REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT ("Agreement") made as of the 11th day of
October, 1996 by and between AutoInfo, Inc., a Delaware corporation (the
"Company") and SunAmerica Life Insurance Company ("SunAmerica ").
WITNESSETH
WHEREAS, SunAmerica owns in the aggregate Warrants to purchase up to
159,095 shares of the Company's Common Stock, $.01 par value per share (the
"Warrants"), pursuant to a Warrant by and between the Company and SunAmerica
dated the date hereof ( the "Warrant Agreement"); and
WHEREAS, in connection with its issuance of the Warrant, the Company has
agreed to grant to SunAmerica certain registration rights with respect to the
shares issuable upon exercise of the Warrant as set forth in this Registration
Rights Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the "Securities Act" (as defined
herein).
"Common Stock" shall mean the Common Stock, $.01 par value per share, of
the Company, as constituted as of the date of this Agreement.
"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 at the time.
"Majority Holders" shall mean persons holding in the aggregate more than
fifty percent (50%) of the total number of Registrable Shares.
"Registrable Shares" shall mean the shares of Common Stock of the Company
issued upon exercise of the Warrant.
"Registration Expenses" shall mean the expenses so described in Section 5.
"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.
"Selling Expenses" shall mean the expenses so described in Section 5.
2. [Section intentionally omitted]
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3. Registration. (a) The Majority Holders may on one occasion make a
written request for a registration under the Securities Act and state securities
laws of all or part of the Registrable Shares (a "Demand Registration"). Such
request will specify the number of Registrable Shares to be sold and will also
specify the intended method of disposition thereof. The Company will use its
best efforts (subject to the provisions of this Agreement) to effect, as soon as
practicable after such request, all such registrations, qualifications and
compliances under the Securities Act and state securities laws (including
without limitation, filings required to effect a registration pursuant to the
Securities Act if available or pursuant to any applicable exemption) of the
Registrable Shares which the Company has been so requested to register by the
Majority Holders. Such request will also specify the number of shares of
Registrable Shares to be registered and the intended method of disposition
thereof. If (x) the Company intends to make a registered offering of its
securities at the same time that the Majority Holders request a Demand
Registration, as determined in good faith by the Board of Directors of the
Company, or (y) the Company has received a request for a Demand Registration
from the holders of other registration rights prior to the date of such request,
then the Company may defer its obligation under this section 3(a) for a period
of not more than 120 days if the Board of directors of the Company shall
determine that filing such a Registration Statement would have material adverse
consequences to the Company. The Company shall not for any reason be obligated
to effect more than one Demand Registration pursuant to this Section 3(a).
If the Majority Holder requesting a Demand Registration so elects, the
offering of the Registrable Shares pursuant to the Demand Registration may be in
the form of an underwritten offering. The Company shall have the right to select
the managing underwriter in connection with such offering; provided, however,
that such managing underwriter and additional investment bankers and managers
must be reasonably satisfactory to the Majority Holder. If the proposed sale by
the Majority Holder is to be effected pursuant to an underwritten public
offering, the right of any holder to registration pursuant to this Section 3(a)
shall be conditioned upon such holder's participation in such underwriting and
the inclusion of such holder's Registrable Shares in the underwriting to the
extent requested, unless otherwise mutually agreed by the Company and the
Majority Holder, to the extent provided herein. The Company and the holders
proposing to distribute their securities through such underwriting shall enter
into an agreement in customary form with the underwriter(s) selected for such
underwriting, and shall execute powers of attorney and custodial agreements in
customary form for selling stockholders.
Notwithstanding the foregoing, the Majority Holder shall not have the
right to make demand for registration of the Registrable Shares, if, in the
reasonable opinion of counsel to the Company, reasonably satisfactory to the
Majority Holder and addressed thereto that all of their Registrable Shares may
be sold at the time of such demand in reliance upon Rule 144 under the
Securities Act of 1933, as amended, or other similar provision during any three
month period. The expense of any such legal opinion shall be borne by the
Company.
(b) If the Company at any time proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 or another form not available for
registering the Registrable Shares for sale to the public), then at each such
time it will give written notice to holders of outstanding Registrable Shares of
its intention to do so. Upon the written request of any such holder, received by
the Company within 10 business days after the giving of any such notice by the
Company, to register any of such holder's Registrable Shares, the Company will
use its best efforts to cause the Registrable Shares as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the holder (in
accordance with its written request) of such Registrable Shares so registered
("Piggy-Back Registration Rights"). The
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foregoing provisions notwithstanding, (i) the Company may withdraw any
registration statement referred to in this Section 3(b) without thereby
incurring any liability to the holders of Registrable Shares, and (ii) the
inclusion of shares of Registrable Shares under such Piggy-Back Registration
Rights is subject to the cut back provisions of Section 3(c) below.
(c) If the managing underwriter of an offering described in Section 3(b)
above advise the Company that the size of the offering that the Majority Holder,
the Company and any other persons intend to make, is such that the success of
the offering could be adversely affected by inclusion of all or part of the
Registrable Shares requested to be included, then the amount of Registrable
Shares to be offered shall be reduced to the extent necessary to reduce the
total number of shares of Registrable Shares to be included in such offering to
the amount recommended in good faith by the managing underwriter, for the
accounts of the selling SunAmerica , provided that any such reductions shall be
made in the following priorities:
First, the number of shares of Common Stock requested to be registered by
the holders requesting Piggy-Back Registration and any holders of Common Stock
whose rights are pari passu with the registration rights of such holders
requesting Piggy-Back Registration shall be reduced as required;
Second, the number of shares of Common Stock to be registered by the
holders of registration rights having priority over the registration rights of
the holders having Piggy-Back Registration shall be reduced as required; and
then
Third, the number of shares of Common Stock requested to be registered for
the account of any person requesting Demand Registration, if any, shall be
reduced as required.
Within the categories set forth above for reductions of the number of
shares of Common Stock to be registered, the reductions shall be pro rata in
relation to the number of shares of Common Stock to be registered, unless other
rights exist among such persons.
(d) The Company will not grant to any person on or after the date hereof,
and prior to the registration of all of the Registrable Securities, a piggy-back
registration right which by its terms is senior in any respect as it relates to
cut-back provisions to the Piggy-Back Registration Rights.
4. Registration Procedures. If and whenever the Company is required by
the provisions of Section 3 above to use its best efforts to effect the
registration of Registrable Shares under the Securities Act, the Company will,
as expeditiously as possible, or in any event no later than ninety (90) days
after the end of the period within which request for registration may be given
to the Company :
(a) prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby, determined as hereinafter provided;
(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 statement effective for the period
specified in subsection (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Shares covered
by such registration statement in accordance with the sellers' intended method
of disposition set forth in such registration statement for such period;
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(c) furnish to each seller of Registrable Shares, and to each underwriter
such number of copies of the registration statement and the prospectus included
therein, including each preliminary prospectus, as such persons reasonably may
request in order to facilitate the public sale or other disposition of the
Registrable Shares covered by such registration statement;
(d) use its best efforts to register or qualify the Registrable Shares
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Registrable Shares or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request;
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to list the Registrable Shares covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
(f) immediately notify each seller of Registrable Shares and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
For purposes of Sections 4(a) and 4(b) above, the period of distribution
of Registrable Shares in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Shares
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Shares covered thereby and 270 days after the effective
date thereof.
In connection with each registration hereunder, the sellers of Registrable
Shares will furnish to the Company in writing such information with respect to
themselves and the proposed distribution by them as shall be reasonably
necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Section 3 above covering
an underwritten public offering, the Company and each seller agree to enter into
a written agreement with the managing underwriter selected in the manner herein
provided in such form and containing such provisions as are customary in the
securities business for such an arrangement between such underwriter and
companies of the Company's size and investment stature.
5. Expenses. All expenses incurred by the Company in complying with
Section 3 above, including without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company and
independent public accountants for the Company, fees and expenses incurred in
connection with complying with state securities or "blue sky" laws, up to $7,500
of fees and disbursements of one special counsel to the sellers of Registrable
Shares, fees of the National Association of Securities Dealers, Inc., transfer
taxes, fees of transfer agents and registrars and costs of insurance are called
"Registration Expenses." All underwriting discounts and selling commissions
applicable to the sale of Registrable Shares and fees and disbursements of
counsel to the sellers of Registrable Shares in excess of the $7,500 payable by
the Company as set forth in this provision are called "Selling Expenses."
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The Company will pay all Registration Expenses in connection with each
registration statement relating to the Demand Registration and each Piggy-Back
Registration under Section 3 above. All Selling Expenses in connection with each
Demand and Piggy-Back Registration under Section 3 above shall be borne by the
participating sellers in proportion to the number of shares sold by each.
6. Indemnification and Contribution. (a) In the event of a registration of
any of the Registrable Shares under the Securities Act pursuant to Section 3
above, the Company will indemnify and hold harmless each seller of such
Registrable Shares thereunder, each underwriter of such Registrable Shares
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities, or actions in
respect thereof, arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Shares was registered under the Securities Act
pursuant to Section 4 above, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, 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 not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and 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 so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any of the Registrable Shares under
the Securities Act pursuant to Section 3 above, each seller of such Registrable
Shares thereunder, severally and not jointly, will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
the Securities Act, each officer of the Company who signs the registration
statement, each director of the Company against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer, director or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities, or actions in respect
thereof, arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Registrable Shares was registered under the Securities Act pursuant
to Section 3 above, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, 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 not misleading,
and will reimburse the Company and each such officer, director and controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that such seller will be liable hereunder in any such
case if and only 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 reliance upon and in conformity with
information pertaining to such seller, as such, furnished in writing to the
Company by such seller specifically for use in such registration statement or
prospectus; and provided further, however, that the liability of each seller
hereunder shall be limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that the public offering
price of the shares sold by such seller under such registration statement bears
to the total public offering price of all securities sold thereunder, but not in
any event to exceed the proceeds
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received by such seller from the sale of Registrable Shares covered by such
registration statement.
(c) Promptly after receipt by a party indemnified hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 6 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 6 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 6 for any legal expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified parties shall have the
right to select one separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 but it is judicially determined, by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal, that such indemnification may not be
enforced in such case, the fact that this Section 6 provides for indemnification
in such case notwithstanding, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
6, then and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject, after contribution from others, in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that in any such case, (x) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Registrable Shares offered by it pursuant to such registration statement;
and (y) no person or entity guilty of fraudulent misrepresentation, within the
meaning of Section 11(f) of the Securities Act, will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
7. Changes in Common Stock. If, and as often as, there is any change in
the Common Stock by way of a stock split, stock dividend, combination or
reclassification, or through a merger, consolidation, reorganization or
recapitalization where the Company is the surviving entity, appropriate
adjustment shall be made in the provisions hereof so that the rights
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and privileges granted hereby to the holders of Registrable Shares shall
continue with respect to the Common Stock as so changed.
8. Representations and Warranties of the Company. The Company represents
and warrants to each other party to this Agreement as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or by-laws of the Company or any
provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute, with due notice or lapse of time or both, a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company; and
(b) This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms.
9. Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company will
file the reports required to be filed by it, and in the manner required to be
filed by it, under the Securities Act and the Exchange Act (or, if the Company
is not required to file such reports, will, upon the request of any holder of
Registrable Shares, make publicly available other information) and will take
such further action as any holder of Registrable Shares may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Shares without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time (b) any similar rule or regulation
hereafter adopted by the Commission ("Rule 144"). Upon the reasonable request of
any holder of Registrable Shares, the Company will deliver to such holder
written statement as to whether it has complied with such requirements.
10. Miscellaneous. (a) All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not; provided, however, that registration rights
conferred herein on the holders of Registrable Shares shall only inure to the
benefit of a transferee of Registrable Shares if such transferee agrees to be
bound by the provisions of the Warrant and this Agreement.
(b) Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered upon the earlier
of (i) personal delivery to the address set forth below, (ii) in the case of
mailed notice, three (3) days after deposit in the United States mails, with
proper postage for certified mail, return receipt requested, prepaid, or (iii)
in the case of notice by Federal Express or other reputable overnight courier
service, one (1) business day after delivery to such courier service, addressed
to the party to be notified as follows:
if to the Company or the SunAmerica , at the address of such party set
forth in the Warrant Agreement to which it is a party;
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if to any subsequent holder of Registrable Shares, to it at such address
as may have been furnished to the Company in writing by such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Registrable Shares) or to
the holders of Registrable Shares (in the case of the Company) in accordance
with the provisions of this paragraph.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to conflict-of-laws principles
which would require the application of the laws of another jurisdiction.
(d) This Agreement may not be amended or modified, and no provision hereof
may be waived, without the written consent of the Company and the Majority
Holders.
(e) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Registrable
Shares under Section 3 above shall terminate on October 31, 2001.
(g) If requested in writing by the underwriters for any underwritten
public offering of securities of the Company, each holder of Registrable Shares
who is a party to this Agreement shall agree not to sell publicly any shares of
Registrable Shares or any other shares of Common Stock (other than shares of
Registrable Shares or other shares of Common Stock being registered in such
offering), without the consent of such underwriters, for a period of not more
than 45 days following the effective date of the registration statement relating
to such offering.
(h) The provisions of Section 4(a) above to the contrary notwithstanding,
the Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not to exceed 90 days in any 12-month period if there exists at the time
material non-public information relating to the Company which, in the reasonable
opinion of the Company, should not be disclosed.
(i) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(j) As used in this Agreement, the masculine, feminine or neutral gender
and the singular or plural number shall be deemed to include the others whenever
the context so indicates or requires.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first written above.
AutoInfo, Inc.
By: __________________________
Xxxxx Xxxxxx, President
SunAmerica Life Insurance Company
By: __________________________
Xxxxxx Xxxxxxx, Authorized Agent
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COMMON STOCK PURCHASE WARRANT
Warrant No. S-1
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION
SHALL BE APPLICABLE, THE HOLDER SHALL HAVE DELIVERED AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on October 31, 2001.
WARRANT TO PURCHASE COMMON STOCK OF
AUTOINFO, INC.
FOR VALUE RECEIVED, AUTOINFO, INC., a Delaware corporation, (the
"Company"), hereby certifies that OKGBD & Co., as nominee for SunAmerica Life
Insurance Company, or its permitted assigns, (the "Holder") is entitled to
purchase from the Company, at any time, or from time to time, commencing on the
date hereof, and prior to 5:00 p.m., Eastern Standard Time, on October 31, 2001,
a total of 159,095 (subject to adjustment as provided herein) fully paid and
nonassessable shares of the Common Stock, par value $.01 per share, of the
Company for an aggregate purchase price of $429,556.50 (subject to adjustment as
provided herein). (Hereinafter, (i) said Common Stock, together with any other
equity securities which may be issued by the Company with respect thereto or in
substitution therefor, is referred to as the "Common Stock", (ii) the shares of
the Common Stock purchasable hereunder are referred to as the "Warrant Shares",
(iii) the aggregate purchase price payable hereunder for the Warrant Shares is
referred to as the "Aggregate Warrant Price", (iv) the price payable hereunder
for each of the Warrant Shares is referred to as the "Per Share Warrant Price",
(v) this Warrant, and all warrants hereafter issued in exchange or substitution
for this Warrant, are referred to as the "Warrant" and (vi) the holder of this
Warrant is referred to as the "Holder"). The Per Share Warrant Price is subject
to adjustment as hereinafter provided. Except as otherwise provided in Section
3, in the event of any such adjustment, the number of Warrant Shares shall be
adjusted by dividing the Aggregate Warrant Price by the Per Share Warrant Price
in effect immediately after such adjustment.
1. Exercise of Warrant. This Warrant may be exercised, in whole at any
time or in part from time to time, commencing on the date hereof (the
"Commencement Date") and prior to 5:00 p.m., Eastern Standard Time, on October
31, 2001, by the Holder of this Warrant by the surrender of this Warrant (with
the subscription form at the end hereof duly executed) at the address set forth
in Subsection 9 (a) hereof, together with proper payment of the Aggregate
Warrant Price, or the proportionate part thereof if this Warrant is exercised in
part. Payment for Warrant Shares shall be made (i) in cash, by certified or
official bank check
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or wire transfer payable to the order of the Company, (ii).by Net-Issue
Exercise (as hereinafter defined), or (iii) by any combination of (i) or (ii). A
"Net-Issue Exercise" means a "cashless" exercise by a holder by delivery of a
subscription form instructing the Company to retain, in payment of the Per Share
Warrant Price (or portion thereof), a number of Warrant Shares (the "Payment
Shares") equal to the quotient of the aggregate Per Share Warrant Price of the
Warrants then being exercised by Net-Issue Exercise divided by the Market Price
(as hereinafter defined) of such shares as of the date of exercise, and to
deduct the number of Payment Shares from the Warrant Shares to be delivered to
such holder If this Warrant is exercised in part, this Warrant must be exercised
for a minimum of 1,000 shares of the Common Stock, and the Holder is entitled to
receive a new Warrant covering the number of Warrant Shares in respect of which
this Warrant has not been exercised and setting forth the proportionate part of
the Aggregate Warrant Price applicable to such remaining Warrant Shares. Upon
such surrender of this Warrant, the Company will issue a certificate or
certificates in the name of the Holder for the largest number of whole shares of
the Common Stock to which the Holder shall be entitled and, (a) in lieu of any
fractional share of the Common Stock to which the Holder shall be entitled, cash
equal to the fair value of such fractional share (determined in such reasonable
manner as the Board of Directors of the Company shall determine), or (b) deliver
a new Warrant for the proportionate part thereof in respect of which this
Warrant has not been exercised, if this Warrant is exercised in part, pursuant
to the provisions of this Warrant.
2. Reservation of Warrant Shares. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, free from preemptive rights, and will keep available, solely for
issuance or delivery upon the exercise of this Warrant, the shares of the Common
Stock as from time to time shall be receivable upon the exercise of the Warrant.
The Company covenants and agrees that all shares of Common Stock which are
issuable hereunder will, upon issuance, be duly authorized and issued, fully
paid and non-assessable.
3. Anti-Dilution Provisions.
(a) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, including options
and other securities convertible into, or exchangeable for Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares or (iv) issue by reclassification of its Common Stock any
shares of capital stock of the Company, the Per Share Warrant Price in effect
immediately prior to such action shall be adjusted so that if the Holder
surrendered this Warrant for exercise immediately thereafter the Holder would be
entitled to receive the number of shares of Common Stock or other capital stock
of the Company which he would have owned immediately following such action had
such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the Holder of this Warrant shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive and shall be described in a written notice to the Holder of
this Warrant promptly after such adjustment) shall in good faith determine the
allocation of the adjusted Per Share Warrant Price between or among shares of
such classes of capital stock or shares of Common Stock and other capital stock;
provided that the effect thereof does not materially adversely affect the value
of this Warrant.
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(b) In case of any reorganization, consolidation or merger to which the
Company is a party, other than a merger or consolidation in which the Company is
the continuing corporation, or in case of any sale or conveyance to another
entity of the property of the Company as an entirety or substantially as an
entirety, or in the case of any statutory exchange of securities with another
corporation (including any exchange effected in connection with a merger of a
third corporation into the Company), the Holder shall have the right thereafter
to convert this Warrant into the kind and amount of securities, cash or other
property which he would have owned or have been entitled to receive immediately
after such reorganization, consolidation, merger, statutory exchange, sale or
conveyance had such Warrant been converted immediately prior to the effective
date of such reorganization, consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section 3 with
respect to the rights and interests thereafter of the Holder to the end that the
provisions set forth in this Section 3 shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
or other securities or property thereafter deliverable on the conversion of this
Warrant. The above provisions of this subsection (b) shall similarly apply to
successive reorganizations, consolidations, mergers, statutory exchanges, sales
or conveyances. Notice of any such reorganization, consolidation, merger,
statutory exchange, sale or conveyance and of said provisions so proposed to be
made, shall be mailed to the Holder not less than 30 days prior to such event. A
sale of all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a consolidation
or merger for the foregoing purposes.
(c) If the Company shall, at any time after the date hereof issue any
shares of Common Stock, other than Excluded Shares (as defined in subsection (h)
below), for a consideration per share less than the Market Price in effect
immediately prior to such issuance, then (i) the Per Share Warrant Price in
effect immediately prior to each such instance shall forthwith be adjusted to a
price equal to the Per Share Warrant Price then in effect multiplied by the
quotient obtained by dividing (a) an amount equal to the sum of (1) the total
number of shares of Common Stock outstanding on a fully diluted basis
immediately prior to such issuance multiplied by the Market Price in effect
immediately prior to such issuance, plus (2) the consideration received by the
Company upon such issuance, by (b) the total number of shares of Common Stock
outstanding on a fully diluted basis immediately after such issuance multiplied
by the Market Price in effect immediately prior to such issuance, and (ii) the
number of shares of Common Stock then issuable upon the exercise of Warrant
shares outstanding immediately prior to each such issuance shall forthwith be
adjusted by adding a number of shares of Common Stock equal to the product of
(a) the number of shares of Common Stock issuable upon the exercise of Warrant
Shares outstanding immediately prior to such issuance, times (b) the quotient
obtained by dividing (1) an amount equal to the Per Share Warrant Price in
effect immediately prior to such issuance less the Per Share Warrant Price in
effect immediately after such issuance, by (2) the Per Share Warrant Price in
effect immediately after such issuance.
(d) For the purpose of any adjustment of the Per Share Warrant Price
and the number of shares of Common Stock issuable upon exercise of the Warrants
pursuant to the clause (c), the following provisions shall be applicable:
-3-
(i) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash received by the Company
therefor.
(ii) In the case of the issuance of Common Stock for a consideration in
whole or in part other than cash, the consideration other than cash shall be
deemed to be the "fair value" of such consideration as determined in the good
faith judgment of the Board of Directors of the Company.
(iii) In the case of the issuance of (x) options to purchase or rights to
subscribe for Common Stock, (y) securities by their terms convertible into or
exchangeable for Common Stock or (z) options to purchase or rights to subscribe
for such convertible or exchangeable securities:
(1) the aggregate maximum number of shares of Common Stock deliverable
upon exercise of such options to purchase or rights to subscribe for Common
Stock shall be deemed to have been issued at the time such options or rights
were issued and for a consideration equal to the consideration (determined in
the manner provided in subdivisions (i) and (ii) above), if any, received by the
Company upon the issuance of such options or rights plus the minimum purchase
price provided in such options or rights for the Common Stock covered thereby;
(2) the aggregate maximum number of shares of Common Stock deliverable
upon conversion of or in exchange for any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration equal
to the consideration received by the Company for any such securities and related
options or rights (excluding any cash received on account of accrued interest or
accrued dividends), plus the additional consideration, if any, to be received by
the Company upon the conversion or exchange of such securities or the or the
exercise of any related options or rights (the consideration in each case to be
determined in the manner provided in subdivisions (i) and (ii) above);
(3) on any change in the number of shares or exercise price of Common
Stock deliverable upon exercise of any such options or rights or conversions of
or exchange for such convertible or exchangeable securities, other than a change
resulting from the antidilution provisions thereof, the Per Share Warrant Price
and the number of shares of Common Stock issuable upon exercise of the Warrants
shall forthwith be readjusted to such Per Share Warrant Price and to such number
of shares as would have obtained had the adjustment made at the time of the
issuance of such options, rights or securities not converted prior to such
change been made upon the basis of such change; and
-4-
(4) on the expiration of any such options or rights, the termination of
any such rights to convert or exchange or the expiration of any options or
rights related to such convertible or exchangeable securities, the Per Share
Warrant Price and the number of shares of Common Stock issuable upon exercise of
the Warrants shall forthwith be readjusted to such Per Share Warrant Price and
to such number of shares as would have obtained had such options, rights,
securities, or options or rights related to such securities not been issued.
(e) Whenever the Per Share Warrant Price is adjusted as provided in
this Section 3 and upon any modification of the rights of the Holder of this
Warrant in accordance with this Section 3, the Company shall promptly prepare a
certificate of an officer of the Company, setting forth the Per Share Warrant
Price and the number of Warrant Shares after such adjustment or modification, a
brief statement of the facts requiring such adjustment or modification and the
manner of computing the same and cause a copy of such certificate to be mailed
to the Holder.
(f) If the Board of Directors of the Company shall declare any dividend
or other distribution in cash or property (including securities other than
Common Stock) with respect to the Common Stock, the Company shall mail notice
thereof to the Holder not less than 15 days prior to the record date fixed for
determining shareholders entitled to participate in such dividend or other
distribution.
(g) (i) If any event occurs of the type contemplated by the provisions
of this Section 3 but not expressly provided for by such provisions, the Board
of Directors, or, at the election of holders of a majority of the Warrants, an
appraiser (to be selected by the Board of Directors with the consent of such
holders of Warrants), will determine whether to make appropriate adjustments to
the terms and conditions of the Warrants as may be necessary fully to carry out
the adjustments contemplated by Section 3 hereof.
(ii) the Company will not, by amendment of its Certificate of
Incorporation or by-laws or through any reorganization, transfer of assets,
reclassification, merger, dissolution, issue or sale of securities or otherwise,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by the Company hereunder but will at all times in good
faith assist in the carrying out of all the provisions hereof and in the taking
of all such actions as may be necessary or appropriate in order to protect the
rights of the holders of the Warrants against impairment.
(h) For purposes of this Section 3, "Excluded Shares" shall mean (i)
all shares issued upon (a) exercise or conversion of any other warrants
outstanding on the date hereof, (b) exercise of any options outstanding on the
date hereof, and (c) the issuance of shares of Common Stock or options to
purchase such shares, to officers and employees or former employees of the
Company and its subsidiaries pursuant to any equity incentive plan, agreements
or other arrangements.
(i) Definition of Market Price. "Market Price" shall mean either:
(1) if shares of the Common Stock are listed or admitted to trading on
any exchange or quoted through NASDAQ or any similar organization, the
average
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of the daily closing prices per share of the Common Stock for the 20
consecutive trading days immediately preceding the date of public
announcement of the event giving rise to adjustment under this Section
3 or, if no such public announcement is made with respect to such
event, the average of the daily closing prices per share of the Common
Stock for the 20 consecutive trading days immediately preceding the day
as of the which "Market Price" is being determined. The closing price
of each day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices regular way, in either case on the New York Stock
Exchange, or, if shares of the Common Stock are not listed or admitted
to trading on the New York Stock Exchange, on the principal national
securities exchange or national market on which the shares are listed
or admitted to trading or quoted, or if the shares are not so listed or
admitted to trading or quoted, the average of the highest reported bid
and lowest reported asked prices as furnished by the National
Association of Securities Dealers, Inc. through NASDAQ or through a
similar organization if NASDAQ is no longer reporting such information;
or
(2) if such shares of common Stock are not listed or admitted to
trading on any exchange or quoted through NASDAQ or any similar
organization, such value shall be determined by the Board of Directors
of the Company, in good faith and in the exercise of reasonable
business judgment, without taking into consideration any premium for
share representing control of the Company, any discount for any
minority interest therein or any restrictions on transfer under Federal
and applicable state securities laws or otherwise, which determination
shall be conclusive, and which determination of valuation shall be sent
in writing by the Board of Directors to the registered holders of
Warrants outstanding.
4. Fully Paid Stock; Taxes. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be duly and properly authorized, validly issued and outstanding, fully paid and
non-assessable, and not subject to preemptive rights, and the Company will take
all such actions as may be necessary to assure that the par value or stated
value, if any, per share of the Common Stock is at all time equal to or less
than the then Per Share Warrant Price. The Company further covenants and agrees
that it will pay, when due and payable, any and all Federal and state stamp or
similar taxes that may be payable in respect of the issue of any Warrant Share
or certificate therefor.
5. Transfer.
(a) Securities Laws. Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities Act,
of 1933, as amended (the "Securities Act"), or under any state securities laws,
and unless so registered, may not be transferred, sold, pledged, hypothecated or
otherwise disposed of unless an exemption from such registration is available.
In the event the Holder desires to transfer this Warrant or any
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of the Warrant Shares issued, the Holder must give the Company prior written
notice of such proposed transfer including the name and address of the proposed
transferee. Such transfer may be made only (i) upon receipt by the Company of an
opinion of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer will not violate the provisions of the Securities Act, as
amended, or the rules and regulations promulgated under either such act; or (ii)
if the Warrant or Warrant Shares to be sold or transferred have been registered
under the Securities Act and there is in effect a current prospectus meeting the
requirements of Subsection 10(a) of the Securities Act, which is being or will
be delivered to the purchaser or transferee at or prior to the time of delivery
of the certificates evidencing the Warrant or Warrant Shares to be sold or
transferred.
(b) Conditions to Transfer. Prior to any such proposed transfer, and as
a condition thereto, if such transfer is not made pursuant to an effective
registration statement under the Securities Act, the Holder will, if requested
by the Company, deliver to the Company (i) an investment covenant signed by the
proposed transferee, (ii) an agreement by such transferee to the impression of
the restrictive investment legend set forth herein on the certificate or
certificates representing the securities acquire by such transferee and (iii) an
agreement by such transferee that the Company may place a "stop transfer order"
with its transfer agent or registrar.
(c) Transfer. Except as restricted hereby, this Warrant and the Warrant
Shares issued may be transferred by the Holder in whole or in part at any time
or from time to time. Upon surrender of this Warrant to the Company or at the
office of its stock transfer agent, if any, with assignment documentation duly
executed and funds sufficient to pay any transfer tax, and upon compliance with
the foregoing provisions, the Company shall, without charge, execute and deliver
a new Warrant in the name of the assignee named in such instrument of
assignment, and this Warrant shall promptly be canceled. Any assignment,
transfer, pledge, hypothecation or other disposition of this Warrant attempted
contrary to the provisions of this Warrant, or any levy of execution, attachment
or other process attempted upon the Warrant, shall be null and void and without
effect.
(d) Legend and Stop Transfer Orders. Unless the Warrant Shares have
been registered under the Securities Act, or the Company shall have received an
opinion of counsel satisfactory to the Company to the effect that it is not
required, upon exercise of any part of the Warrant and the issuance of any of
the shares of Warrant Shares, the Company shall instruct its transfer agent to
enter stop transfer orders with respect to such shares, and all certificates
representing Warrant Shares shall bear on the face thereof substantially the
following legend, insofar as is consistent with Delaware law:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE
OPINION OF COUNSEL TO THE HOLDER HEREOF IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY, IS EXEMPT FROM REGISTRATION UNDER
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
6. Listing of Common Stock. The Company covenants and agrees for the
benefit of the Holders and each other holder of any Common Stock issued
upon
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exercise of the Warrants, that at the time of and in connection with the
listing of Common Stock on any national securities exchange, it will, at
its expense, use its best efforts to cause the shares of Common Stock
issuable form time to time upon exercise of the Warrants to be approved
for listing, subject to notice of issuance, and will provide prompt notice
to each such exchange of the issuance thereof from time to time.
7. Registration Rights. The Holder has been granted certain registration
with respect to the Common Stock underlying this Warrant as more fully described
in that certain Registration Rights Agreement of even date herewith between the
Holder and the Company.
8. Loss, etc. of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.
9. Warrant Holder Not Shareholder. Except as otherwise provided herein,
this Warrant does not confer upon the Holder any right to vote or to consent to
or receive notice as a shareholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a shareholder, prior
to the exercise hereof.
10. Communication. No notice or other communication under this Warrant
shall be effective unless the same is in writing and is mailed by first-class
mail, postage prepaid, addressed to:
(a) the Company at 0000 Xxxxx 000, Xxxx Xxxx, Xxx Xxxxxx 00000, Attn.:
President, or such other address as the Company has designated in writing to the
Holder, or
(b) the Holder at Xxx XxxXxxxxxx Xxxxxx Xxx Xxxxxxx, XX 00000-0000,
Attn.: Xxxxxx Xxxxxxx, or such other address as the Holder has designated in
writing to the Company.
11. Headings. The headings of this Warrant have been inserted as a matter
of convenience and shall not affect the construction hereof.
12. Applicable Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
principles of conflicts of law thereof.
13. Gender and Number. As used in this Warrant, the masculine, feminine or
neuter gender and the singular or plural number shall be deemed to include the
others whenever the context so indicates or requires.
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IN WITNESS WHEREOF, AUTOINFO, INC., has caused this Warrant to be signed
by its President and its corporate seal to be hereunto affixed and attested by
its Assistant Secretary this 11th day of October, 1996.
ATTEST: AUTOINFO, INC.
__________________________ By: __________________________
Xxxxxxx X. Xxxx Xxxxx Xxxxxx
Assistant Secretary President
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SUBSCRIPTION
The undersigned, _________________________, pursuant to the provisions of the
foregoing Warrant agrees to subscribe for the purchase of ___________________
shares of the Common Stock of AUTOINFO, INC. covered by said Warrant, and makes
payment therefor in full at the price per share provided by said Warrant.
Dated:___________________ Signature: _________________________
Address: _________________________
_________________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________, hereby sells, assigns and
transfers unto _________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint __________________,
attorney, to transfer said Warrant on the books of AUTOINFO, INC.
Dated:___________________ Signature: _________________________
Address: _________________________
_________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby assigns and transfers
unto _______________ the right to purchase _________ shares of the Common Stock
of AUTOINFO, INC. by the foregoing Warrant, and a proportionate part of said
Warrant and the rights evidenced hereby, and does irrevocably constitute and
appoint _________________, attorney, to transfer that part of said Warrant on
the books of AUTOINFO, INC.
Dated:___________________ Signature: _________________________
Address: _________________________
_________________________
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