EXHIBIT 4(8)
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MUST BE HELD
INDEFINITELY UNLESS SUBSEQUENTLY REGISTERED UNDER SAID ACT OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THIS WARRANT AND THE SHARES OF COMMON
STOCK PURCHASABLE HEREUNDER MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNLESS SUCH SALE, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION SHALL HAVE BEEN REGISTERED UNDER SAID ACT OR AN EXEMPTION UNDER
SAID ACT IS AVAILABLE TO PERMIT SUCH WARRANT AND THE SHARES OF COMMON STOCK
PURCHASABLE HEREUNDER TO BE LEGALLY SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH
REGISTRATION. THIS WARRANT IS SUBJECT TO THE TERMS AND PROVISIONS SET FORTH
BELOW, INCLUDING OTHER RESTRICTIONS ON TRANSFERABILITY.
Dated: April 25, 1996
WARRANT
To Purchase 100,000 Shares of Common Stock
VERNITRON CORPORATION
Expiring April 25, 2006
THIS IS TO CERTIFY THAT, for value received, XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION (the "Original Holder"), and its permitted designees,
successors or assigns (collectively, together with the Original Holder, the
"Holder") is entitled to purchase from VERNITRON CORPORATION, a Delaware
corporation (the "Company"), at any time or from time to time after 9:00 a.m.,
New York City time, on the date hereof and prior to 5:00 p.m., New York City
time, on April 25, 2006 (the "Expiration Date"), at the place where a Warrant
Agency (as hereinafter defined) is located, at the Exercise Price (as
hereinafter defined), 100,000 shares of Common Stock, $0.01 par value (the
"Common Stock"), of the Company, all subject to adjustment and upon the terms
and conditions as hereinafter provided, and is entitled also to exercise the
other appurtenant rights, powers and privileges hereinafter described. Such
shares of Common Stock purchasable under this Warrant, less any such shares
actually purchased hereunder shall be referred to as "Shares."
Certain terms used in this Warrant are defined in Article
IV. This Warrant is one of three Warrants issued by the Company in connection
with the acquisition of Precision Aerotech, Inc. The Warrants are being issued
as of the date hereof to Banque Paribas, Paribas Principal, Inc. and to
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the aggregate, as of
the date of issuance of such Warrants, the Warrants will be exercisable into
1,542,700 shares of Common Stock of the Company.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise. To exercise this Warrant in whole or
in part with respect to any Shares, the Holder shall deliver to the Company,
at the Warrant Agency, (a) this Warrant, (b) a written notice, in
substantially the form of the Subscription Notice attached hereto, of such
Holder's election to exercise this Warrant, which notice shall specify the
number of Shares of Common Stock to be purchased, the denominations of the
share certificate or certificates desired and the name or names in which such
certificates are to be registered and (c) payment of the Exercise Price with
respect to such Shares or cancellation of this Warrant with respect to a
number of Shares. If the Holder elects to pay the Exercise Price in money,
such payment may be made, at the election of the Holder, by cash, money order,
certified or bank cashier's check or wire transfer of immediately available
funds. If the Holder elects to pay the Exercise Price by cancelling this
Warrant with respect to Shares, the Exercise Price may be paid by cancelling
this Warrant with respect to that number of Shares whose aggregate Current
Market Price minus the aggregate Exercise Price is equal to the aggregate
Exercise Price with respect to the number of Shares to be received upon
exercise of this Warrant.
The Company shall, as promptly as practicable and in any
event within seven days thereafter, execute and deliver or cause to be
executed and delivered, in accordance with such notice, a certificate or
certificates, representing the aggregate number of Shares specified in said
notice. The share certificate or certificates so delivered shall be in such
denominations as may be specified in such notice or, if such notice shall not
specify denominations, in a denomination equal to the aggregate number of
Shares specified in said notice, and shall be issued in the name of
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the Holder or such other name or names as shall be designated in such notice,
subject to any restrictions contained hereinbelow. Such certificate or
certificates shall be deemed to have been issued, and such Holder or, subject
to any restrictions contained hereinbelow, any other Person so designated to
be named therein shall be deemed for all purposes to have become a holder of
record of such shares, as of the date the aforementioned notice and the
Exercise Price is received by the Company. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of the
certificate or certificates, deliver to the Holder a new Warrant evidencing
the rights to purchase the remaining 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 which shall then be returned to the Holder. The Company shall pay
all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of share certificates and new Warrants,
except that, if share certificates or Warrants shall be registered in a name
or names other than the name of the Holder, funds sufficient to pay all
transfer taxes payable as a result of such transfer shall be paid by the
Holder at the time of delivering the aforementioned notice of exercise or
promptly upon receipt of a written request of the Company for payment.
1.2 Shares To Be Fully Paid and Nonassessable. All shares of
Common Stock issued upon the exercise of this Warrant ("Warrant Common Stock")
shall be validly issued, fully paid and nonassessable, free of all liens,
taxes and other charges, and, if the Common Stock of any class is then listed
on any national securities exchange (as such term is used in the Exchange Act)
or quoted on NASDAQ, shall be duly listed or quoted thereon, as the case may
be.
1.3 No Fractional Shares To Be Issued. The Company shall not
be required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the
Company shall pay to the Holder, in cash, an amount equal to the same fraction
of the Current Market Price per share of outstanding Common Stock on the
Business Day immediately prior to the date of such exercise.
1.4 Share Legend. Each certificate for shares
of Common Stock issued upon exercise of this Warrant,
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unless at the time of exercise such shares are registered under the Securities
Act, shall bear the following legend:
This security has not been registered under the Securities
Act of 1933, as amended, and must be held indefinitely unless
subsequently registered under said Act or an exemption from such
registration is available. This security may not be sold, pledged,
hypothecated or otherwise transferred unless such sale, pledge,
hypothecation or other disposition shall have been registered under
said act or such disposition is made in reliance upon an exemption
from registration under said act.
Any certificate issued at any time in exchange or
substitution for any certificate bearing such legend (except a new certificate
issued upon completion of a public distribution pursuant to a registration
statement under the Securities Act covering such Shares) shall also bear such
legend unless, in the opinion of counsel selected by the holder of such
certificate and reasonably acceptable to the Company (who may be an employee
of such holder), the
securities represented thereby need no longer be subject to restrictions on
resale under the Securities Act.
1.5 Authorized Shares; Reservation of Shares for Issuance.
At all times while this Warrant is outstanding, the Company shall maintain its
corporate authority to issue, and shall reserve for issuance upon exercise of
this Warrant, such number of shares of Common Stock as shall be sufficient to
perform its obligations under this Warrant (after giving effect to any
adjustments to the number of Shares purchasable upon exercise of this Warrant
pursuant to Article III hereof).
1.6 Notification By The Company. In case at any time:
(i) the Company shall declare any dividend or
make any distribution upon its Common Stock; or
(ii) the Company shall offer for sale, or shall otherwise issue
(except upon exercise of the Existing Warrants), any additional
shares of stock of any class or any other securities convertible into
or exchangeable for shares of stock or any rights or options to
subscribe thereto; or
(iii) the Board of Directors of the Company shall
authorize any capital reorganization, reclassification
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or similar transaction involving the capital stock of the Company, or
a sale or conveyance of all or substantially all of the assets of the
Company, or a consolidation, merger or business combination of the
Company with another Person; or
(iv) actions or proceedings shall be authorized or
commenced for a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of such cases, the Company shall give written notice
to the Holder, at the earliest time legally practicable (and not less than 30
days before any record date or other date set for definitive action) of the
date on which (A) the books of the Company shall close or a record shall be
taken for such dividend, distribution or sale or other issuance or (B) such
reorganization, reclassification, sale, conveyance, consolidation, merger,
dissolution, liquidation or winding-up shall take place or be voted on by
stockholders of the Company, as the case may be. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in said dividend, distribution, sale or other issuance or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, sale, conveyance,
consolidation, merger, dissolution, liquidation or winding-up, as the case may
be. If the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act or to a
favorable vote of stockholders, the notice required by this Section 1.6 shall
so state.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE AND
REPLACEMENT OF WARRANTS
2.1 Warrant Agency. The Company shall maintain, at its own
expense, an agency (the "Warrant Agency"), for certain purposes specified
herein and shall cause such Warrant Agency to remain open during normal
business hours on each Business Day in connection with the performance of its
obligations hereunder. The Company shall perform the obligations of the
Warrant Agency provided herein at its address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 or such other address as the Company shall specify by notice to
all Warrantholders.
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2.2 Ownership of Warrant. The Company may deem and treat the
Person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any
Person other than the Company) for all purposes and shall not be affected by
any notice to the contrary, until presentation of this Warrant for
registration of transfer as provided in this Article II.
2.3 Transfer of Warrant. The Company agrees to maintain at
the Warrant Agency books for the registration of transfers of this Warrant and
all rights hereunder shall be registered, in whole or in part, on such books,
upon surrender of this Warrant at the Warrant Agency, together with a written
assignment of this Warrant duly executed by the Holder or its duly authorized
agent or attorney and funds sufficient to pay any transfer taxes payable upon
such transfer. Upon surrender the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in the instrument of assignment, and this Warrant
shall promptly be canceled. Notwithstanding the foregoing, a Warrant may be
exercised by a new holder without having a new Warrant issued.
2.4 Division or Combination of Warrants. Subject to
restrictions contained hereinbelow, this Warrant may be divided or combined
with other Warrants upon surrender hereof and of any Warrant or Warrants with
which this Warrant is to be combined at the Warrant Agency, together with a
written notice specifying the names and denominations in which the new Warrant
or Warrants are to be issued, signed by the holders hereof and thereof or
their respective duly authorized agents or attorneys. Subject to compliance
with Section 2.3 as to any permitted transfer which may be involved in the
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.
2.5 Loss, Theft, Destruction of Warrant Certificates. Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security reasonably
satisfactory to the Company (the Original Holder's or any institutional
Warrantholder's indemnity being satisfactory indemnity in the event of loss,
theft or destruction of any Warrant owned by such institutional holder), or,
in the case of any such
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mutilation, upon surrender and cancellation of such Warrant, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated
Warrant, a new Warrant of like tenor and representing the right to purchase
the same aggregate number of shares of Common Stock.
2.6 Expenses of Delivery of Warrants. The Company shall pay
all expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants and Common
Stock hereunder.
2.7 Restrictions on Transfer. (a) The Holder, by acceptance
hereof, represents and warrants that this Warrant, and upon exercise hereof
the holder of any Warrant Common Stock will represent and warrant, that any
shares of Warrant Common Stock are being acquired for its own account for
investment without any intent to make a public distribution thereof in
violation of the securities laws and that this Warrant and such Warrant Common
Stock may not be sold, encumbered or otherwise transferred except pursuant to
an effective Registration Statement under the Act or an exemption from such
registration requirement and, if an exemption shall be applicable, the Holder
or the holder of Warrant Common Stock shall have delivered an opinion of
counsel reasonably satisfactory to the Company that such registration is not
required under the Act.
(b) The Holder acknowledges that the Company may direct the
transfer agent for the Warrant and the Warrant Common Stock to note a stop
transfer order upon its records in respect of this Warrant and any
certificates evidencing shares of the Warrant Common Stock and that in the
event of any permitted sale, transfer or exchange of this Warrant, any Warrant
certificate issued by the Company shall bear the legend obtained on the front
part of this Warrant.
(c) As a condition to any sale, transfer or other
disposition of this Warrant, the transferee shall be required to make the
representations and warranties contained in Section 2.7(a) hereof and
acknowledge the stop transfer order and consent to the legend contained in
Section 2.7(b) hereof. The Warrant shall not be sold, pledged, transferred or
otherwise disposed of except in whole to an entity controlled by Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation.
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ARTICLE III
ANTIDILUTION PROVISIONS
3.1 Adjustment of Exercise Price and Number of Warrant
Shares. The number and kind of shares purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment and reset from
time to time upon the happening of certain events, as hereinafter described.
3.2 Mechanical Adjustments. The number of
Shares and the Exercise Price shall be subject to
adjustment as follows:
(a) In case the Company shall at any time after the date of
this Agreement (i) declare or pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to all holders
of its Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any shares of
its capital stock in a reclassification or reorganization of the
Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
entity), this Warrant shall be adjusted to the number of Shares and
amount of any other securities, cash or other property of the Company
which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above had this
Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately
after the effective date of such event retroactive to the record
date, if any, for such event. (b) Any Shares purchasable as a result
of such adjustment shall not be issued prior to the effective date
of such event.
Other than if resulting in an adjustment pursuant to
Section 3.2(a), in case the Company shall issue rights, options or
warrants to subscribe for or purchase, or other securities
exchangeable for or convertible into, shares of Common Stock (any
such rights, options, warrants or other securities being herein
called "Rights") to all holders of shares of its Common Stock whether
or not such Rights are immediately exercisable or convertible, the
Company shall issue
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such Rights to each Holder on the same basis as such Holder would
have been entitled to receive such Rights if the Warrants had been
exercised immediately prior to the happening of such event or the
record date with respect thereto and no adjustment in the number and
kind of Shares or Exercise Price shall be made under this Warrant in
such circumstance.
(c) Whenever the numbers of Shares are adjusted as herein
provided, the Exercise Price payable upon exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately
prior to such adjustment by a fraction, of which the numerator shall
be the number of Shares immediately prior to such adjustment, and of
which the denominator shall be the number of Shares immediately
thereafter.
(d) No adjustment in the number of Shares shall be required
hereunder unless such adjustment would result in an increase or
decrease of at least one percent (1%) of the Exercise Price;
provided, however, that any adjustments which by reason of this
paragraph (d) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
shall be made to the nearest one-hundredth of a cent or to the
nearest one-thousandth of a Share, as the case may be.
(e) No adjustment shall be made pursuant to this Article III
in respect of the issuance of shares of Common Stock pursuant to the
Existing Warrants. No adjustment need be made for a change in the par
value of the Common Stock.
(f) For the purpose of this subsection 3.2, the term "shares
of Common Stock" shall mean (i) the classes of stock designated as
Common Stock at the date of this Agreement, (ii) any other class of
stock resulting from successive changes or reclassifications of such
shares consisting solely of changes in par value, or from par value
to no par value, or from no par value to par value or (iii) any other
capital stock of the Company which is not by its terms restricted in
amount or timing to the entitlement to dividends. In the event that
at any time, as a result of an adjustment made pursuant to this
Section 3.2, the Holders shall become entitled to receive any
securities of the Company other than shares of Common Stock,
thereafter the number of such other securities so receivable upon
exercise of this Warrant and the
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Exercise Price of such shares shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares contained in
this Article III.
3.3 Voluntary Adjustment by the Company. The Company may
at its option, at any time during the term of this Warrant, reduce
the then current Exercise Price to any amount and for any period of
time deemed appropriate by the Board of Directors of the Company,
including such reductions in the Exercise Price as the Company
considers to be advisable in order that any event treated for Federal
income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipients; provided, however, that no such
adjustment in Exercise Price shall affect the number of Shares.
3.4 Notice of Adjustment. Whenever the number of Shares or
the Exercise Price is required to be adjusted, as herein provided, the Company
promptly shall mail by first class, postage prepaid, to each Holder, notice of
such adjustment or adjustments setting forth the number of Shares and the
Exercise Price after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which
such adjustment was made.
3.5 Dividends and Distributions. Other than if resulting in
an adjustment pursuant to Section 3.2(a) or issuance covered by 3.2(b), in
case the Company shall declare a dividend or make any other distribution upon
Common Stock (other than in shares of Common Stock), the Company shall hold
any property (including cash) paid in respect of such dividend or distribution
that the Holder would have received if the Holder had theretofore exercised
the Warrant for the benefit of the Holder and promptly pay same over to the
Holder.
3.6 Preservation of Purchase Rights upon Merger,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company with or into another Person or in case of any sale, transfer or
lease to another Person of all or substantially all the assets of the Company,
the Company or such successor or purchasing Person, as the case may be, shall
agree (and such merger, consolidation or transfer of assets shall not be
consummated without such agreement) that each Holder thereafter shall have the
right only to receive, and such Warrant shall only represent the right to
receive, upon
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payment of the Exercise Price in effect immediately prior to such action, the
kind and amount of shares and other securities, cash and other property which
he would have been entitled to receive after the happening of such con
solidation, merger, sale, transfer or lease had this Warrant been exercised
immediately prior to such action (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
merger, sale or transfer is not the same for each share of Common Stock of the
Company, then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon exercise of this Warrant
immediately after such consolidation, merger, sale or transfer shall be the
kind and amount so receivable per share by a majority of the holders of Common
Stock), and if the successor or purchasing Person is not a corporation, such
person shall provide appropriate tax indemnification with respect to such
shares and other securities and property so that upon exercise of the Warrant,
the Holder would have the same benefits it otherwise would have had if such
successor or purchasing Person were a corporation. Such agreement shall
provide for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article III and that such
adjustments shall similarly apply to successive consolidations, mergers,
sales, transfers or leases.
3.7 Statement on Warrant Certificates. Irrespective of any
adjustments in the Exercise Price or the number or kind of Shares, this
Warrant may continue to express the same price and number and kind of shares
as are stated on the front page hereof.
ARTICLE IV
REGISTRATION RIGHTS
4.1 Registration Rights. If at any time or from
time to time:
(a) the Company shall determine to register any of its
securities (other than by means of a registration statement on a form (e.g.,
Form S-8 or Form S-4 or successor forms) which by its terms could not be used
for the sale and distribution of any Warrant Common Stock) the Company will:
(i) promptly (but not less than thirty (30)
days prior to the filing of any registration statement) give written notice
thereof (which shall include a list of the
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jurisdictions, if any, in which the Company intends to register or qualify
such securities under the applicable blue sky or other state securities laws)
to each holder of Warrant Common Stock;
(ii) if so requested in writing by any holder
of Warrant Common Stock, use its best efforts to effect such registration and
any qualification any compliance relating thereto, including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with the Securities Act and any other
governmental requirements or regulations as would permit or facilitate the
sale and distribution of all Warrant Common Stock, unless, in the opinion of
counsel to the Company reasonably acceptable to the holder of the Warrant
Common Stock who wishes to have them included in such registration statement,
registration under the Act is not required for the sale of such Warrant Common
Stock in the manner proposed by such holders. Notwithstanding the foregoing,
if any managing underwriter of the Company's offering shall advise the Company
in writing that, in its opinion, the distribution of all or a portion of the
Warrant Common Stock (the "Piggy-back Shares") requested to be included in the
registration statement currently with the securities being registered by the
Company would materially adversely affect the distribution of such securities
by the Company for its own account, then the holders of such Warrant Common
Stock shall delay their offering and sale of Warrant Common Stock (or the
portions thereof so designated by such managing underwriter) for such period,
not to exceed 180 days, as the managing underwriter shall request. In the
event of such delay, the Company shall file such supplements, post-effective
amendments or separate registration statement, and take any such other steps
as may be necessary to permit such holders to make their proposed offering and
sale for a period of 90 days immediately following the end of such period of
delay ("Piggy-back Termination Date"); provided, however, that if at the
Piggyback Termination Date the Piggy-back Shares are covered by a registration
statement which is, or is required to remain, in effect beyond the Piggy-back
Termination Date, the Company shall maintain in effect the registration
statement as it relates to the Piggy-back Shares for so long as such
registration statement remains or is required to remain in effect for any
other such securities.
(iii) bear all expenses in connection with
such registration, qualification and compliance, including,
without limitation, all registration and filing fees,
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printing expenses, fees and disbursements of the Company's counsel (but
exclusive of the fees and disbursements of legal counsel retained by holders
of Warrant Common Stock) and expenses of any audits incident to or required by
any such registration, qualification or compliance, provided, that the Company
shall not, in any event, be required to bear the cost of any commissions and
compensation paid, and concessions and discounts allowed to, underwriters,
dealers or others performing similar functions in connection with the sale and
distribution of the Warrant Common Stock sold by any holders thereof.
4.2 No Additional Liability. Notwithstanding anything to the
contrary contained in this Section IV or elsewhere herein, the Company will
not, in any event, be obligated to qualify any Warrant Common Stock covered by
a registration statement under any blue sky or other state securities law if
the Company would by reason thereof be required to qualify to do business in
any jurisdiction where it is not then so qualified.
4.3 Notification; Continuation of Effectiveness. In the
case of each registration, qualification and compliance pursuant to this
Section IV, the Company will keep the holder of Warrant Common Stock promptly
advised in writing as to the initiation of proceedings for such registration,
qualification and compliance and as to the completion thereof, and will advise,
upon request, of the progress of such proceedings. The Company will, at its
expense, keep such registration, qualification and compliance effective for
a period of 90 days after the later of (x) the effective date of such
registration statement or (y) the last day on which the holder of this
Warrant is restricted in selling Warrant Common Stock, as set forth in
Section 4.1(a)(ii) hereof.
4.4 Information from Holders. The Company may require the
holder of Warrant Common Stock, as a condition to having the Warrant Common
Stock included among the securities as to which any registration,
qualification or compliance referred to in this Section IV is being effected,
to furnish to the Company such reasonable information regarding the proposed
distribution of the Warrant Common Stock as the Company may request in writing
and as shall be required in connection with such registration, qualification
or compliance.
4.5 Prospectuses, etc. The Company will, at its expense,
furnish to each holder of Warrant Common Stock with respect to which
registration has been effected, such number
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of prospectuses, offering circulars and other documents incident to such
registration and related qualification or compliance as such holder from time
to time may reasonably request.
4.6 Indemnification. The Company will indemnify each holder
of Warrant Common Stock (and each person, if any, who or which controls such
holder) and each underwriter of the Warrant Common Stock held by or issuable
to such holder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any registration,
qualification or compliance referred to in this section IV, or arising out of
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each such holder
of Warrant Common Stock (and each person, if any, who or which controls such
holder of Warrant Common Stock) and each such underwriter for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, provided, that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company
by an instrument duly executed by such holder of Warrant Common Stock (and
each person, if any, who or which controls such holder of Warrant Common
Stock) or underwriter and stated specifically to be for use therein. The
Company may require of such holder of Warrant Common Stock, as a condition to
having such Warrant Common Stock held or issuable to holder of Warrant Common
included among the securities as to which such registration, qualification or
compliance is being effected, that each such holder of Warrant Common Stock
and underwriter will indemnify the Company, its directors, and its officers
who sign the registration statement in respect of such registration against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any written information furnished by such
holder for inclusion in the registration statement by such
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holder of Warrant Common Stock or underwriter, as the case may be, or an
omission (or alleged omission) to state in any such written information a
material fact required to be stated therein or necessary to make the statement
therein not misleading.
4.7 Notice of Claim, etc. Each party entitled to
indemnification hereunder (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party shall be acceptable to the Indemnified
Party (which acceptance shall not be unreasonably withheld), and provided
further, that the failure of any Indemnified Party to give notice as provided
in this Section 4.7 shall not relieve the Indemnifying Party of its obligation
under Section 4.6.
4.8 Listing on Securities Exchanges, etc. The Company will,
at its expense, promptly list on each national securities exchange or
quotation system on which Common Stock is a the time listed, upon official
notice of issuance upon the exercise of the Warrant, all Warrant Common Stock,
provided that the Warrant Common Stock is registered under the Securities Act
of 1933.
4.9 Right to Deliver Cash. Notwithstanding the provisions of
this Warrant, the Company shall have the right, in lieu of including the
shares of Warrant Stock in a registration statement pursuant to Section 4.1(a)
to elect to purchase the Warrant Common Stock to be included in such
registration statement by delivering to a holder of Warrant Common Stock cash
in the amount ("Repurchase Amount") equal to the number of shares of Warrant
Common Stock to be included in such registration statement multiplied by an
amount equal to the closing price (or, if applicable, the average of the
closing bid and asked prices) of the Company's Common Stock on the last
trading day immediately preceding the day of notice by the Company pursuant to
Section 4.1(a)(i). If the Company elects to exercise its rights hereunder, it
should so notify the holders of Warrant Common Stock within 10 business days
of such notice. The holders shall thereupon promptly deliver the certificates
evidencing shares of Warrant Common Stock to be sold at the time and place
designated in the Company's notice, in duly transferable form, together with a
representation and warranty of good title free and clear of all liens and
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encumbrances against receipt from the Company of a bank or certified check
payable to the respective order of such holders in the Repurchase Amount
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday, and Friday which is not a day on which banking institutions in the
City of New York are authorized or obligated by law or executive order to
close.
"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 have the meaning set forth in the first
paragraph of this Warrant, subject to adjustment pursuant to Article III.
"Company" shall have the meaning set forth in the
first paragraph of this Warrant.
"Current Market Price" shall mean at any date the average of
the daily closing prices for the 10 consecutive trading days prior to the date
as of which the market price is to be computed on the principal national
securities exchange or in the NASDAQ-National Market System on which the
shares of Common Stock are listed or to which such shares are admitted to
trading, or, if not listed or admitted to trading, the average of the closing
bid and asked prices of the Common Stock in the over-the-counter market as
reported by NASDAQ or any comparable system, or if the Common Stock is not
listed on NASDAQ or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Board of Directors
of the Company for that purpose. In the absence of the foregoing, the
appropriate Current Market Price per share shall be the fair market value
thereof as determined by Board of Directors of the Company in good faith.
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Exercise Price" means $1.25 per share of Common Stock,
subject to adjustment pursuant to Article III.
"Existing Warrants" shall mean the Warrants other than this
Warrant, the warrant issued to CIT entitling CIT to purchase 31,345 Shares of
Common Stock on the date hereof and the Management Options.
"Expiration Date" shall have the meaning set forth in the
first paragraph of this Agreement.
"Holder" shall have the meaning set forth in the
first paragraph of this Warrant.
"Management Options" shall mean the options to acquire up to
193,000 shares of Common Stock issued pursuant to the Company's Long Term
Stock Incentive Plan and any other options granted to employees of the Company
or any of its Subsidiaries having an exercise price equal to or in excess of
the Current Market Price.
"NASDAQ" means the National Association of
Securities Dealers, Inc. Automated Quotation System.
"Original Holder" shall have the meaning set forth in the
first paragraph of this Warrant.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind.
"Rights" shall have the meaning set forth in
Section 3.2(b).
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder.
"Shares" shall have the meaning set forth in the
first paragraph of this Warrant.
"Subsidiary" means, with respect to any Person, (i) a
corporation a majority of whose capital stock with voting power, under
ordinary circumstances, to elect
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directors is at the time, directly or indirectly, owned by such Person, by one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries thereof or such Person and one or
more Subsidiaries thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest or, if such
other Person is a partnership, a majority ownership interest in the general
partner thereof.
"Warrant shall mean this Warrant as this Warrant may be
amended, modified or supplemented from time to time.
"Warrant Agency" shall have the meaning set forth
in Section 2.1.
"Warrantholder" means a holder of any Warrant issued by the
Company on the date hereof and such holder's permitted designees, successors
and permitted assigns.
ARTICLE V1
MISCELLANEOUS
6.1 Notices. Any notice or other communication to be given
shall be in writing and may be personally served, telexed or sent by United
States mail and shall be deemed to have been given when delivered in person,
upon receipt of telex or four Business Days after deposit in the United States
mail, registered or certified, with postage prepaid and properly addressed. In
the case of the Original Holder, such notices and communications shall be
addressed to its address set forth below, unless the Original Holder shall
notify the Company that notices and communications should be sent to a
different address (or telex number), in which case such notices and
communications shall be sent to the address (or telex number) specified by the
Holder. In the case of other Holders, such notices and communications shall be
addressed to such address as such other Holder shall specify to the Company.
In the case of the Company, such notices and communications shall be addressed
as follows (until notice of a change is given as provided herein):
Vernitron Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: General Counsel
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If to the Original Holder:
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
2121 Avenue of the Stars
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx
6.2 Waivers; Amendments. No failure or delay of the Holder
in exercising any power or right hereunder shall operate as a waiver thereof
(except for a failure to exercise this Warrant prior to the Expiration Date),
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the holder of this Warrant.
6.3 Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE LAWS OF DELAWARE SHALL BE MANDATORILY APPLICABLE HERETO.
6.4 Covenants To Bind Successors and Assigns. All covenants,
stipulations, promises and agreements in this Warrant contained by or on
behalf of the Company shall bind its successors and permitted assigns, whether
so expressed or not.
6.5 Severability. In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
6.6 Construction. The definitions in this Warrant shall apply
equally to both the singular and the plural forms of the terms defined.
Wherever the context
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may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The Section headings used herein are for convenience of
reference only, are not part of this Warrant and are not to affect the
construction of or be taken into consideration in interpreting this Warrant.
6.7 No Rights as Stockholder. This Warrant shall not entitle
the Holder to any rights as a stockholder of the Company until such time as
this Warrant shall have been exercised.
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IN WITNESS WHEREOF, VERNITRON CORPORATION has caused this
Warrant to be executed in its corporate name by one of its officers thereunto
duly authorized, attested by its Secretary or an Assistant Secretary, all as
of the day and year first above written.
VERNITRON CORPORATION
By .......................
Title:
Attest:
......................
Assistant Secretary
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SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To VERNITRON CORPORATION
The undersigned hereby irrevocably elects to exer cise the
right of purchase represented by the attached Warrant for, and to purchase
thereunder, shares of Common Stock as provided for therein, and tenders
herewith payment of the Exercise Price in full in the form of cash, money
order, certified or bank cashier's check or wire transfer or by cancellation
of the Warrant with respect to shares of Common Stock subject to the Warrant.
Please issue a certificate or certificates for such shares
of Common Stock in the following name and names and denominations:
If said number of shares shall not be all the shares
issuable upon exercise of the attached Warrant, a new Warrant is to be issued
in the name of the undersigned for the balance remaining of such shares less
any fraction of a share paid in cash.
Dated: ..........., ......
.......................................
NOTE: The above signature should
correspond exactly with the
name on the face of the
attached Warrant or with
the name of the assignee
appearing in the assignment
form below.
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ___________________________ hereby
sells, assigns and transfers unto _________________ the attached Warrant,
together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _________________________ attorney to
transfer said Warrant on the books of VERNITRON CORPORATION, a Delaware
corporation, with full power of substitution in the premises.
----------------------------------
NOTE: The above signature should
correspond exactly with
the name on the face of
the attached Warrant.
Dated: __________, ____
