Exhibit 10.9.6
STOCK PURCHASE WARRANT AND
REGISTRATION RIGHTS AGREEMENT
This STOCK PURCHASE WARRANT AND REGISTRATION RIGHTS AGREEMENT ("Warrant
Agreement") is issued this _______ day of July, 1999, by IMTEK OFFICE SOLUTIONS,
INC., a Delaware corporation (the "Company"), to FINOVA MEZZANINE CAPITAL INC.,
a Tennessee corporation f/k/a Sirrom Capital Corporation (FINOVA Mezzanine
Capital Inc. and any subsequent assignee or transferee hereof are hereinafter
referred to collectively as "Holder" or "Holders").
AGREEMENT:
13. ISSUANCE OF WARRANT; TERM.
(a) For and in consideration of FINOVA MEZZANINE CAPITAL INC.
agreeing to subordinate its loan to the Company in an amount of Six
Million and no/100ths Dollars ($6,000,000) pursuant to the terms of one
or more secured promissory notes (as amended from time to time,
collectively the "Note") and related loan agreement dated May 29, 1998
(as amended from time to time, the "Loan Agreement") to a senior credit
facility from The Provident Bank in a principal amount not exceeding
$10,000,000, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby grants
to Holder the right to purchase _______ shares of the Company's common
stock (the "Common Stock"), which the Company represents to equal 3.0%
of the shares of capital stock outstanding on the date hereof,
calculated on a fully diluted basis and assuming exercise of this
Warrant, provided that in the event that (i) the Company's EBITDA (as
hereinafter defined) exceeds $2,700,000 for the fiscal year ending June
30, 1999 and $3,215,200 for the fiscal year ending June 30, 2000, or
(ii) the Company receives additional cash equity or indebtedness
subordinate in all respects to the Note, the related loan and
collateral documents, and the related security interests and liens in
an amount of at least $3,000,000 pursuant to an arm's-length bona fide
transaction prior to December 31, 1999, this Warrant Agreement shall
terminate and Holder shall not be entitled to purchase any Shares (as
hereinafter defined) hereunder. For purposes of this Warrant Agreement
the term "EBITDA" shall mean net income PLUS interest expense PLUS
income taxes PLUS depreciation expenses PLUS amortization expenses, all
determined in accordance with generally accepted accounting principles.
(b) The shares of Common Stock issuable upon exercise of this
Warrant are hereinafter referred to as the "Shares." This Warrant shall
be exercisable at any time and from time to time from July 1, 2000
until July 31, 2003 (the "Expiration Date").
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14. EXERCISE PRICE. The exercise price (the "Exercise Price") per share
for which all or any of the Shares may be purchased pursuant to the terms of
this Warrant Agreement shall be One Cent ($.01).
15. EXERCISE. The Warrants granted pursuant to this Warrant Agreement
may be exercised by the Holder hereof (but only on the conditions hereinafter
set forth) in whole or in part, upon delivery of written notice of intent to
exercise (the "Exercise Notice") to the Company in the manner and at the address
of the Company set forth in Section 14 hereof, together with this Warrant and
payment to the Company of the aggregate Exercise Price of the Shares so
purchased. The Exercise Notice shall set forth the number of Warrants to be
exercised and will contain a written acknowledgement that the Holder has read
and been afforded an opportunity to ask questions of the Company's management
regarding all financial and other information provided to Holder regarding the
Company. In addition to exercise of the Warrants, Holder shall permit the
Company to deliver to Holder all financial and other information regarding the
Company it believes necessary to enable Holder to make an informed investment
decision, and Holder shall make all customary investment representations
(including, without limitation, regarding securities compliance) which the
Company shall reasonably require. The Exercise Price shall be payable, at the
option of the Holder, (i) by certified or bank check, (ii) by the surrender of
the Note or portion thereof having an outstanding principal balance equal to the
aggregate Exercise Price or (iii) by the surrender of a portion of the Warrants
granted pursuant to this Warrant Agreement where the Shares subject to the
portion of the Warrants granted pursuant to this Warrant Agreement that are
surrendered have a fair market value equal to the aggregate Exercise Price. In
the absence of an established public market for the Common Stock, fair market
value shall be established by the Company's board of directors in a commercially
reasonable manner. Upon exercise of the Warrants granted pursuant to this
Warrant Agreement as aforesaid, the Company shall as promptly as practicable,
and in any event within fifteen (15) days thereafter, execute and deliver to the
Holder under this Warrant Agreement a certificate or certificates for the total
number of whole Shares for which the Warrants granted pursuant to this Warrant
Agreement are being exercised in such names and denominations as are requested
by such Holder. If the Warrants granted pursuant to this Warrant Agreement shall
be exercised with respect to less than all of the Shares, the Holder shall be
entitled to receive a new Warrant Agreement covering the number of Shares in
respect of which this Warrant Agreement shall not have been exercised, which new
Warrant Agreement shall in all other respects be identical to this Warrant
Agreement. The Company covenants and agrees that it will pay when due any and
all state and federal issue taxes which may be payable in respect of the
issuance of this Warrant Agreement or the issuance of any Shares upon exercise
of the Warrants granted pursuant to this Warrant Agreement.
16. COVENANTS AND CONDITIONS. The above provisions are subject to the
following:
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(a) Neither the Warrants granted pursuant to this Warrant
Agreement nor the Shares have been registered under the Securities Act
of 1933, as amended ("Securities Act"), or any state securities laws
("Blue Sky Laws"). The Warrants granted pursuant to this Warrant
Agreement have been acquired for investment purposes and not with a
view to distribution or resale and may not be sold or otherwise
transferred without (i) an effective registration statement for such
Warrants under the Securities Act and such applicable Blue Sky Laws, or
(ii) an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company and its counsel, that
registration is not required under the Securities Act or under any
applicable Blue Sky Laws (the Company hereby acknowledges that
Xxxxxxxxx, Xxxxxx & Xxxxxxx, P.C. is acceptable counsel). Transfer of
the Shares shall be restricted in the same manner and to the same
extent as the Warrant and the certificates representing such Shares
shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW
AND MAY NOT BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT
UNDER THE ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) IN THE
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION
UNDER SUCH SECURITIES ACTS AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER.
The Holder hereof and the Company agree to execute such other documents
and instruments as counsel for the Company reasonably deems necessary
to effect the compliance of the issuance of the Warrants granted
pursuant to this Warrant Agreement and any shares of Common Stock
issued upon exercise hereof with applicable federal and state
securities laws. Sirrom Capital Corporation hereby represents to the
Company that it is an "accredited investor" as defined in Regulation D
promulgated under the Act.
(b) The Company covenants and agrees that all Shares which may
be issued upon exercise of the Warrants granted pursuant to this
Warrant Agreement will, upon issuance and payment therefor, be legally
and validly issued and outstanding, fully paid and nonassessable, free
from all taxes, liens, charges and preemptive rights, if any, with
respect thereto or to the issuance thereof. The Company shall at all
times reserve and keep available for issuance upon the exercise of the
Warrants granted pursuant to this Warrant Agreement such number of
authorized but unissued shares of Common Stock as will be sufficient to
permit the exercise in full of the Warrants granted pursuant to this
Warrant Agreement.
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(c) The Company covenants and agrees that it shall not sell
any shares of the Company's capital stock at a price per share below
the fair market value of such shares, without the prior written consent
of the Holder hereof (which consent shall not be unreasonably
withheld). In the event that the Company sells shares of Common Stock
at a price per share below the fair market value of such shares (a
"Below Market Transaction"), without the prior written consent of the
Holder hereof, the Company covenants and agrees that the number of
shares issuable upon exercise of the Warrants granted pursuant to this
Warrant Agreement shall be equal to the product obtained by multiplying
the number of shares issuable pursuant to this Warrant Agreement prior
to the Below Market Transaction by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately
prior to consummation of the Below Market Transaction plus the number
of shares of Common Stock issued in the Below Market Transaction, and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the Below Market Transaction plus the
number of shares of Common Stock that the aggregate consideration
received by the Company in the Below Market Transaction would purchase
at fair market value. For purposes of this subsection, Common Stock
shall be deemed to include that number of shares of Common Stock that
would be obtained assuming (i) the conversion of any securities of the
Company which, by their terms, are convertible into or exchangeable for
Common Stock, and (ii) the exercise of all options to purchase or
rights to subscribe for Common Stock or securities which, by their
terms, are convertible into or exchangeable for Common Stock. In the
absence of an established public market for the securities sold by the
Company in a Below Market Transaction, fair market value shall be
established by the Company's board of directors in a commercially
reasonable manner.
17. TRANSFER OF WARRANTS. Subject to the provisions of Section 4
hereof, the Warrants granted pursuant to this Warrant Agreement may be
transferred, in whole or in part, to any person or business entity, by
presentation of this Warrant Agreement to the Company with written instructions
for such transfer. Prior to transferring any Warrant to any person, Holder shall
cause the prospective transferee to be bound by this Warrant Agreement and to
execute and deliver a counterpart of this Warrant Agreement to the Company,
pursuant to which such transferee will, with respect to the Warrants acquired by
such transferee, be bound by the obligations of the transferor under this
Warrant Agreement. Upon such presentation for transfer, the Company shall
promptly execute and deliver a new Warrant or Warrants in the form hereof in the
name of the assignee or assignees and in the denominations specified in such
instructions. The Company shall pay all expenses incurred by it in connection
with the preparation, issuance and delivery of Warrants under this Section.
18. WARRANT HOLDER NOT SHAREHOLDER; RIGHTS OFFERING; PREEMPTIVE RIGHTS.
Except as otherwise provided herein, this Warrant Agreement does not confer upon
the Holder, as such, any right whatsoever as a
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shareholder of the Company. Notwithstanding the foregoing, if the Company should
offer to all of the Company's shareholders the right to purchase any securities
of the Company, then all shares of Common Stock that are subject to this Warrant
Agreement shall be deemed to be outstanding and owned by the Holder and the
Holder shall be entitled to participate in such rights offering. The Company
shall not grant any preemptive rights with respect to any of its capital stock
without the prior written consent of the Holder.
19. OBSERVATION RIGHTS. The Holder of this Warrant Agreement shall
receive prior written notice of and be entitled to attend or may send a
representative to attend in person (or in the case of a telephonic meeting, join
in the conference call) all meetings of the Company's Board of Directors in a
non-voting observation capacity and shall receive a copy of all correspondence
and information delivered to the Company's Board of Directors, from the date
hereof until such time as the indebtedness evidenced by the Note has been paid
in full.
20. ADJUSTMENT UPON CHANGES IN STOCK.
(a) If all or any portion of the Warrants granted pursuant to
this Warrant Agreement shall be exercised subsequent to any stock
split, stock dividend, recapitalization, combination of shares of the
Company, or other similar event, occurring after the date hereof, then
the Holder exercising any such Warrants shall receive, for the
aggregate Exercise Price, the aggregate number and class of shares
which such Holder would have received if the Warrants granted pursuant
to this Warrant Agreement had been exercised immediately prior to such
stock split, stock dividend, recapitalization, combination of shares,
or other similar event. If any adjustment under this Section 8(a),
would create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares subject to this Warrant Agreement
shall be the next higher number of shares, rounding all fractions
upward. Whenever there shall be an adjustment pursuant to this Section
8(a), the Company shall forthwith notify the Holder or Holders of this
Warrant Agreement of such adjustment, setting forth in reasonable
detail the event requiring the adjustment and the method by which such
adjustment was calculated.
(b) If all or any portion of the Warrants granted pursuant to
this Warrant Agreement shall be exercised subsequent to any merger,
consolidation, exchange of shares, separation, reorganization or
liquidation of the Company, or other similar event, occurring after the
date hereof, as a result of which shares of Common Stock shall be
changed into the same or a different number of shares of the same or
another class or classes of securities of the Company or another
entity, or the holders of Common Stock are entitled to receive cash or
other property, then the Holder exercising such Warrants shall receive,
for the aggregate Exercise Price, the aggregate number and class
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of shares, cash or other property which such Holder would have received
if such Warrants had been exercised immediately prior to such merger,
consolidation, exchange of shares, separation, reorganization or
liquidation, or other similar event. If any adjustment under this
Section 8(b) would create a fractional share of Common Stock or a right
to acquire a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares subject to this Warrant
Agreement shall be the next higher number of shares, rounding all
fractions upward. Whenever there shall be an adjustment pursuant to
this Section 8(b), the Company shall forthwith notify the Holder or
Holders of this Warrant Agreement of such adjustment, setting forth in
reasonable detail the event requiring the adjustment and the method by
which such adjustment was calculated.
21. PUT AGREEMENT.
(a) The Company hereby irrevocably grants and issues to Holder
the right and option to sell to the Company (the "Put") the Warrants
granted pursuant to this Warrant Agreement for a period of sixty (60)
days immediately prior to the Expiration Date, at a purchase price (the
"Put Price") equal to the Fair Market Value (as hereinafter defined) of
the shares of Common Stock issuable to Holder upon exercise of such
Warrants.
(b) Holder may exercise the Put by delivery of written notice
(the "Put Notice") of such exercise to the Company in the manner and at
the address of the Company set forth in Section 14 hereof. The Company
shall pay to Holder, in cash or by wire transfer of immediately
available funds, the Put Price within thirty (30) days of the receipt
of the Put Notice.
(c) For purposes of this Section 9, the Fair Market Value of
the shares of Common Stock of the Company issuable pursuant to this
Warrant Agreement shall be determined as follows:
(i) The Company and the Holder shall each appoint an
independent, experienced appraiser who is a member of a
recognized professional association of business appraisers.
The two appraisers shall determine the value of the shares of
Common Stock which would be issued upon the exercise of the
Warrants granted pursuant to this Warrant Agreement, assuming
that the sale would be between a willing buyer and a willing
seller, both of whom have full knowledge of the financial and
other affairs of the Company, and neither of whom is under any
compulsion to sell or to buy.
(ii) If the higher of the two appraisals is not ten
percent (10%) greater than the lower of the appraisals, the
Fair Market Value shall be the average of the two appraisals.
If the higher of the two appraisals is equal to or greater
than ten percent (10%) more than the lower of the two
appraisals, then a third appraiser shall be
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appointed by the two appraisers, and if they cannot agree on
a third appraiser, the American Arbitration Association shall
appoint the third appraiser. The third appraiser, regardless
of who appoints him or her, shall have the same qualifications
as the first two appraisers.
(iii) The Fair Market Value after the appointment of
the third appraiser shall be the mean of the three appraisals.
(iv) The fees and expenses of the appraisers shall be
paid one-half by the Company and one-half by the Holder.
22. REGISTRATION.
(a) The Company and the Holders of the Shares agree that if at
any time after the date hereof the Company shall propose to file a
registration statement with respect to any of its Common Stock on a
form suitable for a secondary offering (including its initial public
offering), it will give notice in writing to such effect to the
registered holder(s) of the Shares at least fifteen (15) days prior to
such filing, and, at the written request of any such registered holder,
made within ten (10) days after the receipt of such notice, will
include therein at the Company's cost and expense (including the fees
and expenses of counsel to such holder(s), but excluding underwriting
discounts, commissions and filing fees attributable to the Shares
included therein) such of the Shares as such holder(s) shall request;
provided, however, that if the offering being registered by the Company
is underwritten and if the representative of the underwriters advises
the Company in writing (a copy of which is provided to the Holder
requesting inclusion of the Shares therein) that, in its opinion, the
inclusion therein of the Shares would materially and adversely affect
the sale of the securities to be sold by the Company thereunder, then
the Company shall be required to include in such registration only that
number of securities which the underwriters determine in their sole
discretion will not jeopardize the success of the offering selected in
the following order of priority: (i) in the case of a primary
registration on behalf of the Company (A) first, the securities that
the Company intends to be including in such registration, and (B)
second, Shares that Holder and all other parties requested to be
included in such registration (pro rata according to the securities
proposed to be included in the registration by such other parties or
Holder); or (ii) in the case of a secondary registration for the
account of any holders (including Holder) of the Company's security's,
(A), first, the securities requested to be included therein by the
holders initially requesting such registration and the Shares requested
to be included in such registration by Holder (pro rata according to
the securities proposed to be included in the registration by such
other parties or Holder), and (B) second, securities hold by all other
parties requested to be included in such registration (pro rata
according to the
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securities proposed to be included in the registration by such other
parties).
(b) Whenever the Company undertakes to effect the registration
of any of the Shares, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Securities and
Exchange Commission (the "Commission") a registration
statement covering such Shares and use its best efforts to
cause such registration statement to be declared effective by
the Commission as expeditiously as possible and to keep such
registration effective until the earlier of (A) the date when
all Shares covered by the registration statement have been
sold or (B) one hundred eighty (180) days from the effective
date of the registration statement; provided, that before
filing a registration statement or prospectus or any amendment
or supplements thereto, the Company will furnish to each
Holder of Shares covered by such registration statement and
the underwriters, if any, copies of all such documents
proposed to be filed (excluding exhibits, unless any such
person shall specifically request exhibits), which documents
will be subject to the review of such Holders and
underwriters, and the Company will not file such registration
statement or any amendment thereto or any prospectus or any
supplement thereto (including any documents incorporated by
reference therein) with the Commission if (A) the
underwriters, if any, shall reasonably object to such filing
or (B) if information in such registration statement or
prospectus concerning a particular selling Holder has changed
and such Holder or the underwriters, if any, shall reasonably
object.
(ii) Prepare and file with the Commission such
amendments and post-effective amendments to such registration
statement as may be necessary to keep such registration
statement effective during the period referred to in Section
10(b)(i) and to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered
by such registration statement, and cause the prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed with the Commission pursuant to Rule
424 under the Securities Act.
(iii) Furnish to the selling Holder(s) such numbers
of copies of such registration statement, each amendment
thereto, the prospectus included in such registration
statement (including each preliminary prospectus), each
supplement thereto and such other documents as they may
reasonably request in order to facilitate the disposition of
the Shares owned by them.
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(iv) Use its reasonable efforts to register and
qualify under such other securities laws of such jurisdictions
as shall be reasonably requested by any selling Holder and do
any and all other acts and things which may be reasonably
necessary or advisable to enable such selling Holder to
consummate the disposition of the Shares owned by such Holder,
in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a
condition thereto to qualify to transact business, to subject
itself to taxation, or to file a general consent to service of
process in any such states or jurisdictions.
(v) Promptly notify each selling Holder of the
happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to
make the statements therein not misleading and, at the request
of any such Holder, the Company will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Shares, such prospectus will not
contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not
misleading.
(vi) Provide a transfer agent and registrar for all
such Shares not later than the effective date of such
registration statement.
(vii) Enter into such customary agreements (including
underwriting agreements in customary form for a primary
offering) and take all such other actions as the underwriters,
if any, reasonably request in order to expedite or facilitate
the disposition of such Shares (including, without limitation,
effecting a stock split or a combination of shares).
(viii) Make available for inspection by any selling
Holder or any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such selling Holder
or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause
the officers, directors, employees and independent accountants
of the Company to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or agent
in connection with such registration statement.
(ix) Promptly notify the selling Holder(s) and the
underwriters, if any, of the following events and (if
requested by any such person) confirm such notification in
writing: (A) the filing of the prospectus or any
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prospectus supplement and the registration statement and any
amendment or post-effective amendment thereto and, with
respect to the registration statement or any post-effective
amendment thereto, the declaration of the effectiveness of
such documents, (B) any requests by the Commission for
amendments or supplements to the registration statement or the
prospectus or for additional information, (C) the issuance or
threat of issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose and (D) the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threat of initiation of any
proceeding for such purposes.
(x) Use its reasonable efforts to prevent the entry
of any order suspending the effectiveness of the registration
statement and obtain at the earliest possible moment the
withdrawal of any such order, if entered.
(xi) Cooperate with the selling Holder(s) and the
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing the Shares to be sold
and not bearing any restrictive legends, and enable such
Shares to be in such lots and registered in such names as the
underwriters may request at least two (2) business days prior
to any delivery of the Shares to the underwriters.
(xii) Provide a CUSIP number for all the Shares not
later than the effective date of the registration statement.
(xiii) Prior to the effectiveness of the registration
statement and any post-effective amendment thereto and at each
closing of an underwritten offering, (A) make such
representations and warranties to the selling Holder(s) and
the underwriters, if any, with respect to the Shares and the
registration statement as are customarily made by issuers in
primary underwritten offerings; (B) use its reasonable efforts
to obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed
to the selling Holders and the underwriters, if any, such
letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters by
underwriters in connection with primary underwritten
offerings; (C) deliver such documents and certificates as may
be reasonably requested (1) by the holders of a majority of
the Shares being sold, and (2) by the underwriters, if any, to
evidence compliance with clause (A) above and with any
customary conditions contained in the underwriting agreement
or other agreement
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entered into by the Company; and (D) obtain opinions of
counsel to the Company and updates thereof (which counsel and
which opinions shall be reasonably satisfactory to the
underwriters, if any), covering the matters customarily
covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by the
selling Holders and underwriters or their counsel. Such
counsel shall also state that no facts have come to the
attention of such counsel which cause them to believe that
such registration statement, the prospectus contained therein,
or any amendment or supplement thereto, as of their respective
effective or issue dates, contains any untrue statement of any
material fact or omits to state any material fact necessary to
make the statements therein not misleading (except that no
statement need be made with respect to any financial
statements, notes thereto or other financial data or other
expertized material contained therein). If for any reason the
Company's counsel is unable to give such opinion, the Company
shall so notify the Holders of the Shares and shall use its
best efforts to remove expeditiously all impediments to the
rendering of such opinion.
(xiv) Otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the Commission,
and make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act, no later than forty-five (45) days after the
end of any twelve-month period (or ninety (90) days, if such
period is a fiscal year) (A) commencing at the end of any
fiscal quarter in which the Shares are sold to underwriters in
a firm or best efforts underwritten offering, or (B) if not
sold to underwriters in such an offering, beginning with the
first month of the first fiscal quarter of the Company
commencing after the effective date of the registration
statement, which statements shall cover such twelve-month
periods.
(c) After the date hereof, the Company shall not grant to any
holder of securities of the Company any registration rights which have
a priority greater than or equal to those granted to Holders pursuant
to this Warrant without the prior written consent of the Holder(s).
(d) The Company's obligations under Section 10(a) above with
respect to each Holder of Shares are expressly conditioned upon such
Holder's (i) agreeing to sell its securities on the basis provided in
any underwriting arrangements approved by the persons entitled to
approve such arrangements; (ii) furnishing to the Company in writing
such information concerning such Holder and the terms of such Holder's
proposed offering as the Company shall reasonably request for inclusion
in the registration statement and (iii) completing and executing all
questionnaires,
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powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements and this Warrant Agreement. If any registration statement
including any of the Shares is filed, then the Company shall indemnify
each Holder thereof (and each underwriter for such holder and each
person, if any, who controls such underwriter within the meaning of the
Securities Act) from any loss, claim, damage or liability arising out
of, based upon or in any way relating to any untrue statement of a
material fact contained in such registration statement or any omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except for any
such statement or omission based on information furnished in writing by
such holder of the Shares expressly for use in connection with such
registration statement; and such Holder shall indemnify the Company
(and each of its officers and directors who has signed such
registration statement, each director, each person, if any, who
controls the Company within the meaning of the Securities Act, each
underwriter for the Company and each person, if any, who controls such
underwriter within the meaning of the Securities Act) and each other
such holder against any loss, claim, damage or liability arising from
any such statement or omission which was made in reliance upon
information furnished in writing to the Company by such holder of the
Shares expressly for use in connection with such registration
statement.
(e) For purposes of this Section 10, all of the Shares shall
be deemed to be issued and outstanding.
23. CERTAIN NOTICES. In case at any time the Company shall propose to:
(a) declare any cash dividend upon its Common Stock;
(b) declare any dividend upon its Common Stock payable in
stock or make any special dividend or other distribution to the holders
of its Common Stock;
(c) offer for subscription to the holders of any of its Common
Stock any additional shares of stock in any class or other rights;
(d) reorganize, or reclassify the capital stock of the
Company, or consolidate, merge or otherwise combine with, or sell of
all or substantially all of its assets to, another corporation;
(e) voluntarily or involuntarily dissolve, liquidate or wind
up of the affairs of the Company; or
(f) redeem or purchase any shares of its capital stock or
securities convertible into its capital stock;
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then, in any one or more of said cases, the Company shall give to the Holder of
the Warrant Agreement, by certified or registered mail, (i) at least twenty (20)
days' prior written notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the same shall take
place. Any notice required by clause (i) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the
holders of Common Stock shall be entitled thereto, and any notice required by
clause (ii) shall specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be.
24. RIGHTS OF CO-SALE.
(a) None of Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, Xxxxxx X. Xxxxx,
Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxx (the "Management
Shareholders") shall enter into any transaction that would result in
the sale by it of any Common Stock now or hereafter owned by him,
unless prior to such sale such Management Shareholder shall give
written notice (the "Co-Sale Notice") to Holder addressed and delivered
as set forth in Section 14 hereof, of its intention to effect such sale
in order that Holder may exercise its rights under this Section 12 as
hereinafter described. Such notice shall set forth (i) the number of
shares to be sold by such Management Shareholder, (ii) the principal
terms of the sale, including the price at which the shares are intended
to be sold, and (iii) an offer by such Management Shareholder to use
his best efforts to cause to be included with the shares to be sold by
it in the sale, on a share-by-share basis and on the same terms and
conditions, the Shares issuable or issued to Holder pursuant this
Warrant Agreement.
(b) If Holder has not accepted such offer in writing within a
period of ten (10) days from the date of receipt of the Co-Sale Notice,
then such Management Shareholder shall thereafter be free for a period
of ninety (90) days to sell the number of shares specified in the
Co-Sale Notice, at a price no greater than the price set forth in the
Co-Sale Notice and on otherwise no more favorable terms to such
Management Shareholder than as set forth in the Co-Sale Notice, without
any further obligation to Holder in connection with such sale. In the
event that such Management Shareholder fails to consummate such sale
within such ninety-day period, the shares specified in Co-Sale Notice
shall continue to be subject to this Section 12.
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(c) If Holder accepts such offer in writing within ten-day
period, then such acceptance shall be irrevocable unless such
Management Shareholder shall be unable to cause to be included in his
sale the number of Shares of stock held by Holder and set forth in the
written acceptance. In that event, such Management Shareholder and
Holder shall participate in the sale equally, with such Management
Shareholder and Holder each selling half the total number of such
shares to be sold in the sale.
25. ARTICLE AND SECTION HEADINGS. Numbered and titled article and
section headings are for convenience only and shall not be construed as
amplifying or limiting any of the provisions of this Warrant Agreement.
26. NOTICE. Any and all notices, elections or demands permitted or
required to be made under this Warrant Agreement shall be in writing, signed by
the party giving such notice, election or demand and shall be delivered
personally, telecopied, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery or telecopy or two (2) business days after the date of mailing (or the
next business day after delivery to such courier service), as the case may be,
shall be the date of such notice, election or demand. For the purposes of this
Warrant Agreement:
The Address of Lender is: FINOVA Mezzanine Capital Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy No.: 615/726-1208
with a copy (which shall Xxxxxxxxx, Xxxxxx & Xxxxxxx, P.C.
not constitute notice) to: 0000 Xxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Telecopy No.: 423/265-9574
The Address of Borrower is: Imtek Office Solutions, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy No.: 410/931-2837
with a copy (which shall McGuire, Woods, Battle & Xxxxxx, LLP
not constitute notice) to: 0 Xx. Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telecopy No.: 410/659-4599
14
27. SEVERABILITY. If any provisions(s) of this Warrant Agreement or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Warrant Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
28. ENTIRE AGREEMENT. This Warrant Agreement between the Company and
Holder represents the entire agreement between the parties concerning the
subject matter hereof, and all oral discussions and prior agreement are merged
herein.
29. GOVERNING LAW AND AMENDMENTS. This Warrant Agreement shall be
construed and enforced under the laws of the State of Tennessee applicable to
contracts to be wholly performed in such State. No amendment or modification
hereof shall be effective except in a writing executed by each of the parties
hereto.
30. COUNTERPARTS. This Warrant Agreement may be executed in any number
of counterparts and be different parties to this Warrant Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Warrant
Agreement.
31. CONSENT TO JURISDICTION; EXCLUSIVE VENUE. The Company hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Holder
may be a party and which concerns this Warrant Agreement. It is further agreed
that venue for any such action shall lie exclusively with courts sitting in
Davidson County, Tennessee, unless Holder agrees to the contrary in writing.
32. WAIVER OF TRIAL BY JURY. HOLDER AND THE COMPANY HEREBY KNOWINGLY
AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS,
PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE,
AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS WARRANT
AGREEMENT.
33. EQUITY PARTICIPATION. This Warrant Agreement is issued in
connection with the Loan Agreement. It is intended that this Warrant Agreement
constitute an equity participation under and pursuant to T.C.A. ss.00-00-000, ET
SEQ. and that equity participation be permitted under said statutes and not
constitute interest on the Note. If under any circumstances whatsoever,
fulfillment of any obligation of this Warrant Agreement, the Loan Agreement, or
any other agreement or document executed in connection with the Loan Agreement,
shall violate the lawful limit of any applicable usury statute or any other
applicable law with regard to obligations of like character and amount, then the
obligation to be fulfilled shall be reduced to such lawful limit, such that in
no event shall there occur, under this Warrant Agreement, the Loan Agreement, or
any other document or instrument executed in connection with the Loan Agreement,
any violation of such
15
lawful limit, but such obligation shall be fulfilled to
the lawful limit. If any sum is collected in excess of the lawful limit, such
excess shall be applied to reduce the principal amount of the Note.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
COMPANY:
IMTEK OFFICE SOLUTIONS, INC., a
Delaware corporation
By:
-------------------------------
Title:
----------------------------
HOLDER:
FINOVA MEZZANINE CAPITAL INC.,
a Tennessee corporation f/k/a
Sirrom Capital Corporation
By:
-------------------------------
Title:
----------------------------
16
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Warrant Agreement to be executed as of the date first above written for the
purpose of agreeing to the terms and conditions of Section 12 hereof.
MANAGEMENT SHAREHOLDERS:
/s/ Xxxxx X. Xxxxxx
--------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx
-------------------
Xxxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxxx
--------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxx X Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
17
