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EXHIBIT 10.17
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED
OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND NEITHER THIS WARRANT
NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE TRANSFERRED
EXCEPT AS PROVIDED IN SECTION 3 OF THIS WARRANT.
WARRANT
to purchase Common Stock of
General Automation, Inc.
Expiring April 30, 2003
FOR VALUE RECEIVED, General Automation, Inc., a Delaware corporation (the
"Company"), hereby grants to Xxxxxxx X. Xxxxx as Trustee of the 92653 Trust
Dated December 29, 1995, or registered assigns ("Holder"), the right to purchase
from the Company, upon and subject to the terms and conditions set forth in this
Warrant, all or any part of 61,111 fully paid and non-assessable shares of the
Common Stock of the Company for the aggregate exercise price of $72,722.00.
Hereafter, (i) the Common Stock of the Company, together with any other
equity securities which may be issued by the Company in substitution therefor,
is referred to as the "Common Stock", (ii) the shares of the Common Stock
purchasable hereunder are referred to as the "Warrant Shares", (iii) the
aggregate exercise price payable for all of the Warrant Shares is referred to as
the "Aggregate Exercise Price", and (iv) the price payable hereunder for each of
the Warrant Shares is referred to as the "Per Share Exercise Price", which shall
initially be $1.19 per share. The Per Share Exercise Price and the number of
Warrant Shares are subject to adjustment as hereinafter provided. The Aggregate
Exercise Price is not subject to adjustment.
This Warrant is issued in connection with the Warrant Agreement dated May
4, 1998 ("Warrant Agreement") by and between the Company and the "Lenders" (as
defined in the Warrant Agreement) and is issued in consideration of the Loan
made to the Company as described in the Warrant Agreement, which Loan is
evidenced by the "Note" (as defined in the Warrant Agreement").
This Warrant is subject to the following provisions, terms and conditions:
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Section 1. EXERCISE OF WARRANT.
To exercise this Warrant in whole or in part, the Holder shall deliver to
the Company at its principal office in Irvine, California, (a) a written notice,
in substantially the form of the Subscription Notice appearing at the end of
this Warrant, of the Holder's election to exercise this Warrant, which notice
shall specify the number of shares of Common Stock to be purchased, (b) cash or
a certified check payable to the Company, in an amount equal to the aggregate
purchase price of the number of shares of Common Stock being purchased and (c)
this Warrant. The Company shall as promptly as practicable, and in any event
within 15 days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in such
notice. The stock certificate or certificates so delivered shall be in the
denomination as may be specified in such notice and shall be issued in the name
of the Holder or such other name as shall be designated in such notice (provided
such designation complies with Section 3 herein). Such certificate or
certificates shall be deemed to have been issued and the Holder or any other
person so designated to be named therein shall be deemed for all purposes to
have become a holder of record of such shares as of the date such notice and
payment are received by the Company as aforesaid. If this Warrant shall have
been exercised only in part, the Company shall, at the time of delivery of said
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the remaining shares of Common Stock called for
by this Warrant, which new Warrant shall in all other respects be identical to
this Warrant, or, at the request of the Holder, appropriate notation may be made
on this Warrant and the same returned to the Holder. The Company shall pay all
expenses, taxes (except transfer taxes) and other charges payable in connection
with the preparation, issue and delivery of such stock certificates and new
Warrants.
All shares of Common Stock issued upon the exercise of this Warrant shall
be validly issued, fully paid and nonassessable and, if the Common Stock is then
listed on a national securities exchange or quoted on an automated quotation
system, shall be duly listed or quoted thereon.
The Company shall not be required upon any exercise of this Warrant to
issue a certificate representing any fraction of a share of Common Stock, but,
in lieu thereof, shall pay to the Holder cash in an amount equal to a
corresponding fraction (calculated to the nearest 1/100 of a share) of the
purchase price of one share of Common Stock as of the date of receipt by the
Company of notice of exercise of this Warrant.
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Section 2. TRANSFER, DIVISION AND COMBINATION.
The Company agrees to maintain at its principal office in Irvine,
California, books for the registration and transfer of this Warrant, and,
subject to the provisions of Section 3 hereof, this Warrant and all rights
hereunder are transferable, in whole, on such books at such office, upon
surrender of this Warrant at such office, together with a written assignment of
this Warrant duly executed by the Holder or his agent or attorney and funds
sufficient to pay any stock transfer taxes payable upon the making of such
transfer; provided, however, that no transfer shall be for less than 10,000
Warrant Shares, except as provided for in Section 10(i) hereof. Upon such
surrender and payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and this Warrant shall promptly be
canceled. A Warrant may be exercised by a new holder for the purchase of shares
of Common Stock without having a new Warrant issued.
This Warrant is transferable only on the books of the Company which it
shall cause to be maintained for such purpose. The Company may treat the
registered holder of this Warrant as he, she or it appears on the Company's
books at any time as the Holder for all purposes, notwithstanding the Company's
receipt of any notice to the contrary. No transferee or assignee of this Warrant
shall be eligible to become the registered holder of this Warrant unless the
requirements of Section 3 shall have been complied with in connection with the
transfer or assignment of this Warrant to such transferee or assignee.
Subject to Section 3 below, this Warrant may be divided or combined with
other Warrants upon presentation hereof at such principal office in Irvine,
California, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder or
his agent or attorney; provided, however, that no transfer shall be for less
than 10,000 Warrant Shares, except as provided for in Section 10(i) hereof.
Subject to compliance with the preceding paragraph as to any transfer that may
be involved in such division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
Section 3. RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS AND COMMON
STOCK.
This Warrant shall be exercisable (a) only under circumstances such that
the issue of Common Stock issuable upon such exercise is exempt from the
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requirements of registration under the Securities Act of 1933, as amended (or
any similar statute then in effect) (the 1933 Act) and any applicable state
securities law or (b) upon registration of such Common Stock in compliance
therewith. This Warrant shall be transferable only under circumstances such that
the transfer is exempt from the requirements of registration under the 1933 Act
and any applicable state securities law. By acceptance hereof, the Holder agrees
to comply with such legislation. All certificates issued representing the
Warrant Shares will bear a legend referring to the foregoing matters.
Before any transfer or attempted transfer of all or any part of this
Warrant or the Warrant Shares, the Holder shall give the Company written notice
of its intention so to do describing briefly the manner of any such proposed
transfer. Promptly after receiving such written notice, the Company shall
present copies thereof to Company counsel and, if the Company requests the
Holder to designate special counsel therefor, to any special counsel designated
by the Holder that is reasonably satisfactory to the Company. If, in the opinion
of counsel for the Company and counsel, if any, for the Holder, the proposed
transfer may be effected without registration under the 1933 Act and any
applicable state securities law of any such securities, the Company, as promptly
as practicable, shall notify the Holder of such opinion, whereupon the
securities proposed to be transferred may be transferred in accordance with the
terms of such notice. The Company shall not be required to effect any such
transfer before the receipt of such favorable opinion or opinions of the
effectiveness of registration. All costs associated with any counsel review or
issuance of any opinion in connection with the exercise or transfer of this
Warrant shall be borne solely by the Company.
Section 4. CERTAIN COVENANTS.
The Company covenants and agrees that it will at all times reserve and set
apart and have, free from preemptive rights, a number of shares of authorized
but unissued Common Stock, or other stock or securities deliverable pursuant to
this Warrant, sufficient to enable it at any time to fulfill all its obligations
hereunder.
Section 5. NOTICES
In the event that:
(a) the Company proposes to pay any dividend payable in stock (of
any class or classes) or any other security, upon its Common Stock or make any
distribution (other than ordinary cash dividends) to the holders of its Common
Stock,
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(b) the Company proposes to grant to the holders of its Common Stock
generally any rights or options,
(c) the Company proposes to effect any capital reorganization or
reclassification of capital stock of the Company,
(d) the Company proposes to consolidate with, or merge into, any
other corporation or to transfer its property as an entirety or substantially as
an entirety, or
(e) the Company proposes to effect the liquidation, dissolution or
winding up of the Company,
then the Company shall cause notice of any such intended action to be given to
holder of this Warrant not less than 20 days before the date on which the
transfer books of the Company shall close or a record shall be taken for such
stock dividend, distribution or granting of rights or options, or the date when
such capital reorganization, reclassification, consolidation, merger, transfer,
liquidation, dissolution or winding up shall be effective, as the case may be.
Any notice or other document required or permitted to be given or
delivered to holder of record of Warrants shall be delivered by facsimile,
reliable courier or first-class mail postage prepaid to each such holder at the
last address shown on the books of the Company maintained for the registry and
transfer of the Warrants. Any notice or other document required or permitted to
be given or delivered to holders of record of Warrant Shares pertaining to the
rights granted to such holder under Section 10 below shall be delivered by
facsimile, reliable courier or first-class mail postage prepaid to each such
holder at such holder's address as the same appears on the stock records of the
Company. Any notice or other document required or permitted to be given or
delivered hereunder to the Company shall be delivered by facsimile, reliable
courier or first-class mail postage prepaid to the principal office of the
Company, at Irvine, California, or delivered to the office of one of the
Company's executive officers at such address, or such other address as shall
have been furnished by the Company to the holders of record of such Warrants and
the holders of record of such Warrant Shares.
Section 6. LIMITATION OF LIABILITY; NOT SHAREHOLDERS.
No provision of this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive dividends or to receive
notice as a shareholder in respect of meetings of shareholders for the election
of directors of the Company or any other matter whatsoever as shareholders of
the Company.
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No provision hereof, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of Holder for the
purchase price or as a shareholder of the Company, whether such liability is
asserted by the Company, creditors of the Company or others.
Section 7. LOSS, DESTRUCTION, ETC. OF WARRANT.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of this Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of this Warrant, the Company
will make and deliver a new Warrant, of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any Warrant issued under the provisions
of this Section 7 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
Section 8. EXERCISE AND EXPIRATION OF WARRANT.
This Warrant may be exercised in whole or in part from and after the
"Valuation Date" (as defined in the Warrant Agreement) and prior to the
expiration of this Warrant. Notwithstanding the preceding sentence, in the event
this Warrant is subject to early termination pursuant to Section 9(d) hereof,
then the Holder shall have a right to exercise this Warrant (in whole or in
part) pursuant to Section 9(d) hereof. The expiration time and date of the
Warrant shall be 5:00 P.D.T. on April 30, 2003, subject to earlier termination
pursuant to Section 9(d) below.
Section 9. ADJUSTMENT OF NUMBER OF SHARES ISSUABLE PURSUANT TO THIS
WARRANT.
(a) DISTRIBUTION WITH RESPECT TO COMMON STOCK. If, at any time or
from time to time after the date of this Warrant, the Company shall distribute
to the holders of the Common Stock, without payment therefor: (i) securities,
other than shares of the Common Stock, or (ii) property, other than cash, with
respect to the Common Stock, then, and in each such case, subject to Section
9(d) below, the Holder, upon the exercise of this Warrant, shall be entitled to
receive the securities and properties which the Holder would hold on the date of
such exercise if, on the date of such distribution, the Holder had been the
holder of record of the number of shares of the Common Stock subscribed for upon
such exercise and, during the period from the date of such distribution to and
including
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the date of such exercise, had retained such shares and the securities and
properties receivable by the Holder during such period.
(b) STOCK SPLITS, ETC. If, at any time or from time to time after
the date of this Warrant, the Company shall issue to the holders of the Common
Stock shares of the Common Stock by way of a stock dividend or stock split,
then, and in each such case, the Per Share Exercise Price shall be adjusted, or
further adjusted, to a price (to the nearest tenth of one cent) determined by
dividing (i) an amount equal to the number of shares of the Common Stock
outstanding immediately prior to such issuance multiplied by the Per Share
Exercise Price as it existed immediately prior to such issuance by (ii) the
total number of shares of the Common Stock outstanding immediately after such
issuance. Upon each such adjustment in the Per Share Exercise Price, the number
of Warrant Shares shall be adjusted by dividing the Aggregate Exercise Price by
the Per Share Exercise Price in effect immediately after such adjustment.
(c) REVERSE SPLITS, ETC. If, at any time or from time to time after
the date of this Warrant, the number of shares of Common Stock outstanding is
decreased by way of combination of shares or reverse split, then, and in each
such case the Per Share Exercise Price shall be adjusted, or further adjusted,
to a price (to the nearest tenth of one cent) determined by dividing (i) an
amount equal to the number of shares of the Common Stock outstanding immediately
prior to such event multiplied by the Per Share Exercise Price as it existed
immediately prior to such event by (ii) the total number of shares of the Common
Stock outstanding immediately after such event. Upon each such adjustment in the
Per Share Exercise Price, the number of Warrant Shares shall be adjusted by
dividing the Aggregate Exercise Price by the Per Share Exercise Price in effect
immediately after such adjustment.
(d) REORGANIZATION; TERMINATION OF WARRANT. In the event that the
Company at any time proposes to (i) merge into, consolidate with or enter into
any other reorganization (including the sale of substantially all of its assets)
in which the Company is not the surviving corporation (other than a merger
solely for the purpose of effecting a change in the Company's corporate
domicile), or (ii) enter into a merger or other reorganization as a result of
which the outstanding shares of Common Stock of the Company will be changed into
or exchanged for shares of the capital stock or other securities of another
corporation or for cash or other property (other than a merger solely for the
purpose of effecting a change in the Company's corporate domicile), the Company
shall mail notice thereof (the "Notice") to the Holder and shall not consummate
any such transaction nor make any distribution to shareholders with respect
thereto, until the expiration of twenty (20) days after the date of mailing of
the Notice, and the
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record date for shareholders entitled to participate in such transaction or
distribution, if applicable, shall not be earlier than a date which is at least
twenty (20) days after the date of mailing of the Notice. Notwithstanding any
other provision hereof, the right to exercise this Warrant shall automatically
expire and terminate upon consummation of the transaction to which the Notice
relates.
Section 10. REGISTRATION RIGHTS.
(a) DEFINITIONS. The terms defined in this Section 10(a) shall have the
meanings herein specified for all purposes of this Warrant, applicable to both
the singular and plural forms of any of the terms herein defined.
(1) Board. "Board means the Board of Directors of the Company.
(2) Commission. "Commission" means the United States Securities and
Exchange Commission.
(3) Holder's Registrable Securities. "Holder's Registrable
Securities" means (i) the Common Stock issued or issuable upon the exercise of
this Warrant and all other Original Warrants and/or Additional Warrants of which
the Holder is the record holder, and (ii) any securities issued or issuable with
respect to the Common Stock referred to in clause (i) above by way of a stock
dividend or stock split or in connection with a combination of shares,
reclassification, recapitalization, merger or consolidation or reorganization;
provided, however, that such shares of Common Stock shall only be treated as
Holder's Registrable Securities if and so long as they have not been (i) sold to
or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (ii) sold in a transaction exempt from the
registration and prospectus delivery requirements of the 1993 Act under Section
4(1) thereof or other applicable exemption so that all transfer restrictions and
restrictive legends with respect to such Common Stock are removed upon the
consummation of such sale, or (iii) issued and outstanding for one year or more.
(4) Other Registrable Securities. "Other Registrable Securities"
means all Common Stock, whether now outstanding or hereafter issued, which the
Company has agreed to register, or may hereafter agree to register, other than
the Holder's Registrable Securities.
(5) Registrable Securities. "Registrable Securities" means all of
the Holder's Registrable Securities and all of the Other Registrable Securities,
collectively.
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(6) Register, Registered and Registration. The terms "register,"
"registered," and "registration" refer to a registration effected by preparing
and filing a registration statement in compliance with the 1933 Act, and the
declaration or ordering of the effectiveness of such registration statement.
(b) REGISTRATION.
(1) Notice to Holders, Etc. Each time the Company shall determine to
file a registration statement under the 1933 Act in connection with the public
offering of shares of Common Stock for cash on a form which would also permit
the registration of the Holder's Registrable Securities, the Company will
promptly give written notice of its determination to the Holder. Upon the
written request of the Holder given within twenty (20) days after the receipt of
such written notice from the Company, the Company agrees to cause all of the
Holder's Registrable Securities, or such portion thereof as the Holder has
specified to the Company in writing, to be included in such registration
statement and registered under the 1933 Act.
(2) Inclusion in Underwriting. If the registration of which the
Company gives written notice pursuant to Section 10(b)(1) is for a public
offering involving an underwriting, the Company agrees to advise the Holder as a
part of its written notice. In such event, the right of the Holder to
registration pursuant to this Section 10 shall be conditioned upon the Holder's
participation in such underwriting and the inclusion of Holder's Registrable
Securities in the underwriting to the extent provided herein. If any of the
Holder's Registrable Securities are to be distributed through such underwriting,
the Holder shall enter into (together with the Company and the other
shareholders of the Company distributing their securities through such
underwriting) an underwriting agreement with the underwriter or underwriters
selected for such underwriting by the Company, provided that such underwriting
agreement is in customary form.
(3) Limitations. Notwithstanding any other provision of this Section
10, if the managing underwriter of an underwritten distribution advises the
Company in writing that in its good faith judgment the number of shares of
Registrable Securities requested to be registered exceeds the number of shares
of Registrable Securities which can be sold in such offering, then the number of
shares of Registrable Securities so requested to be included in the offering
shall be reduced to that number of shares which in the good faith judgment of
the managing underwriter can be sold in such offering (except for shares to be
issued by the Company, which shall have priority over the shares of Registrable
Securities), and such reduced number of shares shall be allocated among the
Holder and all other participating holders of Registrable Securities in
proportion, as nearly as
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practicable, to the respective number of shares of Registrable Securities held
by such persons at the time of filing the registration statement. All Holder's
Registrable Securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation and all Holder's Registrable Securities not
originally requested to be so included shall not be included in such
registration.
(4) Abandonment of Registration. Notwithstanding any other provision
of this Warrant, the Company may at any time, at the discretion of the Board,
abandon or terminate any registration statement, either prior to or after its
filing with the Commission, without liability or obligation to the Holder.
(c) EXPENSES.
(1) Registration Expenses. The Company agrees to bear all fees,
costs and expenses with respect to the inclusion of shares of Holder's
Registrable Securities in any registration statement pursuant to this Section
10.
(2) Company Expenses; Expenses of Holder. The fees, costs and
expenses of registration to be borne as provided in Section 10(c)(1) above shall
consist of all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, fees and disbursements
of counsel for the underwriter or underwriters of such securities (if the
Company and/or selling security holders are otherwise required to bear such fees
and disbursements), and all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified. The fees, costs
and expenses to be borne by the Company under Section 10(c)(1) above shall not
include the fees, costs or expenses of any counsel to Holder or stock transfer
taxes or underwriters' discounts and commissions relating to any of the Holder's
Registrable Securities.
(d) OBLIGATIONS OF THE COMPANY. Whenever required under this Section 10 to
effect the registration of any Holder's Registrable Securities, the Company
shall, as expeditiously as reasonably possible, furnish to the Holder such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the 1933 Act, and such other documents as
the Holder may reasonably request in order to facilitate the disposition of the
Holder's Registrable Securities included in the registration; and
(e) FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 10 that
the Holder shall furnish to the Company such information regarding the Holder,
the
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Holder's Registrable Securities and the intended method of disposition of such
securities as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
(f) INDEMNIFICATION. In the event any shares of the Holder's Registrable
Securities are included in the registration statement under this Section 10:
(1) to the extent permitted by law, the Company will indemnify and
hold harmless the Holder, any underwriter (as defined in the 0000 Xxx) for it
and each person, if any, who controls the Holder or underwriter within the
meaning of the 1933 Act, against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading or
arise out of any violation by the Company of any rule or regulation promulgated
under the 1933 Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration; and will
reimburse the Holder, such underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the indemnity agreement contained in this Section 10(f)(l) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld) nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
the Holder, or any such underwriter or controlling person;
(2) to the extent permitted by law, the Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act and each agent and any underwriter for the
Company and each person who controls such underwriter (within the meaning of
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the 1933 Act) against any losses, claims, damages or liabilities to which the
Company or any such director, officer, controlling person, agent or underwriter
may become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by the Holder expressly for use in connection with such registration, and the
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or underwriter
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 10(f)(2) shall not apply to amounts paid in settlement of any
such loss, claim damage, liability or action if such settlement is effected
without the consent of the Holder (which consent shall not be unreasonably
withheld); and
(3) promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this paragraph, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. The failure to notify
an indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
paragraph, but the omission so to notify the indemnifying party will not relieve
him of any liability that he may have to any indemnified party otherwise than
under this paragraph.
(g) REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the 1933 Act
and any other rule or regulation of the Securities and Exchange Commission that
may at any time permit the Holder to sell
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securities of the Company to the public without registration, the Company agrees
to use its reasonable best efforts to:
(1) make and keep public information available, as those terms are
understood and defined in Rule 144;
(2) file with the Securities and Exchange Commission in a timely
manner all reports and other documents required of the Company under the 1933
Act and the Securities Exchange Act of 0000 (xxx 0000 Xxx); and
(3) furnish to the Holder so long as the Holder owns any of the
Holder's Registrable Securities forthwith upon request a written statement by
the Company that it has complied with the reporting requirements of Rule 144 and
the 1934 Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as may be
reasonably requested in availing any holder of any rule or regulation of the
Securities and Exchange Commission permitting the selling of any such securities
without registration.
(h) CERTAIN SITUATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION
RIGHTS. The Company shall not, as long as any shares of Holder's Registrable
Securities are outstanding, enter into any agreement with any holder or
prospective holder of securities of the Company which limits or restricts in any
manner the performance of the Company's obligations under this Section 10 or
alters the allocation provisions in Section 10(b)(3) if marketing factors
require a limitation on the number of securities to be included in an
underwritten offering.
(i) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register securities granted to the Holder by the Company under this Section 10
may be transferred or assigned by the Holder only to a transferee or assignee of
not less than 10,000 shares of Registrable Securities, provided that the Company
is given written notice at the time of or within a reasonable time after such
transfer or assignment, stating the name and address of the assignee or
transferee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and, provided, further,
that the transferee or assignee of such rights assumes in writing the
obligations of the Holder under this Section 10. Notwithstanding anything
contained to the contrary in Section 10(i) hereof, Four JM LLC shall be entitled
to transfer or assign the securities granted herein in increments as small as
1,000 shares, provided that such transferees or assignees are then existing
members of Four JM LLC.
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Section 11. AMENDMENTS.
Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, provided that any term of this
Warrant may be amended or the observance of such term may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Company and the holders of
Original Warrants and Additional Warrants, as defined in the Warrant Agreement
(collectively, "Warrants"), and/or shares of Registrable Securities then
outstanding which were issued upon the exercise of any of the Warrants, that
represent, in the aggregate, at least a majority of the sum of (i) all of the
Registrable Securities then outstanding which were issued upon the exercise of
any of the Warrants, and (ii) the total number of shares of Registrable
Securities issuable under all of the Warrants then outstanding.
Section 12. ATTORNEYS FEES.
If a lawsuit, arbitration, or other proceedings are instituted by any
party to enforce any of the terms or conditions of this Warrant against any
other party hereto, the prevailing party in such litigation, arbitration, or
proceedings shall be entitled, as an additional item of damages, to such
reasonable attorneys' and other professional fees(including but not limited to
expert witness fees), court costs, arbitrators' fees, arbitration administrative
fees, travel expenses, and other out-of-pocket expenses or costs of such other
proceedings as may be fixed by any court of competent jurisdiction, arbitrator,
or other judicial or quasi-judicial body having jurisdiction thereof, whether or
not such litigation or proceedings proceed to a final judgment or award. For the
purposes of this Section 12.0, any party receiving an arbitration award or a
judgment for damages or other amounts shall be deemed to be the prevailing
party, regardless of amount of the damage awarded or whether the award or
judgment was based upon all or some of such party's claims or causes of action.
Section 13. GOVERNING LAW.
This Warrant shall be governed by the laws of the State of California
without regard to its conflict of laws principles or rules.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its duly authorized officer.
GENERAL AUTOMATION, INC.,
a Delaware corporation
-----------------------------------------
By: XXXXXXX XXXXX
Its: Chief Financial Officer
Dated:
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EXHIBIT A
Notice of Exercise
1. The undersigned hereby elect(s) to purchase _____________ shares of the
Common Stock of General Automation pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
2. Please issue a certificate or certificates representing said shares in
the name(s) of the undersigned or in such other name(s) as specified below:
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(Name)
---------------------------------------------------
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(Address)
3. The undersigned represents the undersigned is acquiring the shares
solely for its own account and not as a nominee for any other party and not with
a view toward the resale or distribution thereof except in compliance with the
applicable securities law.
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(Signature)
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(Date)
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