Exhibit 4.2
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR
ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
THIS WARRANT IS ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH
HEREIN.
MARCO HI-TECH J.V. LTD.
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for good and valuable consideration, MARCO HI-TECH
J.V., LTD., a New York corporation (the "Company"), grants to XXXXX BROTHERS
XXXXXXXX & CO or its assigns (the "Warrantholder"), the right to subscribe for
and purchase from the Company (subject to adjustment pursuant to Section 6)
validly issued, fully paid and nonassessable shares in the amount set forth
below (the "Warrant Shares") of the Company's Common Stock, $.01 par value (the
"Common Stock") at a purchase price per share of $1,829.27 (subject to
adjustment pursuant to Section 6) (the "Exercise Price"), at any time and from
time to time, beginning on the date of issuance of this Warrant and ending at
5:00 PM Eastern time on the date which is seven (7) years from the date of
issuance of this Warrant (the "Expiration Date" ), all subject to the terms,
conditions and adjustments herein set forth.
Number of Shares: 41
Name of Warrantholder: XXXXX BROTHERS XXXXXXXX & CO.
1. DURATION AND EXERCISE OF WARRANT: Limitation on Exercise: Payment of
Taxes.
1.1 DURATION AND EXERCISE OF WARRANT. Subject to the terms and conditions
set forth herein, this Warrant may be exercised, in whole or in part (but
subject to the vesting provision in Section 1.1(c)), by the Warrantholder by:
(a) the surrender of this Warrant to the Company, with a duly executed
Exercise Form specifying the number of Warrant Shares to be purchased, during
normal business hours on any Business Day prior to the Expiration Date: and the
delivery of payment to the Company; (i) by cash or by certified or bank
cashier's check, or (ii) by cancellation by the Warrantholder of indebtedness of
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the Company to the Warrantholder under the Loan Facility, in an amount equal to
the Exercise Price for the number of Warrant Shares specified in the Exercise
Form, or by a combination of subsections (i) and (ii). The Company agrees that
such Warrant Shares shall be deemed to be issued to the Warrantholder as the
record holder of such Warrant Shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for the Warrant
Shares as aforesaid (or as provided in Section 1.2 below).
(b) The Warrantholder's right to exercise this Warrant shall vest as
follows:
Number of Warrant Shares Vesting Date
------------------------ ------------
14 Fully vested
14 January 15, 2000
13 January 15, 2001
In the event that the Warrantholder terminates the Loan Facility "without cause"
prior to January 15, 2001, the unvested portion of this Warrant shall be
forfeited. Such a forfeiture shall not, under any circumstances, invalidate,
modify or otherwise adversely affect that portion of this Warrant which
theretofore has vested. For purposes of this Section 1.1(b), "without cause"
shall mean a termination of the Loan Facility by the Warrantholder, and a demand
by the Warrantholder for payment in full thereon, for reasons other than (i) a
default by the Company under the Loan Facility, or (ii) a material adverse
change in the financial condition of the Company as determined by the
Warrantholder. With the exception of the foregoing, there are no other
conditions or limitations on the vesting of this Warrant or the Warrantholder's
rights to exercise this Warrant for the full amount of the Warrant Shares.
(c) Notwithstanding anything to the contrary herein, the Vesting Period
shall automatically accelerate, and this Warrant shall be fully vested, in the
Warrantholder upon the first to occur of any of the following events prior to
the expiration of the Vesting Period:
(i) A merger or consolidation of the Company in which the Company is not
the surviving corporation;
(ii) a sale of all or substantially all of the assets of the Company;
(iii) an initial public offering by the Company or any of its Securities;
or
(iv) the repayment of all or substantially all of the Loan Facility for a
reason other than a termination of the Loan Facility by the Warrantholder
"without cause".
1.2 CONVERSION RIGHT.
(a) in lieu of the payment of the Exercise Price, the Warrantholder
shall have the right (but not the obligation), to require the Company to convert
this Warrant, in whole or in part, into shares of Common Stock (the "Conversion
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Right") as provided for in this Section 1.2. Upon exercise of the Conversion
Right, the Company shall deliver to the Warrantholder (without payment by the
Warrantholder of any of the Exercise Price; provided, however, that the
Warrantholder shall be required to pay the par value for any shares of common
stock so delivered) that number of shares of common stock equal to the quotient
obtained by dividing (i) the value of this Warrant at the time the Conversion
Right is exercised (determined by subtracting the aggregate Exercise Price in
effect immediately prior to the exercise of the Conversion Right from the
aggregate Fair Market Value for the shares of Common Stock issuable upon
exercise of this Warrant immediately prior to the exercise of the Conversion
Right) by (ii) the Fair Market Value of one share of Common Stock immediately
prior to the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Warrantholder on any
Business Day prior to the Expiration Date by delivering this Warrant
Certificate, with a duly executed Exercise Form with the conversion section
completed to the Company, exercising the Conversion right and specifying .the
total number of shares of Common Stock the Warrantholder will be issued pursuant
to such conversion.
(c) Fair Market Value of a share of Common Stock as of a particular date
(the "Determination Date") shall mean:
(i) If the Common Stock is listed on a national Securities exchange, the
Fair Market Value shall be the average of the last ten "daily sales prices" of
the Common Stock on the national Securities exchange on which the Common Stock
is listed or admitted for trading on the last ten Business Days prior to the
Determination Date, or if not listed or traded on any such exchange, then the
Fair Market Value shall be the average of the last ten "daily sales prices" of
the Common Stock on the National Market or Small Cap Market of the National
Association of Securities Dealers Automated Quotations System (NASDAQ") on the
last ten (10) business days prior to the Determination Date. The "daily sales
price" shall be the closing price of the Common Stock at the end of each day; or
(ii) If the Common Stock is not so listed or admitted to unlisted trading
privileges or if no such sales is made on at least nine of such days, then the
Fair Market Value shall be the "Fair Value" (as defined in Section 10) per
Share.
Where the term "Fair Market Value" is used in reference to Securities other
than Common Stock (as is the case in Section 6.2(f)), all reference to Common
Stock in this Section 1.2 (c) shall be read to mean such Securities.
1.3 LIMITATIONS ON EXERCISE. Notwithstanding anything to the contrary
herein, this Warrant may be exercised only upon the delivery to the Company of
the duly executed Exercise Form.
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1.4 WARRANT SHARES CERTIFICATE. A Stock certificate or certificates for
the Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder within 10 Business Days after receipt of the Exercise Form and
receipt of payment of the purchase price if the Conversion Right is not
exercised. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the stock certificate or certificates, deliver
to the Warrantholder a new Warrant evidencing the rights to purchase the
remaining Warrant Shares, which new Warrant shall in all other respects be
identical with this Warrant.
1.5 PAYMENT OF TAXES. The issuance of certificates for Warrant Shares shall
be made without charge to the Warrantholder for any stock transfer or other
issuance tax in respect thereto; PROVIDED, HOWEVER, that the Warrantholder shall
be required to pay any and all taxes which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of then Warrantholder as reflected upon the books of the
Company.
1.6 DIVISIBILITY OF WARRANT; TRANSFER OF WARRANT.
(a) Subject to the provisions of this Section 1.6, this Warrant may be
divided upon surrender at the principle office of the Company, without charge to
any Warrantholder. Upon such division, this Warrants may be transferred of
record as the then Warrantholder may specify without charge to such
Warrantholder (other than any applicable taxes.) In addition, the Warrantholder
shall also have the right to transfer this Warrant in its entirety to any person
or entity.
(b) Upon surrender of this Warrant to the Company with a duly executed Form
of Assignment and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant or Warrants of like tenor in
the name of the assignee named in such Form. of Assignment, and this Warrant
shall promptly be canceled. The term "Warrant" as used in this Agreement shall
be deemed to include any Warrants issued in substitution or exchange for this
Warrant.
2. RESTRICTIONS ON TRANSFER; RESTRICTIVE LEGENDS.
Except as otherwise permitted by this Section 2, each Warrant shall (and
each Warrant issued upon direct or indirect transfer or in substitution for any
Warrant pursuant to Section 1.6 or Section 4 shall) be stamped or otherwise
imprinted with a legend in substantially the following form:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURI'11ES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
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Except as otherwise permitted by this Section 2, each stock certificate
for Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a stock certificate for Warrant Shares, in each case without
a legend, if either (i) such Warrant or such Warrant Shares, as the case may be,
have been registered for resale under the Securities Act; or (ii) the
Warrantholder has delivered to the Company an opinion of legal counsel, which
opinion shall be addressed to the Company and be reasonably satisfactory in form
and substance to the Company's counsel, to the effect that such registration is
not required with respect to such Warrant or such Warrant Shares, as the case
may be.
3. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF THE COMPANY.
The Company represents, warrants, covenants and agrees as follows:
(a) All Warrant Shares which are issued upon the exercise of this Warrant
will, upon issuance, be validly issued, fully paid, and nonassessable, not
subject to any preemptive rights, and free from all taxes, liens, security
interests, charges, and other encumbrances with respect to the issue thereof,
other than taxes with respect to any transfer occurring contemporaneously with
such issue.
(b) During the period within which this Warrant may be exercised, the
Company will at all times have authorized and reserved, and will keep available
free from preemptive rights, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant.
(c) During the period within which this Warrant may be exercised, the
Company will not take any action that would cause the Exercise Price to be less
than the par value of the Warrant Shares.
(d) During the period within which this Warrant may be exercised, the
Company will deliver to the Warrantholder (i) within 120 days after the end of
each fiscal year of the Company, the Company's annual audited financial
statements and (ii) as soon as practicable after the end of each calendar
quarter, and in any event within forty-five (45) days thereafter, management
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prepared financial statements of the Company. This covenant shall survive the
exercise of this Warrant, but shall expire upon the Company's initial public
offering.
(e) The Company has been duly incorporated and organized and is validly
existing as a corporation in good standing under the laws of the State of New
York and has, as of the date hereof, all requisite corporate power and authority
to own its properties and conduct its business as presently conducted, and to
execute and deliver this Warrant and Warrant Shares and the Registration Rights
Agreement. The Company is duly qualified as a foreign corporation for the
transaction of business, and is in good standing, under the laws of each of the
jurisdiction in which the Company conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing will not have a material adverse effect on the Company. Attached hereto
as Schedule 5(e), are correct and complete copies of the Certificate of
Incorporation, Bylaws and Stockholders' Agreement of the Company, in each case
as in effect on this date.
(f) The authorized Capital Stock of the Company consists of 30,000 shares
of Common Stock, $.01 par value per share (of which 41 shares are reserved and
available upon the exercise of this Warrants and the other options issued by the
Company as set forth in Schedule 3(f) hereto).
As of the date hereof, 4,000 shares of Common Stock are issued and
outstanding. All such issued and outstanding shares of Capital Stock of the
Company have been duly authorized, validly issued and outstanding, and are fully
paid and nonassessable. Schedule 3(f) sets forth: (i) a list of all record
owners of shares of Capital Stock of the Company, and the number and kind of
shares of Capital Stock held by each such record owner; (ii) a list of all
record owners of options, warrants or other rights to purchase or acquire shares
of Capital Stock of the Company, and the number of options and warrants held by
each such record owner, (iii) a list of all voting trusts, voting agreements,
proxies or other agreements, instruments or understandings with respect to the
voting of the Capital Stock of the Company to which the Company is a party, and
(iv) a list of all agreements or understandings granting to any Person any right
to cause the Company to effect the registration under the Securities Act of any
shares of its Capital Stock. Except as set forth in Schedule 3(f) there are no
other agreements, commitments or obligations to issue Capital Stock of the
Company, or options, warrants or other rights to purchase or acquire Capital
Stock of the Company.
(g) The Company has taken all corporate action necessary to authorize its
execution and delivery of this Warrant, the Registration Rights Agreement and
the Co-Sale Agreement and its performance of its obligations thereunder. Both
this Warrant and the Registration Rights Agreement have been executed and
delivered by an officer of the Company in accordance with such authorization.
The Warrant, Registration Rights Agreement and Co-Sale Agreement constitute the
valid and binding obligation of the Company, enforceable by the Warrantholder
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting enforcement of creditors' rights generally.
(h) The execution and delivery of this Warrant and the Registration Rights
Agreement by the Company and the Warrantholder, and the issuance sale of the
Warrant Shares, will not result in a breach or violation of any of the terms or
6
provisions of or constitute a default under. the Certificate of Incorporation or
By-laws of the Company, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company is a party or by which the
Company is bound, any statute or law of which the Company or any of its
properties are subject, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties. Except as set forth in SCHEDULE 3(h), no consent, approval,
authorization, order, registration, or qualification of or with any such court,
governmental agency, or person or entity, is required for the execution and
delivery, or the performance by the Company, of this Warrant or the Registration
Rights Agreement.
(i) Neither the execution of this Warrant nor the issuance of the Warrant
Shares will violate or cause to be effective any preemptive right, right of
first refusal, anti-dilution right or similar right of any person or entity
unless same have been duly waived.
(j) The execution and delivery of this Warrant, and/or the issuance and
sale of the Warrant Shares will not result in any adjustment to the conversion
price or exercise price of, or number of shares of the Capital Stock of the
Company issuable under, any shares of the Company's Capital Stock or Convertible
Securities.
(k) There are no restrictions on the transferability of this Warrant or the
Warrant Shares except as imposed by applicable federal and state Securities
laws.
(1) There are no agreements or understandings granting to any person or
entity any right to cause the Company to effect the registration of any shares
of its Capital Stock under the 1933 Securities Act other than the Registration
Rights Agreement. The Company is not a party to any agreement containing
provisions or granting registration rights other than the rights granted by it
to the Holders in the Registration Rights Agreement.
(m) The Company shall not by any action including, without limitation,
amending its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
Securities or any other action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the
Warrantholder against impairment. Without limiting the generality of the
foregoing, the Company will (i) take all such action as may be reasonably
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock, free and clear of any liens, claims,
encumbrances and restrictions (other than as provided herein upon the exercise
of this Warrant; and (ii) use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be reasonably necessary to enable the Company to
perform its obligations under this Warrant.
(n) The issuance of this Warrant is exempt from registration under
applicable federal and state Securities laws.
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4. LOSS OR DESTRUCTION OF WARRANT.
Subject to the terms and conditions hereof, upon receipt by the Company of
evidence reasonably satisfactorily to it of the loss, theft, destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, upon
delivery of such bond or indemnification as the Company may reasonably require,
and, in the case of such mutilation, upon surrender and cancellation of this
Warrant, the Company will execute and deliver a new Warrant of like tenor and
terms.
5. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this Warrant is
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. ADJUSTMENTS TO THE WARRANT AND THE WARRANT SHARES.
6.1 ADJUSTMENT OF NUMBER OF SHARES PURCHASEABLE AND EXERCISE PRICE.
Subject to the provisions of this Section 6, the Exercise Price and the number
and type of shares of Common Stock issuable upon exercise of this Warrant shall
be subject to adjustment at any time prior to the Expiration Date.
(a) ADJUSTMENT OF EXERCISE PRICE. In the event the Company shall issue,
sell, or distribute any shares of Common Stock (including any Common Stock
deemed issued under 6.2(a) but excluding any Common Stock issued under Section
6.2(b)) for a consideration per share less than the greater of: (i) the Exercise
Price in effect immediately prior to such issuance, sale, or distribution; or
(ii) the Fair Market Value of Common Stock, as determined pursuant to Section
1.2(c), in effect immediately prior to the time of such issue or sale, then,
forthwith upon such issue or sale, the Exercise Price shall be reduced to the
lower of the prices calculated by:
(i) dividing (A) an amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the then existing Exercise Price, plus (y) the aggregate
consideration, if any, received by the Company upon such issue or sale, by (B)
the total number of shares of Common Stock outstanding immediately after such
issue or sale; and
(ii) multiplying the then existing Exercise Price by a fraction, the
numerator of which is the sum of (x) the number of shares of Common Stock
outstanding immediately prior to such issue or sale multiplied by the Fair
Market Value per share of Common Stock immediately prior to such issue or sale,
plus (y) the cash consideration received by the Company upon such issue or sale,
and the denominator of which is the total number of shares. of Common Stock
outstanding immediately after such issue or sale times the Fair Market Value per
share of Common Stock immediately prior to such issue or sale.
8
For purposes of this subsection (a), the date as of which the Fair Market Value
per share of Common Stock shall be computed shall be the earlier of the dates on
which the Company shall have (i) entered into a fine contract for the issuance
of such shares or (ii) issued such shares.
(b) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. Upon any adjustment of the
Exercise Price as provided in this Section 6.1 or in Section 6.2, the
Warrantholder shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Common Stock (rounded up
to the nearest whole share obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
purchasable hereunder immediately prior to such adjustment and dividing the
product thereof by- the Exercise Price resulting from such adjustment.
(c) MINIMUM ADJUSTMENT. In the event any adjustment of the Exercise Price
pursuant to this Section shall result in an adjustment of less than $.01 per
share of Common Stock, no such adjustment shall be made, but any such lesser
adjustment shall be carried forward and shall be made at the time and together
with the next subsequent adjustment which, together with any adjustment so
carried forward, shall amount to $.01 or more per share of Common Stock;
provided, however, upon any adjustment of the Exercise Price resulting from (i)
the declaration of a dividend upon, or the making of any distribution in respect
of, any stock of the Company payable in Common Stock or Convertible Securities;
or (ii) the reclassification be subdivision, combination or otherwise, of the
Common Stock into a greater or smaller number of shares, the foregoing figure of
$.01 per share (or such figure as last adjusted) shall be proportionately
adjusted and PROVIDED, FURTHER, upon the exercise of this Warrant, the Company
shall make all necessary adjustments (to the nearest cent) not theretofore made
to the Exercise Price up to and including the date upon which this Warrant is
exercised.
6.2 PROVISIONS APPLICABLE TO SECTION 6.1. For purposes of Section 6.1, the
following subsections (a) through (j), inclusive, shall be applicable:
(a) OPTIONS, OTHER RIGHTS OR CONVERTIBLE SECURITIES.
(1) ISSUANCE. In case at any time the Company shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any options or
Securities, or shall in any manner issue or sell Convertible Securities, whether
or not such rights or options or rights to convert or exchange any such
Convertible Securities are immediately exercisable, and the consideration per
share (as determined under subsection 6.2 (f)) for which shares of Common Stock
are issuable upon the exercise of such rights or options or upon conversion or
exchange of such Convertible Securities shall be less than (i) the Exercise
Price in effect immediately prior to the time of the granting of such rights or
options or such Convertible Securities, or (ii) the Fair Market Value per share
of Common Stock immediately prior to the time of the granting of such rights or
options or such Convertible Securities, then the maximum amount of such
9
Convertible Securities shall be deemed to be outstanding and to have been issued
for such consideration per share.
No further adjustments under Section 6.1 shall be made upon the actual
issuance of Common Stock or of Convertible Securities upon exercise of options
or rights or upon the actual issue of Common Stock upon conversion or exchange
of Convertible Securities if adjustments pursuant to this Section 6.2(a) (1),
and Section 6.1, have been made previously in respect of the grant of such
options or rights, or in respect of issuance or sale of such Convertible
Securities, except as otherwise provided in subsection (2) below.
For purposes of this subsection (1), the date as of which the Fair Market
Value per share of Common Stock shall be computed shall be the earlier of the
dates on which the Company shall have (i) entered into a firm contrast for the
issuance of such rights or other options; or (ii) issued such rights or other
options.
(2) READJUSTMENT OF EXERCISE PRICE. In the event (i) the purchase price
per share provided for in any rights, options, or Convertible Securities
referred to in subsection (1) above, (ii) the number of shares of Convertible
Securities that would be delivered under such rights, options or Convertible
Securities; (iii) the additional consideration, if any, payable upon exercise of
such rights or options or the conversion or exchange of such Convertible
Securities, or (iv) the rate at which any Convertible Securities above are
convertible into or exchangeable for Common Stock, in any case, shall change,
the` Exercise Price in effect at the time of such event shall forthwith be
adjusted or readjusted to give effect to the Exercise Price which would have
been in effect at such time had such rights, options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold.
On the expiration of any such option or right not exercised, or the
termination of any such unexercised right to convert or exchange Convertible
Securities, the Exercise Price then in effect hereunder shall forthwith be
increased to the Exercise Price which would have been in effect at the time of
such expiration or termination had such right, option or convertible Security
never been issued, and the Common Stock issuable thereunder shall no longer be
deemed to be outstanding.
No readjustment of the Exercise Price pursuant to this subsection (2)
shall have the effect of increasing the Exercise Price by an amount in excess of
the adjustment initially made to the Exercise Price in respect to the issue,
sale, grant or assumption of the applicable options, rights or Convertible
Securities.
(b) SPLITS AND COMBINATIONS. In case the Company shall at any time
subdivide any of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision shall
be proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Exercise Price in effect immediately prior to such combination shall be
proportionately increased.
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(c) REORGANIZATION, RECLASSIFICATION, RECAPITALIZATION, CONSOLIDATION,
MERGER OR SALE. In the case of any capital reorganization or reclassification or
recapitalization of the Capital Stock of the Company (other than that referred
to in Section 6.2(b)), or in the case of the consolidation or merger of the
Company with or into another corporation, or in the case of the sale or transfer
of all or substantially all of the property of the Company, upon the exercise of
this Warrant or any portion thereof (in lieu of or in addition to the number of
shares of Common Stock theretofore deliverable, as appropriate) the amount of
stock, Other Securities, cash, or property which the Warrantholder would have
received had it exercised this Warrant or such portion thereof immediately prior
to such reorganization, recapitalization or reclassification of Capital Stock,
consolidation merger, or sale, shall be delivered to the Warrantholder, and the
aggregate Exercise Price shall remain unchanged.
Prior to and as a condition of the consummation of any transaction
described in the preceding sentence, the Company shall make equitable, written
adjustments in the application of the provisions set forth herein with respect
to the rights and interests of the Warrantholder so that the provisions set
forth herein shall thereafter be applicable, in a manner as similar as possible
to the methods used herein, to any share of stock or other Securities or other
property thereafter deliverable upon exercise of this Warrant, which adjustments
are satisfactory to the Warrantholder. Any such adjustment shall be made by and
set forth in a supplemental agreement between the Company and the successor
entity, which agreement shall bind such entity, shall be accompanied by an
opinion of counsel as to the enforceability of such agreement, and shall be
approved by the Warrantholder.
(d) PURCHASE OF COMMON STOCK BY THE COMPANY. If the Company at any time
while this Warrant is outstanding shall directly or indirectly through a
Subsidiary or otherwise, purchase, redeem or otherwise acquire any shares of
Common Stock at a price per share greater than the Fair Market Value then in
effect, then the Exercise Price upon each such purchase, redemption or
acquisition shall be adjusted to that price determined by multiplying such
Exercise Price by a fraction, (i) the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such purchase,
redemption or acquisition minus the number of shares of Common Stock which the
aggregate consideration for the total number of shares of Common Stock so
purchased, redeemed or acquired would purchase at the Fair Market Value then in
effect; and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such purchase, redemption or
acquisition. For the purposes of this Section 6.2(d), the date as of which the
Fair Market Value shall be computed shall be the date of actual purchase,
redemption or acquisition of such Common Stock. For the purposes of this Section
6.2(d) a purchase, redemption or acquisition of a Convertible Security shall be
deemed to be a purchase of the underlying Common Stock, and the computation
herein required shall be made on the basis of the full exercise, conversion or
exchange of such Convertible Security on the date as of which such computation
is required hereby to be made, whether or not such Convertible Security is
actually exercisable, convertible or exchangeable on such date.
(e) OTHER DILUTIVE EVENTS. In case any event shall occur as to which the
other provisions of this Section 6 are not applicable strictly, (e.g. a rights
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offering by a Subsidiary or parent of the Company) but with respect to which the
failure to make any adjustment would not protect fairly the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof then, in each such case, if requested by the Warrantholder in
writing following the inability of the Company and the Warrantholder to agree on
an appropriate adjustment, a fine of independent public accountants of
recognized national standing, shall be selected and paid in accordance with
Section 6.6(a), which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in this
Section 6, necessary to preserve, without dilution, the purchase rights
represented by the Warrant. Upon receipt of such opinion, the Company will
promptly mail a copy thereof to the holder of this Warrant and shall make the
adjustments described therein.
(f) DETERMINATION OF CONSIDERATION. For purposes of this Section 6, the
consideration, received by the Company for the issue, sale, grant or assumption
of additional shares of Common Stock, rights, options or Convertible Securities,
irrespective of the accounting treatment of such consideration, shall be valued
as follows:
(1) CASH PAYMENT. In case of cash, the net amount received by the Company
after deduction of any accrued interest, dividends, or any expenses paid or
incurred or any underwriting commissions or concessions paid or allowed by the
Company;
(2) SECURITIES OR OTHER PROPERTY. In the case of Securities or other
property, as of the date immediately preceding such issue, sale, grant or
assumption, the Fair Value thereof;
(3) ALLOCATION RELATED TO COMMON STOCK. In the event additional shares of
Common Stock are issued or sold together with Other Securities or the assets of
the Company for a consideration which covers both, the consideration received
(computed as provided in (1) and (2) above) shall be allocable to such
additional shares of Common Stock as determined in good faith by the Board of
Directors of the Company (except as otherwise provided in (4) below);
(4) ALLOCATION RELATED TO OPTIONS. Other Rights and Convertible
Securities. In case any options or the rights to purchase any shares of Common
Stock or Convertible Securities shall be issued or sold together with other
Securities or other assets of the Company, in one transaction such that no
specific consideration is allocated to the rights or options, such rights,
options or Convertible Securities shall be deemed to have been issued without
consideration;
(5) DIVIDENDS IN SECURITIES. In case the Company shall declare a dividend
or make any other distribution upon any stock of the Company payable, in either
case, in Common Stock or Convertible Securities, such Common Stock or
Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without
consideration;
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(6) WARRANTS. OPTIONS. OTHER RIGHTS AND CONVERTIBLE SECURITIES. The price
per share for which shares of Common Stock are issuable upon the exercise of
rights or options to purchase any shares of Common Stock or upon conversion or
exchange of Convertible Securities shall be determined by dividing (1) the sum
of (x) the total amount, if any, received or receivable by the Company as
consideration for the granting of such rights or options or the issuance of such
Convertible Securities, plus (y) the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of such rights or
options, or, in the case of such Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the conversion or
exchange thereof, in each case after deducting any accrued interest, dividends
or any expenses paid or incurred or any underwriting commissions or concessions
paid or allowed by the Company by; (ii) the maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon the
conversion or exchange of all such Convertible Securities; and
(7) MERGER CONSOLIDATION OR SALE OF ASSETS. In case any shares of Common
Stock or Convertible Securities or any rights or options to purchase such Common
Stock or Convertible Securities shall be issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the Fair Value of such portions of
the assets and business of the acquired corporation as shall be attributed (in
the determination of Fair Value) to such Common Stock, Convertible Securities,
rights or options, as the case may be. In the event of any merger or
consolidation of the Company in which the Company is not the surviving
corporation or in the event of any sale of all or substantially all of the
assets of the Company for stock or other Securities of any corporation, the
Company shall be deemed to have issued a number of shares of its Common Stock
for stock or Securities of the other corporation computed on the basis of the
actual exchange ratio on which the transaction was predicated and for a
consideration equal to the Fair Value on the date of such transaction of such
stock of Securities of the other corporation, and if any such calculation
results in adjustment of the Exercise Price, the determination of the number of
shares of Common Stock issuable upon exercise of this Warrant immediately prior
to such merger, consolidation or sale, for the purposes of subsection (c) of
this Section 6.2, shall be made after giving effect to such adjustment of the
Exercise Price.
(g) RECORD DATE. In case the Company shall take a record of the holders of
the Common Stock for the purpose of entitling them to receive a dividend or
other distribution payable in Common Stock or Convertible Securities, then all
references in this Section 6 to the date of the issue or sale of the shares of
Common Stock deemed to be issued or sold pursuant to the declaration of such
dividend or making of such other distribution or to the date of the granting of
such right of subscription or purchase, as the case may be, shall be deemed to
be references to such record date.
(h) SHARES OUTSTANDING. The number of shares of Common Stock deemed to be
outstanding at any given time shall not include: (i) shares of Common Stock in
the treasury of the Company or any subsidiary; and (ii) the Warrant shares not
purchased, but shall include (x) all shares of Common Stock ultimately issuable
13
pursuant to convertible Securities of the Company then outstanding. (y) the
number of shares of Common Stock issuable upon the exercise of outstanding
options and warrants, and (z) any other class of Common Stock hereafter issued
by the Company.
(i) MAXIMUM EXERCISE PRICE. At no time shall the Exercise Price per share
of Common Stock issuable upon exercise of this Warrant exceed the Exercise Price
specified on the cover of this Warrant except as provided in subsection (b) or
(c) of this Section 6.2.
(j} APPLICATION. Except as otherwise provided herein, all subsections of
this Section 6.2 are intended to operate independently of one another. If an
event occurs that requires the application of more than one subsection, all
applicable subsections shall be given independent effect.
6.3 DILUTION IN CASE OF DISTRIBUTION OF INDEBTEDNESS, DIVIDENDS OR ASSETS.
In the event the Company shall fix a record date for making to all holders of
its Common Stock a distribution of evidence of its indebtedness, Securities
(other than shares of Common Stock) whether issued by the Company or not,
property, rights, assets (including all cash dividends or other cash
distributions whether payable out of earnings or out of surplus legally
available for dividends under the laws of the jurisdiction governing the Company
or otherwise), or any other thing of value, then the Warrantholder shall be
entitled to receive, subject to applicable law, upon exercise of this Warrant,
that portion of such distribution to which it would have been entitled had the
Warrantholder exercised its Warrant immediately prior to the date of such
distribution. At the time it fixes the record date for such distribution, the
Company shall allocate sufficient reserves to ensure the timely and full
performance of the provisions of this Section 6.3.
6.4 RIGHTS OFFERING. In the event the Company shall effect an offering of
Common Stock pro rata among its stockholders, the Warrantholder shall be
entitled, subject to applicable law, to elect to participate in each and every
such offering; provided, however, that the Warrantholder shall exercise this
Warrant as a condition precedent to its participation in such offering. In the
event that such offering is applicable by its terms solely to accredited
investors, the Warrantholder shall be an accredited investor. The Company shall
promptly (but in any case no later than ten (10) Business Days prior to such
rights offering) mail by first class, postage prepaid, to the Warrantholder,
notice that such rights offering will take place. The Warrantholder's rights
under this Section 6.4 shall survive the exercise of this Warrant.
6.5 NO ADJUSTMENTS UNDER CERTAIN CIRCUMSTANCES. Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment of the Exercise Price in case of:
(a) the issuance of shares of Common Stock upon the exercise in whole or
part of any of this Warrant or any other warrants issued on or prior to the date
hereof;
(b) the issuance of shares of Common Stock pursuant to a rights offering
in which the holder hereof elects to participate under the provisions of Section
6.4.
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6.6 NOTICES OF ADJUSTMENTS AND OF EXTRAORDINARY CORPORATE EVENTS.
(a) ADJUSTMENTS TO EXERCISE PRICE. Whenever the Exercise Price or Warrant
Share Number shall be adjusted pursuant to Section 6 (each an "adjustment"), the
Company shall cause its Chief Financial Officer to prepare and execute a
certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated (including a description of the basis on which the board made any
determination hereunder), and the Exercise Price and Warrant Share number after
giving effect to such adjustment, and shall cause copies of such certificate to
be delivered to the Warrantholder promptly after each adjustment. Any dispute
between the Company and the Warrantholder with respect to the matters set forth
in such certificate may at the option of the Warrantholder be submitted to a
firm of independent public accountants of recognized national standing selected
by the Warrantholder, provided that the Company shall have ten (10) days after
receipt of notice from such Warrantholder of its selection of such firm to
object thereto, in which case such Warrantholder shall select another such firm
and the Company shall have no such right of objection. The firm selected by the
Warrantholder as provided in the preceding sentence shall be instructed to
deliver a written opinion as to such matters to the Company and such
Warrantholder within thirty days after submission to it of such dispute. Such
opinion shall be final and binding on the parties hereto. The fees and expenses
of such accounting firm shall be paid equally by the Company and the
Warrantholder, unless such accounting firm is the Company's regular outside
auditors, in which case the Company shall pay all such fees and expenses.
(b) EXTRAORDINARY CORPORATE EVENTS. In case the Company after the date
hereof shall propose to (i) distribute any dividend (whether stock or cash or
otherwise) to the holders of shares of Common Stock or to make any other
distribution to the holders of shares of Common Stock, (ii) offer to the holders
of shares of Common Stock rights to subscribe for or purchase any additional
shares of any class of stock or any other rights or options, or (iii) effect any
reclassification of the Common Stock (other than a reclassification involving
merely the subdivision or combination of outstanding shares of Common Stock),
any capital reorganization, any consolidation or merger (other than a merger in
which no distribution of Securities or other property is to be made to holders
of shares of Common Stock), any sale, transfer or other disposition of all or
substantially all of its property, assets and business, or the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall mail to each Warrantholder notice of such proposed action, which notice
shall specify the date on which (a) the books of the Company shall close, or (b)
a record shall be taken for determining the holders of Common Stock entitled to
receive such stock dividends or other distribution or such rights or options, or
(c) such reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, dissolution or winding up shall take
place or commence, as the case may be, and the date, if any, as to which it is
expected that holders of record or Common Stock shall be entitled to receive
Securities or other property deliverable upon such action. Such notice shall be
mailed in the case of any action covered by clause (1) or (ii) above at least
ten (10) days prior to the record date for determining holders of Common Stock
for purposes of receiving such payment or offer, or in the case of any action
covered by clause (iii) above at least thirty (30) days prior to the date upon
which such action takes place and twenty (20) days prior to any record date to
15
determine holders of Common Stock entitled to receive such Securities or other
property.
(c) EFFECT OF FAILURE. Failure to file any certificate or notice or to
mail any notice, or any defect in any certificate or notice pursuant to this
Section 6.6 shall not affect the legality or validity of the adjustment of the
Exercise Price, the number of shares purchasable upon exercise of this Warrant,
or any transaction giving rise thereto.
7. REGISTRATION RIGHTS AND CO-SALE AGREEMENT. The Warrantholder shall be
entitled, with respect to (i) its Warrant Shares and other Securities issued or
issuable upon exercise of this Warrant and (ii) any Securities issued or
issuable with respect to any Common Stock or other Securities referred to in
subdivision by way of stock dividend or stock split or in connection with a
combination or other reorganization or otherwise, to the rights set forth in the
Registration Rights Agreement and Co-Sale Agreement. The Warrantholder's rights
pursuant to the Registration Rights Agreement and the Co-Sale Agreement shall be
automatically assigned to transferees or assignees of this Warrant or such
securities, in accordance with the terms thereof.
8. AMENDMENTS. Any provision of this Warrant (including registration
rights to which the Warrantholder is entitled pursuant to Section 7) may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Warrantholders who hold a majority in
interest of the Warrant Shares. Any amendment or waiver effected in accordance
with this Section 8 shall be binding upon each Warrantholder and the Company.
9. EXPIRATION OF THIS WARRANT. Except with respect to Section 7, the
obligations of the Company pursuant to this Warrant shall terminate on the
Expiration Date.
10. DEFINITIONS.
As used herein, unless the context otherwise requires, the following terms
have the following respective meanings:
AFFILIATE: of any person or entity means any other person or entity
directly or indirectly controlling, controlled by or under direct or indirect
common control with such person or entity. For the purposes of this definition
"control", when used with respect to any person or entity, means the power to
direct or cause the direction of the management or policies of such person or
entity, directly or indirectly, whether through the ownership of voting
Securities. by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
ASSIGNMENT FORM: an Assignment Form is the form annexed hereto as Exhibit
B.
BOOK VALUE: per share of Common Stock as of any date herein shall mean the
Consolidated Net Worth of the Company and its Subsidiaries as of such date
divided by the number of shares of Common Stock outstanding as of such date.
16
BUSINESS DAY: any day other than a Saturday, Sunday or a day on which
national banks are authorized by law to close in the City of New York, State of
New York.
CAPITAL STOCK: any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including,
without limitation, shares of common and preferred stock.
COMMON STOCK: the meaning specified on the cover of this Warrant.
COMPANY: the ntaning specified on the cover of this Warrant.
CONSOLIDATED NET WORTH: as of any date herein specified, the total
consolidated assets of the Company and its Subsidiaries minus the total
consolidated liabilities of the Company and its Subsidiaries (exclusive of any
liabilities associated with this Warrant), shareholder loans and advances to
affiliates, as determined from the consolidated balance sheet of the Company and
its Subsidiaries from the most recent fiscal quarter, which consolidated balance
sheet shall be prepared in accordance with generally accepted accounting
principles, consistently applied, shall be in reasonable detail, and shall be
certified as complete and correct by the chief financial officer of the Company.
CO-SALE AGREEMENT: the Co-Sale Agreement among the Company, its
stockholders who are parties thereto and the Warrantholder, dated the date
hereof, in the form annexed hereto as Exhibit D.
CONVERTIBLE SECURITIES: evidences of indebtedness shares of stock or other
Securities which are convertible into or exchangeable for, with or without
payment of additional consideration, .additional shares of Common Stock, or
other Securities which are convertible into or exchangeable for Common Stock,
either immediately or upon the arrival of a specified date or the happening of a
specified event.
EXERCISE FORM: an Exercise Form in the form annexed hereto as Exhibit A.
EXERCISE PRICE: the meaning specified on the cover of this Warrant.
EXPIRATION DATE: the meaning specified on the cover of this Warrant.
FAIR MARKET VALUE: the meaning specified in Section 1.2(c),
FAIR VALUE: as reasonably calculated by the Company's Board of Directors
or a duly appointed committee of the Board; provided, however, that any Director
or committee member who acquires the Company's Common Stock in the transaction
17
requiring the calculation of Fair Value shall not participate in such
calculation or approval without the consent of the Warrantholder. Upon
determination of Fair Value, the Board of Directors (or committee as the case
may be) shall provide the Warrantholder with written notice of the Fair Value
along with reasonable documentation supporting such calculation.
LOAN FACILITY: the $3,000,000 demand loan facility extended by the
Warrantholder to the Company dated April 15, 1998.
OTHER SECURITIES: any stock and other Securities of the Company (other
than Common Stock) or Convertible Securities or any options or rights to
purchase Common Stock or convertible Securities.
REGISTRATION RIGHTS AGREEMENT: the Registration Rights Agreement, dated
the date hereof, between the Company and the Warrantholder, providing for the
registration of the Warrant Shares, in the form annexed hereto as Exhibit C.
SEC: the Securities and Exchange Commission or any other Federal agency at
the time administering the Securities Act or the Securities Exchange Act of
1934, as amended, whichever is the relevant statute for the particular purpose.
SECURITIES: any debt or equity securities of the Company, whether now or
hereafter authorized, any instrument convertible into or exchangeable for
Securities or a security and any option, warrant or other right to purchase or
acquire any Security.
SECURITIES ACT: the meaning specified on the cover of this Warrant, or any
successor Federal statute, and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.
Reference to a particular section of the Securities Act, shall include a
reference to the comparable section, if any, of any such successor Federal
statute.
SUBSIDIARY: any corporation, association or other business organization
(a) more than 50% (by number of votes) owned by the Company or by one or more of
its Subsidiaries, or any other business entity in which the Company or one or
more of its Subsidiaries owns more than a 50% interest in either the capital or
profits of such business entity, or (b) whose net earnings or portions thereof
are consolidated with the net earnings of the Company and are recorded in the
books of the Company for financial reporting purposes in accordance with
generally accepted accounting principles.
WARRANT: this Warrant and any other warrants of like tenor issued in
substitution or exchange thereof pursuant to the terms of this Warrant or any
other Warrant.
WARRANTHOLDER: the meaning specified on the cover of this Warrant.
WARRANT SHARES: the meaning specified on the cover of this Warrant. 18
18
11. MISCELLANEOUS.
11.1 ENTIRE AGREEMENT. This Warrant. except as to registration rights and
co-sale rights in respect of the Warrantholder's Warrant Shares, constitutes the
entire agreement between the Company and the Warrantholder with respect to this
Warrant.
11.2 BINDING EFFECTS: Benefits. This Warrant shall inure to the benefit of
and shall be binding upon the Company and the Warrantholder and their respective
heirs, legal representatives, successors and assigns. Nothing in this Warrant,
expressed or implied, is intended to or shall confer on any person other than
the Company and the Warrantholder, or their respective heirs, legal
representative, successors , assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
11.3 SECTION AND OTHER HEADINGS. The section and other headings contained
in this Warrant are for reference purposes only and shall not be deemed to be a
part of this Warrant or to affect the meaning or interpretation of this Warrant.
11.4 PRONOUNS. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
11.5 FURTHER ASSURANCES. Each of the Company and the Warrantholder shall
do and perform all such further acts and things and execute and deliver all such
other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Warrant.
11.6 NOTICES: All notices and other communications required or permitted
to be given under this Warrant shall be in writing and shall be by regular mail,
commercial overnight courier service, personal delivery or telecopier, to the
parties hereto at the following addresses or to such other address as any party
subsequently gives to the other party:
(a) if to the Company. addressed to:
Marco Hi-Tech J.V. Ltd.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Xxxx Xxxxxxxxxx, Vice President
19
(b) if to the Warrantholder, addressed to:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: Chief Credit Officer
Except as otherwise provided herein, all such notices and communications
shall be deemed to have been duly given on the second business day after
postmarking, if delivered by regular mail; upon receipt, if delivered by
commercial overnight courier service; upon receipt if personally delivered and
when receipt is acknowledged, if telecopied.
11.7 SEVERABILITY. Any term or provision of this Warrant which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions. of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
11.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY
CHOICE OR CONFLICT OF LAWS PROVISIONS).
11.9 CONSENT TO JURISDICTION. THE COMPANY AND THE HOLDER HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS IN NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND EACH OF THE COMPANY AND THE HOLDER AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING RELATED THERETO EXCEPT IN SUCH COURTS. EACH OF THE COMPANY AND THE
HOLDERS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11.10 WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION TO ENFORCE, OR CONTROVERSY ARISING UNDER, THIS AGREEMENT.
11.11 REMEDIES. The Company stipulates that the remedies at law of the
Warranthoder in the event of any default or threatened default or threatened
20
default by the Company in the performance of or compliance with any of the terms
of this Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
11.12 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this
Warrant shall be determined as conferring upon the Warrantholder any rights as
a stockholder of the Company or as imposing any liabilities on the Warrantholder
to purchase any Securities whether such liabilities are asserted by the Company
or by creditors or stockholders of the Company or otherwise.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
MARCO HI-TECH J.V. LTD.
By:/s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: President
Dated: As of July 1, 1999
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