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EXHIBIT 10.114
NEITHER THIS SPRINGING WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS SPRINGING WARRANT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND NEITHER THIS SPRINGING WARRANT NOR THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THIS SPRINGING WARRANT MAY BE TRANSFERRED EXCEPT AS PROVIDED IN
SECTION 3 OF THIS SPRINGING WARRANT.
SPRINGING WARRANT
to Purchase Common Stock of
Wilshire Technologies, Inc.
Subject to the occurrence of the conditions set forth in Section
8 hereof, this Springing Warrant certifies that Trilon Dominion Partners,
L.L.C., a Delaware limited liability company, or registered assigns (the
"Holder"), is entitled to subscribe for and purchase from Wilshire Technologies,
Inc., a corporation organized under the laws of the State of California (the
"Company"), all or any part of duly authorized, validly issued, fully paid and
nonassessable shares of the Company's common stock, no par value per share (the
common stock, including any stock into which it may be changed, reclassified, or
converted, and as it may be adjusted pursuant to Section 10 below, is herein
referred to as the "Common Stock"), as comprise 250,000 shares at a purchase
price per share equal to the average of the highest reported bid and lowest
reported asked prices for the Common Stock on December 31, 1998, as reported by
the National Association of Securities Dealers, Inc. through NASDAQ, or if no
such prices are quoted on such date, said average on the most recent trading day
prior to such date on which such prices were quoted (as it may be adjusted
pursuant to Section 10(B), the "Exercise Price"). This Springing Warrant may be
exercised only as provided in Section 8 hereof. The maximum number of shares so
issuable under this Springing Warrant is sometimes referred to as the "Aggregate
Number," and initially the Aggregate Number is 250,000.
This Springing Warrant is issued pursuant to that certain Amended
and Restated Credit Agreement and Revolving Line of Credit, dated as of March
31, 1998, by and between the Company and the Holder (the "Credit Agreement").
Pursuant to the Credit Agreement, the Holder has agreed to extend credit to the
Company in the aggregate principal amount of $7,493,296.92, evidenced by a Grid
Promissory Note dated March 31, 1998, issued by the Company in favor of the
Holder in an aggregate principal amount of $7,493,296.92 and bearing interest at
the prime rate published in The Wall Street Journal (Eastern Edition) plus 3%
(the "Note").
This Springing Warrant is subject to the following provisions,
terms and conditions:
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Section 1. Exercise of Springing Warrant.
To exercise this Springing Warrant in whole or in part, the
Holder shall deliver to the Company at its principal office in Carlsbad,
California (a) a written notice, in substantially the form of the Subscription
Notice appearing at the end of this Springing Warrant, of the Holder's election
to exercise this Springing Warrant, which notice shall specify the number of
shares of Common Stock to be purchased, (b) cash or a certified check payable to
the Company, or by crediting such amount against outstanding indebtedness
(including principal and accrued interest thereon) of the Company to the Holder
hereof, if any, at the time of exercise, including any portion of the Note, in
an amount equal to the Exercise Price and (c) this Springing Warrant. The
Company shall as promptly as practicable, and in any event within 15 days
thereafter, execute and deliver or cause to be executed and delivered, in
accordance with such notice, a certificate or certificates representing the
aggregate number of shares of Common Stock specified in such notice. The stock
certificate or certificates so delivered shall be in the denomination of 1,000
shares each or such lesser or greater denomination as may be specified in such
notice and shall be issued in the name of the Holder or such other name as shall
be designated in such notice. Such certificate or certificates shall be deemed
to have been issued and the Holder or any other person so designated to be named
therein shall be deemed for all purposes to have become a holder of record of
such shares as of the date such notice, with receipt of this Springing Warrant
and payment of the Exercise Price, is received by the Company as aforesaid. If
this Springing Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of said certificate or certificates, deliver to
the Holder a new springing warrant evidencing the rights of the Holder to
purchase the remaining shares of Common Stock called for by this Springing
Warrant, which new springing warrant shall in all other respects be identical to
this Springing Warrant, or, at the request of the Holder, appropriate notation
may be made on this Springing Warrant and the same returned to the Holder. The
Company shall pay all expenses, taxes and other charges payable in connection
with the preparation, issue and delivery of such stock certificates and new
springing warrants, except that, in case such stock certificates or new
springing warrants shall be registered in a name or names other than the name of
the Holder, funds sufficient to pay all stock transfer taxes that are payable
upon the issuance of such stock certificate or certificates or new springing
warrants shall be paid by the Holder at the time of delivering the notice of
exercise mentioned above.
Subject to compliance with applicable securities laws and the
terms of this Agreement, all shares of Common Stock issued upon the exercise of
this Springing Warrant shall be validly issued, fully paid and nonassessable
and, if the Common Stock is then listed on a securities exchange, or quoted on
an automated quotation system, shall be duly listed or quoted thereon.
The Company shall not be required upon any exercise of this
Springing Warrant to issue a certificate representing any fraction of a share of
Common Stock, but, in lieu thereof, shall pay to the Holder cash in an amount
equal to a corresponding fraction (calculated to the nearest 1/100 of a share)
of the purchase price of one share of Common Stock as of the date of receipt by
the Company of notice of exercise of this Springing Warrant.
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Section 2. Transfer, Division and Combination.
The Company agrees to maintain at its principal office in
Carlsbad, California, books for the registration and transfer of this Springing
Warrant, and, subject to the provisions of Section 3 hereof, this Springing
Warrant and all rights hereunder are transferable, in whole, on such books at
such office, upon surrender of this Springing Warrant at such office, together
with a written assignment of this Springing Warrant duly executed by the Holder
or his agent or attorney, and funds sufficient to pay any stock transfer taxes
payable upon the making of such transfer. Upon such surrender and payment, the
Company shall execute and deliver a new springing warrant or springing warrants
in the name of the assignee or assignees and in the denominations specified in
such instrument of assignment, and this Springing Warrant shall promptly be
canceled. A springing warrant may be exercised by a new holder for the purchase
of shares of Common Stock without having a new springing warrant issued.
This Springing Warrant may be divided or combined with other
Springing Warrants upon presentation hereof at such principal office in
Carlsbad, California, together with a written notice specifying the names and
denominations in which new Springing Warrants are to be issued, signed by the
Holder or his agent or attorney. Subject to compliance with the preceding
paragraph as to any transfer that may be involved in such division or
combination, the Company shall execute and deliver a new Springing Warrant or
Springing Warrants in exchange for the Springing Warrant or Springing Warrants
to be divided or combined in accordance with such notice.
Section 3. Restrictions on Exercise and Transfer of Springing
Warrants and Common Stock.
This Springing Warrant shall be exercisable (a) only under
circumstances such that the issue of Common Stock issuable upon such exercise is
exempt from the requirements of registration under the Securities Act of 1933,
as amended (or any similar statute then in effect) (the "1933 Act") and any
applicable securities law or (b) upon registration of such Common Stock in
compliance therewith. This Springing Warrant shall be transferable only under
circumstances such that the transfer is exempt from the requirements of
registration under the 1933 Act and any applicable securities law. By acceptance
hereof, the Holder agrees to comply with such legislation.
Before any transfer or attempted transfer of all or any part of
this Springing Warrant or such Common Stock, the Holder shall give the Company
written notice of its intention so to do, describing briefly the manner of any
such proposed transfer. Promptly after receiving such written notice, the
Company shall present copies thereof to Company counsel and, if the Company
requests the Holder to designate special counsel therefor, to any special
counsel designated by the Holder that is reasonably satisfactory to the Company.
If, in the opinion of counsel for the Company and counsel, if any, for the
Holder, the proposed transfer may be effected without registration under the
1933 Act and any applicable state securities law of any such securities, the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the securities proposed to be transferred may be transferred in
accordance with the
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terms of such notice. The Company shall not be required to effect any such
transfer before the receipt of such favorable opinion or opinions or the
effectiveness of registration.
Section 4. Certain Covenants.
The Company covenants and agrees that it will at all times
reserve and set apart and have, free from preemptive rights, a number of shares
of authorized but unissued Common Stock, or other stock or securities
deliverable pursuant to this Springing Warrant, sufficient to enable it at any
time to fulfill all its obligations hereunder.
Section 5. Notices.
In the event that:
(a) the Company proposes to pay any dividend payable in
stock (of any class or classes) or in Convertible Securities, as defined
below, upon its Common Stock or make any distribution (other than
ordinary cash dividends) to the holders of its Common Stock,
(b) the Company proposes to grant to the holders of its
Common Stock generally any rights or options,
(c) the Company proposes to effect any capital
reorganization or reclassification of capital stock of the Company,
(d) the Company proposes to consolidate with, or merge
into, any other corporation or to transfer its property as an entirety
or substantially as an entirety, or
(e) the Company proposes to effect the liquidation,
dissolution or winding up of the Company,
then the Company shall cause notice of any such intended action to be given to
the holder(s) of record of outstanding "Springing Warrants" (as hereinafter
defined) not less than 20 days before the date on which the transfer books of
the Company shall close or a record shall be taken for such stock dividend,
distribution or granting of rights or options, or the date when such capital
reorganization, reclassification, consolidation, merger, transfer, liquidation,
dissolution or winding up shall be effective, as the case may be.
Any notice or other document required or permitted to be given or
delivered to holders of record of Springing Warrants shall be delivered by
facsimile, reliable courier or first-class mail postage prepaid to each such
holder at the last address shown on the books of the Company maintained for the
registry and transfer of the Springing Warrants. Any notice or other document
required or permitted to be
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given or delivered to holders of record of Common Stock issued pursuant to
Springing Warrants shall be delivered by facsimile, reliable courier or
first-class mail postage prepaid to each such holder at such holder's address as
the same appears on the stock records of the Company. Any notice or other
document required or permitted to be given or delivered to the Company shall be
delivered by facsimile, reliable courier or first-class mail postage prepaid to
the principal office of the Company, in Carlsbad, California, or delivered to
the office of one of the Company's executive officers at such address, or such
other address as shall have been furnished by the Company to the holders of
record of such Springing Warrants and the holders of record of such Common
Stock.
Section 6. Limitation of Liability; Not Shareholders.
No provision of this Springing Warrant shall be construed as
conferring upon the Holder the right to vote or to consent or to receive
dividends or to receive notice as a shareholder in respect of meetings of
shareholders for the election of directors of the Company or any other matter
whatsoever as shareholders of the Company. No provision hereof, in the absence
of affirmative action by the Holder to purchase shares of Common Stock, and no
mere enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of Holder for the purchase price or as a shareholder of
the Company, whether such liability is asserted by the Company, creditors of the
Company or others.
Section 7. Loss, Destruction, etc. of Springing Warrant.
Upon receipt of evidence satisfactory to the Company of the loss,
theft, mutilation or destruction of any Springing Warrant, and in the case of
any such loss, theft or destruction upon delivery of a bond of indemnity in such
form and amount as shall be reasonably satisfactory to the Company, or in the
event of such mutilation upon surrender and cancellation of the Springing
Warrant, the Company will make and deliver a new Springing Warrant, of like
tenor, in lieu of such lost, stolen, destroyed or mutilated Springing Warrant.
Any Springing Warrant issued under the provisions of this Section 7 in lieu of
any Springing Warrant alleged to be lost, destroyed or stolen, or of any
mutilated Springing Warrant, shall constitute an original contractual obligation
on the part of the Company.
Section 8. Term of Springing Warrant; Shares Issuable Upon
Exercise.
(a) This Springing Warrant shall become exercisable only
in the event that the principal amount, plus all accrued and unpaid
interest, on the Note, shall not be paid in full on or before December
31, 1998.
(b) Upon the occurrence of the event described in Section
8(a), this Springing Warrant shall be exercisable for 250,000 shares, at
any time after the date of such occurrence and on or prior to 5:00 p.m.,
New York, New York time, on December 31, 2003 (the "Maturity Date").
(c) The Holder of this Springing Warrant is hereby
authorized by the Company to record on the grid attached to this
Springing Warrant any increase in the number of shares to be issued upon
exercise of this Springing Warrant.
(d) The Holder of this Springing Warrant covenants and
agrees to surrender the Springing Warrant to the Company for
cancellation in the event the
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outstanding principal amount of the Note, plus all accrued and
unpaid interest, is paid in full on or prior to December 31, 1998.
Section 9. Right to Convert Springing Warrant.
The Holder shall have the right to convert this Springing Warrant
(the "Conversion Right") at any time after such Warrant becomes exercisable and
prior to the expiration of the Maturity Date, into shares of Common Stock in
accordance with this Section 9; provided that the Conversion Right shall be
exercisable only if there is no outstanding indebtedness (including principal
and accrued interest thereon) of the Company to the Holder hereof at the time of
exercise of such Conversion Right.
Upon exercise of the Conversion Right, the Company shall deliver
to the Holder (without payment by the Holder of the Exercise Price) that number
of shares of Common Stock equal to the quotient obtained by dividing (x) the
value of this Springing Warrant at the time the Conversion Right is exercised
(determined by subtracting the aggregate Exercise Price for this Springing
Warrant (in effect immediately prior to the exercise of the Conversion Right)
from the amount obtained by multiplying the number of shares of Common Stock
issuable upon the exercise of this Springing Warrant by the Closing Price (as
defined below) immediately prior to the exercise of the Conversion Right) by (y)
the Closing Price of one share of Common Stock immediately prior to the exercise
of the Conversion Right.
For purposes hereof, the "Closing Price" shall mean the average
of the highest reported bid and lowest reported asked prices on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the highest reported bid and lowest
reported asked prices for the Common Stock as furnished by the National
Association of Securities Dealers, Inc. through NASDAQ or a similar organization
if NASDAQ is no longer reporting such information. If the highest reported bid
and lowest reported asked prices are not reported for the Common Stock, the
"Closing Price" shall be the fair market value of the Common Stock, as
determined in good faith by the Company's Board of Directors.
The Conversion Right may be exercised by the Holder, at any time
or from time to time, prior to its expiration, on any business day by delivering
a written notice (the "Conversion Notice") to the Company at the offices of the
Company, exercising the Conversion Right and specifying (i) the total number of
shares of Common Stock the Holder will purchase pursuant to the conversion and
(ii) a place and date not less than two nor more than seven (7) business days
from the date of the Conversion Notice for the closing of such purchase.
At any closing under this Section 9, (i) the Holder will
surrender this Springing Warrant and (ii) the Company will deliver to the Holder
a certificate or certificates for the number of shares of Common Stock issuable
upon such conversion.
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Section 10. Adjustment of Aggregate Number and Exercise Price
(A) Adjustments of Number of Shares Issuable Pursuant to this Springing
Warrant.
The Aggregate Number shall be subject to adjustment from time to
time as follows and thereafter as adjusted shall be deemed to be the Aggregate
Number hereunder.
(a) In case at any time or from time to time the Company
shall:
(i) take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend
payable in, or other distribution of, Common Stock,
(ii) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock,
(iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or
(iv) enter into any consolidation with or merge
into any other corporation wherein the Company is not the
continuing corporation, or wherein cash or securities of a
corporation other than the Company are distributable to holders
of Common Stock of the Company, or sell or convey its property as
an entirety or substantially as an entirety, and in connection
with such consolidation, merger, sale or conveyance, shares of
stock or cash or other securities shall be issuable or
deliverable in exchange for the Common Stock of the Company,
then the Aggregate Number in effect immediately prior thereto shall be
adjusted so that the holder or holders of this Springing Warrant shall
thereafter be entitled to receive, upon exercise hereof, the number of
shares of Common Stock that such holder or holders would have owned or
have been entitled to receive after the occurrence of such event had
this Springing Warrant been exercised immediately prior to the
occurrence of such event. In case of any such consolidation, merger,
sale or conveyance, appropriate provision (as determined by a resolution
of the Board of Directors of the Company) shall be made with respect to
the rights and interests thereafter of the Holder, to the end that all
the provisions of this Springing Warrant (including adjustment
provisions) shall thereafter be applicable as nearly as reasonably
practicable, in relation to any such stock or other securities.
(b) In case at any time or from time to time the Company
shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive any dividend or other distribution
(collectively, a "Distribution") of:
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(i) cash (other than dividends payable out of
earnings or any surplus legally available for the payment of
dividends under the laws of the state of incorporation of the
Company),
(ii) any evidences of its indebtedness (other than
any obligations or stock convertible into or exchangeable for
shares of Common Stock (such convertible or exchangeable
obligations or stock being hereinafter called "Convertible
Securities")), any shares of its capital stock (other than
additional shares of Common Stock or Convertible Securities) or
any other securities or property of any nature whatsoever (other
than cash), or
(iii) any options or warrants or other rights to
subscribe for or purchase any of the following: any evidences of
its indebtedness (other than Convertible Securities), any shares
of its capital stock (other than additional shares of Common
Stock or Convertible Securities) or any other securities or
property of any nature whatsoever,
then the holder or holders of this Springing Warrant shall be entitled
to receive upon the exercise hereof at any time on or after the taking
of such record the number of shares of Common Stock to be received upon
exercise of this Springing Warrant determined as stated herein and in
addition and without further payment, the cash, stock, securities, other
property, options, warrants and/or other rights to which such holder or
holders would have been entitled by way of the Distribution and
subsequent dividends and distributions to which such holder or holders
would have been entitled by way of the Distribution if such holder or
holders (x) had exercised this Springing Warrant immediately prior to
such Distribution, and (y) had retained the Distribution in respect of
the Common Stock and all subsequent dividends and distributions to which
such holder or holders would have been entitled by way of the
Distribution. A reclassification of the Common Stock into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of such
shares of such other class of stock within the meaning of this paragraph
(b) and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such event shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common
Stock within the meaning of paragraph (a) of this Section 10.
(c) In case at any time or from time to time the Company
shall (except as hereinafter provided) issue or sell any additional
shares of Common Stock or securities at a price which is less than the
Exercise Price, then the Aggregate Number in effect immediately prior
thereto shall be adjusted immediately so that the Aggregate Number
thereafter shall be an amount equal to the product of (x) the percentage
represented by the fraction, the numerator of which is the Aggregate
Number in effect immediately prior to such issuance or sale and the
denominator of which is the total outstanding shares of Common Stock
immediately prior to such issuance or sale (assuming for purposes of
such calculation the exercise of all of the warrants issued by the
Company, and the
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conversion, exercise or exchange of all other securities then
outstanding and convertible, exercisable or exchangeable into shares of
Common Stock) as of the date of the sale or issuance by the Company of
the shares requiring the adjustment to the Aggregate Number pursuant to
this Section 10 (such total number of shares of Common Stock outstanding
immediately prior to such issuance or sale, the "Prior Outstanding
Number"), and (y) the total number of shares of Common Stock outstanding
immediately after such issuance or sale (assuming for purposes of such
calculation (i) the exercise of all of the warrants issued by the
Company, and (ii) the conversion, exercise or exchange of all other
securities then outstanding and convertible, exercisable or exchangeable
into shares of Common Stock) (the "New Outstanding Number");
The provisions of this paragraph (c) shall not apply to
any issuance of additional shares of Common Stock for which an
adjustment is provided under Section 10(A)(a).
(d) In case at any time or from time to time the Company
shall (except as hereinafter provided) take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
distribution of, or shall in any manner issue or sell, any warrants or
other rights to subscribe for or purchase (x) any shares of Common Stock
or (y) any Convertible Securities, whether or not the rights to
subscribe, purchase, exchange or convert thereunder are immediately
exercisable, at a purchase price per share of Common Stock which is less
than the Exercise Price, then the Aggregate Number in effect immediately
prior thereto shall be adjusted immediately so that the Aggregate Number
thereafter shall be an amount equal to the product of (x) the percentage
represented by the fraction, the numerator of which is the Aggregate
Number in effect immediately prior to such distribution, issuance or
sale and the denominator of which is the Prior Outstanding Number and
(y) the New Outstanding Number assuming the exercise of the warrants or
other rights and/or the conversion of the Convertible Securities
distributed, issued or sold at such time.
The provisions of this paragraph (d) shall not apply to
any issuance of additional shares of Common Stock for which an
adjustment is provided under Section 10(A)(a).
(e) In case at any time or from time to time the Company
shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a distribution of or shall in any manner
issue or sell Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, at an
exercise price per share of Common Stock which is less than the Exercise
Price, then the Aggregate Number in effect immediately prior thereto
shall be adjusted immediately so that the Aggregate Number thereafter
shall be an amount equal to the product of (x) the percentage
represented by the fraction, the numerator of which is the Aggregate
Number in effect prior to such distribution, issuance or sale and the
denominator of which is the Prior Outstanding Number and (y) the New
Outstanding Number assuming the conversion of the Convertible Securities
distributed, issued or sold at such time.
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No adjustment of the Aggregate Number shall be made under
this Section 10(A)(e) upon the issuance of any Convertible Securities
which are issued pursuant to the exercise of any warrants or other
subscription or purchase or similar rights if an adjustment shall
previously have been made.
(f) The following provisions shall be applicable to the
making of adjustments of the Aggregate Number and Exercise Price
hereinbefore and hereinafter provided for in this Section 10:
(i) The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the
Company shall be deemed an issuance thereof for the purposes of
this Section 10.
(ii) The adjustments required by the preceding
paragraphs of this Section 10 shall be made whenever and as often
as any specified event requiring an adjustment shall occur,
except as expressly provided herein. For the purpose of any
adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.
(iii) In computing adjustments under this Section
10, fractional interests in Common Stock shall be taken into
account to the nearest one-thousandth (.001) of a share and shall
be aggregated until they equal one whole share.
(iv) If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to
receive a dividend, distribution, warrants or subscription or
purchase or similar rights under Sections 10(A)(a) through
10(A)(e) hereof, but abandon its plan to pay or deliver such
dividend, distribution, warrants, subscription or purchase or
similar rights, then no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made
in respect thereof shall be rescinded and annulled.
(v) Notwithstanding anything herein to the
contrary, no adjustment shall be made to the Aggregate Number as
a result of (x) the issuance of shares of Common Stock issued
upon exercise of this Springing Warrant or any other warrant or
springing warrant heretofore, now or hereafter issued to Holder,
(y) the issuance of securities or options to any employee,
director, officer, contractor or consultant of the Company
pursuant to an approval of the Board of Directors of the Company
or pursuant to any plan approved by the Board of Directors of the
Company, including but not limited to, employee stock options
authorized to be issued pursuant to the Company's 1993 and 1995
Stock Option Plans, or (z) any other warrants or options
outstanding on the date hereof and any other warrants or
springing warrants issued to the Holder.
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(vi) Upon the expiration or termination of any of
the warrants or other rights or options referred to in Section
10(A)(d) above or the Convertible Securities referred to in
Section 10(A)(e) above, the Aggregate Number after the expiration
or termination of any such warrants, rights, options or
Convertible Securities, the issuance of which caused an
adjustment to the Aggregate Number, shall be readjusted to such
Aggregate Number as would have been obtained had the adjustment
made upon the issuance of such warrants, rights, options or
Convertible Securities been made upon the basis of only the
number of shares of Common Stock actually issued upon the
exercise of such warrants, options or rights, upon the conversion
or exchange of such securities or upon the exercise of the
options or rights related to such securities and subsequent
conversion or exchange thereof.
(vii) The consideration for any additional shares
of Common Stock issuable pursuant to any options, warrants or
other rights to subscribe for or purchase the same shall be the
consideration received or receivable by the Company for issuing
such options, warrants or other rights, plus the additional
consideration payable to the Company upon the exercise of such
options, warrants or other rights. The consideration for any
additional shares of Common Stock issuable pursuant to the terms
of any Convertible Securities shall be the consideration received
or receivable by the Company for issuing any options, warrants or
other rights to subscribe for or purchase such Convertible
Securities, plus the consideration paid or payable to the Company
in respect of the subscription for or purchase of such
Convertible Securities, plus the additional consideration, if
any, payable to the Company upon the exercise of the right of
conversion, exercise or exchange of such Convertible Securities.
In case of the issuance at any time of any additional shares of
Common Stock or Convertible Securities in payment or satisfaction
of any dividend upon any class of stock other than Common Stock,
the Company shall be deemed to have received for such additional
shares of Common Stock or Convertible Securities a consideration
equal to the amount of such dividend so paid or satisfied.
(g) If any event occurs as to which the other provisions
of this Section 10 are not strictly applicable but the lack of any
provision for the exercise of the rights of a holder or holders of this
Springing Warrant would not, in the judgment of the Board of Directors
of the Company, fairly protect the purchase rights of such holder or
holders of this Springing Warrant in accordance with the essential
intent and principles of such provisions, or, if strictly applicable,
would not, in the judgment of the Board of Directors of the Company,
fairly protect the conversion rights of the holder or holders of this
Springing Warrant in accordance with the essential intent and principles
of such provisions, then the Company shall appoint a firm of independent
certified public accountants in the United States (which may be the
regular auditors of the Company) of recognized national standing in the
United States reasonably satisfactory to the Holder, which shall give
their opinion as to the adjustments, if any, necessary to preserve
without dilution, on a basis consistent with the essential intent and
principles established in the
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other provisions of this Section 10, the exercise rights of the holder
or holders of this Springing Warrant. Upon receipt of such opinion, the
Company shall forthwith make any adjustments described therein.
(h) Within 45 days after the end of each fiscal quarter
during which an event occurred that resulted in an adjustment pursuant
to this Section 10, the Company shall cause to be promptly mailed to
each holder of this Springing Warrant (and upon the exercise of this
Springing Warrant to the exercising holder) by first-class mail, postage
prepaid, notice of each adjustment or adjustments to the Aggregate
Number effected since the date of the last such notice and a certificate
of the Company's Chief Financial Officer or, in the case of any such
notice delivered within 45 days after the end of a fiscal year, a firm
of independent public accountants in the United States selected by the
Company and acceptable to the Holder (who may be the regular accountants
employed by the Company), in each case, setting forth the Aggregate
Number after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
The fees and expenses of such accountants shall be paid by the Company.
(i) The occurrence of a single event shall not trigger an
adjustment of the Aggregate Number under more than one paragraph of this
Section 10.
(B) Adjustments to Exercise Price.
(a) Stock Split or Combination. The Exercise Price shall
be adjusted from time to time in the case of any stock split, dividend
payable in Common Stock, subdivision of the number of shares of the
Common Stock or similar event involving Common Stock (a "Split") or any
reverse stock split, combination or similar event involving the Common
Stock (a "Combination"), and, accordingly, the Exercise Price shall be
proportionately decreased in the case of a Split or increased in the
case of a Combination, as of the close of business on the date the Split
or Combination becomes effective, computed to the nearest cent.
(b) Issuance of Common Stock. The Exercise Price shall be
adjusted from time to time according to the following provisions:
(i) As used in this Section 10(B)(b), the term
"Additional Shares" means any shares of Common Stock or
Convertible Securities issued by the Company after the date
hereof other than (1) the issuance of shares of Common Stock
issued upon exercise of this Springing Warrant or any other
warrant or springing warrant heretofore, now or hereafter issued
to Holder; (2) shares of Common Stock issued upon the exercise of
any other warrants or options outstanding on the date hereof and
any other warrants or springing warrants issued to the Holder;
(3) the issuance of securities or options to any employee,
director, officer, contractor or consultant of the Company
pursuant to an approval of the Board of Directors of the Company,
including but not limited to, employee stock options authorized
to be issued pursuant to the Company's
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1993 and 1995 Stock Option Plans, and (4) shares issued by the
Company upon any Split or Combination or pursuant to any merger,
recapitalization or other event to which the provisions of
Paragraph 10(A) apply.
(ii) If the Company shall issue any Additional
Shares either (1) without consideration or (2) for a
consideration per share of Common Stock less than the Exercise
Price in effect immediately prior to the issuance of such
Additional Shares or (3) in the case of Convertible Securities,
at an exercise price per share of Common Stock which is less than
the Exercise Price in effect immediately prior to the issuance of
such Additional Shares, then the Exercise Price (as adjusted
previously pursuant to the terms of this Section 10(B)) shall be
adjusted to a price (computed to the nearest cent and shall be
the new Exercise Price) obtained by applying the following
formula:
NP = (AS x OP) + C
------------------
AS + NS
where:
NP equal the new Exercise Price
AS equals the number of shares of Common Stock
outstanding (treasury shares not being deemed to
be outstanding) on the date hereof
OP equals the Exercise Price in effect immediately
prior to the calculation
C equals the aggregate consideration received by the
Company for all Additional Shares which were
issued since the date of the last adjustment
pursuant to this formula, or in the case of the
first such adjustment, which were issued after the
date hereof
NS equals the number of Additional Shares which were
issued after the date hereof
provided, however, that adjustment shall be made only if the
result obtained by applying the foregoing formula yields a new
Exercise Price which is less than the Exercise Price in effect
immediately prior to the issuance of such Additional shares.
Section 11. Registration Rights.
(a) Registrable Stock. As used in this Section 11, the
term "Registrable Stock" shall mean (i) all shares of Common Stock that
may be issued upon
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exercise of this Springing Warrant, and (ii) all shares of Common Stock
that may be issued upon exercise of any Springing Warrant.
References in this Springing Warrant to rules, regulations
and forms promulgated by the Securities and Exchange Commission shall
include rules, regulations and forms succeeding to the functions
thereof, whether or not bearing the same designation.
The rights and obligations of the Company and the Holder
with respect to the Registrable Stock set forth in this Section 11 shall
supersede any registration rights and obligations of the Company and the
Holder existing prior to the date hereof with respect to the Registrable
Stock.
(b) Request for Registration. If the Company shall receive
a written request (specifying that it is being made pursuant to this
Section 11(b)) from the Holder of the Registrable Stock that the Company
file a registration statement under the 1933 Act, or a similar document
pursuant to any other statute then in effect corresponding to the 1933
Act covering the registration of the Registrable Stock, then the Company
shall use its reasonable best efforts to cause all Registrable Stock to
be registered under the 1933 Act.
Notwithstanding the foregoing, (i) the Company shall not
be obligated to effect a registration pursuant to this Section 11(b)
during the period starting with the date 60 days prior to the Company's
estimated date of filing of, and ending on a date 180 days following the
effective date of, a registration statement pertaining to an
underwritten public offering of securities for the account of the
Company, provided that the Company is actively employing in good faith
all reasonable efforts to cause such registration statement to become
effective and that the Company's estimate of the date of filing such
registration statement is made in good faith; and (ii) if the Company
shall furnish to the Holder a certificate signed by the chief executive
officer of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or
its shareholders for a registration statement to be filed in the near
future, then the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed six
months.
Any request for registration under this Section 11(b) must
be for a firmly underwritten public offering to be managed by an
underwriter or underwriters of recognized national standing reasonably
acceptable to the Company.
(c) Company Registration. Subject to Section 11(g), if at
any time the Company proposes to register any of its Common Stock under
the 1933 Act in connection with the public offering of such securities
solely for cash on a form that would also permit the registration of the
Registrable Stock, the Company shall, each such time, promptly give each
holder of Registrable Stock written notice of such determination. Upon
the written request of the Holder as to all of the Registrable Stock,
given within 20 days after mailing of any such notice by the Company,
the Company shall use its
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reasonable best efforts to cause to be registered under the 1933 Act all
of the Registrable Stock.
(d) Obligations of the Company. Whenever required under
Sections 11(b), 11(c) or 11(j) to use its reasonable best efforts to
effect the registration of any Registrable Stock, the Company shall, as
expeditiously as reasonably possible:
(1) prepare and file with the Securities and
Exchange Commission a registration statement with respect to such
Registrable Stock and use its reasonable best efforts to cause
such registration statement to become and remain effective;
provided, however, that in connection with any proposed
registration intended to permit an offering of any securities
from time to time (i.e., a so-called "shelf registration"), the
Company shall in no event be obligated to cause any such
registration to remain effective for more than 90 days;
(2) prepare and file with the Securities and
Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with
the provisions of the 1933 Act with respect to the disposition of
all securities covered by such registration statement;
(3) furnish to the holders of Registrable Stock
such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the 1933 Act,
and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Stock owned by them;
and
(4) use its reasonable best efforts to register and
qualify the securities covered by such registration statement
under such other securities or Blue Sky Laws of such
jurisdictions as shall be reasonably appropriate for the
distribution of the securities covered by the registration
statement.
(e) Furnish Information. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to this
Section 11 that the holders of Registrable Stock shall furnish to the
Company such information regarding them, the Registrable Stock held by
them and the intended method of disposition of such securities as the
Company shall reasonably request and as shall be required in connection
with the action to be taken by the Company.
(f) Expenses of Demand Registration. All expenses incurred
in connection with a registration pursuant to Sections 11(b), 11(c) or
11(j) (excluding underwriters' discounts and commissions), including,
without limitation, all registration and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
and the reasonable fees and disbursements of one counsel for the selling
holders, shall be borne by the Company, except to the extent prohibited
or otherwise restricted by state or federal securities laws or
regulations.
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(g) Underwriting Requirements.
(1) In connection with any offering involving an
underwriting of shares being issued by the Company, the Company
shall not be required under Section 11(c) to include any of the
holders' Registrable Stock in such underwriting unless they
accept the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it or them, and then
only in such quantity as will not, in the written opinion of the
underwriters, jeopardize the success of the offering by the
Company. If the total amount of securities that all holders
request to be included in such offering exceeds the amount of
securities that the underwriters reasonably believe compatible
with the success of the offering, the Company shall only be
required to include in the offering so many of the securities of
the selling holders as the underwriters believe will not
jeopardize the success of the offering, shall so advise all
selling holders of Registrable Stock, and the number of shares of
securities that are entitled to be included in the offering and
underwriting shall be allocated first, to the Company for
securities being sold for its own account, second, among all such
selling holders of Registrable Stock and, third, among all other
selling stockholders, in each case in proportion, as nearly as
practicable, to the respective total amounts of securities owned
by said selling holders of Registrable Stock and other selling
stockholders. If any selling holder of Registrable Stock or any
other selling stockholder disapproves of the terms of any such
underwriting, he, she or it may elect to withdraw therefrom by
written notice to the Company and the underwriter.
(2) In connection with any offering initiated by
any holders of Registrable Stock involving an underwriting of
shares being sold by such holders of Registrable Stock, such
holders shall not be required under Section 11(b) to include any
shares being issued by the Company or sold by any other selling
stockholders in such underwriting unless the Company and such
other selling stockholders accepts the terms of the underwriting
as agreed upon between such holders of Registrable Stock and the
underwriters selected by it and reasonably acceptable to the
Company, and then only in such quantity as will not, in the
written opinion of the underwriters, jeopardize the success of
the offering by such holders. If the total amount of securities
that all holders request to be included in such offering exceeds
the amount of securities that the underwriters reasonably believe
compatible with the success of the offering, the holders of
Registrable Stock shall only be required to include in the
offering so many of the securities of the Company as the
underwriters believe will not jeopardize the success of the
offering, shall so advise the Company and such other selling
stockholders, and the number of shares of securities that are
entitled to be included in the offering and underwriting shall be
allocated first, among all such selling holders of Registrable
Stock and other securities of the Company held by such holders,
second, to the Company for securities being sold for its own
account and, third, among all other selling stockholders. If some
but not all of the
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securities in any of the foregoing classes are includable in the
offering the holders in such class shall be permitted to
participate in the offering pro rata, as among holders in such
class. If the Company of any other selling stockholder
disapproves of the terms of any such underwriting, he, she or it
may elect to withdraw therefrom by written notice to the holders
of Registrable Stock and the underwriter.
(h) Delay of Registration. No holders of Registrable Stock
shall have any right to take any action to restrain, enjoin or otherwise
delay any registration as the result of any controversy that might arise
with respect to the interpretation or implementation of this Section 11.
(i) Indemnification. In the event any shares of
Registrable Stock are included in the registration statement under this
Section 11:
(1) to the extent permitted by law, the Company
will indemnify and hold harmless each holder of Registrable Stock
requesting or joining in a registration, any underwriter (as
defined in the 0000 Xxx) for it and each person, if any, who
controls such holder or underwriter within the meaning of the
1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based on any untrue or alleged untrue statement of any material
fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or arise out of any
violation by the Company of any rule or regulation promulgated
under the 1933 Act applicable to the Company and relating to
action or inaction required of the Company in connection with any
such registration; and will reimburse each such holder, such
underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, -------- however, that the indemnity agreement
contained in this Section 11(i)(1) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld) nor
shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with
such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance
upon and in conformity with written information furnished
expressly for use in connection with such registration by any
such holder, underwriter or controlling person;
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(2) to the extent permitted by law, each holder
requesting or joining in a registration will indemnify and hold
harmless the Company, each of its directors, each of its officers
who have signed the registration statement, each person, if any,
who controls the Company within the meaning of the 1933 Act and
each agent and any underwriter for the Company (within the
meaning of the 0000 Xxx) against any losses, claims, damages or
liabilities to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with
written information furnished by such holder expressly for use in
connection with such registration; and each such holder will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent
or underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 11(i)(2)
shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of such holder (which consent shall not be
unreasonably withheld); and
(3) promptly after receipt by an indemnified party
under this paragraph of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this paragraph,
notify the indemnifying party in writing of the commencement
thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such
action, if prejudicial to his ability to defend such action,
shall relieve such indemnifying party of any liability to the
indemnified party under this paragraph, but the omission so to
notify the indemnifying party will not relieve him of any
liability that he may have to any indemnified party otherwise
than under this paragraph.
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(j) Registrations on Form S-3.
(1) If (i) the Holder requests in writing
(specifying that the request is being made pursuant to this
Section 11(j)) that the Company file a registration statement on
Form S-3 under the 1933 Act ("Form S-3") (or any successor form
to Form S-3 regardless of its designation) for a public offering
of shares of all of the Registrable Stock, the reasonably
anticipated aggregate price to the public of which would exceed
$500,000, and (ii) the Company is a registrant entitled to use
Form S-3 to register such shares, then the Company shall use its
reasonable best efforts to cause such shares to be registered on
Form S-3 (or any successor form to Form S-3).
(2) All expenses incurred in connection with a
registration requested pursuant to Section 11(j)(1) (excluding
underwriters' discounts and commissions), including, without
limitation, all registration, qualification, printing and
accounting fees, and reasonable fees and disbursements of one
counsel for the selling holder or holders and counsel for the
Company, shall be borne by the Company.
(3) Holders' rights to registration under this
Section 11(j) are in addition to, and not in lieu of, their
rights to registration under Sections 11(b) and 11(c).
(k) Termination of the Company's Obligations. The Company
shall have no obligations pursuant to Sections 11(b), 11(c) or 11(j) as
to Holder after the Company has included Registrable Stock of Holder in
a registration pursuant to Sections 11(b), 11(c) or 11(j); provided,
however, that if Holder has requested that all of its Registrable Stock
be registered under Section 11(c), but Holder shall be prohibited from
selling all of such stock by virtue of Section 11(g), then Holder's
rights shall not be restricted by the provisions of this Section 11(k)
until such time as it has had an opportunity to sell all of its
Registrable Stock.
(l) Reports Under Securities Exchange Act of 1934. With a
view to making available to the holders of Registrable Stock the
benefits of Rule 144 promulgated under the 1933 Act and any other rule
or regulation of the Securities and Exchange Commission that may at any
time permit a holder to sell securities of the Company to the public
without registration, the Company agrees to use its reasonable best
efforts to:
(1) make and keep public information available, as
those terms are understood and defined in Rule 144, at all times
subsequent to 90 days after the effective date of the first
registration statement covering an underwritten pubic offering
filed by the Company;
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(2) file with the Securities and Exchange
Commission in a timely manner all reports and other documents
required of the Company under the 1933 Act and the Securities
Exchange Act of 1934 (the "1934 Act"); and
(3) furnish to any holder so long as such holder
owns any of the Registrable Stock forthwith upon request a
written statement by the Company that it has complied with the
reporting requirements of Rule 144 (at any time after 90 days
after the effective date of said first registration statement
filed by the Company), and of the 1933 Act and the 1934 Act (at
any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so
filed by the Company as may be reasonably requested in availing
any holder of any rule or regulation of the Securities and
Exchange Commission permitting the selling of any such securities
without registration.
(m) Lockup Agreement. In consideration for the Company's
agreeing to its obligations under this Section 11, holder of Registrable
Stock agrees in connection with any registration of the Company's
securities that, upon the request of the Company or the underwriters
managing any underwritten offering of the Company's securities, not to
sell, make any short sale of, loan, grant any option for the purchase of
or otherwise dispose of any Registrable Stock (other than those included
in the registration) without the prior written consent of the Company or
such underwriters, as the case may be, for such period of time (not to
exceed 180 days) from the effective date of such registration as the
Company or the underwriters may specify.
(n) Certain Limitations in Connection with Future Grants
of Registration Rights. From and after the date hereof, the Company
shall not enter into any agreement with any holder or prospective holder
of any securities of the Company providing for the granting to such
holder of registration rights unless:
(1) the Company shall use its best efforts to
include the equivalent of Section 11(m) as a term in any such
agreement; and
(2) any such agreement shall include a provision
that, in the case of a public offering involving an underwritten
registered offering under Section 11(c), protects the holders of
Registrable Stock if marketing factors require a limitation on
the number of securities to be included in the underwriting in
the manner in which the Company is protected under Section 11(g).
(3) any such agreement does not grant to such
holder, or prospective holder, registration rights more favorable
than those granted to the holders of Registrable Stock under this
Section 11.
(o) Transfer of Registration Rights. The registration
rights of the Holder of the Springing Warrant under this Section 11 may
be transferred pro rata to any transferee who acquires at least 20% of
the then outstanding shares of Registrable Stock,
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or the Springing Warrant; provided, however, that the Company is given
written notice by the Holder at the time of such transfer stating the
name and address of the transferee and identifying the securities with
respect to which the rights under this Section 11 are being assigned.
Section 12. Amendments.
(a) Other than in respect of Section 11 hereof, neither
this Springing Warrant nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, provided that any term of
this Springing Warrant may be amended or the observance of such term may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent
of the Company and the holders of all Springing Warrants that are
exercisable for a number of shares that represent in the aggregate at
least a majority of the total number of shares for which all Springing
Warrants are then exercisable (whether or not the holder of this
Springing Warrant consents).
(b) Neither Section 11 of this Springing Warrant nor
Section 11 of any other Springing Warrant nor any term of either of such
Sections 11 may be changed, waived, discharged or terminated orally or
in writing, provided that any term of Section 11 of this Springing
Warrant and any term of Section 11 of any other Springing Warrant may be
amended or the observance of such term may be waived (either generally
or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Company and the holders
of all Springing Warrants that are exercisable for a number of shares
that represent in the aggregate at least a majority of the total number
of shares for which all Springing Warrants are then exercisable (whether
or not the holder of this Springing Warrant consents). As used herein,
"Springing Warrants" means any warrant or springing warrant heretofore,
now or hereafter issued by the Company to Holder.
Section 13. Governing Law.
This Springing Warrant shall be governed by the laws of the State
of New York without regard to its conflict of laws, principles or rules.
Section 14. Consent to Jurisdiction.
Any legal action, suit or proceeding arising out of or relating
to this Agreement or the consummation of the transactions contemplated hereby
may only be instituted in any federal court of the Southern District of New York
or any state court located in New York County, State of New York, and each party
agrees not to assert, by way of motion, as a defense or otherwise, in any such
action, suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such courts, that the action, suit or proceeding if brought in
such courts, would be an inconvenient forum, that the venue of the action, suit
or proceeding, if brought in any of such courts, is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such courts
on jurisdictional grounds.
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IN WITNESS WHEREOF, the Company has caused this Springing Warrant
to be signed in its name by its duly authorized officer.
Dated: March 31, 1998
WILSHIRE TECHNOLOGIES, INC.
By /s/ Xxxx Xxx Xxxxxx
-------------------------
Name: Xxxx Xxx Xxxxxx
Title: President & CEO
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FORM OF NOTICE OF CONVERSION
Pursuant to Section 9 of the Springing Warrant to purchase shares
of Common Stock of Wilshire Technologies, Inc. (the "Company"), at an exercise
price of $________ per share, Trilon Dominion Partners, L.L.C. (the "Holder")
hereby gives notice of its desire to convert such Springing Warrant into shares
of Common Stock of the Company in accordance with the terms set forth below:
1. The total number of shares of Common Stock to be purchased
by the Holder pursuant to the conversion is _____________
__________________________.
2. The closing of such purchase shall take place on _______
_____________________ (a date not less than two nor more
than seven business days from the date of this Conversion
Notice) at______________________________________________
________________________________________________________
TRILON DOMINION PARTNERS, L.L.C.
By: VC Holdings, Inc., its Managing Member
Dated: By:
----------------- ---------------------------
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SUBSCRIPTION NOTICE
The undersigned, the Holder, hereby elects to exercise purchase
rights represented by such Springing Warrant for, and to purchase thereunder,
________________ shares of the Common Stock covered by such Springing Warrant
and herewith makes payment in full therefor of $______________________ cash
and/or by cancellation of $________________________ of indebtedness of the
Company to the Holder hereof and requests that certificates for such shares (and
any securities or property deliverable upon such exercise) be issued in the name
of and delivered to _____________________ whose address is ___________________ .
The undersigned agrees that, in the absence of an effective
registration statement with respect to Common Stock issued upon this exercise,
the undersigned is acquiring such Common Stock for investment and not with a
view to distribution thereof and that the certificate or certificates
representing such Common Stock may bear a legend substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS.
UNLESS THEY ARE SOLD PURSUANT TO RULE 144 PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT, THEY MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN ABSENCE OF SUCH REGISTRATION
AND QUALIFICATION WITHOUT AN OPINION OF COUNSEL FOR THE HOLDER,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
Dated:
---------------------
Signature guaranteed:
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto __________________________________________ the rights represented
by the foregoing Springing Warrant of ___________________________ and
appoints_______________________ __________________________________ attorney to
transfer said rights on the books of said corporation, with full power of
substitution in the premises.
Dated:
---------------------
Signature guaranteed:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Springing Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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SHARES ISSUED UPON EXERCISE OF SPRINGING WARRANT
This Springing Warrant entitles the holder hereof to purchase the
number of shares of Common Stock as set forth below.
Date of Default on Note Increase in Shares Total Shares Outstanding Notation Made by
----------------------- ------------------ ------------------------ ----------------
