THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. VOID AFTER 5:00 P.M., NEW YORK TIME, ON JUNE 23,
2004 OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME,
ON THE NEXT FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
_______ Shares of Common
Stock
No.
WARRANT TO PURCHASE
COMMON STOCK
OF
ARX, INC.
TRANSFER RESTRICTED -- SEE SECTION 6.02
This certifies that, for good and valuable consideration, Value
Investing Partners, Inc., a Delaware corporation, having an address at 0000 Xxxx
Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 06880, and its registered, permitted assigns
(collectively, the "Warrantholder"), is entitled to purchase from ARX, Inc. a
Delaware corporation (the "Company"), subject to the terms and conditions
hereof, at any time before 5:00 P.M., New York time, on June 23, 2004, (or, if
such day is not a Business Day, as defined herein, at or before 5:00 P.M., New
York time on the next following Business Day), the number of fully paid and
non-assessable shares of Common Stock, $.10 par value per share, of the Company
(the "Common Stock") stated above at the Exercise Price (as defined herein). The
Exercise Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Warrant, the following
capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on
which banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, $.10 par value per share, of the
Company.
(c) Common Stock Equivalents: Securities that are convertible
into or exercisable for shares of Common Stock.
(d) Demand Registration: See Section 7.02.
(e) Exchange Act: Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $6.75 per share.
(g) Expiration Date: 5:00 P.M., New York time, on June
23, 2004.
(h) Holder: A Holder of Registrable Securities.
(i) NASD: National Association of Securities Dealers,
Inc.
(j) Person: An individual, partnership, joint
corporation, trust, unincorporated organization or government or
any department of agency thereof.
(k) Piggyback Registration: See Section 7.01.
(l) Prospectus: Any prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
(m) Public Offering: A public offering of any of the
Company's equity or debt securities pursuant to a registration
statement under the Securities Act.
(n) Registration Expenses: Any and all expenses incident to the
performance of or compliance with Article VII, including, without limitation,
(i) all SEC, stock exchange and NASD registration and filing fees; (ii) all fees
and expenses of complying with securities or blue sky laws (including reasonable
fees and disbursements of counsel for the underwriters in connection with blue
sky qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expenses; (iv) the fees and disbursements of counsel for
the Company and of its independent certified public accountants, including the
expenses of any special audits and/or "cold comfort" letters required by or
incident to such performance and compliance; and (v) any disbursements of
underwriters customarily paid by issuers or sellers of securities including
liability insurance if the Company so desires, and the reasonable fees and
expenses of any special experts retained in connection with the requested
registration, but excluding underwriting fees, discounts and commissions and
transfer taxes if any.
(o) Registrable Securities: Any Warrant Shares and/or other securities
that may be or are issued by the Company upon exercise of this Warrant (and
other Warrants as defined below), including those which may thereafter be issued
by the Company in respect of any such securities by means of any stock splits,
stock dividends, recapitalization or the like, and as adjusted pursuant to
Article III hereof; provided, however, that as to any particular security
contained in Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement; or (ii) they shall have been sold pursuant to Rule 144 (or any
successor provision) under the Securities Act; or (iii) they shall have been
sold, assigned or otherwise transferred to any Person other than those Persons
specified in Section 6.02(i) below ("6.02(i) Persons") and other than to any
spouses, lineal descendants or adopted children of a 6.02(i) Person to whom such
securities are transferred upon the death of any 6.02(i) Person by operation of
law or by bequest.
(p) Registration Statement: Any registration statement of the Company
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference by such registration statement.
(q) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
(r) Securities Act: Securities Act of 1933, as amended.
(s) Warrants: This Warrant and all other warrants that have been or
may be issued to Value Investing Partners, Inc., or its assignees or
transferees, as additional compensation under a Placement Agency Agreement,
dated June 6, 1994, in its or their place.
(t) Warrantholder: The person(s) or entity(ies) to whom this Warrant
is originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(u) Warrant Shares: Common Stock purchasable upon
exercise of the Warrants.
ARTICLE II
Duration and Exercise of Warrant
Section 2.01: Duration of Warrant. Subject to the terms contained herein,
this Warrant may be exercised at any time before 5:00 P.M., New York time, on
the Expiration Date (or, if such day is not a Business Day, at or before 5:00
P.M., New York time, on the next following Business Day). If this Warrant is not
exercised at or before 5:00 P.M., New York time, on the Expiration Date, it
shall become void, and all rights hereunder shall thereupon cease.
Section 2.02: Exercise of Warrant.
(a) (i) The Warrantholder may exercise this Warrant, in whole or in
part, upon surrender of this Warrant with the Subscription Form hereon duly
executed, to the Company at its corporate office at 00 Xxxxx Xxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, or to such other office as the Company has given due
notice thereof to the Warrantholder, together with the full Exercise Price for
each Warrant Share to be purchased by wire transfer, certified check or bank
draft payable in United States Dollars to the order of the Company, or by
delivering to the Company the number of shares of the Company's Common Stock
having a value on the date of exercise equal to such Exercise Price.
(ii) Notwithstanding this Section 2.02 or any other provision of
this Warrant to the contrary, the Warrantholder may, upon any full or partial
exercise of the Warrants, at its election, pay the Exercise Price applicable to
such exercise by receiving from the Company upon such exercise the number of
shares of Common Stock equal to the number of shares otherwise issuable upon
such exercise, less the number of shares of Common Stock having a value on the
date of exercise equal to such Exercise Price, to the extent permitted under
Delaware law.
(iii) For purposes of this Section 2.02(a), the value of shares of
Common Stock on any date shall be equal to the average of the bid and asked
prices of the Company's Common Stock on the New York Stock Exchange (or the
closing prices on any national securities exchange or market system on which the
Company's Common Stock is then primarily traded) for the thirty (30) trading
days immediately preceding the date of exercise.
(b) Upon receipt of this Warrant with the Subscription Form duly
executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company shall
cause to be issued certificates for the total number of whole shares of Common
Stock for which this Warrant is being exercised (adjusted to reflect the effect
of the anti-dilution provisions contained in Article III hereof, if any, and as
provided in Section 4.04 hereof) in such denominations in multiples as are
requested by the Warrantholder, and the Company shall promptly deliver such
certificates to the Warrantholder. If at the time this Warrant is exercised, a
registration statement is not in effect to register under the Securities Act the
Warrant Shares issuable upon exercise of this Warrant, the Company may require
the Warrantholder to make such investment intent representations, and may place
such legends on certificates representation the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
(c) In case the Warrantholder shall exercise this Warrant with respect
to less than all of the Warrant Shares that may be purchased under this Warrant,
the Company will execute a warrant in the form and on the terms of this Warrant
for the balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company covenants and agrees that it will pay when due and
payable any and all stock transfer and similar taxes which may be payable in
respect of the issue of this Warrant or in respect of the issue of any Warrant
Shares. The Company shall not, however, be required to pay any tax imposed on
income or gross receipts or any tax which may be payable in respect of any
transfer involved in the issuance or delivery of this Warrant or at the time of
surrender and, until the payment of such tax, shall not be required to issue
such Warrant Shares.
ARTICLE III
Adjustment of Shares of Common Stock
Purchasable and of Exercise Price
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
Section 3.01: Mechanical Adjustments.
(a) If at any time prior to the full exercise of this Warrant, the
Company shall (i) pay a dividend or make a distribution on its shares of Common
Stock in shares of Common Stock (other than cash dividends or distributions out
of surplus or earnings); (ii) subdivide, reclassify or recapitalize its
outstanding Common Stock into a greater number of shares; or (iii) combine,
reclassify or recapitalize its outstanding Common Stock into a smaller number of
shares, the Exercise Price in effect at the time of the record date of such
subdivision, combination, reclassification or recapitalization shall be
proportionately adjusted so that the Warrantholder shall be entitled to receive
the aggregate number and kind of shares which, if this Warrant had been
exercised in full immediately prior to such time, he would have owned upon such
exercise and been entitled to receive upon such dividend, subdivision,
combination, reclassification or recapitalization. Such adjustment shall be made
successively whenever any event listed in this paragraph 3.01(a) shall occur.
(b) If the Company shall hereafter issue rights, options or warrants
to all holders of its outstanding Common Stock, without charge to such holders,
entitling them to subscribe for or purchase shares of Common Stock (or Common
Stock Equivalents) at a price (or having a conversion price per share) less than
the lower of the exercise price or the current market price of the Common Stock
(as determined pursuant to paragraph (e) of this Section 3.01) on the record
date described below, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the date of such sale or issuance (which date in the
event of distribution to shareholders shall be deemed to be the record date set
by the Company to determine shareholders entitled to participate in such
distribution) by a fraction, the numerator of which shall be (i) the number of
shares of Common Stock outstanding on the date of such sale or issuance, plus
(ii) the number of additional shares of Common Stock which the aggregate
consideration received by the Company upon such issuance or sale (plus the
aggregate of any additional amount to be received by the Company upon the
exercise of such rights or warrants) would purchase at such current market price
per share of the Common Stock; and the denominator of which shall be (i) the
number of shares of Common Stock outstanding on the date of such issuance or
sale, plus (ii) the number of additional shares of Common Stock offered for
subscription or purchase (or into which the Common Stock Equivalents so offered
are convertible). Such adjustments shall be made successively whenever such
warrants or rights are issued. To the extent that shares of Common Stock are not
delivered (or Common Stock Equivalents are not delivered) after the expiration
of such rights or warrants, the Exercise Price shall be readjusted to the
Exercise Price which would then be in effect had the adjustments been made upon
the issuance of such rights or warrants been made upon the basis of delivery of
only the number of shares of Common Stock (or Common Stock Equivalents) actually
delivered.
(c) In case the Company shall hereafter fix a record date for making a
distribution to the holders of Common Stock of assets or evidences of its
indebtedness (excluding cash dividends or distributions out of earnings and
dividends or distributions referred to in paragraph (a) of this Section 3.01) or
Common Stock subscription rights, options or warrants for Common Stock or Common
Stock Equivalents (excluding those referred to in paragraph (b) of this Section
3.01), then in each such case the Exercise Price in effect after such record
date shall be adjusted to the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock (as defined in paragraph (e) of
this Section 3.01), less the fair market value (as determined by the Company's
Board of Directors) of said assets or evidences of indebtedness so distributed
or of such Common Stock subscription rights, option and warrants or of such
Common Stock Equivalents applicable to one share of Common Stock, and the
denominator of which shall be the total number of shares of Common Stock
outstanding multiplied by such current market price per share of Common Stock.
Such adjustment shall be made successively whenever the record date for such
distribution is fixed and shall become effective immediately after such record
date.
(d) Whenever the Exercise Price payable upon exercise of each Warrant
is adjusted pursuant to paragraphs (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the number of
Warrant Shares initially issuable upon exercise of each Warrant by the Exercise
Price in effect on the date thereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing price for 30 consecutive Business Days
commencing 45 Business Days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the representative closing bid price as reported by
NASDAQ (or any stock quotation system on which the Company's Common Stock is
then primarily traded), or if not so available, the fair market price as
determined by the Board of Directors.
(f) No adjustments in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.05)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to paragraph (a) of this Section 3.01, the Warrantholder thereafter
shall become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in paragraphs (a) to (f), inclusive, of this Section
3.01.
Section 3.02: Notice of Adjustment. Whenever the number of Warrant Shares
or the Exercise Price is adjusted as herein provided, the Company shall prepare
and deliver to the Warrantholder a certificate signed by its President, any Vice
President, Treasurer or Secretary, setting forth the adjusted number of shares
purchasable upon the exercise of this Warrant and the Exercise Price of such
shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which adjustment
was made.
Section 3.03: No Adjustment for Dividends. Except as provided in Section
3.01 of this Agreement, no adjustment in respect of any cash dividends shall be
made during the term of this Warrant or upon the exercise of this Warrant.
Section 3.04: Form of Warrant After Adjustments. The form of this Warrant
need not be changed because of any adjustments in the Exercise Price or the
number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
Section 3.05: Preservation of Purchase Rights in Certain
Transactions.
(a) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a publicly traded company, the Company
agrees that a condition of such transaction will be that the Company or such
successor or purchasing corporation, as the case may be, shall assume the
obligations of the Company hereunder in writing. In the case of any such
consolidation, merger or sale or conveyance, the Warrantholder shall have the
right until the expiration date upon payment of the Exercise Price in effect
immediately prior to such action, to receive the kind and amount of shares and
other securities and/or property which it would have owned or have been entitled
to receive after the happening of such consolidation, merger, sale or conveyance
had this Warrant been exercised immediately prior to such action, subject to
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article III. The provisions of this Section
3.05 shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(b) In case of any consolidation of the Company with or a merger of
the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, upon any such consolidation, merger, sale or
conveyance and the surviving entity is a non-publicly traded company, the
Company agrees that a condition of such transaction will be that the Company
shall mail to the Warrantholder at the earliest applicable time (and, in any
event not less than 20 days before any record date for determining the persons
entitled to receive the consideration payable in such transaction) written
notice of such record date. Such notice shall also set forth facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price of and the kind and amount of the
shares of stock and other securities and property deliverable upon exercise of
this Warrant.
ARTICLE IV
Other Provisions Relating
to Rights of Warrantholders
Section 4.01: No Rights as Shareholders: Notice to Warrantholders. Nothing
contained in this Warrant shall be construed as conferring upon the
Warrantholder or its transferees the right to vote or to receive dividends or to
consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any other matter
or any rights whatsoever as shareholders of the Company, except to the extent
specifically provided for herein.
Section 4.02: Lost, Stolen Mutilated or Destroyed Warrants. If this Warrant
is lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may in its discretion impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
of like denomination and tenor as, and in substitution for, this Warrant.
Section 4.03: Reservation of Shares.
(a) The Company covenants and agrees that at all times it shall
reserve and keep available for the exercise of this Warrant such number of
authorized shares of Common Stock as are sufficient to permit the exercise in
full of this Warrant.
(b) Prior to the issuance of any shares of Common Stock upon exercise
of this Warrant, the Company shall use its best efforts to secure the listing of
such shares of Common Stock upon the securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed.
(c) The Company covenants that all shares of Common Stock issued on
exercise of this Warrant will be validly issued, fully paid, non-assessable and
free of preemptive rights.
Section 4.04: No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue any
fraction of a share in connection with the exercise of this Warrant, and in any
case where the Warrantholder would, except for the provisions of this Section
4.04, be entitled under the terms of this Warrant to receive a fraction of a
share upon exercise of this Warrant and receipt of the Exercise Price, issue the
larger number of whole shares purchasable upon exercise of this Warrant. The
Company shall not be required to make any cash or other adjustment in respect of
such fraction of a share to which the Warrantholder would otherwise be entitled.
ARTICLE V
Treatment of Warrantholder
Prior to due presentment for registration or transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
the purpose of any exercise hereof and for all other purposes of the Company
shall not be affected by any notice to the contrary.
ARTICLE VI
Split-Up, Combination
Exchange and Transfer of Warrants
Section 6.01: Split-Up, Combination, Exchange and Transfer of Warrants.
Subject to and limited by the provisions of Section 6.02 hereof, this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, it
shall make such request in writing delivered to the Company and shall surrender
to the Company this Warrant and any other Warrants to be so split up, combined
or exchanged. Upon any such surrender for a split-up, combination or exchange,
the Company shall execute and deliver to the person entitled thereto a Warrant
or Warrants, as the case may be, as so requested. The Company shall not be
required to effect any split-up, combination or exchange which will result in
the issuance of a Warrant entitling the Warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split-up,
combination or exchange of Warrants.
Section 6.02: Restrictions on Transfer. This Warrant may not be sold,
hypothecated exercised, assigned or transferred (a "Transfer"), except (i) to
Value Investing Partners, Inc., any successor to the business of such company,
or any officer, director, stockholder or employee of such company, or a member
of such transferee's immediate family or a trust for the benefit of any such
person, or (ii) to any underwriter in connection with a Public Offering of the
Company's Common Stock, provided (as to (ii)) that this Warrant is exercised
immediately upon such Transfer and the Common Stock issued upon such exercise is
sold by such underwriter as part of such Public Offering and, as to (i) and
(ii), only in accordance with and subject to the provisions of the Securities
Act and the rules and regulations promulgated thereunder. If at the time of such
a Transfer a Registration Statement is not in effect to register this Warrant
under the Securities Act, the Company may require the Warrantholder to make such
representations, and may place such legends on certificates representing this
Warrant, as may be reasonably required in the opinion of counsel to the Company
to permit such a Transfer without such registration.
ARTICLE VII
Registration Under the Securities Act of 1933
Section 7.01: Piggyback Registration.
(a) Right to Include Registrable Securities. If at any time prior to
the Expiration Date the Company proposes to register any class of debt or equity
security or any Common Stock Equivalent under the Securities Act on any form for
the registration of securities under such Act, whether or not for its own
account (other than a registration form relating to (i) a registration of a
stock option, stock purchase or compensation or incentive plan or of stock
issued or issuable pursuant to any such plan, or a dividend investment plan;
(ii) a registration of securities proposed to be issued in exchange for
securities or assets of, or in connection with a merger or consolidation with,
another corporation; or (iii) a registration of securities proposed to be issued
in exchange for other securities of the Company) in a manner which would permit
registration of Registrable Securities for sale to the public under the
Securities Act (a "Piggyback Registration"), it will at such time give prompt
written notice to all Holders of Registrable Securities of its intention to do
so and of such Holders' rights under this Section 7.01. Such rights are referred
to hereinafter as "Piggyback Registration Rights". Upon the written request of
any such Holder made within 20 days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Holder and the intended method of disposition thereof), the Company will
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof provided that
the Company need not include any such Registrable Securities in Registration
Statements filed after the Expiration Date.
(b) Withdrawal of Piggyback Registration by Company. If, any time
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement filed in connection with such Piggyback Registration, the
Company shall determine for any reason not to register such securities, the
Company will give written notice of such determination to each Holder and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 7.02 shall cease if the Company
determines to terminate any registration where Registrable Securities are being
registered pursuant to this Section 7.01.
(c) Piggyback Registration of Underwritten Public Offerings. If a
Piggyback Registration requested pursuant to this Section 7.01 involves an
underwritten offering, then, (i) all Holders requesting to have their
Registrable Securities included in the Company's registration must sell their
Registrable Securities to the underwriters selected by the Company on the same
terms and conditions as apply to other selling shareholders; and (ii) any Holder
requesting to have its Registrable Securities included in such registration may
elect in writing, not later than three (3) Business Days prior to the
effectiveness of the Registration Statement filed in connection with such
registration, not to have its Registrable Securities so included in connection
with such registration.
(d) Payment of Registration Expenses for Piggyback Registration. The
Company will pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 7.01, except for the fees and disbursements of any
counsel retained by the Holders of the Registrable Securities being so
registered.
(e) Priority in Piggyback Registration. If a Piggyback Registration
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number or kind of Registrable
Securities requested to be included in such Piggyback Registration would have a
material adverse effect on such offering, including a significant decrease in
the price at which such securities can be sold, then the Registrable Securities
to be offered for the accounts of Holders pursuant to a Piggyback Registration
Right shall be eliminated entirely or reduced pro rata as to all requesting
Holders on the basis of the relative number of Registrable Securities to be
included in such offering to the amount recommended by such managing
underwriter; provided, however, that no securities may be offered in such
registration for the account of persons other than the Company by virtue of
their also having "piggyback" registration rights, or otherwise, unless the
Registrable Securities requested to be included in such registration are so
included on a pro rata basis (by percentage of each class of securities) as to
such other persons holding "piggyback" rights and the Holders requesting
registration.
(f) Expiration of Piggyback Registration Rights. The Piggyback
Registration Rights shall survive the exercise of the Warrant or the
transactions or events pursuant to which such Registrable Securities were
issued, but all such rights will terminate in all events on the Expiration Date.
The Holders, as a group, shall be limited to three Piggyback Registrations under
this Section 7.01.
Section 7.02: Demand Registration.
(a) Request for Registration. Subject to the limitations set forth
below in this Section 7.02, any Holder or Holders may after June 22, 1995 from
time to time but prior to nine (9) months after the Expiration Date make written
requests for the registration under the Securities Act of their Registrable
Securities (a "Demand Registration") provided the number of Warrant Shares
subject to the request is all Warrant Shares issuable under this Warrant and any
other outstanding Warrants, as well as all warrant shares issuable under
warrants granted to Value Investing Partners, Inc. as additional compensation
under a Placement Agency Agreement, dated September 11, 1992. The Company shall
use its best efforts to effect such Demand Registration. The Holders, as a
group, shall be limited to one Demand Registration, and thereafter may not make
any further written requests for registration under this Section 7.02.
(b) Limitations on Demand Registration. The Company shall not be
required to effect a Demand Registration sooner than (i) for a sixty (60)
day period following the effective date of a registration statement pertaining
to an underwritten Public Offering for the account of the Company; (ii) if the
Company, in its reasonable judgment, determines that registration at the time
requested by the Holders would materially adversely affect the Company, by,
among other things, requiring disclosure of, any litigation or transactions at
an inopportune time, in which case the obligation of the Company to register any
Registrable Securities shall be delayed until the reason for such adverse affect
has ceased to exist; or (iii) if the timing of the Demand Registration is such
that a special audit of the Company would be required in connection with the
preparation of financial statements for the registration.
Section 7.03: Registration Procedures. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Article VII,
the Company will, as expeditiously as practicable:
(a) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (h) below ceases to be true and correct; (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, and (vi) of
the happening of any event that makes any statement made in the Registration
Statement, the Prospectus or any document incorporated therein by reference
untrue or which requires the making of any changes in the Registration Statement
or Prospectus so that they will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(b) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(c) if reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or
"best-efforts" underwritten) offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(d) furnish to each selling Holder of Registrable Securities and each
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by all
exhibits (including those incorporated by reference);
(e) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company consents
to the use of such Prospectus or any amendment or supplement thereto by each of
the selling Holders of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(f) prior to any public offering of Registrable Securities, cooperate
with the selling Holders of Registrable Securities, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing, use its reasonable
efforts to keep each such registration or qualification effective during the
period such Registration Statement is required to be kept effective and any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject the Company to general
service of process in any jurisdiction where it is not at the time so subject or
would subject the principal stockholders of the Company to any restrictions on
the resale or transfer of their shares of the Company's Common Stock;
(g) cooperate with the selling Holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
to the underwriters;
(h) upon the occurrence of any event contemplated by paragraph (a)(vi)
above, prepare a supplement or post-effective amendment to the applicable
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement or a material fact or omit
to state any material fact necessary to make the statements therein not
misleading;
(i) with respect to each issue or class of Registrable Securities, use
its best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange on which similar securities
issued by the Company are listed, if so requested by the Holders of a majority
of such Registrable Securities;
(j) except as otherwise provided in this Agreement, the Company shall
have sole control in connection with the preparation, filing, withdrawal,
amendment or supplementing of each Registration Statement, the selection of
underwriters, and the distribution of any preliminary prospectus included in the
Registration Statement, and may include within the coverage thereof additional
shares of Common Stock or other securities for its own account or for the
account of one or more of its other security holders;
(k) Holders of Registrable Securities shall have no registration
rights hereunder in respect of any proposed transfer of such securities if, in
the opinion of recognized securities counsel to the Company (A) registration
under the Securities Act is not required for the transfer of the Registrable
Securities in the manner provided by such Holder and that there are no further
Securities Act resale restrictions on the Registrable Securities or (B) a
post-effective amendment to an existing registration statement would be legally
sufficient for such transfer.
Section 7.04: Agreements by Selling Holders.
(a) The Company may require each seller of Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding the distribution of such securities and such other
information as may otherwise be required by the Securities Act to be included in
such Registration Statement, as the Company may from time to time reasonably
request in writing.
(b) Each Holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 7.03(a) or (b)
hereof, such Holder will forthwith discontinue disposition of such Registrable
Securities covered by such Registration Statement or Prospectus until such
Xxxxxx's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7.03(h) hereof, or until it is advised in writing by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in such Prospectus, and, if so directed by the Company, such holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Each Holder of Registrable Securities agrees to notify the Company upon
completion of its distribution of such Registrable Securities.
(c) Each holder of Registrable Securities whose Registrable Securities
are covered by a Registration Statement filed pursuant to Article VII hereof
agrees, if requested by the managing underwriters in any underwritten offering,
not to effect any public sale or distribution of any securities of the Company
of the same class as the securities included in such Registration Statement,
including a sale pursuant to rule 144 under the Securities Act (except as part
of such underwritten registration), during any period during which the officers
and directors of the Company and any other selling shareholders included in such
Registration Statement are similarly restricted in the sale or distribution of
any securities of the Company pursuant to such Registration Statement, to the
extent timely notified in writing by the managing underwriters.
Section 7.05: Indemnification.
(a) Indemnification by Company. The Company agrees to indemnify and
hold harmless, to the full extent permitted by the law, each Holder, its
officers, directors and agents and each Person who controls such Holder or
agents (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses caused by any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, 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 not misleading, except insofar as the same are contained in any
information furnished in writing to the Company by such Holder expressly for use
therein; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or in based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any preliminary prospectus if (i) such
Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of Registrable Securities and (ii)
the Prospectus would have corrected such untrue statement or omission; and
provided, further, that the Company shall not be liable in any such case to the
extent that any such loss claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and if, having previously been furnished by or on
behalf of the Company with copies of the Prospectus as so amended or
supplemented, such Holder thereafter fails to deliver or cause to be delivered
such Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Registrable Security to the person asserting such loss, claim, damage,
liability or expense who purchased such Registrable Security from such Holder.
The Company will also indemnify underwriters, selling brokers, dealer managers,
and similar securities industry professionals participating in the distribution
their officers and directors and each person who controls such Persons (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if
requested.
(b) Indemnification by Holder of Registrable Securities. In connection
with any registration, each Holder will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any Registration Statement or Prospectus and agrees to
indemnify, to the same extent as the indemnification provided by the Company in
Section 7.05(a), the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue statement
of a material fact or any omission of a material fact required to be stated in
any Registration Statement or Prospectus or preliminary prospectus or necessary
to make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in or based upon any
information or affidavit so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or Prospectus. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers, and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information so furnished in writing by
such Persons specifically for inclusion in any prospectus or Registration
Statement.
(c) Conduct of Indemnification Procedure. Any party that proposes to
assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served, No
indemnification provided for hereunder shall be available to any party who shall
fail to give notice as provided in this Section 7.05(c) if the party to whom
notice was not given was unaware of the proceeding to which such notice would
have related and was prejudiced by the failure to give such notice but the
omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any
indemnified party for contribution or otherwise than under this Section. In case
any such action, suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnifying party to such indemnified party of its election so
to assume the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses, except as provided below and except for the
reasonable costs of investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The indemnified party shall have
the right to employ its counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in writing
by the indemnifying parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such action
(in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
ARTICLE VIII
Other Matters
Section 8.01: Expenses of Transfer. The Company will from time to time
promptly pay, subject to the provisions of Section 6.01 and paragraph (d) of
Section 2.02, all taxes and charges that may be imposed upon the Company in
respect to the issuance or delivery of Warrant Shares upon the exercise of this
Warrant by the Warrantholder.
Section 8.02: Successors and Assigns. All the covenants and provisions of
this Warrant by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 8.03: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waiver or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of the outstanding Warrants. Holders shall be bound by
any consent authorized by this Section whether or not certificates representing
such Warrants have been marked to indicate such consent.
Section 8.04: Counterparts. This Warrant may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
Section 8.05: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware.
Section 8.06: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
Section 8.07: Integration/Entire Agreement. This Warrant is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Warrant supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
Section 8.08: Notices. Notice or demand pursuant to this Warrant to be
given or made by the Warrantholder to or on the Company shall be sufficiently
given or made if sent by first class mail, postage prepaid, to the Warrantholder
or the Holder of Registrable Securities at its last known address as it shall
appear on the books of the Company, and to the Company at 00 Xxxxx Xxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxx 00000, or to such other address as may be duly given to such
Holder.
Section 8.09: Headings. The Article headings herein are for
convenience only and are not part of this Warrant and shall not
affect the interpretation thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Comp
any under its corporate seal as of the 23nd day of June, 1994.
ARX, INC.
By:________________________________
Name: Xxxxxxx Xxxxx
Title: President
(Corporate Seal)
ATTEST:
------------------------------
_________________, Secretary
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________________ hereby sells, assigns and
transfers unto ______________________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ______________________ attorney, to transfer said Warrant
Certificate on the books of ARX, Inc. with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrants
----------- ------- ---------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated: ______________ ___, 19__.
-----------------------------------
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.
EXERCISE FORM
(To be executed upon exercise of Warrant)
ARX, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
_________ shares of Common Stock, as provided for therein, at an aggregate
exercise price of $_____, and tenders herewith payment of the purchase price in
full in the form of a wire transfer, a certified or bank draft in the amount of
$_______, and/or _____ shares of Common Stock of ARX, Inc. having a fair market
value of $_____.
Please issue a certificate or certificates for such Common
Shares in the name of
Name__________________________
(Please Print)
--------------------------
Address
--------------------------
--------------------------
Social Security No.
Signature______________________
Note: The above signature
should correspond
exactly with the
name on the first
page of this Warrant
Dated: _______________ ___, 19__. Certificate.
And if said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of the undersigned for the balance remaining of the number of whole shares
purchasable thereunder.
