EXHIBIT 5
EXECUTION COPY
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WARRANT AGREEMENT
Dated as of February 23, 2000
by and between
OPTIKA INC.,
XXXXXX XXXXXX CAPITAL PARTNERS, L.P.
and
THE PARTIES LISTED ON THE SIGNATURE PAGE HERETO
WARRANT AGREEMENT
TABLE OF CONTENTS*
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* This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
Page
SECTION 1. DEFINITIONS...................................................1
SECTION 2. WARRANT CERTIFICATES..........................................3
SECTION 3. ISSUANCE OF WARRANTS..........................................3
SECTION 4. EXECUTION OF WARRANT CERTIFICATES.............................4
SECTION 5. REGISTRATION..................................................4
SECTION 6. REGISTRATION OF TRANSFERS AND EXCHANGES.......................4
SECTION 7. TERMS OF WARRANTS; EXERCISE OF WARRANTS.......................6
SECTION 8. PAYMENT OF TAXES..............................................7
SECTION 9. MUTILATED OR MISSING WARRANT CERTIFICATES.....................7
SECTION 10. RESERVATIONS OF WARRANT SHARES...............................8
SECTION 11. ADJUSTMENT OF NUMBER OF WARRANT SHARES.......................8
(a) Initial Exercise........................................8
(b) Adjustment to Exercise Price for Stock Dividends
and for Combinations or Subdivisions of
Common Stock.........................................9
(c) Adjustment in connection with Reclassification
and Reorganization..................................13
(d) No Amendments..........................................13
(e) Voluntary Increases....................................13
(f) When Issuance or Payment May Be Deferred...............14
(g) Form of Warrants.......................................14
(h) Other Dilutive Events..................................14
(i) Adjustment in Warrant Shares...........................14
SECTION 12. FRACTIONAL INTERESTS........................................15
SECTION 13. NOTICES TO WARRANT HOLDERS; RIGHTS OF WARRANT HOLDERS.......15
SECTION 14. OBTAINING STOCK EXCHANGE LISTINGS...........................16
SECTION 15. NOTICES TO THE COMPANY......................................16
SECTION 16. SUPPLEMENTS AND AMENDMENTS..................................17
SECTION 17. SUCCESSORS..................................................17
SECTION 18. TERMINATION.................................................17
SECTION 19. GOVERNING LAW...............................................17
SECTION 20. BENEFITS OF THIS AGREEMENT..................................17
SECTION 21. HEADINGS....................................................17
SECTION 22. SUBMISSION TO JURISDICTION..................................18
SECTION 23. WAIVER OF JURY TRIAL........................................18
SECTION 24. SERVICE OF PROCESS..........................................18
SECTION 25. COUNTERPARTS................................................18
EXHIBIT A. FORM OF WARRANT CERTIFICATE................................A-1
EXHIBIT B. FORM OF TRANSFER...........................................B-1
WARRANT AGREEMENT, dated as of February 23, 2000, by and between
OPTIKA INC., a Delaware corporation (the "Company"), and Xxxxxx Xxxxxx
Capital Partners, L.P., a limited partnership organized under the laws of
Delaware ("TWCP") and the entities listed on the signature pagers hereto
(each such entity and TWCP, a "Purchaser" and collectively with TWCP, the
"Purchasers").
RECITALS
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WHEREAS, the Company has entered into a Securities Purchase
Agreement, dated as of February 9, 2000 (the "Purchase Agreement"), with
the Purchasers, pursuant to which the Company has agreed to sell to the
Purchasers (i) an aggregate of 731,851 shares of Series A Convertible
Preferred Stock, par value $0.001 per share (the "Preferred Stock") of the
Company, and (ii) warrants (the "Warrants") to purchase up to an aggregate
of 307,298 shares (subject to adjustment as provided in Section 11 hereof),
exercisable at any time at an exercise price of $22.448 per share, of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), and
(the shares of Common Stock issuable on exercise of the Warrants being
herein called the "Warrant Shares");
WHEREAS, the parties hereto desire to enter into this Agreement
in order to set forth the terms and conditions of the Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following capitalized terms will
have the respective meanings:
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement" and all references thereto means this Agreement as it
may from time to time be amended or supplemented.
"Board of Directors" means the board of directors of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in New York City, New York are
authorized or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall have the meaning set forth in the Recitals.
"Company" shall have the meaning set forth in the first paragraph
of this Agreement.
"Conversion Right" shall have the meaning set forth in Section 7
hereof.
"Current Market Price," shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Company or any
other issuer which are publicly traded, the average of the daily Market
Prices of the Common Stock for the fifteen consecutive Trading Days
immediately preceding the date for which such value is to be computed.
"Exercise Price" shall have the meaning set forth in Section 7
hereof.
"Exercise Rate" shall have the meaning set forth in Section 11
hereof.
"Expiration Date" shall have the meaning set forth in Section 7
hereof.
"Fair Market Value" shall mean, as to shares of Common Stock or
any other class of capital stock or securities of the Company or any other
issuer which are publicly traded, the Current Market Price of such shares
or securities. The "Fair Market Value" of any security which is not
publicly traded or of any other property shall mean the fair value thereof
as determined by an independent investment banking firm experienced in the
valuation of such securities or property selected in good faith by the
Board of Directors or a committee thereof and reasonably acceptable to
holders of a majority of the Warrant Shares.
"Issue Date" shall mean February 23, 2000.
"Market Price" when used with reference to shares of Common Stock
or other securities on any date, shall mean (i) if such Common Stock or
other security is listed or authorized for trading on any national
securities exchange, the closing price of such Common Stock or other
security on such date, (ii) if such shares of Common Stock or other
security are not so listed, the price of the last trade, as reported on the
Nasdaq National Market, not identified as having been reported late to such
system, or (iii) if such shares of Common Stock or other securities are so
traded as provided in clause (ii), but not so quoted, the average of the
last bid and ask prices, as those prices are reported on the Nasdaq
National Market, or (iv) if such shares of Common Stock or other securities
are not listed or authorized for trading on a national securities exchange
or the Nasdaq National Market or any comparable system, the average of the
closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If the Common Stock or such other securities are
not publicly held or so listed or publicly traded, "Market Price" shall
mean the Fair Market Value per share of Common Stock or of such other
securities as determined in good faith by the Board of Directors based on
an opinion of an independent investment banking firm experienced in the
valuation of such securities selected in good faith by the Board of
Directors or a committee thereof and reasonably acceptable to holders of a
majority of the Warrant Shares.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be
determined, fully diluted shares of Common Stock (calculated as prescribed
by generally accepted accounting principles), except shares then owned or
held by or for the account of the Company or any subsidiary thereof and
except options shall not be included until the same are exercised.
"Person" means any individual, firm, corporation, partnership or
other entity and shall include any successor (by merger or otherwise of
such entity).
"Purchasers" shall have the meaning set forth in the first
paragraph of this Agreement.
"Register Office" shall have the meaning set forth in Section 6
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"Trading Day" means a Business Day or, if the Common Stock is
listed or admitted to trading on any national securities exchange or the
Nasdaq National Market, a day on which such exchange or the Nasdaq National
Market is open for the transaction of business.
"Transfer Agent" shall have the meaning set forth in Section 10
hereof.
"Transfer Notice" shall have the meaning set forth in Section 6
hereof.
"Warrant holder(s)" or "holders of Warrant certificates" means,
in each case, registered holders of Warrant certificates.
"Warrants" shall have the meaning set forth in the Recitals.
"Warrant Shares" shall have the meaning set forth in the
Recitals.
SECTION 2. WARRANT CERTIFICATES.
The Warrant certificates to be issued and delivered pursuant to
this Agreement shall be in registered form only and shall be substantially
in the form set forth in Exhibit A attached hereto.
SECTION 3. ISSUANCE OF WARRANTS.
The Company, simultaneously with the Closing (as defined in the
Purchase Agreement), shall deliver to the Purchasers duly executed Warrant
certificates registered in the name of the Purchasers for the purchase of
an aggregate of 307,298 shares of Common Stock, with each Purchaser
receiving Warrant certificates for the purchase of the number of shares of
Common Stock set forth opposite the name of such Purchaser on Schedule A to
the Purchase Agreement.
SECTION 4. EXECUTION OF WARRANT CERTIFICATES.
Warrant certificates evidencing Warrants to purchase initially an
aggregate of up to 307,298 shares of Common Stock shall be duly executed,
on the date of this Agreement, by the Company and delivered to the
registered holder of the Warrants in accordance with the provisions of
Section 3 hereof. Warrant certificates shall be signed on behalf of the
Company by any two authorized officers. Each such signature upon the
Warrant certificates may be in the form of a facsimile signature and may be
imprinted or otherwise reproduced on the Warrant certificates and, for that
purpose, the Company may adopt and use the facsimile signature of any
person who shall have been an authorized officer, notwithstanding the fact
that at the time the Warrant certificates shall be delivered or disposed of
such person shall have ceased to hold such office. In case any officer of
the Company who shall have signed any of the Warrant certificates shall
cease to hold such office before such Warrant certificates shall have been
an authorized officer delivered or disposed of by the Company, such Warrant
certificates nevertheless may be delivered or disposed of as though such
person had not ceased to hold such office. Any Warrant certificate may be
signed on behalf of the Company by any person who, at the actual date of
the execution of such Warrant certificate, shall be a proper officer of the
Company to sign such Warrant certificate, although at the date of the
execution of this Agreement such person did not hold such office.
SECTION 5. REGISTRATION.
The Company shall number and register the Warrant certificates in
a register as they are issued by the Company. The Company may deem and
treat the registered holder(s) of the Warrant certificates as the absolute
owner(s) thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone), for all purposes, and the Company shall
not be affected by any notice to the contrary.
SECTION 6. REGISTRATION OF TRANSFERS AND EXCHANGES.
The Company shall cause to be kept at its principal corporate
office (the "Register Office") a register in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for
the registration of Warrant certificates and of transfers or exchanges of
Warrant certificates at the Warrant holder's option. The Company shall from
time to time register the transfer of any outstanding Warrant certificates
upon the records to be maintained by it for that purpose, upon surrender
thereof. Upon any such registration of transfer, a new Warrant certificate
shall be issued to the transferee(s) and the surrendered Warrant
certificate shall be canceled by the Company. Canceled Warrant certificates
shall thereafter be disposed of in a manner satisfactory to the Company in
accordance with any applicable laws. Whenever any Warrant certificates are
surrendered for exchange, the Company shall execute and deliver the Warrant
certificates that the Warrant holder making the exchange is entitled to
receive. All Warrant certificates issued upon any registration of transfer
or exchange of Warrant certificates shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant certificates surrendered for such
registration of transfer or exchange. Every Warrant certificate surrendered
for registration of transfer or exchange shall (if so required by the
Company) be duly endorsed, or be accompanied by a written instrument of
transfer in the form of Exhibit B attached hereto, duly executed by the
Warrant holder or his attorney duly authorized in writing. No service
charge will be made for any registration of transfer or exchange upon
surrender of Warrant certificates or any issuance of Warrant certificates
pursuant to Section 3 or this Section 6, but the Company may require
payment of a sum sufficient to cover any stamp or other governmental charge
or tax which may be imposed in connection with any such transfer or
exchange. Any Warrant certificate when duly endorsed in blank (with
signature guaranteed) shall be deemed negotiable. The holder of any Warrant
certificate duly endorsed in blank may be treated by the Company and all
other Persons dealing therewith as the absolute owner thereof for any
purpose and as the Person entitled to exercise the rights represented
thereby, or to the transfer thereof on the register of Warrants maintained
by the Company, any notice to the contrary notwithstanding; but until such
transfer on such register, the Company may treat the registered Warrant
holder as the owner for all purposes. In addition to any other legend which
may be required by applicable law, each Warrant certificate representing
Warrants and each certificate representing Warrant Shares issued upon
exercise of the Warrant shall have endorsed, to the extent appropriate,
upon its face the following words:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO (I) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAW, OR (II) ANY EXEMPTION
FROM REGISTRATION UNDER SUCH ACT, OR APPLICABLE STATE
SECURITIES LAW, RELATING TO THE DISPOSITION OF
SECURITIES, INCLUDING RULE 144 PROVIDED, IF SO
REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL IS
FURNISHED TO THE COMPANY, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND/OR APPLICABLE STATE SECURITIES LAW IS
AVAILABLE.
Prior to any transfer or attempted transfer of any Warrants, the
holder of such Warrants shall give 10 days' prior written notice (a
"Transfer Notice") to the Company of such holder's intention to effect such
transfer, describing the manner and circumstances of the proposed transfer,
and, if requested by the Company, obtain from counsel to such holder, who
shall be reasonably satisfactory to the Company, an opinion that the
proposed transfer of such Warrants may be effected without registration
under the Securities Act. After receipt of the Transfer Notice and opinion,
the Company shall, within five days thereof, so notify the holder of such
Warrants and such holder shall thereupon, subject to compliance with the
other restrictions on transfer contained herein, be entitled to transfer
such Warrants, in accordance with the terms of the Transfer Notice. Each
Warrant issued upon such transfer shall bear the restrictive legends set
forth above, unless, in the opinion of counsel to such holder (which
opinion must be reasonably satisfactory to the Company and its counsel),
such legend is not required in order to ensure compliance with the
Securities Act. The holder of the Warrants giving the Transfer Notice shall
not be entitled to transfer such Warrants until receipt of notice from the
Company under this Section 6.
SECTION 7. TERMS OF WARRANTS; EXERCISE OF WARRANTS.
Subject to the terms of this Agreement, the Warrants may be
exercised at any time after the date hereof in whole and from time to time
in part until 5:00 p.m. (ET) on February 23, 2008 (the "Expiration Date").
Each Warrant, when exercised in accordance with the terms hereof and upon
payment in cash of the exercise price of $22.448 per share (the "Exercise
Price") will entitle the holder thereof to acquire from the Company (and
the Company shall issue to such holder of a Warrant) one fully paid and
nonassessable share of the Company's authorized but unissued Common Stock
(subject to adjustment as provided in Section 11). No cash dividend shall
be paid to a holder of Warrant Shares issuable upon the exercise of
Warrants unless such holder was, as of the record date for the declaration
of such dividend, the record holder of such Warrant Shares.
A Warrant may be exercised upon surrender to the Company at the
Register Office of the certificate or certificates evidencing the Warrants
to be exercised with the form of election to purchase on the reverse
thereof duly filled in and signed, together with payment to the Company of
the Exercise Price for each Warrant Share then exercised.
In lieu of payment of the Exercise Price pursuant to the
preceding paragraph, the Warrant holder shall have the right to require the
Company to convert the Warrants, in whole or in part and at any time or
times (the "Conversion Right"), into shares of Common Stock by surrendering
to the Company the certificate or certificates evidencing the Warrant to be
converted with the form of notice of conversion on the reverse thereof duly
filled in and signed. Upon exercise of the Conversion Right, the Company
shall deliver to the Warrant holder (without payment by the holder of the
Warrant of any Exercise Price) that number of shares of Common Stock which
is equal to the quotient obtained by dividing (x) the value of the number
of Warrants being exercised at the time the Warrants are exercised
(determined by subtracting the aggregate Exercise Price for all such
Warrants immediately prior to the exercise of the Warrants from the
aggregate Current Market Price (as defined in Section 11) of that number of
Warrant Shares purchasable upon exercise of such Warrants immediately prior
to the exercise of the Warrants (taking into account all applicable
adjustments pursuant to Section 11) by (y) the Current Market Price of one
share of Common Stock immediately prior to the exercise of the Warrants.
Subject to the provisions of Section 8 hereof, upon surrender of
the Warrant certificate or certificates, the Company shall issue and
deliver with all reasonable dispatch, to or upon the written order of the
Warrant holder and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of Warrant Shares
issuable or other securities or property to which such holder is entitled
hereunder upon the exercise of such Warrants, including, at the Company's
option, any cash payable in lieu of fractional interests as provided in
Section 12 hereof. Such certificate or certificates shall be deemed to have
been issued and any Person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the
date of the surrender of such Warrants and payment of the Exercise Price.
The Company may issue fractional shares of Common Stock upon exercise of
any Warrants in accordance with Section 12 hereof.
The Warrants shall be exercisable on or prior to the Expiration
Date, at the election of the holders thereof, either at any time in whole
or from time to time in part (in whole shares) and, in the event that a
certificate evidencing Warrants is exercised in respect of fewer than all
of the Warrant Shares issuable on exercise of such certificate at any time
prior to the Expiration Date, a new certificate evidencing the remaining
Warrant or Warrants will be issued, and the Company will duly execute and
deliver the required new Warrant certificate or certificates pursuant to
the provisions of Section 4 and this Section 7.
All Warrant certificates surrendered upon exercise of Warrants
shall be canceled by the Company. Such canceled Warrant certificates shall
then be disposed of in a manner satisfactory to the Company and in
accordance with any applicable law. The Company shall account promptly in
writing with respect to Warrants exercised and all monies received for the
purchase of the Warrant Shares through the exercise of such Warrants. In
the event that the Company shall purchase or otherwise acquire Warrants,
the Company may elect to have the Warrants canceled and retired. The
Company shall keep copies of this Agreement and any notices given or
received hereunder available for inspection by the registered Warrant
holders during normal business hours and upon reasonable notice at the
Register Office.
SECTION 8. PAYMENT OF TAXES.
The Company will pay all taxes and other governmental charges
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay
any such taxes or charges which may be payable in respect of any transfer
involved in the issue of any Warrant certificates or any certificates for
Warrant Shares in a name other than that of the registered holder of a
Warrant certificate surrendered upon the exercise of a Warrant, and the
Company shall not be required to issue or deliver such Warrant certificates
unless or until the Person or Persons requesting the issuance thereof shall
have paid to the Company the amount of such taxes or charges or shall have
established to the satisfaction of the Company that such taxes or charges
have been paid.
SECTION 9. MUTILATED OR MISSING WARRANT CERTIFICATES.
In case any of the Warrant certificates shall be mutilated, lost,
stolen or destroyed, the Company may in its discretion issue in exchange
and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate
lost, stolen or destroyed, a new Warrant certificate of like tenor and
representing an equivalent number of Warrants, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction of such Warrant certificate and indemnity and security
therefor, if requested, also reasonably satisfactory to the Company.
Applicants for such substitute Warrant certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges as
the Company may prescribe.
SECTION 10. RESERVATIONS OF WARRANT SHARES.
The Company (i) shall at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but
unissued Common Stock, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum
number of shares of Common Stock which would then be deliverable upon the
exercise of all outstanding Warrants if all such outstanding Warrants were
then exercisable and (ii) shall not take any action which results in any
adjustment of the number of Warrant Shares if the total number of Warrant
Shares issuable after the action upon the exercise of all of the Warrant
Shares would exceed the total number of shares of Common Stock then
authorized by the Company's certificate of incorporation and available for
the purpose of issue upon such exercise.
The transfer agent for the Preferred Stock (which may be the
Company if it is acting as transfer agent) (the "Transfer Agent") and every
subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid will
be irrevocably authorized and directed at all times to reserve such number
of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with the Transfer Agent for any
shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by the Warrants. The Company will supply
such Transfer Agent with duly executed stock certificates for purposes of
honoring all outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement and the Company will provide or otherwise make
available any cash which may be payable as provided in Section 12 hereof.
The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto which are transmitted to each
Warrant holder pursuant to Section 13 hereof.
The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants have been duly authorized and will, upon payment
of the Exercise Price or upon the exercise of the Conversion Right and
issuance, be duly and validly issued, fully paid and nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
SECTION 11. ADJUSTMENT OF NUMBER OF WARRANT SHARES.
(a) Initial Exercise. Each Warrant will initially be exercisable
by the holder thereof into one share of Common Stock at the Exercise Price.
(b) Adjustment to Exercise Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock. (i) In case the Company shall
at any time or from time to time after the Closing Date (A) pay a dividend
or make a distribution on the outstanding shares of Common Stock in shares
of Common Stock, (B) subdivide or split the outstanding shares of Common
Stock, (C) combine or reclassify the outstanding shares of Common Stock
into a smaller number of shares or (D) issue by reclassification of the
shares of Common Stock any shares of capital stock of the Company, then,
and in each such case, the Exercise Price in effect immediately prior to
such event or the record date therefor, whichever is earlier, shall be
adjusted so that the holder of any Warrants thereafter exercised shall be
entitled to receive the number of shares of Common Stock or other
securities of the Company which after the happening of any of the events
described above such Warrants would have been exercisable had such Warrants
been exercised immediately prior to the happening of such event or the
record date therefor, whichever is earlier. An adjustment made pursuant to
this clause (i) shall become effective (x) in the case of any such dividend
or distribution, immediately after the close of business on the record date
for the determination of holders of shares of Common Stock entitled to
receive such dividend or distribution, or (y) in the case of such
subdivision, split, reclassification or combination, at the close of
business on the day upon which such corporate action becomes effective.
Such adjustment shall be made successively whenever an event listed above
shall occur. No adjustment shall be made pursuant to this clause (i) in
connection with any transaction to which clause (c) applies.
(ii) In case the Company shall issue shares of Common Stock
(or rights, warrants or other securities convertible into or exercisable or
exchangeable for shares of Common Stock) (collectively, "Additional
Shares") after the Closing Date at a price per share (or having a
conversion or exercise price per share) less than the Current Market Price
as of the date of issuance of such shares (or, in the case of convertible
or exchangeable securities, less than the Current Market Price as of the
date of issuance of the rights, warrants or other securities in respect of
which shares of Common Stock were issued), then, and in each such case, the
Exercise Price shall be reduced to an amount determined by multiplying (A)
the Exercise Price in effect on the day immediately prior to the date of
issuance of such Additional Shares by (B) a fraction, the numerator of
which shall be the sum of (1) the number of shares of Common Stock
Outstanding immediately prior to such sale or issue multiplied by the then
applicable Current Market Price per share and (2) the aggregate
consideration receivable by the Company for the total number of shares of
Common Stock so issued (or into or for which the rights, warrants or other
convertible securities may convert or be exercisable or exchangeable), and
the denominator of which shall be the sum of (x) the total number of shares
of Common Stock Outstanding immediately prior to such sale or issue and (y)
the number of Additional Shares issued (or into or for which the rights,
warrants or convertible securities may be converted, exercised or
exchanged), multiplied by the Current Market Price. An adjustment made
pursuant to this clause (ii) shall be made on the next Business Day
following the date on which any such issuance is made and shall be
effective retroactively to the close of business on the date of such
issuance of Additional Shares. For purposes of this clause (ii), the
aggregate consideration receivable by the Company in connection with the
issuance of shares of Common Stock or of rights, warrants or convertible
securities shall be deemed to be equal to the sum of the aggregate offering
price (before deduction of underwriting discounts or commissions and
expenses payable to third parties) of all such Common Stock, rights,
warrants and convertible securities plus the aggregate amount (as
determined on the date of issuance), if any, payable upon exercise or
conversion of any such rights, warrants and convertible securities into
shares of Common Stock. If, subsequent to the date of issuance of such
right, warrants or other convertible securities, the exercise or conversion
price thereof is reduced, such aggregate amount shall be recalculated and
the Exercise Price shall be adjusted retroactively to give effect to such
reduction. On the expiration of any option or the termination of any right
to convert or exchange any securities into Additional Shares, the Exercise
Price then in effect hereunder shall forthwith be increased to the Exercise
Price which would have been in effect at the time of such expiration or
termination (but taking into account other adjustments made following the
time of issuance of such securities) had such security, to the extent
outstanding immediately prior to such expiration or termination, never been
issued. In case any portion of the consideration to be received by the
Company shall be in a form other than cash, the Fair Market Value of such
non-cash consideration shall be utilized in the foregoing computation. If
Common Stock is sold as a unit with other securities, the aggregate
consideration received for such Common Stock shall be deemed to be net of
the Fair Market Value of such other securities. The issuance or reissuance
of (i) any shares of Common Stock or rights, warrants or other securities
convertible into shares of Common Stock (whether treasury shares or newly
issued shares) (A) pursuant to a dividend or distribution on, or
subdivision, split, combination or reclassification of, the outstanding
shares of Common Stock requiring an adjustment in the Exercise Price
pursuant to clause (i) of this clause (b); (B) pursuant to any restricted
stock or stock option plan or stock purchase program of the Company
involving the grant of options or rights to acquire Common Stock to
directors, officers and employees and, in the case of options, consultants
and service providers, of the Company and its subsidiaries so long as (x)
the granting of such options or rights has been approved by the Board of
Directors and (y) the aggregate consideration receivable by the Company in
connection with such options shall be no less than fair market value, as
determined by the Board of Directors, and in connection with such rights
under the employee stock purchase plan of the Corporation shall be no less
than 85% of the fair market value, as determined by the Board of Directors,
of the Common Stock underlying such options or rights on the date of grant;
(C) pursuant to any option, warrant, right, or convertible security
outstanding as of the Closing Date, or (ii) the Series A Preferred Stock
issuable pursuant to the Purchase Agreement and any shares of Common Stock
issuable upon conversion or exercise thereof, shall not be deemed to
constitute an issuance of Common Stock or convertible securities by the
Company to which this clause (b)(ii) applies; provided that,
notwithstanding clause (i)(C), the Exercise Price shall be appropriately
reduced to the extent that the number of shares into which any such
security may be converted, exercised or exchanged is increased or the price
therefor is reduced after the Issue Date. No adjustment shall be made
pursuant to this clause (b)(ii) in connection with any transaction to which
clause (c) applies.
(iii) In case the Company shall fix a record date for the
issuance on a pro rata basis of rights, options or warrants to the holders
of its Common Stock (or other securities convertible into or exercisable or
exchangeable for shares of Common Stock) entitling such holders to
subscribe for or purchase shares of Common Stock (or securities convertible
into or exercisable or exchangeable for shares of Common Stock) at a price
per share of Common Stock (or having a conversion, exercise or exchange
price per share of Common Stock, in the case of a security convertible
into, or exerciseable or exchangeable for, shares of Common Stock) less
than the Current Market Price on such record date, the maximum number of
shares of Common Stock issuable upon exercise of such rights, options or
warrants (or conversion of such convertible securities) shall be deemed to
have been issued and outstanding as of such record date and the Exercise
Price shall be adjusted pursuant to paragraph 11(b)(ii) hereof, as though
such maximum number of shares of Common Stock had been so issued for an
aggregate consideration payable by the holders of such rights, options,
warrants or other securities prior to their receipt of such shares of
Common Stock. Such adjustment shall be made successively whenever such
record date is fixed; and in the event that such rights, options or
warrants are not so issued or expire in whole or in part unexercised, or in
the event of a change in the number of shares of Common Stock to which the
holders of such rights, options or warrants are entitled (other than
pursuant to adjustment provisions therein comparable to those contained in
this paragraph 11(b)), the Exercise Price shall again be adjusted as
follows: (A) in the event that all of such rights, options or warrants
expire unexercised, the Exercise Price shall be the Exercise Price that
would then be in effect if such record date had not been fixed; (B) in the
event that less than all of such rights, options or warrants expire
unexercised, the Exercise Price shall be adjusted pursuant to paragraph
11(b)(ii) to reflect the maximum number of shares of Common Stock issuable
upon exercise of such rights, options or warrants that remain outstanding
(without taking into effect shares of Common Stock issuable upon exercise
of rights, options or warrants that have lapsed or expired); and (C) in the
event of a change in the number of shares of Common Stock to which the
holders of such rights, options or warrants are entitled, the Exercise
Price shall be adjusted to reflect the Exercise Price which would then be
in effect if such holder had initially been entitled to such changed number
of shares of Common Stock. Notwithstanding the foregoing, in case the
Company shall issue rights, options or warrants ("Stockholder Rights") to
all holders of its Common Stock entitling the holders thereof to subscribe
for or purchase shares of Common Stock, which rights or warrants (i) are
deemed to be transferred with such shares of Common Stock, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or event ("Trigger Event"), such
Stockholder Rights shall for purposes of this clause (iii) not be deemed
issued or distributed until the occurrence of the earliest Trigger Event
and the conversion price shall not be reduced until the occurrence of such
earliest Trigger Event.
(iv) In case the Company shall fix a record date for the
making of a distribution to all holders of any class of Common Stock
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of evidences of
indebtedness, assets or other property, the Exercise Price to be in effect
after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, (A)
the numerator of which shall be the Exercise Price immediately prior to
such distributions less the Fair Market Value of the portion of the assets,
other property or evidence of indebtedness so to be distributed which is
applicable to one share of Common Stock and (B) the denominator of which
shall be the Exercise Price immediately prior to such distributions. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Exercise
Price shall again be adjusted to be the Exercise Price which would then be
in effect if such record date had not been fixed. An adjustment to the
Exercise Price also shall be made in respect of dividends and distributions
paid exclusively in cash to all holders of any class of Common Stock
(excluding any dividend or distribution in connection with the Liquidation
(as defined in the Certificate of Designation for the Series A Convertible
Preferred Stock of the Company) of the Company and any cash that is
distributed upon a merger, consolidation or other transaction for which an
adjustment pursuant to paragraph 11(c) is made) or in the case where the
Company effects any repurchase of its Common Stock where the sum of (1) all
such cash dividends and distributions made within the preceding 12 months
in respect of which no adjustment has been made and (2) any cash and the
Fair Market Value of other consideration paid in respect of any repurchases
of Common Stock by the Company or any of its subsidiaries within the
preceding 12 months in respect of which no adjustment has been made,
exceeds 5% of the Company's market capitalization (being the product of the
then Current Market Price of the Common Stock times the aggregate number of
shares of Common Stock then outstanding on the record date for such
distribution). The Exercise Price to be in effect after such adjustment
shall be determined by subtracting from the Exercise Price in effect prior
to such adjustment an amount equal to the quotient of (A) the sum of clause
(1) and clause (2) above and (B) the number of shares of Common Stock
outstanding on the date such adjustment is to be determined.
(v) The term "dividend," as used in this clause (b), shall
mean a dividend or other distribution upon the capital stock of the
Company.
(vi) Anything in this clause (b) to the contrary
notwithstanding, the Company shall not be required to give effect to any
adjustment in the Exercise Price unless and until the net effect of one or
more adjustments (each of which shall be carried forward), determined as
above provided, shall have resulted in a change of the Exercise Price such
that the number of shares of Common Stock receivable upon the exercise of
each Warrant would differ by at least one two-hundredth of one share of
Common Stock, and when the cumulative net effect of more than one
adjustment so determined shall be to change the Exercise Price by at least
one two-hundredth of one share of Common Stock, such change in Exercise
Price shall thereupon be given effect. All calculations under this Section
11 shall be made to the nearest four decimal points.
(vii) The certificate of any firm of independent public
accountants of recognized national standing selected by the Board of
Directors of the Company (which may be the firm of independent public
accountants regularly employed by the Company) shall be presumptively
correct for any computation made under this clause (b).
(viii) If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
other distribution, and shall thereafter and before the distribution to
stockholders legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of shares of
Common Stock issuable upon exercise of the right of Exercise granted by
this clause (b) or in the Exercise Price then in effect shall be required
by reason of the taking of such record.
(ix) If any event occurs as to which the provisions of this
Section 11(b) are not strictly applicable or if strictly applicable would
not fairly protect the rights of the holders of the Warrants in accordance
with the essential intent and principles of such provisions, the Board of
Directors shall make an adjustment in the application of such provisions,
in accordance with such essential intent and principles, so as to protect
such rights of the holders of the Warrants
(c) Adjustment in connection with Reclassification and
Reorganization. In the case of any consolidation or merger or
reclassification in connection therewith of the Company with or into
another corporation (a "Transaction") occurring at any time, each Warrant
then outstanding shall thereafter be exercisable for, in lieu of the Common
Stock issuable upon such conversion prior to consummation of such
Transaction, the kind and amount of shares of stock and other securities
and property receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares of Common Stock for which
such Warrant was exercisable immediately prior to such Transaction. In case
securities or property other than Common Stock shall be issuable or
deliverable upon conversion as aforesaid, then all references in this
Section 11 shall be deemed to apply, so far as appropriate and nearly as
may be, to such other securities or property. The Company, or the person
formed by the consolidation or resulting from the merger or which acquires
such assets or which acquires the Company's shares, as the case may be,
shall make provisions in its certificate or articles of incorporation or
other constituent document to establish such rights and such rights shall
be clearly provided for in the definitive transaction documents relating to
such Transaction. The certificate or articles of incorporation or other
constituent document shall provide for adjustments, which, for events
subsequent to the effective date of the certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11.
The provisions of this Section 11(c) shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share
exchanges.
(d) No Amendments. The Company will not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement, but will
at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Warrant holders thereof against dilution
or other impairment. Without limiting the generality of the foregoing, the
Company (i) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on the exercise of the Warrants from
time to time outstanding and (ii) will not take any action which results in
any adjustment of the number of Warrant Shares if the total number of
shares of Common Stock issuable after the action upon the exercise of all
of the Warrants would exceed the total number of shares of Common Stock
then authorized by the Company's certificate of incorporation and available
for the purposes of issue upon such exercise.
(e) Voluntary Increases. The Company may, but shall not be
obligated to, make such increases in the number of Warrant Shares, in
addition to those required by paragraphs (a) through (c) of this Section
11, as it considers to be advisable in order that any event treated for
United States federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients or if that is not possible,
to diminish any income taxes that are otherwise payable because of such
event.
(f) When Issuance or Payment May Be Deferred. In any case in
which this Section 11 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing
to the holder of any Warrant exercised after such record date the Warrant
Shares and other capital stock of the Company, if any, issuable upon such
exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise
Price and (ii) paying to such holder any amount in cash in lieu of a
fractional share pursuant to Section 13 hereof; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional
Warrant Shares, other capital stock and cash upon the occurrence of the
event requiring such adjustment.
(g) Form of Warrants. Irrespective of any adjustments in the
Exercise Price or kind of shares or other assets purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares or other
assets as are stated in the Warrants initially issuable pursuant to this
Agreement.
(h) Other Dilutive Events. If any corporate action shall occur as
to which the provisions of this Section 11 are not strictly applicable but
as to which the failure to make any adjustment would adversely affect the
purchase rights or value represented by the Warrants in accordance with the
essential intent and principles of such Section 11 (which are to place the
Warrant holder in a position as nearly equal as possible to the position
the Warrant holder would have occupied had the Warrant holder purchased
shares of Common Stock on the date hereof) then, in each such case, the
Company shall appoint a firm of independent certified public accountants of
recognized national standing (which may be the regular auditors of the
Company) to give their opinion upon the adjustment, if any, on a basis
consistent with the essential intent and principles established in this
Section 11, necessary to preserve, without dilution, the purchase rights
represented by Warrants. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to Warrant holders and will make the
adjustments described therein.
(i) Adjustment in Warrant Shares. Except in connection with an
adjustment pursuant to 11(c), upon each adjustment in the Exercise Price of
which a Warrant is exercisable pursuant to this Section 11, the number of
Warrant Shares covered by such Warrant shall be adjusted to equal a number
of shares of Common Stock equal to the number of Warrant Shares before such
adjustment multiplied by a fraction, of which the numerator is the Exercise
Price before giving effect to such adjustment and the denominator of which
is the Exercise Price immediately after giving effect to such adjustment.
SECTION 12. FRACTIONAL INTERESTS.
The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants, although it may do so in its sole
discretion. If more than one Warrant shall be presented for exercise in
full at the same time by the same holder, the number of full Warrant Shares
which shall be issuable upon the exercise thereof shall be computed on the
basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except
for the provisions of this Section 13, be issuable upon the exercise of any
such Warrants (or specified portion thereof), the Company shall pay to the
Warrant holder an amount in cash equal to the Market Price per Warrant
Share, as determined on the day immediately preceding the date the Warrant
is presented for exercise, multiplied by such fraction, computed to the
nearest whole cent.
SECTION 13. NOTICES TO WARRANT HOLDERS; RIGHTS OF WARRANT
HOLDERS.
Upon any adjustment of the number of Warrant Shares pursuant to
Section 11 hereof, the Company shall promptly thereafter (i) file with the
Register Office a certificate of the Senior Financial Officer of the
Company (unless the Purchasers request a certificate of a firm of
independent public accountants of recognized standing selected by the Board
of Directors (who may be the regular auditors of the Company)) setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment, upon exercise of a Warrant and (ii) give to each of the
registered holders of the Warrant certificates at its address appearing on
the Warrant register written notice of such adjustments by first-class
mail, postage prepaid. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be mailed under
the other provisions of this Section 13.
In case the Company shall authorize:
(a) the issuance of any dividend or other distribution on the
Common Stock, whether in cash, capital stock, or other securities,
evidences of indebtedness or other property; or
(b) any action which would require an adjustment of the number of
Warrant Shares pursuant to Section 11 hereof; or
(c) any tender offer or exchange offer by the Company for shares
of Common Stock, or Common Stock open market repurchase program; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Register Office and shall
give to each of the registered holders of the Warrant certificates at the
address appearing on the Warrant register, a written notice by first-class
mail, postage prepaid, at least 20 days (or 10 days in any case specified
in clause (b) above) prior to the applicable record date hereinafter
specified, or, in the case of events for which there is no record date, at
least 20 business days before the effective date of such event or the
commencement of such tender offer, exchange offer, or repurchase program.
Any written notice provided pursuant to this Section 13 shall state (i) the
date as of which the holders of record of shares of Common Stock are
entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the commencement date of any tender offer,
exchange offer or repurchase program for shares of Common Stock, or (iii)
the date on which any such consolidation, merger, conveyance, transfer,
reclassification, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected
that holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property, if any, deliverable
upon such consolidation, merger, conveyance, transfer, reclassification,
dissolution, liquidation or winding up. The failure to give the notice
required by this Section 13 or any defect therein shall not affect the
legality or validity of any issuance, right, option, warrant, distribution,
tender offer, exchange offer, repurchase program, consolidation, merger,
conveyance, transfer, reclassification, dissolution, liquidation or winding
up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice of meetings of
stockholders or the election of Directors of the Company or any other
matter, or any other rights of stockholders of the Company, including any
right to receive dividends. In addition, the holders of Warrant
certificates shall have no preemptive rights and shall not be entitled to
share in the assets of the Company in the event of the liquidation,
dissolution or winding up of the Company's affairs.
SECTION 14. OBTAINING STOCK EXCHANGE LISTINGS.
The Company shall also from time to time take all action
reasonably necessary so that the Warrant Shares, immediately upon their
issuance upon the exercise of Warrants, will be listed on or quoted on the
Nasdaq National Market or any securities exchange or interdealer quotation
system within the United States, if any, on which other shares of Common
Stock are then listed or quoted.
SECTION 15. NOTICES TO THE COMPANY.
Any notice or demand authorized by this Agreement to be given or
made by the Company or by the registered holder of any Warrant certificate
to the Company shall be sufficiently given or made when deposited in the
mail, first class or registered, postage prepaid, addressed, as follows:
Optika Inc.
0000 Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
SECTION 16. SUPPLEMENTS AND AMENDMENTS.
The Company may from time to time supplement or amend this
Agreement without the approval of any holders of Warrant certificates in
order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company may deem necessary or
desirable and which shall not in any way adversely affect the interests of
the holders of Warrant certificates. Any amendment or supplement to this
Agreement that has an adverse effect on the interests of holders of Warrant
certificates shall require the written consent of registered holders of
two-thirds of the then outstanding Warrants. The consent of each holder of
a Warrant affected shall be required for any amendment pursuant to which
the Exercise Price would be increased or the number of Warrant Shares for
or into which a Warrant may be exercised or convertible would be decreased.
SECTION 17. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 18. TERMINATION.
This Agreement shall terminate on the earlier of date on which
all Warrants have been exercised or after 5:00 p.m. (ET) on the Expiration
Date.
SECTION 19. GOVERNING LAW.
THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 20. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
Person other than the Company and the registered holders of Warrant
certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company and the registered holders of the Warrant certificates.
SECTION 21. HEADINGS.
The descriptive headings of the several Sections and paragraphs
of this Agreement inserted for convenience only, do not constitute a part
of this Agreement and shall not affect in any way the meanings or
interpretation of this Agreement.
SECTION 22. SUBMISSION TO JURISDICTION.
If any action, proceeding or litigation shall be brought by the
Purchaser or any holder of Warrants in order to enforce any right or remedy
under this Agreement, the Company hereby consents and will submit, and will
cause each of its subsidiaries to submit, to the jurisdiction of any state
or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Agreement.
The Company hereby irrevocably waives any objection, including, but not
limited to, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of
any such action, proceeding or litigation in such jurisdiction.
SECTION 23. WAIVER OF JURY TRIAL.
THE PARTIES TO THIS AGREEMENT HEREBY WAIVE ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE WARRANTS.
SECTION 24. SERVICE OF PROCESS.
Nothing herein shall affect the right of any holder of a Warrant
or Warrant Share to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Company in
any other jurisdiction.
SECTION 25. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
OPTIKA INC.
By:/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: CFO
PURCHASERS
----------
XXXXXX XXXXXX CAPITAL PARTNERS, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC, its general partner
By: Xxxxxx Xxxxxx Partners Group LLC, its managing member
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
TWP CEO FOUNDERS' CIRCLE (AI), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC, its general partner
By: Xxxxxx Xxxxxx Partners Group LLC, its managing member
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
TWP CEO FOUNDERS' CIRCLE (QP), L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC, its general partner
By: Xxxxxx Xxxxxx Partners Group LLC, its managing member
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
XXXXXX XXXXXX CAPITAL PARTNERS EMPLOYEE FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC, its general partner
By: Xxxxxx Xxxxxx Partners Group LLC, its managing member
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
TWP 2000 C0-INVESTMENT FUND, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC, its general partner
By: Xxxxxx Xxxxxx Partners Group LLC, its managing member
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
[Purchasers' Signature Page -- Warrant Agreement]
PURCHASERS
----------
RKB CAPITAL, L.P.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: General Partner
[Purchasers Signature Page - Warrant Agreement]
EXHIBIT A
Form of Warrant Certificate
[Face]
No. ____
Warrant Certificate
OPTIKA INC.
This Warrant Certificate certifies that _____________, or
registered assigns, is the registered holder of Warrants (the "Warrants")
to purchase an aggregate of _________ shares of Common Stock, par value
$.001 per share (the "Common Stock"), of OPTIKA INC. a Delaware corporation
(the "Company"). Each Warrant entitles the holder upon exercise to purchase
from the Company at any time after the date hereof a fully paid and
nonassessable share of Common Stock (a "Warrant Share") upon surrender of
this Warrant Certificate and payment in full for such Warrant Share at the
Register Office of the Company, subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. The number
of Warrant Shares purchasable upon exercise thereof are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof, which provisions shall
for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless authenticated
by countersignature of the Warrant Agent, as such term is used in the
Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
EXERCISABLE AT ANY TIME UNTIL THE EXPIRATION DATE.
IN WITNESS WHEREOF, Optika Inc. has caused this Warrant
Certificate to be signed by its President and Vice President each by a
facsimile of his signature, and has caused a facsimile of its corporate
seal to be affixed hereunto or imprinted hereon.
Dated:
OPTIKA INC.
By:
----------------------------
By:
----------------------------
[SEAL]
Form of Warrant Certificate
[Reverse]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
ASSIGNED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO (I) A REGISTRATION STATEMENT WITH RESPECT TO
SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAW, OR (II) ANY EXEMPTION FROM REGISTRATION
UNDER SUCH ACT, OR APPLICABLE STATE SECURITIES LAW, RELATING TO
THE DISPOSITION OF SECURITIES, INCLUDING RULE 144.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants having a term of eight years and
entitling the holder on exercise to receive shares of Common Stock (the
"Common Stock"), and are issued or to be issued pursuant to a Warrant
Agreement, dated as of February 23, 2000 (the "Warrant Agreement"), between
the Company and the other parties thereto, which Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and
is hereby referred to for a description of the rights, limitation of
rights, obligations, duties and immunities thereunder of the Company and
the holders (the words "holders" or "holder" meaning the registered holders
or registered holder) of the Warrants. All terms not otherwise defined
herein shall have the meanings set forth in the Warrant Agreement. A copy
of the Warrant Agreement may be obtained by the holder hereof upon written
request to the Company.
Warrants may be exercised at any time after the date hereof in
whole and from time to time in part until the Expiration Date. The holder
of Warrants evidenced by this Warrant Certificate may exercise such
Warrants by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed,
together with payment to the Company of the Exercise Price for each Warrant
then exercised. In lieu of payment of the Exercise Price pursuant to the
preceding sentence, the holder of the Warrants may convert the Warrants, in
whole or in part and at any time or times, into shares of Common Stock by
surrendering to the Company this Warrant Certificate with the form of
notice of conversion set forth hereon properly completed and executed. In
the event that upon any exercise of Warrants evidenced hereby the number of
Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or his
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the number of Warrant Shares may, subject to certain
conditions, be adjusted. The Company will not be required to issue
fractional Warrant Shares on the exchange of Warrants, although it may do
so in its sole discretion. If fractional shares are not issued, the Company
will pay the cash value of such fractional shares as determined in
accordance with the provisions of the Warrant Agreement.
Warrant certificates, when surrendered at the office of the
Company by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in
the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant
certificate or Warrant certificates of like tenor evidencing in the
aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this
Warrant certificate at the office of the Company, a new Warrant certificate
or Warrant certificates of like tenor and evidencing in the aggregate a
like number of Warrants shall be issued to the transferee(s) in exchange
for this Warrant certificate, subject to the limitations provided in the
Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company may deem and treat the registered holder(s)
thereof as the absolute owner(s) of this Warrant certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and the Company shall not be
affected by any notice to the contrary. Neither the Warrants nor this
Warrant certificate entitles any holder hereof to any rights of a
stockholder of the Company.
Form of Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant certificate, to receive ____________ shares of
Common Stock and hereby tenders for payment for such shares to the order of
Optika Inc. in the amount of $____________ in accordance with the terms
hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________________________, whose
address is _________________________________ and that such shares be
delivered to ______________________________ whose address is
________________________.
If said number of Warrant Shares is less than all of the shares
of Common Stock purchasable hereunder, the undersigned requests that a new
Warrant certificate representing the remaining balance of such shares be
registered in the name of _________________________, whose address is
__________________________, and that such Warrant certificate be delivered
to __________________________, whose address is _________________________.
--------------------------------
(Signature)
Date:
-----------------
Form of Notice of Conversion (To Be Executed Upon Conversion of
Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant certificate, to convert Warrants represented
hereby into ________ shares of Common Stock in accordance with the terms
hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________________________, whose
address is _________________________________ and that such shares be
delivered to ______________________________ whose address is
________________________.
If said number of Warrant Shares is less than all of the shares
of Common Stock purchasable hereunder, the undersigned requests that a new
Warrant certificate representing the remaining balance of such shares be
registered in the name of _________________________, whose address is
__________________________, and that such Warrant certificate be delivered
to __________________________, whose address is __________________________.
--------------------------------
(Signature)
Date:
-----------------
EXHIBIT B
---------
Form of Transfer
(To Be Executed Upon Transfer of Warrant)
FOR VALUE RECEIVED, the undersigned registered holder of this
Warrant certificate hereby sells, assigns and transfers unto the
Assignee(s) named below (including the undersigned with respect to any
Warrants constituting a part of the Warrants evidenced by this Warrant
certificate not being assigned hereby) all of the rights of the undersigned
under this Warrant certificate, with respect to the number of Warrants set
forth below:
Name of Assignee(s) Address Social Security or other Number of Warrants
identifying
number of assignee(s)
and does hereby irrevocably constitute and appoint the Company as the
undersigned's attorney to make such transfer on the register maintained by
the Company for that purpose, with full power of substitution in the
premises.
Date:
-----------------------------
(Signature of Owner)
-----------------------------
(Street Address)
-----------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------
Name:
Title:
