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EXHIBIT 10.30
WARRANT AGREEMENT
AMONG
MONARCH DENTAL CORPORATION,
BANK OF AMERICA, N.A.,
FLEET NATIONAL BANK,
AND
COOPERATIEVE CENTRALE RAIFFEISEN
-BOERENLEENBANK B.A., "Rabobank Nederland",
New York Branch
JANUARY 4, 2000
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WARRANT AGREEMENT
This Warrant Agreement (the "Agreement"), dated as of January 4, 2000,
is by and among Monarch Dental Corporation, a Delaware corporation (the
"Company"), Bank of America, N.A., a national banking association ("Bank of
America"), Fleet National Bank, a national banking association ("Fleet") and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "Rabobank Nederland", New
York Branch ("Rabobank") (each a "Holder" and collectively, the "Holders").
W I T N E S S E T H :
WHEREAS, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has agreed to execute
and deliver this Agreement and to issue to the Holders the Warrants hereinafter
described;
WHEREAS, the Company and the Holders desire to set forth in this
Agreement, among other things, the form and provisions of the Warrant
Certificates, and the terms and conditions upon which they may be issued,
transferred, exchanged, replaced, redeemed and surrendered in connection with
the exercise and redemption of the Warrants;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to the
conditions herein set forth, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS . As used in this Agreement, the following
terms shall have the meanings set forth below:
(a) "Act" shall mean the Securities Act of 1933, as amended.
(b)
(c) "Affiliate" shall mean with respect to a specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" having meanings correlative to the foregoing.
(d)
(e) "Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday in the State of Texas.
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(f)
(g) "Closing Date" shall mean the date hereof.
(h)
(i) "Commission" shall mean the Securities and Exchange Commission.
(j)
(k) "Common Stock" shall mean the common stock of the Company, par value $0.01
per share.
(l)
(m) "Common Stock Equivalents" shall mean all evidences of indebtedness, shares
of capital stock or other securities, rights, options or warrants that are
convertible into or exchangeable or exercisable for, with or without payment of
additional consideration of cash or property, shares of Common Stock or rights
to acquire shares of Common Stock, either immediately or upon the arrival of a
specified date or the happening of a specified event, at such date, other than
the Excluded Equivalents.
(n)
(o) "Demand Registration" shall have the meaning set forth in Section 7.01(a).
(p)
(q) [Intentionally Left Blank]
(r)
(s) "Excluded Equivalents" means rights, options or warrants to acquire shares
of Common Stock at a strike price greater than or equal to $10.00 per share.
(t)
(u) "Exercise Price" shall have the meaning set forth in Section 2.02.
(v)
(w) "Expiration Date" shall mean January 4, 2007.
(x)
(y) [Intentionally Left Blank]
(z)
(aa) "Fully Diluted Outstanding Common Stock" shall mean, at any date as of
which the number of shares thereof is to be determined, all shares of Common
Stock outstanding at such date, together with all Common Stock Equivalents
outstanding at such date.
(bb)
(cc) "Holder" and "Holders" shall have the meaning set forth in the introductory
paragraph of this Agreement.
(dd)
(ee) "Notice of Exercise" shall have the meaning set forth in Section 2.03(a).
(ff)
(gg) [Intentionally Left Blank]
(hh)
(ii) "Person" shall mean a corporation, an association, a trust, a partnership,
a joint venture, an organization, a business, an individual, a government or
political subdivision thereof or a governmental body.
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(jj)
(kk) "Required Institutional Debt" means either (i) Permitted Institutional Debt
(as defined in the Second Amended and Restated Loan Agreement dated as of June
30, 1999 among the Company and the Holders (the "Loan Agreement")) in an amount
not less than $25,000,000 (at least $10,000,000 of which shall be Permitted
Subordinate Institutional Debt (as defined in the Loan Agreement), or (ii)
Permitted Subordinate Institutional Debt in an amount not less than $15,000,000
(the "Required Amount").
(ll)
(mm) "Registration Expenses" shall mean all reasonable expenses incident to the
registration of the Underlying Common Stock pursuant to Article VII, including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Warrants and Underlying Common Stock, but not including filing fees, fees and
expenses of compliance with securities or Blue Sky laws or fees and
disbursements of counsel for the underwriters in connection with Blue Sky
qualifications and jurisdictions or Blue Sky compliance as requested by the
Holders and not requested by the underwriters), fronting expenses, printing
expenses (including, without limitation, expenses of printing prospectuses),
messenger and delivery expenses, internal expenses, (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed, and fees and
disbursements of counsel for the Company and its independent certified public
accountants (including, without limitation, the expenses of any special audit or
"cold comfort" letters required by or incident to such performance), liability
insurance (if the Company elects to obtain such insurance), the reasonable fees
and expenses of any special experts retained by the Company in connection with
such registration, reasonable fees and expenses of other persons retained by the
Company, and the reasonable fees and expenses of one counsel for the Holders
(selected by the Holders), incurred in connection with each registration
hereunder (but not including any underwriting discounts or commissions
attributable to the sale of Underlying Common Stock).
(nn)
(oo) (u) "Subsidiaries" shall mean, with respect to the Company, any
corporation, partnership, joint venture or other legal entity of which the
Company owns, directly or indirectly, 50% or more of the stock or other equity
interests that generally entitle the holders thereof to vote for the election of
the board of directors or other governing body of such corporation or other
legal entity.
(pp)
(qq) (v) "Underlying Common Stock" shall mean the Common Stock acquired upon the
exercise of the Warrants carrying a legend identifying the stock as issued
pursuant to the exercise of the Warrants.
(rr)
(ss) (w) "Warrant" and "Warrants" shall have the meanings set forth in Section
2.01.
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(tt)
(uu) (x) "Warrant Assignment Form" shall have the meaning set forth in Section
6.01.
(vv)
(ww) (y) "Warrant Certificates" shall have the meaning set forth in Section
2.01.
(xx)
ARTICLE II
ISSUANCE AND EXERCISE OF WARRANTS
SECTION 2.01. AUTHORIZATION AND ISSUE OF WARRANTS. The Company has
authorized (a) the issuance of warrant certificates, in substantially the form
of Exhibit A attached hereto (the "Warrant Certificates"), granting rights to
purchase shares of Common Stock (herein, together with the rights to purchase
Common Stock thereby, sometimes called, individually, a "Warrant" and,
collectively, the "Warrants") by the Holders pursuant to this Agreement, and (b)
the issuance of such number of shares of Common Stock as will permit compliance
by the Company with its obligations to issue Common Stock pursuant to this
Agreement.
SECTION 2.02. ISSUANCE OF WARRANTS; EXERCISE PRICE. The Company shall
issue to each Holder, on the date hereof, but subject to the vesting provisions
described below, Warrants as evidenced by the Warrant Certificates, which in the
aggregate shall entitle each Holder, subject to the terms set forth herein, to
purchase from the Company the number of shares of Common Stock set forth
opposite such Holders name on Schedule 2.02 (which the Company represents to
Holders constitutes, in the aggregate, three percent (3%) of the Fully Diluted
Outstanding Common Stock as of the date hereof), subject to the anti-dilution
provisions contained in Sections 8.02 and 8.03, for the exercise price of $0.01
per share (the "Exercise Price").
SECTION 2.03. EXERCISE OF WARRANTS.
(a) Manner of Exercise. Each Holder may, from and after the Closing
Date and until 5:00 p.m., Dallas, Texas time, on the Expiration Date, exercise
the Warrants evidenced by a Warrant Certificate which have vested as provided in
Section 2.07, on any Business Day, for all or part of the number of shares of
Common Stock purchasable thereunder through surrender of the Warrant Certificate
to the Company at its principal office, accompanied by (i) a duly executed
Notice of Exercise in substantially the form of Exhibit B attached hereto (the
"Notice of Exercise") and (ii) payment of the amount required for the purchase
of the Underlying Common Stock. The Company will within ten days after the
exercise of Warrants, at its expense, cause to be issued in the name of and
delivered to the exercising Holder (to the nearest full share) a certificate or
certificates for the number of fully paid and nonassessable shares of Underlying
Common Stock set forth in the applicable Notice of Exercise. Certificates for
such shares of Underlying Common Stock shall be dated as of the date of
surrender of the Warrant for exercise and the payment of the Exercise Price,
notwithstanding any delays in the actual execution, issuance or delivery of the
certificates for the shares so purchased, and such Holder
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shall be deemed for all purposes to be the record holder of the Underlying
Common Stock as of the date of such surrender and payment of the Exercise Price.
(b) Expiration of Warrants. Warrants that have not previously been
redeemed or exercised shall expire upon the Expiration Date.
(c) Exchange of Shares for Exercise Price. Each Holder at its option
may provide the Exercise Price under this Warrant by reducing the number of
shares for which the Warrant is otherwise exercisable by the number of shares
having fair market value equal to the Exercise Price. In such a case, delivery
of the Exercise Price shall be effected by such Holder's written notice to the
Company of such reduction. For purposes hereof, the sum of the average of any
publicly-reported closing bid and asked prices for the Common Stock on each of
the last ten (10) trading days prior to the date of exercise divided by ten
(10), shall be deemed to be the fair market value of the Common Stock.
SECTION 2.04. NO OBLIGATION TO EXERCISE WARRANTS. This Agreement does
not impose any obligation on any Holder to exercise Warrants.
SECTION 2.05. TAXES. The Company shall pay all expenses in connection
with, and all taxes and other governmental charges that may be imposed with
respect to, the issuance or delivery of any Underlying Common Stock, unless such
tax or charge is imposed by law upon any Holder, in which case such taxes or
charges shall be paid by such Holder. The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for shares of Underlying Common Stock
issuable upon exercise of Warrants in any name other than that of the exercising
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the satisfaction of the Company that no such tax or other
charge is due.
SECTION 2.06. FRACTIONAL SHARES. The Company shall not be required to
issue a fractional share of Common Stock upon the exercise of Warrants. As to
any fraction of a share which a Holder would otherwise be entailed to purchase
upon such exercise, such fraction shall be rounded upward or downward to the
nearest whole share.
SECTION 2.07. VESTING OF WARRANTS. The Warrants shall vest on the
Vesting Dates set forth on Schedule 2.02, unless the Required Institutional Debt
has closed and been fully funded by the specified Vesting Date. Upon the closing
and funding of the Required Institutional Debt, any Warrants which have not yet
vested (whether pursuant to the above described vesting schedule or as otherwise
provided herein) shall be canceled and of no effect and the Warrant Certificates
representing such Warrants shall be returned by each Holder to the Company for
cancellation. In the event Holders permit Borrower to close on Permitted
Subordinate Institutional Debt in an amount less than the Required Amount (the
"Actual Amount"), then in
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addition to the Warrants which have vested pursuant to the aforementioned
schedule, Holders shall become fully vested in Warrants equal to the product of
(1) a fraction, the numerator of which is the difference between $25,000,000 and
the Actual Amount, and the denominator of which is $25,000,000, times (2) the
balance of the Warrants which have not previously vested in the Holders under
the aforementioned schedule.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Holder as of the date hereof
as follows:
SECTION 3.01. CORPORATE ACTION; AUTHORIZATION. The execution, delivery
and performance by the Company of this Agreement and the Warrants and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action and (a) do not and will not violate or
conflict with (i) the Certificate of Incorporation or Bylaws of the Company, or
any amendments thereto, or (ii) any law, rule or regulation or any order, writ,
injunction or decree of any court, governmental authority, or arbitrator, the
effect of which will have a material adverse effect on the Company, and (b) do
not and will not conflict with, result in a breach of, or constitute a default
under, or result in the imposition of any lien upon any of the assets or rights
of the Company pursuant to the provisions of, any indenture, mortgage, deed of
trust, security agreement, franchise, permit, license, or other instrument or
agreement by which the Company or any of its respective properties is bound. The
shares of Underlying Common Stock to be issued upon exercise of the Warrants
have been duly and validly authorized and reserved for issuance, and when issued
in compliance with the terms of this Agreement and the Warrants, will be validly
issued, fully-paid and nonassessable and free of any preemptive rights. This
Agreement and the Warrants have been duly executed and delivered by the Company
and constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
SECTION 3.02. ORGANIZATION AND GOOD STANDING; QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with all requisite corporate power and
authority to carry on the business in which it is engaged, to own the properties
it owns, to execute and deliver this Agreement and the Warrants, and to
consummate the transactions contemplated hereby.
SECTION 3.03. CONSENTS. The Company has all material licenses,
permits, certificates, orders, approvals and authority from federal, state or
local governmental agencies that are necessary to conduct the businesses of the
Company, and no suspension or cancellation of any such material licenses,
permits, certificates, orders, approvals or authority is pending or, to the
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Company's knowledge, threatened; and the transactions contemplated by this
Agreement will not cause cancellation or suspension or have any effect upon any
of such material licenses, permits, certificates, orders, approvals or
authority. Neither the nature of the Company or of any of its Subsidiaries, or
of any of their respective businesses or properties, nor any relationship
between the Company or any Subsidiary and any other Person, nor any circumstance
in connection with the offer or issue of the Warrants and the Underlying Common
Stock is such as to require consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority on the part of
the Company as a condition to the execution and delivery of this Agreement, the
Warrants and/or the issuance of the Underlying Common Stock, except as may be
necessary or advisable to effect compliance with federal and state securities
laws.
SECTION 3.04. CAPITALIZATION. The authorized capital stock of the
Company on the date hereof consists of (a) 2,000,000 shares of Preferred Stock,
of which none are issued and outstanding, and (b) 50,000,000 shares of Common
Stock, of which 13,157,362 shares are issued and outstanding. The Common Stock
and the Preferred Stock have the rights and preferences set forth in the
Certificate of Incorporation of the Company, a true, correct and complete copy
of which, together with the Bylaws of the Company, has heretofore been delivered
to the Holders. All of the capital stock of the Company outstanding as of the
date hereof has been validly issued, fully paid and non-assessable. Except as
provided in Schedule 3.04 hereof, no subscription, warrant, option or other
right to purchase or acquire any shares of any class of stock of the Company or
any security convertible into or exchangeable for any such shares, in each case
issued by or binding upon the Company, is outstanding on the date hereof. Except
as set forth in Schedule 3.04: (a) the Company is not obligated to redeem any
shares of capital stock of the Company; (b) the Company is not obligated to
register under the Act any securities of the Company; (c) no preemptive rights
exist with respect to the capital stock of the Company; and (d) there are no
agreements or arrangements between any securityholders of the Company or between
any securityholder of the Company and the Company related to the Company or its
capital stock.
SECTION 3.05. ACCURACY OF INFORMATION. The factual information
furnished by or on behalf of the Company to the Holders in connection with this
Agreement or any transaction contemplated hereby does not contain any untrue
statements of material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they
were made, not misleading.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. RESERVATION FOR ISSUANCE. The Company shall reserve a
sufficient number of shares of authorized but unissued Common Stock for issuance
with respect to this Agreement and will refrain from taking any action that
would hinder the Company's ability to
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perform its responsibilities under this Agreement. Further, the Company shall
reserve such additional number of shares of authorized but unissued Common Stock
for issuance from time to time as the number of shares the Warrants evidence the
right to purchase increases as a result of additional issuances of shares or
adjustments as provided in this Agreement.
SECTION 4.02. DIVIDENDS. In the event that the Company shall declare
or pay dividends to its stockholders other than dividends payable in Common
Stock, the Company shall keep in an escrow account, for the benefit of each
Holder, an amount equal to the amount that such Holder would have been entitled
to upon payment if such Holder had exercised the Warrants immediately prior
thereto, to be paid to such Holder (together with all accrued interest thereon)
upon exercise of the Warrants. In the event that a Holder does not exercise all
or part of the Warrants prior to the Expiration Date, the amount in the escrow
account that had been set aside with respect to Underlying Common Stock subject
to unexercised Warrants shall remain the property of the Company.
SECTION 4.03. PROHIBITED ACTIONS. Without the prior written consent of
the Holders, the Company shall not change the par value of the Common Stock from
$0.01 per share.
ARTICLE V
INVESTMENT INTENT
SECTION 5.01. INVESTMENT INTENT; RESTRICTED SECURITIES. Each Holder
represents and warrants that it is acquiring the Warrants and shall be acquiring
the Underlying Common Stock solely for its own account and not with a view to or
for resale in connection with any distribution or public offering thereof within
the meaning of any securities laws and regulations, unless such distribution or
offering is registered under the Act or any exemption from such registration is
available. Each Holder realizes that the resale of the Warrants and the
Underlying Common Stock is restricted by federal and state securities laws and,
accordingly, the Warrants and the Underlying Common Stock must be held
indefinitely unless the resale thereof is subsequently registered under the Act,
or an exemption from such registration is available. Each Holder realizes that
the grant of the Warrants and the sale of the Underlying Common Stock to such
Holder have not been registered under the Act or under any state securities laws
by reason of a specific exemption under the provisions of the Act that may
depend in part upon the such Holder's "investment intent". Accordingly, the
economic risk of the acquisition of such Warrants and Underlying Common Stock
must be borne by the Holders indefinitely unless the resale of the Warrants or
the Underlying Common Stock is subsequently registered under the Act or an
exemption from such registration is available. Each Holder acknowledges and
understands that the Warrants and the Underlying Common Stock are "restricted
securities" as that term is defined in Rule 144 under the Act and are subject to
all of the terms and provisions thereof. Each Holder acknowledges and consents
that the certificates for the Warrants will be legended substantially as
follows:
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THE SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAW AND
SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT (1) REGISTRATION UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR (2) QUALIFICATION
FOR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
THE TRANSFER OF THIS WARRANT IS SUBJECT TO THE CONDITIONS
SPECIFIED IN A WARRANT AGREEMENT DATED AS OF JANUARY 4, 2000
AMONG THE COMPANY BANK OF AMERICA, N.A., A NATIONAL BANKING
ASSOCIATION, FLEET NATIONAL BANK, A NATIONAL BANKING
ASSOCIATION AND COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH, AS
MODIFIED AND SUPPLEMENTED FROM TIME TO TIME, AND NO TRANSFER
OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNTIL SUCH
CONDITIONS HAVE BEEN FULFILLED. A COPY OF THE FORM OF SUCH
AGREEMENT IS ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE COMPANY. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE
BOUND BY THE PROVISIONS OF SUCH AGREEMENT.
Each Holder acknowledges and consents that the certificates for the Underlying
Common Stock will be, when issued, legended substantially as follows:
THE SALE OF THE COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAW AND
SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE WARRANT
AGREEMENT AND ONLY WITH (1) REGISTRATION UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR (2) QUALIFICATION FOR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
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ARTICLE VI
TRANSFER OF WARRANTS
SECTION 6.01. TRANSFER. Subject to the terms hereof, the Warrants and
all rights hereunder and thereunder are transferable, in whole or in part, on
the books of the Company maintained for such purpose at the Company's principal
office by each Holder, upon surrender of the Warrant Certificate to the Company
at its principal office, accompanied by (i) a duly executed form of warrant
assignment, substantially in the form of Exhibit C attached hereto (the "Warrant
Assignment Form"), and (ii) payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer the
Company will issue and deliver to the assigning Holder a new Warrant or
Certificate or Certificates with respect to the Warrants not so transferred.
ARTICLE VII
REGISTRATION
SECTION 7.01. DEMAND REGISTRATION.
(a) Generally. No more than two (2) times during the Term, each Holder
holding, in the aggregate, Warrants to purchase 65,505 shares of the
Underlying Common Stock as of the date hereof, shall have the right to make
written request to the Company with respect to registration under the Act of all
or any part of its Underlying Common Stock (each, a "Demand Registration"), and
the Company will pay Registration Expenses with respect to such Demand
Registration. The Company will, promptly following the receipt of a Demand
Request notice, prepare and file, and use its commercially reasonable efforts to
prosecute to effectiveness, an appropriate filing with the Commission of a
registration statement covering such Underlying Common Stock and the proposed
sale or distribution thereof under the Act. The Company shall maintain the
effectiveness of any registration statement filed hereunder for a period ending
on the earlier of 180 days (excluding any days on which a Holder was prohibited
from selling by virtue of a Delay Notice delivered under Section 7.04(b)) or
until all offered shares are sold pursuant to such registration statement.
(b) Incomplete Public Offerings, Etc. The Company shall have the right
to postpone the filing or effectiveness of any Demand Registration for a
reasonable period of time, but not in excess of 105 days, if (i) the Company is
conducting or is actively pursuing a public offering, (ii) the Company has been
advised by legal counsel that such filing or effectiveness would require
disclosure of a material financing, acquisition or other corporate transaction,
and the Board of
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Directors of the Company determines in good faith that such disclosure is not in
the best interests of the Company and its stockholders or (iii) the Board of
Directors of the Company determines in good faith that there is a valid business
purpose or reason for delaying filing or effectiveness.
(c) No Right of Company or Other Person to Piggy-back on Required
Registrations. Neither the Company nor any Person (other than Holders) owning
any of its securities shall have the right to include any of the Company's
securities in a registration statement initiated as a Demand Registration under
this Section 7.01, unless (i) such securities are of the same class as the
Underlying Common Stock being registered, (ii) if such Demand Registration is an
underwritten offering, the Company or such Persons, as applicable, agree in
writing to sell their securities on the same terms and conditions as apply to
the Underlying Common Stock being sold and (iii) the inclusion of any of the
Company's securities could not reasonably be expected to affect the number of
securities or offering price of such securities to be sold by such Holder. If
any Persons owning any securities of the Company register securities of the
Company in a Demand Registration (in accordance with the provisions of this
Section 7.01(e)), such Persons shall pay the fees and expenses of counsel to
such Persons and their pro rata share of the Registration Expenses if the
Registration Expenses for such registration are not paid by the Company for any
reason.
(d) Selection of Underwriters and Counsel, Etc. If a Demand
Registration involves an underwritten offering: (i) the Company shall have the
right to select the investment banker or bankers and manager or managers to
administer the offering (provided that such investment bankers and managers must
be reasonably satisfactory to the Holders); and (ii) the Holders shall have the
right to select the counsel to represent the Holders.
(e) Limitations on Demand Registrations. Notwithstanding anything
herein to the contrary, the Company shall not be obligated to honor a request
for a Demand Registration in connection with any request for a Demand
Registration pursuant to which a registration statement would be declared
effective prior to the expiration of 365 days following the last effective date
of any previous registration statement pursuant to this Section 7.01.
SECTION 7.02. OTHER REGISTRATION.
(a) Piggyback Registrations. If the Company shall propose the
registration on an appropriate form under the Act of the sale of any of its
securities, for itself or for any other securityholder of the Company (other
than a registration statement on Form S-4 or S-8, or any form substitution
therefor), the Company shall, in respect of each such proposed registration
occurring after the Closing Date, give the Holders written notice, or
telegraphic or telephonic notice followed as soon as practicable by written
confirmation thereof, of such proposed registration. Upon written notice or
telegraphic or telephonic notice of the Holders followed as soon as practicable
by written confirmation thereof, given to the Company within ten (10) Business
Days after the giving of such notice of a proposed offering by the Company, the
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Company shall use its commercially reasonable efforts to include or cause to be
included in any registration statement related to such proposed offering the
sale of all or such portion of the Underlying Common Stock as a Holder may
request; provided, however, that the Company may at any time withdraw or cease
proceeding with any such registration if it shall at the same time withdraw or
cease proceeding with the registration of the sale of the securities originally
proposed to be registered; and provided further, however, that if the Company is
advised in writing in good faith by any managing underwriter of the Company's
securities being offered in an underwritten public offering pursuant to such
registration statement that the amount to be sold by Persons other than the
Company (collectively, the "Selling Stockholders") is greater than the amount
which can be offered without adversely affecting the offering, the Company may
reduce the amount offered for the accounts of Selling Stockholders (including
Holders) to a number deemed satisfactory by such managing underwriter and shares
to be excluded shall be determined in the following sequence: (i) first,
securities held by any Persons not having any such contractual, incidental
registration rights, and (ii) second, the securities sought to be registered by
Selling Stockholders (including the Holders) on a pro rata basis in accordance
with the total number of securities sought to be registered by all Selling
Stockholders. In the event that the proposed registration by the Company is, in
whole or in part, an underwritten public offering of Common Stock, any request
pursuant to this Section 7.02 to register shall specify that such Underlying
Common Stock is to be included in the underwriting on the same terms and
conditions as the shares of Common Stock, if any, otherwise being sold through
underwriters under such registration.
(b) Expenses. All expenses, disbursements and fees of any registration
pursuant to this Section 7.02 shall be borne by the Company, except that the
Holders shall bear underwriting commissions and discounts attributable to the
shares of Underlying Common Stock being sold by the Holders and the fees and
expenses of separate counsel for the Holders, if any.
SECTION 7.03. COMPANY'S OBLIGATIONS IN REGISTRATION. In the event any
Holder participates in an offering of Underlying Common Stock in a registration
statement pursuant to Section 7.01 or Section 7.02, the Company shall:
(a) notify such Holder as to the filing thereof and of all amendments
or supplements thereto filed prior to the effective date of such registration
statement;
(b) notify such Holder immediately, and confirm the notice in writing,
(i) when the registration statement becomes effective, (ii) of the issuance by
the Commission of any stop order or of the initiation, or the threatening, of
any proceedings for that purpose, (iii) of the receipt by the Company of any
notification with respect to the suspension of qualification of the Underlying
Common Stock for sale in any jurisdiction or of the initiation, or the
threatening, of any proceedings for that purpose and (iv) of the receipt of any
comments, or requests for additional information, from the Commission or any
state regulatory authority. If the Commission or any state regulatory authority
shall enter such a stop order or order suspending
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qualification at any time, the Company will promptly use its commercially
reasonable efforts to obtain the lifting of such order;
(c) during any time when a prospectus is required to be delivered under
the Act during the period required for the distribution of the Underlying Common
Stock, use its commercially reasonable efforts to comply with all requirements
imposed upon it by the Act, as hereafter amended, and by the rules and
regulations promulgated thereunder, so far as necessary to permit the
continuance of sales of or dealings in the Underlying Common Stock pursuant to a
prospectus complying with Section 10(a)(3) of the Act. If at any time when a
prospectus relating to the Underlying Common Stock is required to be delivered
under the Act and any event shall have occurred as a result of which, in the
opinion of counsel for the Company, the prospectus relating to the Underlying
Common Stock as then amended or supplemented includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend such prospectus to comply with the Act and the rules and regulations of
the Commission promulgated thereunder, the Company will promptly prepare and
file with the Commission an appropriate amendment or supplement in form
satisfactory to the Company's counsel;
(d) use its commercially reasonable efforts, in cooperation with such
Holder, at or prior to the time the registration statement becomes effective, to
register or qualify the Underlying Common Stock for offering and sale under the
securities laws relating to the offering or sale of the Underlying Common Stock
in such jurisdictions as such Holder may reasonably designate and to continue
the qualifications in effect so long as required for purposes of the sale of the
Underlying Common Stock; provided that no such qualification shall be required
in any jurisdiction where, as a result thereof, the Company would be subject to
service of process for all purposes. In each jurisdiction where such
qualification shall be effected, the Company will, unless such Holder agrees
that such action is not at the time necessary or advisable, file and make such
statements or reports at such times as are or may reasonably be required by the
laws of such jurisdiction;
(e) use the Company's commercially reasonable efforts to cause the
independent certified public accountants of the Company to deliver to such
Holder, and to the underwriters if the Underlying Common Stock is being sold
through underwriters, letters on the date that the registration statement
becomes effective and on the date the Underlying Common Stock is delivered to
the underwriters for sale pursuant to such registration or, if the Underlying
Common Stock is not being sold through underwriters, on the date that the
registration statement becomes effective, stating that they are independent
certified public accountants within the meaning of the Act and the rules and
regulations of the Commission thereunder, and that, in their opinion, the
financial statements and other financial data of the Company included in the
registration statement or prospectus, or any amendment or supplement thereto,
comply as to form in all material respects with the applicable accounting
requirements of the Act, and such other
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financial matters as the underwriter, if any, or such Holder may reasonably
request. If any such letter or letters are requested by a Holder in an offering
other than an underwritten offering, such Holder or Holders shall reimburse the
Company the actual cost of obtaining such letter or letters;
(f) after the effective date of such registration statement, prepare,
and promptly notify such Holder of the proposed filing of, and promptly file
with the Commission, each and every amendment or supplement thereto or to any
prospectus forming a part thereof as may be necessary to make any statements
therein not misleading in any material respect;
(g) furnish to such Holder, as soon as available, copies of any such
registration statement and each preliminary or final prospectus, or supplement
or amendment prepared pursuant thereto, all in such quantities as such Holder
may from time to time reasonably request in order to facilitate the public sale
or other disposition of the Underlying Common Stock;
(h) make such representations and warranties to any underwriter of the
Underlying Common Stock, and use the Company's best efforts to cause the
Company's counsel to render, at the time or times of the letters referred to in
subparagraph (e) above, such opinions to such underwriter, if any, as such
underwriter may reasonably request; and
(i) pay all Registration Expenses incident to the performance of the
Company's obligations to the extent required by this Article VII.
SECTION 7.04. AGREEMENTS BY THE HOLDERS. (a) Obligations. In
connection with the filing of a registration statement pursuant to this Article
VII, if a Holder participates in the offering of the Underlying Common Stock,
such Holder shall:
(i) furnish the Company all material information reasonably requested
by the Company concerning such Holder and the proposed method of sale or other
disposition of the Underlying Common Stock and such other information and
undertakings as shall be reasonably required in connection with the preparation
and filing of any such registration statement covering the sale of all or part
of the Underlying Common Stock and in order to ensure full compliance with the
Act and the rules and regulations of the Commission thereunder;
(ii) if the Company is at the time entering into an underwriting
agreement covering the sale of its Common Stock, enter into an underwriting
agreement in customary form with the same underwriter or underwriters who are
parties to such underwriting agreement with the Company, provided that the sales
of Underlying Common Stock by such Holder and the Company thereunder are at the
same price and upon the same terms and conditions; and
(iii) cooperate in good faith with the Company and its underwriters, if
any, in connection with such registration, including placing the shares of
Underlying Common Stock to be included in such registration statement in escrow
or custody to facilitate the sale and distribution thereof.
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(iv) each Holder holding at least 1% of the Fully-Diluted Outstanding
Common Stock agrees, that if requested by the Company and an underwriter of
Common Stock in connection with any public offering of the Company, not to sell
or otherwise transfer or dispose of any shares held by it for such period, not
to exceed ninety (90) days following the effective date of the relevant
registration statement in connection with any other public offering of common
stock, as such underwriter shall specify reasonably and in good faith (provided
that each officer, director and other holder of 1% of the Fully-Diluted
Outstanding Common Stock also so agree).
(b) Black-Out Periods. The Holders agree that they shall not sell any
shares of the Underlying Common Stock pursuant to any effective registration
statement during any period of time when, but only so long as, the Company
notifies the Holders (a "Delay Notice") that the Company is in possession of
material non-public information that, in the exercise of its reasonable judgment
based on the advice of its counsel, would be required to be disclosed in a
registration statement (or any amendment or post-effective amendment thereto) in
order to comply with Commission requirements, which material information may
relate, including, without limitation, to a financing project or a pending
acquisition, merger or other material corporate reorganization to which the
Company is or is expected to be a party; provided, however, that the Company
shall advise the Holders in writing as soon as any such delay is no longer
applicable; provided further that the Holders shall only be prohibited from so
selling any shares of Underlying Common Stock for up to 45 consecutive days (a
"Delay Period") following the receipt of a Delay Notice and any two Delay
Periods must be at least 30 days apart during which time the Holders shall be
permitted to sell shares of Underlying Common Stock pursuant to an effective
registration statement.
SECTION 7.05. INDEMNIFICATION; CONTRIBUTION.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder, its officers, directors, agents, employees,
representatives and each person or entity who controls such Holder (within the
meaning of the Act), against all losses, claims, damages, liabilities and
expenses arising out of or based upon any untrue or alleged untrue statement of
material fact contained in any registration statement, any amendment or
supplement thereto, any prospectus or preliminary prospectus or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, except insofar as the same arise out of or
are based upon any such untrue statement or omission based upon information with
respect to the Holders furnished to the Company by the Holders, or the failure
of the Holders to deliver a prospectus in which such statements or omissions
were corrected. In connection with an underwritten offering, the Company will
indemnify the underwriters thereof, their officers and directors and each person
who controls such underwriters (within the meaning of the Act) to the same
extent as provided above with respect to the sale of Underlying Common Stock by
the Holders.
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(b) Indemnification by the Holders. In connection with any registration
statement in which a Holder is participating, such Holder will furnish to the
Company in writing such information with respect to the name and address of such
Holder, the amount of Underlying Common Stock held by such Holder, and such
other information as is required by the Company for use in connection with any
such registration statement or prospectus and agrees to indemnify, to the extent
permitted by law, the Company, its directors and officers and each person or
entity who controls the Company (within the meaning of the Act) against any
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue statement of material fact contained in any registration statement,
any amendment or supplement thereto, any prospectus or preliminary prospectus or
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent that such
untrue statement or omission is contained in any information with respect to the
Holders furnished to the Company by the Holders.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such Person will claim indemnification or contribution
pursuant to this Agreement. If the Company is to be the indemnifying party,
unless in the reasonable judgment of the indemnified party (i) a conflict of
interest may exist between the indemnified party and the Company with respect to
a claim or (ii) the named parties to any action, suit, proceeding or
investigation (including any impleaded parties) include both the Company and an
indemnified party, and such indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it that are different
from or additional to those available to the Company, the indemnified party
shall permit the Company to assume the defense of such claim with counsel
reasonably satisfactory to such indemnified party. Whether or not such defense
is assumed by the Company, the Company will not be subject to any liability for
any settlement made without its consent. No indemnifying party will consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. If the Company is not entitled to, or elects not to, assume the
defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the Company shall be obligated to pay the fees and
expenses of one additional counsel.
(d) Contribution. If the indemnification provided for in this Section
7.05 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
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indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any statement of a material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.05(c), any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.05(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7.05(d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
If indemnification is available under this Section 7.05, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 7(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 7.05(d).
SECTION 7.06. OTHER REGISTRATION RIGHTS. The Company covenants that it
shall not grant any registration rights to any Person which could conflict or be
inconsistent with the provisions of Article VII or which would otherwise
adversely affect the rights of the Holders under this Warrant Agreement. If the
Company shall at any time provide to any Person rights with respect to the
registration of securities of the Company under the Act which are, in the sole
judgment of the Holders, on terms or conditions more favorable to such Person
than the terms and conditions provided in this Article VII, the Company shall
provide (by way of amendment to this Agreement or otherwise) such more favorable
terms or conditions to the Holders. In the event of a conflict or inconsistency,
the provisions of this Article VII shall prevail.
SECTION 7.07. TERMINATION. The rights granted under Sections 7.01 and
7.02 shall terminate, with respect to any Holder, upon the earlier of (i) sale
of all of the Underlying Common Stock owned by such Holder under a registration
statement and (ii) the date upon which the Holders may sell all shares of
Underlying Common Stock in a single three month period under Rule 144 as
promulgated under the Securities Act of 1933, as amended, or such comparable
successor statute or rule thereto.
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ARTICLE VIII
ADJUSTMENT OF WARRANTS
SECTION 8.01. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER,
ETC. In case of any reorganization or consolidation of the Company with, or any
merger of the Company with or into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation) or in
case of any sale or transfer (whether in one or more transactions) of all or
substantially all of the assets of the Company, the corporation resulting from
such reorganization or consolidation or surviving such merger or to which such
sale or transfer shall be made, as the case may be, shall make suitable
provision (which shall be fair and equitable to the Holders) and shall either
(i) assume the obligations of the Company hereunder (by written instrument
executed and mailed to the Holders) pursuant to which, upon exercise of Warrants
at any time after the consummation of such reorganization, consolidation, merger
or conveyance, or (ii) make suitable provision in connection with the closing of
such reorganization, consolidation, merger or conveyance such that in the case
of either clause (i) or (ii) the Holders shall be entitled to receive the same
amount of cash, stock or other securities or property that such Holder would
have been entitled to receive if such Holder had exercised the Warrants
immediately prior thereto.
SECTION 8.02. ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE. The
number of shares of Common Stock issuable upon the exercise of the Warrants (the
"Exercise Rate") is subject to adjustment from time to time upon the occurrence
of the events enumerated in this Section 8.02 and under the circumstances
described in Section 8.03. For purposes of this Section 8.02, "Common Stock"
means shares now or hereafter authorized of any class of common stock of the
Company and any other stock of the Company, however designated, that has the
right (subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
1. pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
2. subdivides its outstanding shares of Common Stock into a
greater number of shares;
3. combines its outstanding shares of Common Stock into a
smaller number of shares;
4. makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock, or
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5. issues by reclassification of its Common Stock any shares
of its capital stock;
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the holder of the Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which such holder would have owned immediately following the action if
such Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification. If, after an
adjustment, a holder of a Warrant upon exercise may receive shares of two or
more classes of capital stock of the Company, the Company shall determine the
allocation of the adjusted Exercise Rate between the classes of capital stock.
After such allocation, the exercise privilege and the Exercise Rate of each
class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) Adjustment for Rights Issue. If the Company issues any rights,
options or warrants entitling any person to subscribe for Common Stock or
securities convertible into, or exchangeable or exercisable for, Common Stock at
an offering price (or with an initial conversion, exchange or exercise price
plus such offering price) which is less than the Current Market Price per share
of Common Stock on the record date for such issuance (all of the foregoing,
"Rights"), the Exercise Rate shall be adjusted in accordance with the formula:
E' = E x O + N
-----------
O + N x P
-----
M
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
O = the number of shares of Common Stock outstanding
on the record date.
N = the number of additional shares of Common Stock
offered.
P = the offering price per share of the additional
shares.
M = the Current Market Price per share of Common
Stock on the record date.
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The adjustment shall be made successively whenever any such Rights are
issued and shall become effective immediately after the record date for the
determination of shareholders entitled to receive the Rights in the case of
Rights to be issued to the holders of Common Stock. To the extent that shares of
Common Stock are not delivered after the expiration of such rights or Warrants,
the Exercise Rate shall be readjusted to the Exercise Rate which would otherwise
be in effect had the adjustment made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. In the event that such rights or warrants are
not so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate
which would then be in effect if such date fixed for determination of
shareholders entitled to receive such rights or Warrants had not been so fixed.
(c) Adjustment for Other Distributions. If the Company distributes to
all holders of its Common Stock any of its assets (including but not limited to
cash), debt securities, preferred stock or any rights or Warrants to purchase
any such securities, the Exercise Rate shall be adjusted in accordance with the
formula:
E' = E x M
-----
M-F
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate.
M = the Current Market Price per share of Common
Stock on the record date.
F = the fair market value on the record date of the
assets, securities, rights or warrants
applicable to one share of Common Stock. The
Board of Directors shall determine the fair
market value pursuant to Section 8.02(m) based
upon the trading prices of publicly traded
securities where applicable.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive the distribution.
This subsection does not apply to rights, options or warrants referred to in
subsection (b) of this Section 8.02.
(d) Adjustment for Common Stock Issue. If the Company issues shares of
Common Stock for a consideration per share less than the Current Market Price
per share on the date the Company fixes the offering price of such additional
shares, the Exercise Rate shall be adjusted in accordance with the formula:
E' = E x O + N
-------------
O + N x P
-----
M
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where:
E' = the adjusted Exercise Rate.
E = the then current Exercise Rate.
O = the number of shares outstanding immediately
prior to the issuance of such additional shares.
N = the number of additional shares of Common Stock
issued.
P = the aggregate consideration received per share
for the issuance of such additional shares.
M = the Current Market Price per share on the date
of issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b), (c)
and (e) of this Section 8.02,
(2) the exercise of the Warrant, or the conversion or exchange of
other securities convertible or exchangeable for Common Stock,
(3) Common Stock upon the exercise of rights or warrants issued to
the holders of Common Stock,
(4) Common Stock issued to shareholders of any person that is not
affiliated with the Company and that merges into the Company
or a subsidiary of the Company in proportion to their stock
holdings of such person immediately prior to such merger, upon
such merger.
(e) Adjustment for Convertible Securities Issue. If the Company issues
any securities convertible into or exchangeable for Common Stock (other than
securities issued in transactions described in subsections (b) and (c) of this
Section 8.02) for a consideration per share of Common Stock initially
deliverable upon conversion or exchange of such securities less than the Current
Market Price per share on the date of issuance of such securities, the Exercise
Rate shall be adjusted in accordance with the formula:
E' = E x O + N
-------------
O + N x P
-----
M
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where:
E' = the adjusted Exercise Rate.
E = the then current Exercise Rate.
O = the number of shares outstanding immediately
prior to the issuance of such securities.
N = the maximum number of shares deliverable upon
conversion of or in exchange for such securities
at the initial conversion or exchange rate.
P = the aggregate consideration received for the
issuance of each such security.
M = the Current Market Price per share on the date
of issuance of such securities.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities has not been issued when such securities are no longer
outstanding, then the Exercise Rate shall promptly be readjusted to the Exercise
Rate which would then be in effect had the adjustment upon the issuance of such
securities been made on the basis of the actual number of shares of Common Stock
issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued to
shareholders of any person that is not affiliated with the Company and that
merges into the Company, or with a subsidiary of the Company, in proportion to
their stock holdings of such person immediately prior to such merger, upon such
merger.
(f) Current Market Price. The current market price per share of Common
Stock (the "Current Market Price") on any date is: (i) if the Common Stock is
not registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the value of the Common Stock as determined by an independent,
nationally recognized investment banking firm experienced in valuation matters
chosen by the Company and reasonably satisfactory to the Warrant holder;
provided, however that the current market value shall be determined by the Board
of Directors of the Company, acting in good faith (which valuation shall be to
the reasonable satisfaction of the Warrant holder), with respect to any Common
Stock issued by the Board of Directors pursuant to a stock option plan for
directors, officers, and consultants or advisers of the Company; and provided
further that the Board of Directors shall have such authority referred to in the
immediately preceding proviso with regard to no more than five percent (5%) of
the authorized Common Stock in the aggregate and the current market value of any
Common Stock in excess of such amount shall be determined as otherwise set forth
in this Section 8.02(f), or (ii) if the Common Stock is registered under the
Exchange Act, the average of
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the Quoted Prices of the Common Stock for 30 consecutive trading days commencing
45 trading days before the date in question or, if the Common Stock has been
registered for less than 30 consecutive trading days, the average of the Quoted
Prices for all the trading days of the Common Stock. The "Quoted Price" of the
Common Stock is the last reported sales price of the Common Stock as reported by
the NASDAQ National Market System, or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on such
exchange which shall be for consolidated trading if applicable to such exchange,
or if neither so reported or listed, the last reported bid price of the Common
Stock. In the absence of one or more such quotations, the Board of Directors of
the Company shall determine the Current Market Price pursuant to Section 8.02(m)
in good faith on the basis of such quotations.
(g) Consideration Received. For purposes of any computation respecting
consideration received pursuant to subsections (d) and (e) of this Section 8.02,
the following shall apply:
1. in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the
amount of such cash, provided that in no case
shall any deduction be made for any commissions,
discounts or other expenses incurred by the
Company for any underwriting of the issue or
otherwise in connection therewith;
2. in the case of the issuance of shares 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 market value
thereof as determined in good faith by the Board
of Directors pursuant to Section 8.02(m), based
upon the trading prices of publicly traded
securities where appropriate (irrespective of
the accounting treatment thereof), and described
in a resolution of the Board of Directors of the
Company; and
3. in the case of the issuance of securities
convertible into or exchangeable for shares, the
aggregate consideration received therefor shall
be deemed to be the consideration received by
the Company for the issuance of such securities
plus the additional minimum consideration, if
any, to be received by the Company upon the
conversion or exchange thereof (the
consideration in each case to be determined in
the same manner as provided in clauses (1) and
(2) of this subsection).
(h) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Exercise Rate. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section shall be made to the nearest share.
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(i) When No Adjustment Required. No adjustment need be made for rights
to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. No adjustment need be made for a change in the par value
or no par value of the Common Stock. To the extent the Warrant becomes
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash. No adjustment need be made under this
Section 8.02 for securities issued (up to a maximum of 6% of the Fully Diluted
Outstanding Common Stock) to the holders of the Required Institutional Debt.
(j) Notice of Adjustment. Whenever the Exercise Rate is adjusted, the
Company shall provide the notices required by Section 8.04 hereof.
(k) Voluntary Increase. The Company from time to time may increase the
Exercise Rate by any amount for any period of time if the period is at least 20
days and if the increase is irrevocable during the period. Whenever the Exercise
Rate is increased, the Company shall mail to the Warrant holder a notice of the
increase. The Company shall mail the notice at least 15 days before the date the
increased Exercise Rate takes effect. The notice shall state the increased
Exercise Rate and the period it will be in effect. An increase of the Exercise
Rate does not change or adjust the Exercise Rate otherwise in effect for
purposes of subsections (a), (b), (c), (d) and (e) of this Section 8.02.
(l) Notice of Certain Transactions. If:
1. the Company takes any action that would require
an adjustment in the Exercise Rate pursuant to
subsections (a), (b), (c), (d) or (e) of this
Section 8.02; or
2. there is a liquidation or dissolution of the
Company, then the Company shall mail to the
Warrant holder a notice stating the proposed
record date for a dividend or distribution or
the proposed effective date of a subdivision,
combination, reclassification, consolidation,
merger, transfer, lease, liquidation or
dissolution. The Company shall mail the notice
at least 15 days before such date. Failure to
mail the notice or any defect in it shall not
affect the validity of the transaction.
(m) Company Determination. Any determination that the Company or its
Board of Directors must make pursuant to this Agreement shall be made in good
faith and shall be binding on the Warrant holder, except as set forth herein.
The Company shall give the holder of the Warrant written notice of any such
determination by the Company or its Board of Directors.
SECTION 8.03. NO DILUTION OR IMPAIRMENT, CAPITAL AND OWNERSHIP
STRUCTURE. If any event shall occur as to which the provisions of Section 8.02
are not strictly applicable but the
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failure to make any adjustment would adversely affect the purchase rights
represented by the Warrant in accordance with the essential intent and
principles of such Section, then, in each such case, the Company shall appoint,
at its own expense, an investment banking firm of recognized national standing
that does not have a direct or material indirect financial interest in the
Company or any of its subsidiaries, who has not been, and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, officers, employees, affiliates or shareholders are) a
promoter, director or officer of the Company or any of its subsidiaries, which
shall give their opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in Section 8.02, necessary to
preserve, without dilution, the purchase rights, represented by this Warrant.
Upon receipt of such opinion, the Company will promptly mail a copy thereof to
the holder of the Warrant and shall make the adjustments described therein. The
Company will not, by amendment of its articles of incorporation or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of the Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of the Warrant against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (1) will take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock on
the exercise of the Warrant from time to time outstanding and (2) will not take
any action which results in any adjustment of the Exercise Rate if the total
number of Warrant Shares issuable after the action upon the exercise of the
Warrant would exceed the total number of shares of Common Stock then authorized
by the Company's articles of incorporation and available for the purposes of
issue upon such exercise. A consolidation, merger, reorganization or transfer of
assets involving the Company covered by Section 8.01 shall not be prohibited by
or require any adjustment under this Section 8.03.
SECTION 8.04. NOTICES TO THE WARRANT HOLDER. Upon any adjustment of the
Exercise Rate pursuant to Section 8.02, the Company shall promptly thereafter
cause to be delivered, by first-class mail, postage prepaid, to the registered
holder of the Warrant Certificate at his address appearing on the Warrant
register a certificate of an Officer of the Company setting forth the Exercise
Rate after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment in the Exercise Rate, upon exercise of the Warrant and payment of the
Exercise Price. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 8.04.
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26
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants;
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in shares of Common Stock or distributions
referred to in subsection (a) of Section 8.02 hereof);
(c) of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrant (other than a change in par value, or from no par
value to par value, or as a result of a subdivision or combination), or a tender
offer or exchange offer for shares of Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(e) the Company proposes to take any action which would require an
adjustment of the Exercise Rate pursuant to Section 8.02; then the Company shall
cause to be given to the registered holder of the Warrant Certificate at his or
her address appearing on the Warrant register, at least 20 days (or 10 days in
any case specified in clauses (a) or (b) above) prior to the applicable record
date hereinafter specified, or promptly in the case of events for which there is
no record date, by first-class mail, postage prepaid, a written notice stating
(i) the date as of which any such subdivision, combination or reclassification
is to be made, or (ii) the date as of which the holders of record of shares of
Common Stock to be entitled to receive any such dividends, rights, options,
warrants or distribution are to be determined, or (iii) the initial expiration
date set forth in any tender offer or exchange offer for shares of Common Stock,
or (iv) the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange such shares for securities
or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 8.04 or any defect
therein shall not affect the legality or validity of any distribution, right,
option, warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in the Warrant Certificate shall
be construed as conferring upon the holder thereof the right to vote or to
consent or to receive notice as
28
27
shareholders in respect of the meetings of shareholders or the election of
Directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
ARTICLE IX
HOLDERS' RIGHTS
SECTION 9.01. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
CERTIFICATES. If any Warrant Certificate shall become lost, stolen, mutilated or
destroyed, the Company shall, on such reasonable terms as to indemnity or
otherwise as it may impose, including without limitation the delivery by a
Holder to the Company (at such Holder's expense) of an affidavit of lost
instrument and an indemnity agreement, issue a new Warrant Certificate of like
denomination, tenor and date as the Warrant Certificate so lost, stolen,
mutilated or destroyed. Any such new Warrant Certificate shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
SECTION 9.02. RIGHTS OF WARRANT HOLDERS. No Warrant Certificate shall
entitle the holder thereof to any of the rights of a stockholder of the Company,
including without limitation the right to vote, to receive dividends and other
distributions, to receive any notice of, or to attend, meetings of stockholders
or any other proceedings of the Company, except as expressly provided herein.
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28
ARTICLE X
MISCELLANEOUS
SECTION 10.01. AMENDMENT AND WAIVER. Any term, covenant, agreement or
condition in this Agreement may be amended, or compliance therewith be waived
(either generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Company and the Holders.
SECTION 10.02. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.
Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. Neither this Agreement nor any other agreement
contemplated hereby shall be deemed to confer upon any Person not a party hereto
or thereto any rights or remedies hereunder or thereunder except for successors
or assigns of the parties hereto.
SECTION 10.03. ENTIRE AGREEMENT. This Agreement and the agreements
contemplated hereby constitute the entire agreement of the parties regarding the
subject matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
SECTION 10.04. SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
therefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
SECTION 10.05. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations and warranties and covenants contained herein shall survive
the execution of this Agreement and the purchase of the Underlying Common Stock,
if any, and continue indefinitely and all statements contained in any
certificate, exhibit or other instrument delivered by or on behalf of the
Company or Holders pursuant to this Agreement shall be deemed to have been
representations and warranties by the Company or the Holders, as the case may
be. After the purchase of the Underlying Common Stock, the Holders shall
continue to be entitled with respect to such shares to all rights to which it
would have been entitled as a Holder under this Agreement. The Company will, at
the time of each exercise of Warrants upon the request of a Holder, acknowledge
in writing, in form reasonably satisfactory to such Holder, its continuing
obligation to afford to such Holder all such rights; provided, however, that if
such Holder shall
30
29
fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such Holder all such rights.
SECTION 10.06. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by and construed and
enforced in accordance with the substantive laws (but not the rules governing
conflicts of laws) of the State of Delaware.
SECTION 10.07. CAPTIONS. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
SECTION 10.08. NOTICE. Any notice or communication hereunder or in any
agreement entered into in connection with the transactions contemplated hereby
must be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person, by
overnight courier or by facsimile transmission. Such notice shall be deemed
received on the date on which it is hand-delivered, delivered by overnight
courier or received by facsimile transmission or on the third Business Day
following the date on which it is so mailed. For purposes of notice, the
addresses of the parties shall be:
If to the Company:
MONARCH DENTAL CORPORATION
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
With a copy to:
XXXXXXX, PROCTER & XXXX, LLP Exchange Place Boston,
Massachusetts 02109-2881 Attention: Xxxx X. XxXxxxxx, P.C.
If to Bank of America:
BANK OF AMERICA, N.A.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx XxXxxxxxx
With a copy to:
XXXXXXX XXXXXX L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
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30
If to Fleet:
FLEET NATIONAL BANK
One Federal Street, Mail Stop: MA XX X00X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxxx
If to Rabobank:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "Rabobank
Nederland", New York branch
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Corporate Services
With a copy to:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "Rabobank
Nederland", New York branch
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxx
And a copy to:
JENKENS & XXXXXXXXX
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Any party may change its address for notice by written notice given to the other
parties in accordance with this Section.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURES FOUND ON FOLLOWING PAGES.]
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31
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HOLDERS:
BANK OF AMERICA, N.A., a national banking
association,
By:
Name:
Title:
FLEET NATIONAL BANK,
a national banking association
By:
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank Nederland",
New York Branch
By:
Name:
Title:
By:
Name:
Title:
COMPANY:
MONARCH DENTAL CORPORATION
By:
Name:
Title:
33
EXHIBIT A
THE SALE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAW AND SUCH WARRANTS MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT (1) REGISTRATION UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR (2) QUALIFICATION FOR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
THE TRANSFER OF THIS WARRANT IS SUBJECT TO THE CONDITIONS SPECIFIED IN A WARRANT
AGREEMENT DATED AS OF JANUARY 4, 2000 AMONG THE COMPANY, BANK OF AMERICA, N.A.,
A NATIONAL BANKING ASSOCIATION, FLEET NATIONAL BANK, A NATIONAL BANKING
ASSOCIATION AND COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH AS MODIFIED AND SUPPLEMENTED FROM TIME TO TIME, AND
NO TRANSFER OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS
HAVE BEEN FULFILLED. A COPY OF THE FORM OF SUCH AGREEMENT IS ON FILE AND MAY BE
INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. THE HOLDER OF THIS
CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE
PROVISIONS OF SUCH AGREEMENT.
No.__ Certificate for Warrants
MONARCH DENTAL CORPORATION
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that ______________ or registered assigns is the
registered holder (the "Holder") of Warrants (the "Warrants") that collectively
represent the right to purchase, prior to expiration, __________ shares of
common stock (the "Common Stock") of Monarch Dental Corporation, a Delaware
corporation (the "Company"), subject to the dilution protection provisions
contained in Section 8.02 and 8.03 of the Warrant Agreement (as hereinafter
defined) at the exercise price of $0.01 per share (the "Exercise Price"), as
set forth in the Warrant Agreement, by the Holder surrendering this Warrant
Certificate, with the form of Notice of Exercise duly executed, at the Company's
principal office, and by paying in full the
34
2
Exercise Price, plus any transfer taxes as provided in the Warrant Agreement.
Payment of the Exercise Price may be made at the option of the Holder by
certified check or money order payable to the order of the Company. Terms used
herein but not otherwise defined shall have the meanings ascribed thereto in
that certain Warrant Agreement, of even date herewith, between the Company and
Holder.
This Warrant is issued pursuant to the Warrant Agreement, and all
rights of the holder of this Warrant are further governed by, and subject to the
terms and provisions of, the Warrant Agreement, to all of which terms and
provisions the Holder consents by acceptance hereof. Copies of the Warrant
Agreement and any amendments thereto are available upon request to the Company.
The holder of this Warrant shall be entitled to the benefits, rights and
privileges provided under the Warrant Agreement. If any provision herein
conflicts with a provision in the Warrant Agreement, the provision in the
Warrant Agreement shall apply.
The Warrants are subject to expiration pursuant to the terms of the
Warrant Agreement.
Prior to expiration, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction or
transferability that may appear in the Warrant Agreement, the Holder shall be
entitled to transfer this Warrant Certificate in whole or in part upon surrender
of this Warrant Certificate at the principal office of the Company by the
Holder, accompanied by a duly executed Warrant Assignment Form. Upon any such
transfer, a new Warrant Certificate or Certificates representing the same
aggregate number of Warrants will be issued in accordance with instructions in
the Warrant Assignment Form.
Prior to expiration, subject to the foregoing and to the provisions of
the Warrant Agreement, the Holder shall be entitled to exchange this Warrant
Certificate, with or without other Warrant Certificates, for another Warrant
Certificate or Warrant Certificates for the same aggregate number of Warrants,
upon surrender of this Warrant Certificate by the Holder at the principal office
of the Company.
The Holder has the right to require the Company to purchase the
Warrants represented by this Warrant Certificate, or the shares purchased upon
exercise of the Warrants, pursuant to the terms of the Warrant Agreement.
This Warrant Certificate shall not entitle the registered Holder to any
of the rights of a stockholder of the Company, including without limitation the
right to vote, to receive dividends and other distributions, or to attend or
receive any notice of meetings of stockholders or any other proceedings of the
Company unless specifically provided in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed.
MONARCH DENTAL CORPORATION
By:
Name:
Title:
35
3
EXHIBIT B
NOTICE OF EXERCISE
,
------------- ----
To Monarch Dental Corporation:
The undersigned ___________________________, pursuant to the provisions
of the attached Warrant Certificate, hereby elects to purchase _____% of the
Fully Diluted Outstanding Common Stock of Monarch Dental Corporation evidenced
by the attached Warrant Certificate. I have enclosed with this Notice payment of
the amount required to purchase such shares pursuant to the terms of the Warrant
Agreement.
Unless otherwise provided in the Warrant Agreement, if I have not
executed this Notice for all of the shares of Common Stock purchasable pursuant
to the Warrant, I am entitled to have, and you will promptly deliver to me, a
new Warrant Certificate issued, of the same tenor as the Warrant Certificate
surrendered herewith, for the purchase of the remaining shares.
Mailing address for stock certificate(s) or funds unless otherwise
ordered:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
Very truly yours,
-------------------------------------
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4
EXHIBIT C
WARRANT ASSIGNMENT FORM
-------------,---
ASSIGNMENT IN FULL
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
and transfers unto ___________________________ all Warrants to purchase shares
of Common Stock of the Company as evidenced by the attached Warrant Certificate
and does irrevocably constitute and appoint ___________________________ ,
attorney, to transfer such Warrants on the books of the Company, with full power
of substitution in the premises.
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
and transfers unto ___________________________ Warrants to purchase ____% of the
Fully Diluted Outstanding Common Stock of the Company as evidenced by the
attached Warrant Certificate together with all rights therein, and does
irrevocably constitute and appoint ___________________________, attorney, to
transfer that part of the such Warrants on the books of the Company, with full
power of substitution in the premises.
Under the provisions of the Warrant Agreement, if the undersigned has
not executed this assignment for all of the shares of Common Stock purchasable
pursuant to the Warrant Certificate, the undersigned is entitled to have a new
Warrant Certificate issued, of the same tenor as the Warrant Certificate
surrendered hereby, for the purchase of the remaining shares not subject to this
assignment. The new Warrant Certificates should be mailed to the following
addresses:
Address of Assignor:
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
Address of Assignee:
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
Very truly yours,
--------------------------------------
37
5
AGREEMENT TO BE BOUND BY TERMS
OF WARRANT AGREEMENT
_______________________, the Assignee set forth above, hereby agrees to
be bound by the terms of the Warrant Agreement pursuant to which the Warrants
were issued.
Dated:
-------------------------
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6
Schedule 2.02
--------------------------------------------------------------------------------------------------------------------
Certificate Number Holder Number of Shares Vesting Date
--------------------------------------------------------------------------------------------------------------------
1 Bank of America 36,183 March 31, 2000
--------------------------------------------------------------------------------------------------------------------
2 Fleet 17,763 March 31, 2000
--------------------------------------------------------------------------------------------------------------------
3 Rabobank 11,842 March 31, 2000
--------------------------------------------------------------------------------------------------------------------
4 Bank of America 36,183 April 30, 2000
--------------------------------------------------------------------------------------------------------------------
5 Fleet 17,763 April 30, 2000
--------------------------------------------------------------------------------------------------------------------
6 Rabobank 11,842 April 30, 2000
--------------------------------------------------------------------------------------------------------------------
7 Bank of America 36,183 May 31, 2000
--------------------------------------------------------------------------------------------------------------------
8 Fleet 17,763 May 31, 2000
--------------------------------------------------------------------------------------------------------------------
9 Rabobank 11,842 May 31, 2000
--------------------------------------------------------------------------------------------------------------------
10 Bank of America 108,547 June 30, 2000
--------------------------------------------------------------------------------------------------------------------
11 Fleet 53,286 June 30, 2000
--------------------------------------------------------------------------------------------------------------------
12 Rabobank 35,524 June 30, 2000
--------------------------------------------------------------------------------------------------------------------
Total 394,721
---------------------------
March 28, 2000
