specified, the price at which a share of Common
Stock may be purchased pursuant to this Warrant on such date, as set forth in
Section 2 hereof, subject to adjustment pursuant to Section 5.
"Daily Market Price" shall mean, for each given Trading Day:
(i) the last sale price on such day on the National Stock Exchange on which the
Common Stock (or the Other Common Stock, as the case may be) is then listed or
admitted to trading, (ii) if no sale takes place on such day on such exchange,
the last reported sale price as officially quoted on such exchange, (iii) if the
Common Stock (or the Other Common Stock, as the case may be) is not then listed
or admitted to trading on any National Stock Exchange, the last reported sale
price on the over-the-counter market, as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices), or if such sale price is not available on such
date, the average of the closing bid and asked prices on such date as reported
by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices), or (iv) if there is no
such organization or agency, as furnished by any member of the NASD selected
mutually by the Majority Holders and the Company or, if they cannot agree upon
such selection, by a member selected by two such members of the NASD, one of
which shall be selected by the Majority Holders and one of which shall be
selected by the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Exercise Period" shall mean the period beginning on the
Issuance Date and ending at 5:00 P.M., New York time, on the fifth anniversary
of the Closing Date.
"Expiration Date" shall mean the date of the expiration of the
Exercise Period.
"Fully Diluted Outstanding" shall mean, when used with
reference to Common Stock, at any date as of which the number of shares thereof
is to be determined, all shares of Common Stock Outstanding at such date and all
shares of Common Stock issuable in respect of this Warrant outstanding on such
date and other options or warrants to purchase, or securities convertible into,
shares of Common Stock outstanding on such date, whether or not such options,
warrants or other securities are presently convertible or exercisable.
ACI WARRANT
3
"Holder" shall mean, as the context requires, the Person in
whose name this Warrant or one of the other Warrants is registered on the books
of the Company maintained for such purpose and/or the Person holding any Warrant
Stock.
"Independent Counsel" shall mean counsel to the Holder
reasonably acceptable to the Company.
"Issuance Date" shall mean August 22, 2002.
"June 2000 Warrants" shall mean warrants issued pursuant to
the terms of the Preferred Stock Purchase Agreement, and all warrants issued
upon transfer, division or combination of, or in substitution or exchange for,
any thereof.
"June 2000 Warrant Stock" shall mean the shares of Common
Stock purchased by holders of the June 2000 Warrants upon the exercise thereof.
"Majority Holders" shall mean, at any given time, holders of
Warrants then outstanding who would hold a majority of the Common Stock
purchasable upon exercise of all Warrants in the event all Warrants were so
exercised at such time.
"March 29, 2002 Agreement" shall mean the Agreement, dated as
of March 29, 2002, by and among the Company, the initial Holder hereof and other
designated holders of Warrants.
"NASD" shall mean the National Association of Securities
Dealers, Inc., or any successor corporation thereto.
"National Stock Exchange" shall mean the Nasdaq Stock Market,
the New York Stock Exchange or the American Stock Exchange.
"New Securities" shall mean any Additional Shares of Common
Stock, and any rights or options to purchase any Additional Shares of Common
Stock, and any Convertible Securities.
"Other Common Stock" shall mean the common stock of a company
other than the Company, including without limitation ASP Common Stock.
"Other Property" shall have the meaning set forth in Section
5.7.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be determined,
all issued shares of Common Stock, except shares then owned or held by or for
the account of the Company or any Subsidiary,
ACI WARRANT
4
and shall include all shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock.
"Payment Shares" shall have the meaning set forth in Section
3.1.
"Permitted Issuances" shall mean (i) the issuance of shares of
Common Stock pursuant to an underwritten public offering; (ii) the issuance of
shares of Common Stock upon exercise of the Warrants; (iii) the issuance of
shares of Common Stock upon the exercise of June 2000 Warrants; (iv) the
issuance of shares of Common Stock upon the exercise of options issued to
management employees of the Company or its Subsidiaries pursuant to the Stock
Option Plans; and (v) the issuance of up to a total of 60,000 shares of Common
Stock pursuant to warrants issued to VM Equity Partners, Inc. and Xxxxxx and
Xxxxxxx as finders fees in connection with the transactions related to the
Preferred Stock Purchase Agreement.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization, association,
corporation, institution, public benefit corporation, entity or government
(whether federal, state, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
"Preferred Stock Purchase Agreement" shall mean the Preferred
Stock Purchase Agreement dated as of the Closing Date, by and among the Company
and certain purchasers of Series B Preferred Stock and June 2000 Warrants.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement dated as of August 22, 2002 among the Company, the initial
Holder hereof and other designated parties.
"Reorganization" shall have the meaning set forth in Section
5.7.
"Restricted Common Stock" shall mean shares of Common Stock
which are, or which upon their issuance on the exercise of this Warrant would
be, evidenced by a certificate bearing the restrictive legend set forth in
Section 10.1(a).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Series B Certificate of Designation" shall mean the
Certificate of Designation, Number, Powers, Preferences and Relative
Participating, Optional and Other Rights of Series B Preferred Stock of the
Company, as in effect on the Closing Date.
ACI WARRANT
5
"Series B Preferred Stock" shall mean the Company's Series B
Preferred Stock issued pursuant to the Series B Certificate of Designation and
the Preferred Stock Purchase Agreement.
"Stock Option Plans" shall mean the Company's Amended
Employee's Incentive Stock Option Plan adopted by the Board of Directors on May
27, 1993, and the Company's non- qualified stock option plan for members of its
Board of Directors adopted by the Board of Directors on January 31, 1995.
"Subsidiary" shall mean any corporation of which an aggregate
of more than 50% of the outstanding stock having ordinary voting power to elect
a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by the Company and/or one or more Subsidiaries of the Company.
"Trading Day" shall mean any day on which stock is traded on
the New York Stock Exchange.
"Transfer" shall mean any disposition of any Warrant or
Warrant Stock or of any interest in either thereof, which would constitute a
sale thereof within the meaning of the Securities Act.
"Warrants" shall mean this warrant and all other warrants
issued pursuant to the terms of the March 29, 2002 Agreement, and all warrants
issued upon Transfer, division or combination of, or in substitution or exchange
for, any thereof.
"Warrant Price" shall mean an amount equal to (i) the number
of shares of Common Stock being purchased upon exercise of this Warrant pursuant
to Section 3.1, multiplied by (ii) the Current Warrant Price as of the date of
such exercise.
"Warrant Stock" shall mean the shares of Common Stock
purchased by Holders of the Warrants upon the exercise thereof.
2. CURRENT WARRANT PRICE
2.1. Initial Warrant Price. Commencing on the Issuance Date,
the Current Warrant Price shall be $3.00 per share of Common Stock, subject to
adjustment pursuant to Section 5.
XXX XXXXXXX
0
0. XXXXXXXX XX XXXXXXX
3.1. Manner of Exercise. At any time during the Exercise
Period, the Holder may exercise this Warrant, on any Business Day, for all or
any part of the number of shares of Common Stock purchasable hereunder.
In order to exercise this Warrant, in whole or in part, the
Holder shall deliver to the Company at its office at 0 Xxxxxxxx Xxxxx, Xxxxxx,
Xxx Xxxx 00000, or at the office or agency designated by the Company pursuant to
Section 13, (i) a written notice of the Holder's election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to be
purchased, (ii) payment of the Warrant Price in the manner provided below, and
(iii) this Warrant. Such notice shall be substantially in the form of the
subscription form appearing at the end of this Warrant as Exhibit A, duly
executed by the Holder or its duly appointed agent or attorney. Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event within
five (5) Business Days thereafter, execute or cause to be executed and deliver
or cause to be delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as the Holder
shall request in the notice and shall be registered in the name of the Holder
or, subject to Section 10, such other name as shall be designated in the notice.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
Person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the notice, together
with the cash or check or checks, if any, and this Warrant, are received by the
Company as described above and all taxes required to be paid by the Holder, if
any, pursuant to Section 3.2 prior to the issuance of such shares have been
paid. If this Warrant shall have been exercised in part, the Company shall, at
the time of delivery of the certificate or certificates representing Warrant
Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant,
or, at the request of the Holder, appropriate notation may be made on this
Warrant and the same returned to the Holder. Notwithstanding any provision
herein to the contrary, the Company shall not be required to register shares in
the name of any Person who acquired this Warrant (or part hereof) or any Warrant
Stock otherwise than in accordance with this Warrant.
Payment of the Warrant Price shall be made at the option of
the Holder by (i) cash, (ii) wire transfer to an account in a bank located in
the United States designated for such purpose by the Company, (iii) certified or
official bank check, (iv) delivery of shares of Series B Preferred Stock with an
aggregate stated value, plus accrued and unpaid dividends thereon, equal to the
Warrant Price, (v) delivery of shares of Common Stock, valued per share at the
Daily Market Price as of the last Trading Day prior to the date of delivery of
such shares to the Company, with an aggregate value equal to the Warrant Price,
or (vi) any combination of the
ACI WARRANT
7
foregoing; provided, however, that the Holder shall have the right, at its
election, in lieu of delivering the Warrant Price in cash, to instruct the
Company in the form of Subscription Notice to retain, in payment of the Warrant
Price, a number of shares of Common Stock (the "Payment Shares") equal to the
quotient of the aggregate Warrant Price of the shares as to which this Warrant
is then being exercised divided by the Current Market Price.
3.2. Payment of Taxes. All shares of Common Stock issuable
upon the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable and without any preemptive rights. The
Company shall pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed with respect to, the issue or delivery
thereof, unless such tax or charge is imposed by law upon the Holder, in which
case such taxes or charges shall be paid by the Holder. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of the
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the satisfaction of the Company that no such tax or other
charge is due.
3.3. Fractional Shares. The Company shall not be required to
issue a fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of the Current
Market Price per share of Common Stock on the date of exercise.
3.4. Continued Validity. A holder of shares of Common Stock
issued upon the exercise of this Warrant, in whole or in part (other than a
holder who acquires such shares after the same have been publicly sold pursuant
to a Registration Statement under the Securities Act or sold pursuant to Rule
144 thereunder), shall continue to be entitled with respect to such shares to
all rights to which it would have been entitled as the Holder under Sections 7,
11, 15, and 16 of this Warrant, subject to the obligations thereunder. The
Company will, at the time of each exercise of this Warrant, in whole or in part,
upon the request of the holder of the shares of Common Stock issued upon such
exercise hereof, acknowledge in writing, in form reasonably satisfactory to such
holder, its continuing obligation to afford to such holder all such rights;
provided, however, that if such holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford to
such holder all such rights.
3.5. NASD Rule. Notwithstanding any other provision hereof, in
no event shall this Warrant be exercisable if such exercise would violate NASD
Rule 4460(i)(1)(D)(ii) or any successor provision. If the Holder is unable to
exercise this Warrant because such exercise would violate said rule, the
Company, at the request of the Holder, shall cooperate in a reasonable manner to
seek assurances from The Nasdaq Stock Market, including the waiver of said NASD
rule, in order to facilitate the exercise of this Warrant.
ACI WARRANT
8
4. TRANSFER, DIVISION AND COMBINATION
4.1. Transfer. Subject to compliance with Section 10, Transfer
of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred to in
Section 3.1 or the office or agency designated by the Company pursuant to
Section 13, together with a written assignment of this Warrant substantially in
the form of Exhibit B hereto duly executed by the Holder or its agent or
attorney and if such Transfer is not to be made pursuant to Section 10, funds
sufficient to pay any transfer taxes payable upon the making of such Transfer.
Upon such surrender and, if required, such payment, the Company shall, subject
to Section 10, execute and deliver a new Warrant or Warrants in the name(s) of
the assignee or assignees and in the denomination(s) specified in such
instrument of assignment, which new Warrant or Warrants shall in all other
respects be identical with this Warrant, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, which new
Warrant shall in all other respects be identical with this Warrant, and this
Warrant shall promptly be canceled. A Warrant, if properly assigned in
compliance with Section 10, may be exercised by a new Holder for the purchase of
shares of Common Stock without having a new Warrant issued. If requested by the
Company, a new Holder shall acknowledge in writing, in form reasonably
satisfactory to the Company, such Holder's continuing obligation under Section
10.
4.2. Division and Combination. Subject to Section 10, this
Warrant may be divided or combined with other similar Warrants upon presentation
hereof at the aforesaid office or agency of the Company, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued, signed by the Holder or its agent or attorney. Subject to compliance
with Section 4.1 and with Section 10, as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice, which new Warrant or Warrants shall in
all other respects be identical with this Warrant.
4.3. Expenses. The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or Warrants under
this Section 4.
4.4. Maintenance of Books. The Company agrees to maintain, at
its aforesaid office or agency, books for the registration and the registration
of transfer of the Warrants.
5. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 5. The Company shall give the
ACI WARRANT
9
Holder notice of any event described below which requires an adjustment pursuant
to this Section 5 at the time of such event.
5.1. Subdivisions and Combinations. If at any time the Company
shall:
(a) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(b) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, by a reverse
stock split or otherwise,
then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.
5.2. Issuance of Additional Shares of Common Stock. (a) In the
event the Company shall issue or sell any Additional Shares of Common Stock,
other than Permitted Issuances, for a consideration per Additional Share of
Common Stock less than the Current Market Price, then the Current Warrant Price
shall be reduced to a price calculated by multiplying the then existing Current
Warrant Price by a fraction the numerator of which shall be the sum of (i) the
number of Fully Diluted Outstanding shares of Common Stock immediately prior to
such issue or sale multiplied by the Current Market Price per share of Common
Stock immediately prior to such issue or sale plus (ii) the consideration
received by the Company upon such issue or sale, and the denominator of which
shall be the total number of Fully Diluted Outstanding shares of Common Stock
immediately after such issue or sale multiplied by the Current Market Price per
share of Common Stock immediately prior to such issue or sale.
For purposes of this subsection (a), the date as of which the
Current Market Price per share of Common Stock shall be computed shall be the
earlier of the date upon which the Company shall (i) enter into a firm contract
for the issuance of such shares or (ii) issue such shares.
Upon any adjustment of the Current Warrant Price as provided
in this Section 5.2(a), the Holder shall thereafter be entitled to purchase, at
the Current Warrant Price resulting from such adjustment, the number of shares
of Common Stock (calculated to the nearest 1/100th of a share) obtained by
multiplying the Current Warrant Price in effect immediately prior to such
adjustment by the number of shares of Common Stock purchasable hereunder
immediately prior
ACI WARRANT
10
to such adjustment and dividing the product thereof by the Current Warrant Price
resulting from such adjustment.
(b) The provisions of this Section 5.2 shall not apply to
any issuance of Additional Shares of Common Stock for which an adjustment is
provided under Section 5.1. No adjustment shall be made under this Section 5.2
upon the issuance of any Additional Shares of Common Stock which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights or pursuant to the exercise of any conversion or exchange rights in any
Convertible Securities, if any such adjustment shall previously have been made
upon the issuance of such warrants or other rights or upon the issuance of such
Convertible Securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Section 5.3 or Section 5.4.
5.3. Issuance of Warrants or Other Rights. Except with respect
to Permitted Issuances, if at any time the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
distribution of, or shall in any manner (whether directly or by assumption in a
merger in which the Company is the surviving corporation) issue or sell, any
warrants (other than the Warrants) or other rights to subscribe for or purchase
any Additional Shares of Common Stock or any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such warrants or other rights or upon conversion or exchange of such Convertible
Securities shall be less than the Current Market Price in effect immediately
prior to the time of such distribution, issue or sale, then the number of shares
of Common Stock for which this Warrant is exercisable and the Current Warrant
Price shall be adjusted as provided in Section 5.2(a) on the basis that (i) the
maximum number of Additional Shares of Common Stock issuable pursuant to all
such warrants or other rights or necessary to effect the conversion or exchange
of all such Convertible Securities shall be deemed to have been issued and
outstanding, (ii) the price per share for such Additional Shares of Common Stock
shall be deemed to be the lowest price per share at which such Additional Shares
of Common Stock are issuable to such holders, and (iii) the Company shall have
received all of the consideration, if any, payable for such warrants or other
rights as of the date of the actual issuance thereof. No further adjustments of
the number of shares of Common Stock for which this Warrant is exercisable or of
the Current Warrant Price shall be made upon the actual issue of such Common
Stock or of such Convertible Securities upon exercise of such warrants or other
rights or upon the actual issue of such Common Stock upon such conversion or
exchange of such Convertible Securities.
5.4. Issuance of Convertible Securities. Except with respect
to Permitted Issuances, if at any time the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
distribution of, or shall in any manner (whether directly or by assumption in a
merger in which the Company is the surviving corporation) issue or sell, any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange shall be less than the
Current Market Price in effect immediately prior to
ACI WARRANT
11
the time of such issue or sale, then the number of shares of Common Stock for
which this Warrant is exercisable and the Current Warrant Price shall be
adjusted as provided in Section 5.2(a) on the basis that (i) the maximum number
of Additional Shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities shall be deemed to have been issued and
outstanding, (ii) the price per share of such Additional Shares of Common Stock
shall be deemed to be the lowest possible price in any range of prices at which
such Additional Shares of Common Stock are available to such holders, and (iii)
the Company shall have received all of the consideration payable therefor, if
any, as of the date of actual issuance of such Convertible Securities. No
further adjustment of the number of shares of Common Stock for which this
Warrant is exercisable or of the Current Warrant Price shall be made under this
Section 5.4 upon the issuance of any Convertible Securities which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to Section 5.3. No further
adjustments of the number of shares of Common Stock for which this Warrant is
exercisable or of the Current Warrant Price shall be made upon the actual issue
of such Common Stock upon conversion or exchange of such Convertible Securities
and, if any issue or sale of such Convertible Securities is made upon exercise
of any warrant or other right to subscribe for or to purchase or any warrant or
other right to purchase any such Convertible Securities for which adjustments
thereof have been or are to be made pursuant to other provisions of this Section
5, no further adjustments shall be made by reason of such issue or sale.
5.5. Superseding Adjustment. If, at any time after any
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable shall have been made pursuant to Section 5.3 or Section 5.4 as the
result of any issuance of warrants, rights or Convertible Securities, and either
(a) such warrants or rights, or the right of
conversion or exchange in such other Convertible Securities,
shall expire, and all or a portion of such warrants or rights,
or the right of conversion or exchange with respect to all or
a portion of such other Convertible Securities, as the case
may be, shall not have been exercised, or
(b) the consideration per share for which shares of
Common Stock are issuable pursuant to such warrants or rights,
or such other Convertible Securities, shall be increased or
decreased by virtue of provisions therein contained,
then such previous adjustment shall be rescinded and annulled and the Additional
Shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation.
Thereupon, a recomputation shall be made of the effect of such rights or options
or other Convertible Securities on the then outstanding Warrants, but not on any
then outstanding Warrant Stock, on the basis of
ACI WARRANT
12
(a) treating the number of Additional Shares of
Common Stock or other property, if any, theretofore actually
issued or issuable pursuant to the previous exercise of any
such warrants or rights or any such right of conversion or
exchange, as having been issued on the date or dates of any
such exercise and for the consideration actually received and
receivable therefor, and
(b) treating any such warrants or rights or any such
other Convertible Securities which then remain outstanding as
having been granted or issued immediately after the time of
such increase or decrease of the consideration per share for
which shares of Common Stock or other property are issuable
under such warrants or rights or other Convertible Securities.
5.6. Other Provisions Applicable to Adjustments Under This
Section. The following provisions shall be applicable to the making of
adjustments provided for in this Section 5:
(a) Computation of Consideration. To the extent that
any Additional Shares of Common Stock or any Convertible
Securities or any warrants or other rights to subscribe for or
purchase any Additional Shares of Common Stock or any
Convertible Securities shall be issued for cash consideration,
the consideration received by the Company therefor shall be
the amount of the cash received by the Company therefor, or,
if such Additional Shares of Common Stock or Convertible
Securities are offered by the Company for subscription, the
subscription price, or, if such Additional Shares of Common
Stock or Convertible Securities are sold to underwriters or
dealers for public offering without a subscription offering,
the public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued
dividends, but not subtracting any compensation, discounts or
expenses paid or incurred by the Company for and in the
underwriting of, or otherwise in connection with, the issuance
thereof). To the extent that such issuance shall be for a
consideration other than cash, then, except as herein
otherwise expressly provided, the amount of such consideration
shall be deemed to be the fair value of such consideration at
the time of such issuance as determined in good faith by the
Board of Directors of the Company. In case any Additional
Shares of Common Stock or any Convertible Securities or any
warrants or other rights to subscribe for or purchase such
Additional Shares of Common Stock or Convertible Securities
shall be issued in connection with any merger in which the
Company issues any securities, the amount of consideration
therefor shall be deemed to be the fair value, as determined
in good faith by the Board of Directors of the Company, of
such portion of the assets and business of the nonsurviving
corporation as such Board in good faith shall determine to be
attributable to such Additional Shares of Common Stock,
Convertible Securities, warrants or other rights, as the case
may be. The consideration for any Additional Shares of Common
Stock issuable
ACI WARRANT
13
pursuant to any warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the
Company for issuing such warrants or other rights plus the
additional consideration payable to the Company upon exercise
of such warrants or other rights. The consideration for any
Additional Shares of Common Stock issuable pursuant to the
terms of any Convertible Securities shall be the
consideration, if any, received by the Company for issuing
warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable
to the Company in respect of the subscription for or purchase
of such Convertible Securities, plus the additional
consideration, if any, payable to the Company upon the
exercise of the right of conversion or exchange in such
Convertible Securities. In case of the issuance at any time of
any Additional Shares of Common Stock or Convertible
Securities in payment or satisfaction of any dividends upon
any class of stock other than Common Stock, the Company shall
be deemed to have received for such Additional Shares of
Common Stock or Convertible Securities a consideration equal
to the amount of such dividend so paid or satisfied.
(b) When Adjustments to Be Made. The adjustments
required by this Section 5 shall be made whenever and as often
as any specified event requiring an adjustment shall occur,
except that any adjustment of the number of shares of Common
Stock for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of
a subdivision or combination of shares of the Common Stock, as
provided for in Section 5.1) up to, but not beyond the date of
exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than 1%
of the shares of Common Stock for which this Warrant is
exercisable immediately prior to the making of such
adjustment. Any adjustment representing a change of less than
such minimum amount (except as aforesaid) which is postponed
shall be carried forward and made upon the earlier of (i) the
date upon which such adjustment, together with other
adjustments required by this Section 5 and not previously
made, would result in a minimum adjustment, and (ii) the date
of exercise. For the purpose of any adjustment, any specified
event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(c) Fractional Interests. In computing adjustments
under this Section 5, fractional interests in Common Stock
shall be taken into account to the nearest 1/10th of a share.
(d) When Adjustment Not Required. 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
distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such
dividend, distribution, subscription or purchase rights,
ACI WARRANT
14
then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously
made in respect thereof shall be rescinded and annulled.
(e) Escrow of Warrant Stock. If after any property
becomes distributable pursuant to this Section 5 by reason of
the taking of any record of the holders of Common Stock, but
prior to the occurrence of the event for which such record is
taken, the Holder exercises this Warrant, any Additional
Shares of Common Stock issuable and other property
distributable upon exercise by reason of such adjustment shall
be held in escrow for the Holder by the Company to be issued
to the Holder upon and to the extent that the event actually
takes place, upon payment of the then Current Warrant Price.
Notwithstanding any other provision to the contrary herein, if
the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be canceled by the
Company and escrowed property returned.
(f) Challenge to Good Faith Determination. Whenever
the Board of Directors of the Company shall be required to
make a determination in good faith of the fair value of any
item under this Section 5, such determination may be
challenged in good faith by the Majority Holders, and any
dispute shall be resolved by an investment banking firm of
recognized national standing selected by the Company and
acceptable to the Majority Holders.
5.7. Reorganization, Reclassification, Liquidation,
Dissolution, Merger, Consolidation or Disposition of Assets. (a) Subject to the
provisions of Section 5.7(b), in case the Company shall reorganize its capital,
reclassify its capital stock, liquidate its assets, dissolve, consolidate or
merge with or into another corporation (where the Company is not the surviving
corporation or where there is a change in or distribution with respect to the
Common Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another corporation or
other entity (hereinafter, a "Reorganization") and, pursuant to the terms of
such Reorganization, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property"), are to be received by or distributed to the
holders of Common Stock of the Company, then the Holder shall have the right
following the effectiveness of such Reorganization to receive, upon exercise of
such Warrant, or, in the case of a liquidation of assets or a dissolution to
receive, upon such liquidation or dissolution, without taking any further
action, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such Reorganization by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event (without regard to the number of shares of
Common Stock available or set aside for issuance upon such exercise). In case of
any such Reorganization, the successor or acquiring
ACI WARRANT
15
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such appropriate modifications as are
satisfactory to the Holder in order to provide for adjustments of shares of the
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 5. For
purposes of this Section 5.7 "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 5.7 shall similarly apply to successive
Reorganizations.
(b) From and after the expiration of 18 months following the
Closing Date, in the event of a Reorganization in which the Company is not the
surviving corporation and in which Other Property is to be received by or
distributed to the holders of Common Stock of the Company, and in the event the
successor or acquiring corporation is unwilling to comply with the applicable
provisions of Section 5.7(a), then the Company, in lieu of compliance with the
provisions of Section 5.7(a), shall have the right, upon written notice to the
Holder at least 20 days prior to the occurrence of the Reorganization, to
require the Holder to exercise this Warrant in full prior to or contemporaneous
with the occurrence of the Reorganization.
5.8. Other Action Affecting Common Stock. In case at any time
or from time to time the Company shall take any action in respect of its Common
Stock, other than any action described in this Section 5 for which a specific
adjustment is provided, then, unless such action will not have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock or other stock for which this Warrant is exercisable and/or the purchase
price thereof shall be adjusted in such manner as may be equitable in the
circumstances.
5.9. Certain Limitations. Notwithstanding anything herein to
the contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the Current Warrant Price to be
less than the par value per share of Common Stock.
6. NOTICES TO WARRANT HOLDERS
6.1. Notice of Adjustments. Whenever the number of shares of
Common Stock or the class or type of stock or other property for which this
Warrant is exercisable, or whenever the price at which a share of such Common
Stock may be purchased upon exercise of this Warrant, shall be adjusted pursuant
to Section 5, the Company shall forthwith prepare a certificate to be executed
by the chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment
ACI WARRANT
16
was calculated (including a description of the basis on which the Board of
Directors of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights referred to in Section 5.6(a)), specifying the
number of shares of Common Stock for which this Warrant is exercisable and (if
such adjustment was made pursuant to Section 5.7 or 5.8) describing the number
and kind of any other shares of stock or Other Property for which this Warrant
is exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change. The Company shall promptly cause a
signed copy of such certificate to be delivered to the Holder in accordance with
Section 19.2. The Company shall keep at its office or agency designated pursuant
to Section 13 copies of all such certificates and cause the same to be available
for inspection at said office during normal business hours by the Holder or any
prospective purchaser of a Warrant designated by the Holder.
6.2. Notice of Certain Corporate Action. The Holder shall be
entitled to the same rights to receive notice of corporate action as any holder
of Common Stock.
7. NO IMPAIRMENT
The Company shall not by any action including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Current
Warrant Price immediately prior to such increase in par value, (b) take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (c) use its best efforts
to obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.
Upon the request of the Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to the Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.
8. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Issuance Date, subject to the limitation
set forth in the last sentence of this paragraph, the Company shall at all times
reserve and keep available for issue
ACI WARRANT
17
upon the exercise of warrants such number of its authorized but unissued shares
of Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants and June 2000 Warrants. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
the exercise in full of all outstanding Warrants and June 2000 Warrants, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose, including,
without limitation, taking appropriate board action, recommending such an
increase to the holders of Common Stock, holding shareholders meetings,
soliciting votes and proxies in favor of such increase to obtain the requisite
shareholder approval and upon such approval, the Company shall reserve and keep
available such additional shares solely for the purpose of permitting the
exercise of Warrants and June 2000 Warrants.
All shares of Common Stock which shall be so issuable, when
issued upon exercise of any Warrant and payment therefor in accordance with the
terms of such Warrant, shall be duly and validly issued, fully paid and
nonassessable and free and clear of any liens, claims and restrictions (other
than as provided herein). Except as provided in this Warrant, no stockholder of
the Company has or shall have any preemptive rights to subscribe for such shares
of Common Stock.
Before taking any action which would result in an adjustment
in the number of shares of Common Stock or the type of consideration for which
this Warrant is exercisable or in the Current Warrant Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as
may be necessary from any public regulatory body or bodies having jurisdiction
thereof.
If any shares of Common Stock required to be reserved for
issuance upon exercise of Warrants require registration or qualification with
any governmental authority under any federal or state law (otherwise than as
provided in Section 10) before such shares may be so issued, the Company will in
good faith and as expeditiously as possible and at its expense endeavor to cause
such shares to be duly registered.
9. TAKING OF A RECORD; STOCK AND WARRANT TRANSFER BOOKS
In the case of all dividends or other distributions by the
Company to the holders of its Common Stock with respect to which any provision
of Section 5 refers to the taking of a record of such holders, the Company will
in each such case take such a record and will take such record as of the close
of business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
ACI WARRANT
18
10. RESTRICTIONS ON TRANSFERABILITY
The Holder shall not Transfer all or any portion of this
Warrant or any shares of the Warrant Stock before satisfaction of the conditions
specified in this Section 10. The Holder, by acceptance of this Warrant, agrees
to be bound by the provisions of this Section 10.
10.1. Restrictive Legends. (a) Except as otherwise provided in
this Section 10, each certificate for Warrant Stock initially issued upon the
exercise of this Warrant, and each certificate for Warrant Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with legends in substantially the following form:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under the securities or blue sky laws of any state and are
subject to the conditions specified in a certain Warrant dated
August 22, 2002, originally issued by SEMX Corporation. The
shares represented by this certificate may not be sold, or
otherwise transferred, in the absence of such registration or
an exemption therefrom under such Act and under any such
applicable state laws, or in violation of the provisions of
the Warrant. A copy of the form of said Warrant is on file
with the Secretary of SEMX Corporation. The holder of this
certificate, by acceptance of this certificate, agrees to be
bound by the provisions of such Warrant."
"The shares represented by this certificate are
subject to the terms and conditions of a Registration Rights
Agreement, dated as of August 22, 2002."
(b) Except as otherwise provided in this Section 10, each
Warrant shall be stamped or otherwise imprinted with legends in substantially
the following form:
"This Warrant and the securities represented hereby
have not been registered under the Securities Act of 1933, as
amended, or under the securities or blue sky laws of any state
and may not be sold, or otherwise transferred, in the absence
of such registration or an exemption therefrom under such Act
and under any such applicable state laws, or in violation of
the provisions of this Warrant."
"This Warrant and the securities represented hereby
are subject to the terms and conditions of a Registration
Rights Agreement, dated as of August 22, 2002."
ACI WARRANT
19
10.2. Notice of Proposed Transfers; Requests for Registration.
Prior to any Transfer or attempted Transfer of any Warrants or any shares of
Restricted Common Stock, the Holder of such Warrants or Restricted Common Stock
shall deliver to the Company either a written opinion of Independent Counsel,
which opinion shall be reasonably acceptable to the Company, addressed to the
Company or a no-action letter from the Commission to the effect that the
proposed Transfer of such Warrants or such Restricted Common Stock may be
effected without registration under the Securities Act and applicable state
securities or blue sky laws. After delivery of the written opinion or the
no-action letter to the Company, such Holder shall thereupon be entitled to
Transfer such Warrants or such Restricted Common Stock. Each certificate, if
any, evidencing such shares of Restricted Common Stock issued upon such Transfer
shall bear the restrictive legend set forth in Section 10.1(a), and each Warrant
issued upon such Transfer shall bear the restrictive legend set forth in Section
10.1(b), unless in the written opinion of Independent Counsel addressed to the
Company such legend is not required in order to ensure compliance with the
Securities Act.
10.3. No Transfer to Competitor. Until the termination in
accordance with Section 10.4 of the restrictions on transferability imposed by
this Section 10, the Holder shall not Transfer all or any portion of this
Warrant, the Warrant Stock or the Restricted Common Stock (or Common Stock
issuable upon the exercise of the Warrants) to any Person that the Holder knows,
after reasonable inquiry, is engaged in a business that competes in any material
way with the business of the Company or any of its Subsidiaries (other than a
holder of less than 5% of the public securities of any such Person). In
clarification and not in limitation of the above, the Holder shall be permitted
to effect such a Transfer to such a competitor in connection with the sale of
securities (i) in a public distribution or a public securities transaction, or
(ii) pursuant to Rule 144 (or any successor provision to such Rule) under the
Securities Act, provided such Transfer is not a directed sale.
10.4. Termination of Restrictions. Notwithstanding the
foregoing provisions of Section 10, the restrictions imposed by this Section
upon the transferability of the Warrants, the Warrant Stock and the Restricted
Common Stock (or Common Stock issuable upon the exercise of the Warrants) and
the legend requirements of Section 10.1 shall terminate as to any particular
Warrant or share of Warrant Stock or Restricted Common Stock (or Common Stock
issuable upon the exercise of the Warrants) (i) when and so long as such
security shall have been effectively registered under the Securities Act and
disposed of pursuant thereto, or (ii) when the Company shall have delivered to
the Holder or Holders of Warrants, Warrant Stock or Restricted Common Stock the
written opinion of Independent Counsel stating that such legend is not required
in order to ensure compliance with the Securities Act. Whenever the restrictions
imposed by Section 9 shall terminate as to this Warrant, as hereinabove
provided, the Holder hereof shall be entitled to receive from the Company, at
the expense of the Company, a new Warrant bearing the following legend in place
of the first restrictive legend set forth hereon (which new Warrant shall in all
other respects be identical with this Warrant):
XXX XXXXXXX
00
"XXX XXXXXXXXXXXX ON TRANSFERABILITY OF THE
WITHIN WARRANT CONTAINED IN SECTION 10 HEREOF
TERMINATED ON ____________, 200__, AND ARE OF NO
FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of Transfer, division or
combination of, or in substitution for, any Warrant or Warrants entitled to bear
such legend shall have a similar legend endorsed thereon. Whenever the
restrictions imposed by this Section shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the Holder thereof shall be
entitled to receive from the Company, at the Company's expense, a new
certificate representing such Common Stock not bearing the restrictive legend
set forth in Section 10.1(a).
11. SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and
each Holder of Restricted Common Stock in supplying such information as may be
reasonably requested by such Holder or reasonably necessary for such Holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Warrant or Restricted Common Stock.
12. LOSS OR MUTILATION
Upon receipt by the Company from the Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably satisfactory
to it (it being understood that the written indemnity agreement of ACI Capital
America Fund, LP shall be sufficient indemnity) and in case of mutilation upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to the Holder; provided, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable form
is surrendered to the Company for cancellation.
13. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency (which may be the principal executive offices
of the Company) where the warrants may be presented for exercise, registration
of Transfer, division or combination as provided in this Warrant.
14. [INTENTIONALLY OMITTED]
ACI WARRANT
21
15. REGISTRATION RIGHTS
This Warrant is entitled to the benefits of the registration
rights provisions contained in the Registration Rights Agreement. The Company
shall keep a copy of the Registration Rights Agreement, and any amendments
thereto, at the office or agency designated by the Company pursuant to Section
13 and shall furnish copies thereof to the Holder upon request.
16. LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by
the Holder to purchase shares of Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
17. [INTENTIONALLY OMITTED]
18. RIGHTS PLAN
18.1. Issuance of Rights. Contemporaneous with the issuance of this
Warrant, the Company shall execute all documents and take all actions necessary
to issue to the Holder, pursuant to that certain Rights Agreement dated as of
June 15, 1999, between the Company and Continental Stock Transfer & Trust
Company, Rights Agent (the "Rights Plan"), effective as of the Issuance Date,
the number of Rights (as defined in the Rights Plan) that would be issued to the
Holder were the Holder to own the total number of shares of Common Stock
issuable to the Holder upon the full exercise of this Warrant, and to assure
that the Holder is entitled to all the rights, privileges and protections of a
holder of Rights under the Rights Plan.
18.2. Return of Rights. In the event that a Triggering Event under the
Rights Plan occurs during the Exercise Period but this Warrant is never
exercised during the Exercise Period, then the Holder's Rights under the Rights
Plan granted pursuant to Section 18.1 shall expire on the Expiration Date. In
the event a portion, but less than all, of this Warrant is exercised during the
Exercise Period, then the Holder's prorated share of the Rights corresponding to
the unexercised portion of this Warrant shall so expire.
19. MISCELLANEOUS
19.1. Nonwaiver and Expenses. No course of dealing or any
delay or failure to exercise any right hereunder on the part of the Holder shall
operate as a waiver of such right or otherwise prejudice the Holder's rights,
powers or remedies. If the Company fails to make, when due, any payments
provided for hereunder, or fails to comply with any other provision of this
Warrant, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any
ACI WARRANT
22
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
19.2. Notice Generally. All notices, demands, requests, or
other communications which may be or are required to be given, served, or sent
by any party to any other party pursuant to this Warrant shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), or facsimile transmission, addressed as follows:
(a) If to the Company:
SEMX Corporation
0 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Chairman,
President and CEO
Facsimile: (000) 000-0000
with a copy to:
Xxxx Salon, Esquire
Salon, Marrow, Xxxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
(b) If to the Holder, at its last known address
appearing on the books of the Company maintained for such purpose.
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request or communication shall be deemed to have been duly
given five business days after being deposited in the mail, postage prepaid, if
mailed; when delivered by hand, if personally delivered; or upon receipt, if
sent by facsimile (followed by a confirmation copy sent by either overnight or
two (2) day courier).
19.3. Indemnification. The Company agrees to indemnify and
hold harmless the Holder, its officers, directors, employees, agents, and
attorneys from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against the Holder relating to or arising out of any litigation to which the
Holder is made a party in its capacity as a stockholder or warrantholder of the
Company; provided, however, that the Company will not be liable hereunder to the
extent that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or
ACI WARRANT
23
disbursements are found in a judgment by a court to have resulted from (i) the
Holder's gross negligence or willful misconduct, (ii) actions or omissions taken
or not taken by the Holder in any capacity other than as a stockholder or
warrantholder of the Company or (iii) actions or omissions taken or not taken by
the Holder solely as a stockholder or warrantholder of the Company and for which
stockholders or warrantholders may be held liable under Delaware law.
19.4. Successors and Assigns. Subject to the provisions of
Sections 4.1 and 10, (i) this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the successors and assigns of the Holder, and (ii) the provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of
this Warrant, and shall be enforceable by any such Holder.
19.5. Amendment. The Warrants may be modified or amended or
the provisions thereof waived with the written consent of the Company and the
Holder.
19.6. Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
19.7. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
19.8. Governing Law. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to the conflict of laws principles thereof.
19.9. Arbitration. Any claim or dispute between the parties
hereto arising out of or in connection with this Warrant or any of the
provisions hereof, or the interpretation, meaning or effect hereof, or the
transactions contemplated hereby, shall be submitted to and determined by
arbitration in New York, New York in accordance with the procedures, rules and
regulations of the American Arbitration Association as in effect at such time.
The decision, findings or award of the arbitrator(s) in the matter shall be
final and nonappealable and binding upon the parties (and their respective
successors) with respect to the subject matter herein concerned, and judgment
thereon may be entered in any court or forum having jurisdiction thereof.
[Remainder of Page Intentionally Left Blank]
ACI WARRANT
24
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its duly authorized officer and its corporate seal to be
impressed hereon and attested by its Secretary or Assistant Secretary.
Dated: August 22, 2002
SEMX CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Asst. Secretary
Attest:
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: Secretary
ACI WARRANT
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of _______ shares of Common Stock of
SEMX Corporation and herewith makes payment therefor, all at the price and on
the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to __________________ whose address is ___________________________
and, if such shares of Common Stock shall not include all of the shares of
Common Stock issuable as provided in this Warrant, that a new Warrant of like
tenor and date for the balance of the shares of Common Stock issuable hereunder
be delivered to the undersigned.
(Name of Registered Owner)
------------------------------------------------
(Signature of Registered Owner)
------------------------------------------------
(Street Address)
------------------------------------------------
(City) (State) (Zip Code)
------------------------------------------------
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ACI WARRANT
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:
Name and Address of Assignee No. of Shares of Common Stock
---------------------------- -----------------------------
and does hereby irrevocably constitute and appoint ______________
attorney-in-fact to register such transfer on the books of SEMX Corporation
maintained for the purpose, with full power of substitution in the premises.
Dated:
----------------------------
Name:
----------------------------
Signature:
----------------------------
Witness:
----------------------------
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ACI WARRANT
