EXHIBIT 10(r)
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS RELATING TO SUCH SECURITIES
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO BOUNDLESS CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase [ ] Shares of
Common Stock of Merinta, Inc. (subject
to adjustment as provided herein).
COMMON STOCK PURCHASE WARRANT
As of [ ], 2000
Merinta, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), hereby certifies that, for value received, [ ] or
registered assigns (the "Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before 5:00
p.m., New York time, on [ ], 2005 (the "Expiration Date"), up to [ ]
fully paid and nonassessable shares of Warrant Stock (as hereinafter defined),
$.01 par value per share, of the Company, at a purchase price of $1 per share
(such purchase price per share as adjusted from time to time as herein provided
is referred to herein as the "Purchase Price"). The number and character of such
shares of Warrant Stock and the Purchase Price are subject to adjustment as
provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Merinta, Inc. and any corporation
which shall succeed or assume the obligations of Merinta, Inc. hereunder.
(b) The term "Common Stock" includes (i) the Company's Common Stock, $.01
par value per share, as authorized on the date of the Agreement, and (ii) any
other securities into which or for which any of the securities described in (i)
may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The term "Credit Agreement" shall mean the Second Amended and Restated
Credit Agreement and Guaranty, dated as of May 25, 2000, by and among the
Company, The Chase Manhattan Bank, Silicon Valley Bank and National Bank as
Canada, as lenders, The Chase Manhattan Bank as Administrative Agent for the
lenders, and the other parties named therein, as amended, restated, supplemented
or otherwise modified, from time to time.
(d) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the Holder at any time shall be entitled to receive, or shall
have received, on the exercise of the Warrant, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of Common Stock or Other Securities pursuant
to Section 5 or otherwise.
(e) The term "Warrant Stock" means the shares of Common Stock and Other
Securities owned or to be owned upon exercise of this Warrant.
3. Exercise of Warrant.
1.1 Number of Shares Issuable upon Exercise. The Holder shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Warrant Stock, subject to adjustment
pursuant to Section 5.
1.2 Full Exercise. This Warrant may be exercised in full by the Holder
by surrender of this Warrant, with the form of subscription attached as Exhibit
A hereto (the Subscription Form") duly executed by the Holder, to the Company at
its principal office or at the office of its Warrant agent (as provided in
Section 12), accompanied by payment either (a) in cash or by certified or
official bank check payable to the order of the Company, in the amount obtained
by multiplying the number of shares of Warrant Stock for which this Warrant is
then exercisable by the Purchase Price then in effect or, (b) the surrender to
the Company of securities of the Company having an aggregate Fair Market Value
equal to the aggregate Purchase Price of the shares of Warrant Stock being
purchased upon such exercise; provided, however, that in lieu of the method of
payment under clauses (a) or (b) of this Section 1.2, the Holder may make
payment by allowing the Company to deduct from the number of shares of Warrant
Stock deliverable upon such exercise of this Warrant a number of shares which
has an aggregate Fair Market Value determined as of the date of such exercise of
this Warrant equal to the aggregate Purchase Price for all shares as to which
this Warrant is then being exercised.
1.3 Partial Exercise. This Warrant may be exercised in part (but not for
a fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
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shares of Warrant Stock designated by the Holder in the Subscription Form by
(b) the Purchase Price then in effect. The method of payment shall be as
permitted by Section 1.2. On any such partial exercise, the Company, at its
expense, will forthwith issue and deliver to, or upon the order of, the Holder a
new Warrant of like tenor, in the name of the Holder hereof or as the Holder
(upon payment by such Holder of any applicable transfer taxes), may request,
subject to compliance with applicable securities laws, the number of shares of
Warrant Stock for which such Warrant may still be exercised.
1.4 Fair Market Value. Fair Market Value of a share of Warrant Stock as
of a particular date (the "Determination Date") shall mean:
(a) If the Warrant Stock is traded on an exchange or is quoted on the
National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") National Market System, then the average of the closing or last
sale price, respectively, reported for the five business days immediately
preceding the Determination Date.
(b) If the Warrant Stock is not traded on an exchange or on the
NASDAQ National Market System but is traded in the over-the-counter market
or other similar organization (including the Bulletin Board), then the
average of the closing bid and asked prices reported for the five business
days immediately preceding the Determination Date.
(c) If the Warrant Stock is not traded as provided above, then the
price determined in good faith by the Board of Directors of the Company,
provided that (1) the basis or bases of each such determination shall be
set forth in the corporate records of the Company pertaining to meetings
and other actions of such board, and (2) such records are available to the
Holder for inspection during normal business hours of the Company upon the
giving of reasonable prior notice.
(d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all
amounts to be payable per share to holders of the securities then
comprising Warrant Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Warrant Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the
shares of Warrant Stock then issuable upon exercise of all of the Warrants
are outstanding at the Determination Date.
1.5 Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the Holder acknowledge in writing
its continuing obligation to afford to the Holder any rights to which the Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to the Holder any such rights.
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1.6 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the Holder pursuant to
subsection 4.2, such bank or trust company shall have all the powers and duties
of a warrant agent appointed pursuant to Section 11 and shall accept, in its own
name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Warrant Stock purchased upon exercise of this Warrant shall
be deemed to be issued to the Holder as the record owner of such shares as of
the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as the Holder (upon payment by such Holder of
any applicable transfer taxes) may direct, subject to compliance with applicable
securities laws, a certificate or certificates for the number of duly and
validly issued, fully paid and nonassessable shares of Warrant Stock to which
the Holder shall be entitled on such exercise, plus, in lieu of any factional
share to which the Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then Fair Market Value of one full share, together
with any other stock or other securities and property (including cash, where
applicable) to which the Holder is entitled upon such exercise pursuant to
Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, Reclassification,
etc. In case at any time or from time to time, the holders of securities then
comprising Warrant Stock shall have received, or (on or after the record date
fixed for the determination of shareholders eligible to receive) shall have
become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement
other than additional shares of Warrant Stock issued as a stock dividend or
in a stock split (adjustments in respect of which are provided for in
Section 5),
then and in each such case the Holder, on the exercise hereof as provided in
Section 1, shall be entitled to receive the amount of stock and other securities
and property (including cash in the cases referred to in subdivisions
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(b) and (c) of this Section 3) which the Holder would hold on the date of such
exercise if on the date hereof the Holder had been the holder of record of the
number of shares of Warrant Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this Section 3) receivable by the Holder as
aforesaid during such period, giving effect to all adjustments called for during
such period by Section 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization, Consolidation, Merger etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Warrant Stock
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which the Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if the Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment thereafter as
provided in Sections 3 and 5.
4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets
in a transaction contemplated by Section 4.1(c), the Company, simultaneously
with such dissolution, shall distribute or cause to be distributed to the Holder
the stock and other securities and property (including cash, were applicable)
which would be receivable by the Holder if the Holder had exercised its Warrant
in full immediately prior to such dissolution, less an amount of stock, other
securities, property and cash with a value equal to the Purchase Price.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer referred to in this Section 4, this Warrant shall continue in
full force and effect and the terms hereof shall be applicable to the shares of
stock and other securities and property receivable on the exercise of this
Warrant after the consummation of such reorganization, consolidation or merger,
as the case may be, and shall be binding upon the issuer of any such stock or
other securities, including, in the case of any such transfer, the person
acquiring all or substantially all of the properties or assets of the Company,
whether or not such person shall have expressly assumed the terms of this
Warrant as provided in Section 6.
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5. Extraordinary Events Regarding Warrant Stock. In the event that the
Company shall (a) issue additional shares of the Warrant Stock as a dividend or
other distribution on outstanding Warrant Stock, (b) subdivide its outstanding
shares of Warrant Stock, or (c) combine its outstanding shares of the Warrant
Stock into a smaller number of shares of the Warrant Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Warrant Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Warrant Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The number of shares of Warrant Stock that the Holder shall thereafter, on the
exercise hereof as provided in Section 1, be entitled to receive shall be
increased or decreased to a number determined by multiplying the number of
shares of Warrant Stock that would otherwise (but for the provisions of this
Section 5) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 5) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.
6. Chief Financial Officer's Certificate as to Adjustments. In each case of
any adjustment or readjustment in the shares of Warrant Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Warrant Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Warrant Stock outstanding or deemed to be outstanding, and
(c) the Purchase Price and the number of shares of Warrant Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder and
any Warrant agent of the Company (appointed pursuant to Section 11 hereof),
7. Reservation of Stock, Issuable on Exercise of Warrant. The Company will
at all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, all shares of Warrant Stock from time to time issuable
on the exercise of this Warrant.
8. Assignment, Exchange of Warrant. Subject to compliance with applicable
Securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by the Holder (the "Transferor") with respect to any or all of the
shares of Warrant Stock underlying this Warrant. On the surrender for exchange
of this Warrant, with the Transferor's endorsement in the form of Exhibit B
attached hereto (the "Transferor Endorsement Form") to the Company, the Company
at its expense but with payment by the Transferor of any applicable transfer
taxes will issue and deliver to or on the order of the Transferor thereof a new
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Warrant or Warrants of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Warrant Stock called for on the face or faces of the Warrant
so surrendered by the Transferor. Each Transferee shall be entitled (pro rata
according to the number of shares of Warrant Stock issuable under the
Transferee's new Warrant) to those benefits accruing to the Transferor under
this Warrant prior to the date of issue of such new Warrant or Warrants.
9. Registration Rights: Procedure; Indemnification.
9.1 Registration Rights.
(a) On one occasion, on and after the time that this Warrant first
becomes exercisable, but not prior to the date the Company's registration
statement filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act") with respect to the Company's first public sale of securities is
declared effective by the Commission (the "IPO") and not later than the
third anniversary date of this Warrant, the Company, upon a written request
therefor from any registered holder or holders of more than 50% of the
total number of shares of Warrant Stock shall prepare and file a
registration statement with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), covering the Warrant Stock that is the subject of such request to
the extent required to permit the sale or other disposition of the Warrant
Stock so registered by the holders thereof (collectively, the "Seller").
The underwriter, if any, of an offering registered pursuant to this
Subsection 9.1(a) shall be selected by the holders or persons entitled to
be holders of at least a majority of the Warrant Stock for which
registration has been requested and shall be reasonably acceptable to the
Company. In the event the Warrant Stock is included in a registration
statement that includes securities to be sold for the account of the
Company, such written request for registration shall be deemed to have been
given pursuant to Subsection 9.1(b), rather than this Subsection 9.1(a),
and the rights of the holders of Warrant Stock covered by such written
request shall be governed by Subsection 9.1(b). In the event that the
Company has granted or hereafter grants to other holders of its securities
the right to participate in any registration requested by the holders of
the Warrant Stock pursuant to this Section 9.1(a), and the underwriters, if
any, of any such registered offering are of the opinion that the inclusion
of all shares requested to be included in such registration would adversely
affect the marketing of such shares, then, the number of shares included in
such offering shall be determined on pro rata basis according to the total
number of shares requested to be included by each requesting party.
However, if any registration demanded under this Section 9.1(a) results in
the registration of less than 75% of the shares of Warrant Stock for which
registration was requested pursuant hereto, then the holders of the Warrant
and the Warrant Stock shall be deemed not to have utilized their one-time
right to demand such registration.
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(b) On one occasion, on and after the time that this Warrant first
becomes exercisable, if the Company at any time proposes to register any of
its securities under the Securities Act for sale to the public, except with
respect to a registration statement filed by the Company with respect to an
IPO, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Forms
X-0, X-0 or another form not available for registering the Warrant Stock
that may be acquired upon exercise of this Warrant for sale to the public),
each such time it will give at least 45 days' prior written notice to the
Holder of its intention so to do. Upon the written request of the Holder,
received by the Company within 30 days after the giving of any such notice
by the Company, to register any of the Warrant Stock owned or to be owned
by the Holder pursuant to the exercise of this Warrant, the Company will
cause such Warrant Stock as to which registration shall have been so
requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the
extent required to permit the sale or other disposition of the Warrant
Stock so registered by the Seller. In the event that any registration
pursuant to this Section 9 shall be, in whole or in part, an underwritten
public offering of Warrant Stock, the number of shares of Warrant Stock to
be included in such an underwriting may be reduced by the Company and the
managing underwriter if and to the extent that the Company and the
underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein;
provided, however, that the Company shall notify the Seller in writing of
any such reduction. In the event that the underwriters notify the Company
that inclusion of shares of Warrant Stock would adversely affect the
marketing of the securities to be sold by the Company, and, as a result of
such determination, the holders of the Warrants or shares of Warrant Stock
are unable to include at least 75% of the shares for which registration was
requested pursuant to this Section 9.1(b), then holders of the Warrants and
Warrants Stock shall be deemed not to have utilized their one-time right to
participate in a registration by the Company of any of its securities.
Notwithstanding the forgoing provisions, the Company may withdraw any
registration statement referred to in this Section 9 without thereby
incurring any liability to the Seller.
(c) As a condition of registration pursuant to this Section 9, the
Company may require that this Warrant be exercised, to the extent of the
Warrant Stock to be registered, prior to the filing of the registration
statement in the event the Company's ability to use a Form S-3 or similar
form of registration statement is conditioned upon the issuance of the
stock to be registered prior to the filing of the registration statement.
Prior to exercising its right to require the exercise of the Warrant
contemplated by the preceding sentence, however, the Company shall use
commercially reasonable efforts (which shall not require the Company to
make any payment or to surrender any right) to effect such registration
without requirement of any exercise of the Warrant, including trying to
obtain the agreement of any underwriters participating in such registration
to purchase the Warrants directly from the holders thereof for a purchase
price equal to the price per Warrant Share at which such shares shall be
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offered to the public, less any underwriting commissions and less the
Purchase Price.
9.2 Registration Procedures. If and whenever the Company is required by
the provisions hereof to effect the registration of any shares of Warrant Stock
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities and
use its best efforts to cause such registration statement to become and
remain effective for the period of the distribution contemplated thereby
(determined as hereinafter provided):
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period specified in paragraph (a) above and
comply with the provisions of the Securities Act with respect to the
disposition of all of the Warrant Stock covered by such registration
statement in accordance with the Seller's intended method of disposition
set forth in such registration statement for such period;
(c) furnish to the Seller, and to each underwriter, if any, such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons reasonably
may request in order to facilitate the public sale or their disposition of
the securities covered by such registration statement;
(d) use its best efforts to register or qualify the Seller's Warrant
Stock covered by such registration statement under the securities or "blue
sky" laws of such jurisdictions as the Seller or, in the case of an
underwritten public offering, the managing underwriter reasonably shall
request, provided, however, that the Company shall not for any such purpose
be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent
to general service of process in any such jurisdiction;
(e) list the Warrant Stock covered by such registration statement
with any securities exchange market system on which the Warrant Stock of
the Company is then listed or traded;
(f) immediately notify the Seller and each underwriter, if any, at
any time when a prospectus relating to the Warrant Stock is required to be
delivered under the Securities Act, of the happening of any event of which
the Company has knowledge as a result of which such prospectus, as then in
effect, includes an untrue statement of a material fact or omits to state a
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material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(g) make available for inspection by the Seller, any underwriter
participating in any distribution pursuant to such registration statement,
and any attorney, accountant or other agent retained by the Seller or
underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by the Seller,
underwriter, attorney, accountant or agent in connection with such
registration statement.
For purposes of this Section 9, the period of distribution of
securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, or sooner if the managing underwriter consents, and the period
of distribution of securities in any other registration shall be deemed to
extend until the earlier of the sale of all securities covered thereby and 120
days after the effective date thereof.
In connection with each registration hereunder, the Seller will
furnish to the Company, in writing such information, with respect to itself and
the proposed distribution by it as reasonably shall be necessary in order to
assure compliance with federal and applicable state securities laws. In
connection with each registration pursuant to this Section 9 covering an
underwritten public offering, the Company and the Seller agree to enter into a
written agreement with the managing underwriter in such form and containing such
provisions as are customary in the securities business for such an arrangement
between such underwriter and companies of the Company's size and investment
stature.
9.3 Expenses. All expenses incurred by the Company in complying with
this Section 9, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including counsel fees) incurred
in connection with complying with state securities or "blue sky" laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars and costs of insurance are called "Registration
Expenses." All underwriting discounts and selling commissions applicable to the
sale of Warrant Stock, including any fees and disbursements of any special
counsel to the Seller, are called "Selling Expenses."
The Company will pay all Registration Expenses in connection with up
to two registration statements filed under this Section 9. All Selling Expenses
in connection with each registration statement under this Section 9 shall be
borne by the Seller in proportion to the number of shares sold by the Seller
relative to the number of shares sold under such registration statement or as
all sellers thereunder may agree.
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9.4 Indemnification and Contribution.
(a) In the event of a registration of any Warrant Stock under the
Securities Act pursuant to this Section 9, the Company will indemnify and
hold harmless the Seller, each underwriter of such Warrant Stock thereunder
and each other person, if any, who controls such Seller or underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Seller, or such
underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such Warrant Stock was registered under
the Securities Act pursuant to this Section 9, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or arc 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, and will reimburse the
Seller, each such underwriter and each such 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 Company will not be liable to the
provider of information giving rise to any claim in any such case if and to
the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity with information furnished by any
such Seller, the underwriter or any such controlling person about itself in
writing specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Warrant Stock under
the Securities Act pursuant to Section 9, the Seller will indemnify and
hold harmless the Company, each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who
signs the registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning
of the Securities Act, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement under which such Warrant Stock was registered under
the Securities Act pursuant to this Section 9, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement
thereof, 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, and will reimburse the
Company and each such officer, director, underwriter and 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
actions, provided, however, that the Seller will be liable hereunder in any
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such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and
in conformity with information pertaining to such Seller, as such,
furnished in writing to the Company by such Seller specifically for use in
such registration statement or prospectus, and provided, further, however,
that the liability of the Seller hereunder shall be limited to the
proportion of any such loss, claim, damage, liability or expense which is
equal to the proportion that the public offering price of the Warrant Stock
sold by the Seller under such registration statement bears to the total
public offering price of all securities sold thereunder, but not in any
event to exceed the proceeds received by the Seller from the sale of
Warrant Stock covered by such registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any actions such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this
Section 9.4(c) and shall only relieve it from any liability which it may
have to such indemnified party under this Section 9.4(c) if and to the
extent the indemnifying party is prejudiced by such omission. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent it shall wish,
to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 9.4(c) for any legal
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected, provided, however, that, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party
or if the interests of the indemnified party reasonably may be deemed to
conflict with the interest of the indemnifying party or if the indemnifying
party shall not have assumed or undertaken the defense of such action with
counsel reasonably satisfactory to such indemnified party, the indemnified
party shall have the right to select one separate counsel and to assume
such legal defenses and otherwise to participate in the defense of such
action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the indemnifying
party as incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) the
Seller, or any controlling person of the Seller, makes a claim for
indemnification pursuant to this Section 9.4 but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced
12
in such case notwithstanding the fact that this Section 9.4 provides for
indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of the Seller or controlling person of the
Seller in circumstances for which indemnification is provided under this
Section 9.4; then, and in each such case, the Company and the Seller will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so
that the Seller is responsible for the portion represented by the
percentage that the public offering price of its securities offered by the
registration statement bears to the public offering price of all securities
offered by such registration statement, and the Company is responsible for
the remaining portion; provided, however, that, in any such case, (A) the
Seller will not be required to contribute any amount in excess of the net
proceeds received by such Seller from the sale of all such securities
offered by it pursuant to such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning of
Section 10(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent
misrepresentation.
9.5 Agreement to be Bound by Lock-Up Period. Each Holder, by its
acceptance of this Warrant, agrees that if an IPO should occur at any time at
which such Holder holds any Warrant Shares acquired through the exercise of this
Warrant, or if such Holder should acquire Warrant Shares by exercise of all or a
part of this Warrant within 180 days after such IPO, such Holder will not, if so
requested by the managing underwriter(s) of such IPO, transfer any Warrant
Shares for such reasonable period after the consummation of the IPO (not to
exceed 180 days) as the managing underwriter(s) shall require and, if requested
by such underwriter(s), such Holder will sign an undertaking consistent with the
foregoing.
10. Put Option. Upon written notice from the Holder, Boundless Corporation
shall, within 30 days of the date designated in such notice, repurchase from the
Holder all or the portion of the Warrant as designated in such notice for an
amount equal to (x) $2 for each share of Warrant Stock covered by the portion of
the Warrant to be purchased by the Company as designated in such notice . Upon
such date designated for the exercise of the put option granted pursuant to this
Section 10, the Holder shall surrender its Warrant to the Company, without being
required to make any representation or warranty (other than that the Holder has
good and valid title to the Warrant free and clear of liens, claims,
encumbrances and restrictions of any kind) against payment therefore by (i) wire
transfer to an account at a bank located in the United States designated by the
Holder for such purposes or (ii) delivery of a certified or official bank check
drawn on a member of the New York Clearing House. If less than all of the
Warrant is being repurchased, the Company shall cancel the Warrant and issue in
the name of, and deliver to, the Holder or its designee a new Warrant for the
portion thereof not being repurchased.
11. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
13
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to the each holder of
the Warrant, appoint an agent having an office in New York, NY for the purpose
of issuing Warrant Stock (or Other Securities) on the exercise of this Warrant
pursuant to Section 1, exchanging this Warrant pursuant to Section 8, and
replacing this Warrant pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
13. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
14. Notices, etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
the Holder or, until the Holder furnishes to the Company an address, then to,
and at the address of, the last Holder of this Warrant who has so furnished an
address to the Company. Notices shall be deemed given 48 hours after mailing.
15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof. The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision.
14
IN WITNESS WHEREOF, the Company has executed this Warrant under seal as of
the date first written above.
MERINTA, INC.
By: /s/
----------------------------
Title: Vice President
Witness:
By: /s/
------------------------------
WITH RESPECT TO ITS OBLIGATIONS UNDER SECTION 10 HEREOF:
BOUNDLESS CORPORATION
By: /s/
----------------------------
Name:
Title:
WITNESS:
By: /s/
----------------------------
15
Exhibit A
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: MERINTA, INC.
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, shares of
Warrant Stock of Merinta, Inc. and herewith makes payment of $ therefor by
delivery of a check in such amount hereby instructing Merinta, Inc. to deduct
from the enclosed Warrant a number of shares of Warrant Stock having an
aggregate Fair Market Value equal to $____________ as of the date hereof, which
amount represents the Purchase Price for the shares for which the within Warrant
is hereby exercised, and which is equal to ______ shares of Warrant Stock], and
requests that the certificates for such shares be issued in the name of, and
delivered to whose address is .
Dated:
----- ---, ----
-------------------------------------------
(Signature must conform to name of Holder
as specified an the face of the Warrant)
------------------------------------------
(Address)
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Warrant Stock of Merinta, Inc. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred",
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Merinta, Inc.
with full power of substitution in the premises.
Transferees Percentage Transferred Number Transferred
------------- ------------------------ ----------------------
------------- ------------------------ ----------------------
------------- ------------------------ ----------------------
------------- ------------------------ ----------------------
Dated:
----- --, -----
--------------------------------------
(Signature must conform to name of
Holder as specified on the face of the
warrant)
Signed in the presence of:
------------------------ ------------------------
(Name) (Address)
ACCEPTED AND AGREED:
[TRANSFEREE]
------------------------
(Address)
------------------------ ------------------------
(Name) (Address)
