NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND AS SUCH
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH
WARRANT OR SECURITIES, OR UNLESS SOLD IN FULL COMPLIANCE WITH RULE 144
PROMULGATED UNDER THE ACT OR UNLESS THE COMPANY SHALL RECEIVE AN OPINION FROM
COUNSEL TO HOLDER, REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED.
ANALOGY, INC.
Common Stock Purchase Warrant
November 22, 1996
THIS CERTIFIES THAT, for value received, Xxxx Xxxxxxx ("Grebene") is
entitled to purchase up to Two Hundred Eighteen Thousand One Hundred Eighty
(218,180) shares (the "Shares") of Common Stock of Analogy, Inc., an Oregon
corporation (the "Company"), at a price per share of $ 4.125 (such price and
such other price as shall result, from time to time, from adjustments specified
below is referred to herein as the "Warrant Price"), subject to the provisions
and upon the terms and conditions hereinafter set forth. As used herein, the
term "Common Stock" shall mean the Company's duly authorized Common Stock, no
par value, and the term "Grant Date" shall mean the date set forth above.
1. TERM.
a. WHEN EXERCISABLE. Subject to the terms hereof, the purchase
rights represented by this Warrant vest and become exercisable, in accordance
with the following schedule:
54,545 Shares on that date which is 6 months from the date hereof;
54,545 Shares on that date which is 12 months from the date hereof;
54,545 Shares on that date which is 18 months from the date hereof;
and
54,545 Shares on that date which is 24 months from the date hereof;
provided, however, that in the event Grebene's employment with the Company or
any affiliate thereof is terminated for "cause" (as defined in that certain
Employment Agreement by and between Symmetry Design Systems, Inc. and Xxxx
Xxxxxxx dated as of November 22, 1996 (the "Employment Agreement")) or
voluntarily by Grebene prior to November 22, 1998, the purchase rights
represented by this Warrant shall vest and be exercisable if and only as vested
and exercisable on the date of such termination and in accordance with the last
sentence of this Paragraph 1; and provided, further, that in the event Grebene's
employment with the Company or any affiliate thereof is terminated without
"cause" (as defined in the
1
Employment Agreement) prior to November 22, 1998, the purchase rights
represented by this Warrant shall continue to vest and become exercisable in
accordance with the foregoing schedule and the last sentence of this Paragraph
1. Grebene may exercise the purchase rights represented by this Warrant (to the
extent the same are vested and exercisable), no later than the 180th day
following (i) the termination date of Grebene's employment with the Company or
any affiliate thereof if such termination was for "cause" or voluntary, or (ii)
the period ending November 22, 1998 if Grebene's employment with the Company or
any affiliate thereof was terminated without "cause."
b. ACCELERATION OF EXERCISABLITY. Notwithstanding the
provisions of subparagraph 1(a) above, in the case of (i) any merger of the
Company with or into another corporation where the Company is not the survivor
of such merger, (ii) any sale of all or substantially all of the assets of the
Company, (iii) any acquisition by any person, entity or group within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), of the beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of the Company
representing in excess of fifty percent (50%) of the voting power entitled to
vote in the election of directors, or (iv) the death or permanent disability of
Grebene, then, upon the effective date of such merger, sale or acquisition, or
upon the date of such death or determination of permanent disability, 100% of
the Shares shall be vested and immediately exercisable.
2. METHOD OF EXERCISE; NET ISSUE EXERCISE.
a. METHOD OF EXERCISE: PAYMENT: ISSUANCE OF NEW WARRANT. The
purchase right represented by this Warrant may be exercised by Grebene, in whole
or in part, at any time or from time to time, at the election of Grebene, by the
surrender of this Warrant (with the notice of exercise form attached hereto as
EXHIBIT A duly executed) at the principal office of the Company and by the
payment to the Company, by cash, check or wire transfer, of an amount equal to
the then applicable Warrant Price per share multiplied by the number of Shares
then being purchased.
b. NET ISSUE EXERCISE. In lieu of exercising this Warrant
under subparagraph 2(a) above, Grebene may elect to receive shares equal to the
value of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company, together with notice of
such election, in which event the Company shall issue to Grebene a number of
Shares computed using the following formula:
X= Y(A-B)
------
A
Where: X= The number of Shares to be issued to Grebene
Y= the number of Shares to be exercised under this Warrant at the
time of such exercise (which number shall not exceed the
total number
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of Shares exercisable under this Warrant at the time of such
tender.)
A= the fair market value of one share of Common Stock at the time of
such exercise.
B= the per share Warrant Price (as adjusted through the date of such
exercise.)
For purposes of this subparagraph 2(b), the fair market value of the Common
Stock shall be determined as follows:
(a) if traded on a securities exchange, the fair
market value shall be the average of the closing prices over the ten (10) day
trading period immediately preceding three days before the day the current fair
market value of the securities is being determined; or
(b) if actively traded over-the-counter, the fair
market value shall be deemed to be the average of the closing bid and asked
prices quoted on the Nasdaq system (or similar system) over the ten (10) day
trading period immediately preceding three days before the day the current fair
market value of the securities is being determined.
The person or persons in whose name(s) any certificate(s) representing
Shares shall be issuable upon exercise of this Warrant shall be deemed to have
become the holder(s) of record of, and shall be treated for all purposes as the
record holder(s) of, the shares represented thereby (and such shares shall be
deemed to have been issued) immediately prior to the close of business on the
date or dates upon which this Warrant is exercised. In the event of any
exercise of the rights represented by this Warrant, certificates for the shares
of stock so purchased shall be delivered to Grebene as soon as possible and in
any event within fifteen (15) days of receipt of such exercise and, unless this
Warrant has been fully exercised or expired, a new Warrant representing the
portion of the Shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to Grebene as soon as possible and in
any event within such fifteen (15)-day period.
3. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issue thereof. During the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of Shares to
provide for the exercise of the rights represented by this Warrant.
4. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of the Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events as follows:
3
a. RECLASSIFICATION OR MERGER. In case of any
recapitalization, reclassification, change or conversion of Common Stock
issuable upon exercise of this Warrant (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any merger of the Company
with or into another corporation (other than a merger with another corporation
in which the Company is the continuing and surviving corporation and which does
not result in any reclassification or change of outstanding securities issuable
upon exercise of this Warrant), or in case of any sale of all or substantially
all of the assets of the Company, the Company, or such successor or purchasing
corporation, as the case may be, shall execute a new Warrant (in form and
substance satisfactory to Grebene) providing that Grebene shall have the right
to exercise such new Warrant and upon such exercise to receive, in lieu of each
share of Common Stock theretofore issuable upon exercise of this Warrant, the
kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification, change or merger by a holder of one share
of Common Stock. Such new Warrant shall provide for adjustments that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Paragraph 4. The provisions of this subparagraph 4(a) shall similarly
apply to successive reclassification, changes, mergers and transfers.
b. SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Warrant Price and the number of shares of Common
Stock issuable upon exercise hereof shall be proportionately adjusted such that
the aggregate exercise price of this Warrant shall at all times remain equal,
and such that Grebene will be entitled to receive, after such subdivision or
combination, that number of shares Grebene would have been entitled to received
in connection with such subdivision or combination if Grebene had exercised this
Warrant immediately prior to the effective date of such subdivision or
combination.
c. STOCK DIVIDENDS. If the Company at any time while this
Warrant is outstanding and unexpired shall pay a dividend payable in shares of
Common Stock (except any distribution specifically provided for in the foregoing
subparagraphs 4(a) and 4(b), then (i) the Warrant Price shall be adjusted, from
and after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Warrant
Price in effect immediately prior to such date of determination by a fraction
(x) the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such dividend or distribution, and (y) the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately after such dividend or distribution and (ii) the number
of shares of Common Stock subject to this Warrant shall be proportionately
adjusted such that the aggregate exercise price of this Warrant shall at all
times remain equal.
d. NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action,
4
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Paragraph 4 and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of Grebene as the holder of this Warrant against impairment.
e. NOTICES OF SIGNIFICANT EVENTS. At any time while this
Warrant is outstanding and unexpired, in the event the Company undertakes the
payment of any dividend or other distribution or a merger or consolidation of
the Company with or into any other corporation, or any proposed sale, lease or
conveyance of all or substantially all of the assets of the Company, or any
proposed liquidation, dissolution or winding up of the Company, or any proposed
amendment to the Company's Articles of Incorporation, or any public offering of
its Common Stock the Company shall mail to Grebene, at least twenty (20) days
prior to the date of consummating such event, a notice specifying the event and
the date on which such event is then proposed to be consummated, and before
which it will not be consummated.
5. NOTICE OF ADJUSTMENTS. Whenever, while this Warrant is
outstanding and unexpired, the Warrant Price shall be adjusted pursuant to the
provisions hereof, the Company shall within thirty (30) days of such adjustment
deliver a certificate signed by its chief financial officer to Grebene as the
registered holder hereof setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Warrant Price after giving effect to such
adjustment.
6. FRACTIONAL SHARES. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares, the Company shall make a cash payment therefor upon the basis of the
Warrant Price then in effect.
7. RIGHTS AS SHAREHOLDER. Grebene, as the holder of this Warrant,
shall not be entitled to vote or receive dividends and shall not be deemed the
holder of Common Stock, nor shall anything contained herein be construed to
confer upon Grebene as the holder of this Warrant, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until this Warrant shall have been exercised and the shares of Common Stock
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Grebene as follows:
a. The Company is a corporation duly organized and active under
the laws of the State of Oregon and has all requisite corporate power and
authority to carry on its business as now conducted.
5
b. This Warrant has been duly authorized by all necessary
corporate action by the Company and has been duly executed by the Company, and
this Warrant represents the valid and binding obligation of the Company
enforceable in accordance with the terms set forth herein, except as may be
limited by bankruptcy or other similar laws related to creditors' rights or
equitable remedies.
c. The Shares purchasable upon the exercise hereof have been
duly authorized and reserved for issuance by the Company and when issued in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and will be issued in compliance with all applicable federal and
state securities laws.
d. The execution and delivery of this Warrant does not, and the
issuance of the shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof will not, violate or be inconsistent with the
Company's Articles of Incorporation and the Company's Bylaws, does not and will
not contravene any law, governmental rule or regulation, judgment or order
currently applicable to the Company, and does not and will not contravene any
provision of, or constitute a default under, any indenture, mortgage, contract,
or other instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the registration
with or the taking of any action in respect of or by, any federal state or local
governmental authority or agency or other person.
9. REPRESENTATIONS AND WARRANTIES OF GREBENE. Grebene hereby
represents and warrants to the Company the following:
a. Grebene is aware of the Company's business affairs and
financial condition, and has acquired information about the Company sufficient
to reach an informed and knowledgeable decision to acquire this Warrant and the
Shares issuable upon exercise of this Warrant. Grebene is acquiring this
Warrant and the Shares issuable upon exercise of this Warrant for its own
account for investment purposes only and not with a view to any "distribution"
thereof that would not otherwise be in compliance with the Act.
b. Grebene understands that neither this Warrant nor the Shares
have been registered under the Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Grebene's investment intent as expressed herein.
c. Grebene understands that this Warrant and the Shares
issuable upon the exercise of this Warrant must be held indefinitely unless
subsequently registered under the Act and any applicable state securities laws,
or unless exemptions from registration are otherwise available.
d. Grebene is aware of the provisions of Rule 144, promulgated
under the Act, which, in substance, permits limited public resale of "restricted
securities"
6
acquired, directly or indirectly, from the issuer thereof (or from an affiliate
of such issuer), in a non-public offering subject to the satisfaction of certain
conditions.
e. With respect to any offer, sale or other disposition of this
Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to
registration of such Warrant or Shares, Grebene and each subsequent holder of
this Warrant agrees to (i) give written notice to the Company prior thereto,
describing the manner thereof and (ii) if reasonably requested by the Company,
an opinion of counsel, reasonably satisfactory to the Company, confirming that
such offer, sale or other disposition may be effected without registration or
qualification under the Act as then in effect or any federal or state law then
in effect.
10. MODIFICATION AND WAIVER. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only if expressly set forth in
an instrument in writing signed by the Company and Grebene.
11. NOTICES. Unless otherwise provided, any notice required or
permitted herein shall be given in writing and shall be deemed effectively given
upon personal delivery or fax to the party to be notified or three (3) days
after deposit with the United States Post Office, by registered or certified
mail, postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or such other address as
such party may designate by 10 days advance written notice to the other party.
12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant, and all of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the holder hereof in respect of any rights to which the holder
hereof shall continue to be entitled after such exercise in accordance with this
Warrant; provided, that the failure of the holder hereof to make any such
request shall not affect the continuing obligation of the Company to the holder
hereof in respect of such rights.
13. LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to
the holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant or any
stock certificate and in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, of like tenor, in lieu of the lost, stolen, destroyed, or mutilated
Warrant or stock certificate.
7
14. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
15. GOVERNING LAW. This Warrant shall be governed by, and construed
under, the laws of the State of Oregon as applied to agreements among Oregon
residents entered into and to be performed entirely within Oregon.
16. REGISTRATION RIGHTS. The Shares shall be entitled to those
registration rights set forth in that certain Registration Rights Agreement
dated as of the date hereof by and among the Company and the shareholders
identified therein (the "Registration Rights Agreement"); provided, however,
that the Company may, at its discretion, register the Shares by filing a
Registration Statement on Form S-8 with the Securities and Exchange Commission,
covering the Shares, prior to the filing of any registration statement pursuant
to the Registration Rights Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
effective as of the date first above written.
ANALOGY, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------------
Xxxx X. Xxxxxx
President and Chief Executive Officer
Address: 0000 X.X. Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
/s/ Xxxx Xxxxxxx
-------------------------
Xxxx Xxxxxxx
8
EXHIBIT A
NOTICE OF EXERCISE
To: Analogy, Inc.
0000 X.X. Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attn: ___________________________________
1. The undersigned hereby elects to purchase _____________ shares of
Common Stock of Analogy, Inc. 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 of the undersigned or in such other name or names as are
specified below.
Name:
_____________________________________________
Address: ___________________________________
___________________________________
9
