WARRANT TO PURCHASE COMMON STOCK OF NIVS INTELLIMEDIA TECHNOLOGY GROUP, INC.
Exhibit
4.7
UNDER
FINRA RULE 5110(g) AND SUBJECT TO LIMITED EXCEPTIONS, THIS WARRANT AND THE
UNDERLYING SHARES OF COMMON STOCK SHALL NOT BE SOLD DURING THE PUBLIC OFFERING
OF THE COMPANY'S COMMON STOCK (THE "PUBLIC OFFERING") OR SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF ANY HEDGING, SHORT
SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE
ECONOMIC DISPOSITION OF THIS WARRANT OR THE SECURITIES UNDERLYING THIS WARRANT
BY ANY PERSON FOR A PERIOD OF 180 DAYS IMMEDIATELY FOLLOWING THE DATE OF
EFFECTIVENESS OR COMMENCEMENT OF SALES OF THE PUBLIC OFFERING.
THE
WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE
HEREUNDER, MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR
HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR
(ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SEC RULE 144.
WARRANT
TO PURCHASE COMMON STOCK
OF
NO.
__
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________
__, 2010
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THIS CERTIFIES THAT, for
$[0.001*# of shares] and other valuable consideration received by NIVS INTELLIMEDIA TECHNOLOGY GROUP,
INC., a Delaware corporation (the “Company”),
[XXXXXX & XXXXXXX
LLC/WESTPARK CAPITAL, INC.], or its permitted registered assigns (“Holder”),
is entitled, subject to the terms and conditions of this Warrant, at any time or
from time to time after the first anniversary of the issuance date of this
Warrant (the “Effective
Date”), and before 5:00 p.m. Pacific Time on ____ __, 2015 [5th
anniversary of effective date of registration statement] (the “Expiration
Date”), to purchase from the Company, [3% of primary offering shares]
shares of Common Stock of the Company at a price per share equal to $[125% of
offering price] (the “Purchase
Price”). Both the number of shares of Common Stock purchasable
upon exercise of this Warrant and the Purchase Price are subject to adjustment
and change as provided herein.
1. CERTAIN
DEFINITIONS. As used in this Warrant the following terms shall
have the following respective meanings:
1.1 “Fair Market
Value” of a share of Common Stock as of a particular date shall
mean:
(a) If
traded on a securities exchange, the Fair Market Value shall be deemed to be the
average of the closing prices of the Common Stock of the Company on such
exchange or market over the five (5) trading days ending immediately prior to
the applicable date of valuation;
(b) If
actively traded over-the-counter, the Fair Market Value shall be deemed to be
the average of the closing bid prices over the thirty (30)-day period ending
immediately prior to the applicable date of valuation; and
(c) If
there is no active public market, the Fair Market Value shall be the value
thereof, as agreed upon by the Company and the Holder; provided, however, that if the Company
and the Holder cannot agree on such value, such value shall be determined by an
independent valuation firm experienced in valuing businesses such as the Company
and jointly selected in good faith by the Company and the
Holder. Fees and expenses of the valuation firm shall be paid for in
equal proportions by the Company and the Holder.
1.2 “Registered
Holder” shall mean any Holder in whose name this Warrant is registered
upon the books and records maintained by the Company.
1.3 “Warrant”
as used herein, shall include this Warrant and any warrant delivered in
substitution or exchange therefor as provided herein.
1.4 “Common
Stock” shall mean the Common Stock of the Company and any other
securities at any time receivable or issuable upon exercise of this
Warrant.
2. EXERCISE OF
WARRANT.
2.1 Payment. Subject
to compliance with the terms and conditions of this Warrant and applicable
securities laws, this Warrant may be exercised, in whole or in part at any time
or from time to time, on or before the Expiration Date by the delivery
(including, without limitation, delivery by facsimile) of the form of Notice of
Exercise attached hereto as Exhibit A (the
“Notice of
Exercise”), duly executed by the Holder, at the principal office of the
Company, and as soon as practicable after such date, surrendering
(a) this
Warrant at the principal office of the Company, and
(b) payment,
(i) in cash (by check) or by wire transfer, (ii) by cancellation by
the Holder of indebtedness of the Company to the Holder; or (iii) by a
combination of (i) and (ii), of an amount equal to the product obtained by
multiplying the number of shares of Common Stock being purchased upon such
exercise by the then effective Purchase Price (the “Exercise
Amount”).
2.2 Net Issue Exercise.
In lieu of the payment methods set forth in Section 2.1(b) above,
the Holder may elect to exchange all or some of this Warrant for shares of
Common Stock equal to the value of the amount of the Warrant being exchanged on
the date of exchange. If Holder elects to exchange this Warrant as
provided in this Section 2.2, Holder
shall tender to the Company the Warrant for the amount being exchanged, along
with written notice of Xxxxxx’s election to exchange some or all of the Warrant,
and the Company shall issue to Holder the number of shares of the Common Stock
computed using the following formula:
2
X
=
|
Y
(A-B)
|
||
A
|
|||
Where: X
=
|
the
number of shares of Common Stock to be issued to
Holder.
|
||
Y
=
|
the
number of shares of Common Stock purchasable under the amount of the
Warrant being exchanged (as adjusted to the date of such
calculation).
|
||
A
=
|
the
Fair Market Value of one share of the Common Stock on the date that the
relevant Notice of Exercise is received by the Company.
|
||
B
=
|
Purchase
Price (as adjusted to the date of such
calculation).
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2.3 Stock Certificates; Direct
Registration; Fractional Shares. As soon as practicable on or
after the date of any exercise of this Warrant, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of whole shares of Common Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share equal to such
fraction of the current Fair Market Value of one whole share of Common Stock as
of such date of exercise. No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this
Warrant. In lieu of providing a stock certificate pursuant to this
Section 2.3, the Holder may request that the Company provide the securities in
book-entry (uncertificated form) if, at such time, the Company is direct
registration eligible.
2.4 Partial Exercise; Effective
Date of Exercise. In case of any partial exercise of this
Warrant, the Company shall cancel this Warrant upon surrender hereof and shall
execute and deliver a new Warrant of like tenor and date for the balance of the
shares of Common Stock purchasable hereunder. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above. The person
entitled to receive the shares of Common Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of such shares
as of the close of business on the date the Holder is deemed to have exercised
this Warrant.
2.5 Vesting. This
Warrant shall vest fully upon issuance.
3. VALID ISSUANCE;
TAXES. All shares of Common Stock issued upon the exercise of
this Warrant shall be validly issued, fully paid and nonassessable, and the
Company shall pay all taxes and other governmental charges that may be imposed
in respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for shares of Common Stock in any
name other than that of the Registered Holder of this Warrant, and in such case
the Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company’s reasonable satisfaction that no tax or other charge
is due.
3
4. ADJUSTMENT OF PURCHASE PRICE AND
NUMBER OF SHARES. The number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property receivable or issuable upon exercise of this Warrant) and
the Purchase Price are subject to adjustment upon occurrence of the following
events:
4.1 Adjustment for Stock Splits,
Stock Subdivisions or Combinations of Shares. The Purchase
Price of this Warrant shall be proportionally decreased and the number of shares
of Common Stock issuable upon exercise of this Warrant (or any shares of stock
or other securities at the time issuable upon exercise of this Warrant) shall be
proportionally increased to reflect any stock split or subdivision of the
Company’s Common Stock. The Purchase Price of this Warrant shall be
proportionally increased and the number of shares of Common Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities at the time
issuable upon exercise of this Warrant) shall be proportionally decreased to
reflect any combination of the Company’s Common Stock.
4.2 Adjustment for Dividends or
Distributions of Stock or Other Securities or Property. In
case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock (or any shares of stock or other
securities at the time issuable upon exercise of the Warrant) payable in (a)
securities of the Company or (b) assets (excluding cash dividends), then, in
each such case, the Holder of this Warrant on exercise hereof at any time after
the consummation, effective date or record date of such dividend or other
distribution, shall receive, in addition to the shares of Common Stock (or such
other stock or securities) issuable on such exercise prior to such date, and
without the payment of additional consideration therefor, the securities or such
other assets of the Company to which such Holder would have been entitled upon
such date if such Holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such additional securities or other
assets distributed with respect to such shares as aforesaid during such period
giving effect to all adjustments called for by this Section
4.
4.3 Reclassification. If
the Company, by reclassification of securities or otherwise, shall change any of
the securities as to which purchase rights under this Warrant exist into the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change, and the Purchase
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section
4. No adjustment shall be made pursuant to this Section 4.3 upon any
conversion or redemption of the Common Stock which is the subject of Section
4.5.
4
4.4 Adjustment for Capital
Reorganization, Merger or Consolidation. In case of any
capital reorganization of the capital stock of the Company (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the Company with or into
another corporation, or the sale of all or substantially all the assets of the
Company then, and in each such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the
Holder of this Warrant shall thereafter be entitled to receive upon exercise of
this Warrant, during the period specified herein and upon payment of the
Purchase Price then in effect, the number of shares of stock or other securities
or property of the successor corporation resulting from such reorganization,
merger, consolidation, sale or transfer that a holder of the shares deliverable
upon exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant had been
exercised immediately before such reorganization, merger, consolidation, sale or
transfer, all subject to further adjustment as provided in this Section
4. The foregoing provisions of this Section 4.4 shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of this Warrant. If the
per-share consideration payable to the Holder hereof for shares in connection
with any such transaction is in a form other than cash or marketable securities,
then the value of such consideration shall be determined in good faith by the
Company’s Board of Directors. In all events, appropriate adjustment
(as determined in good faith by the Company’s Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
4.5 Conversion of Common
Stock. In case all or any portion of the authorized and
outstanding shares of Common Stock of the Company are redeemed or converted or
reclassified into other securities or property pursuant to the Company’s
Certificate of Incorporation or otherwise, or the Common Stock otherwise ceases
to exist, then, in such case, the Holder of this Warrant, upon exercise hereof
at any time after the date on which the Common Stock is so redeemed or
converted, reclassified or ceases to exist (the “Termination
Date”), shall receive, in lieu of the number of shares of Common Stock
that would have been issuable upon such exercise immediately prior to the
Termination Date, the securities or property that would have been received if
this Warrant had been exercised in full and the Common Stock received thereupon
had been simultaneously converted immediately prior to the Termination Date, all
subject to further adjustment as provided in this
Warrant. Additionally, the Purchase Price shall be immediately
adjusted to equal the quotient obtained by dividing (x) the aggregate Purchase
Price of the maximum number of shares of Common Stock for which this Warrant was
exercisable immediately prior to the Termination Date by (y) the number of
shares of Common Stock of the Company for which this Warrant is exercisable
immediately after the Termination Date, all subject to further adjustment as
provided herein.
5. CERTIFICATE AS TO
ADJUSTMENTS. In each case of any adjustment in the Purchase
Price, or number or type of shares issuable upon exercise of this Warrant, the
Chief Financial Officer or Controller of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either
first class mail, postage prepaid or overnight delivery) a copy of each such
certificate to the Holder.
5
6. LOSS OR
MUTILATION. Upon receipt of evidence reasonably satisfactory
to the Company of the ownership of and the loss, theft, destruction or
mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will execute and deliver in lieu thereof a new Warrant of like tenor as
the lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF COMMON
STOCK. The Company hereby covenants that at all times there
shall be reserved for issuance and delivery upon exercise of this Warrant such
number of shares of Common Stock or other shares of capital stock of the Company
as are from time to time issuable upon exercise of this Warrant and, from time
to time, will take all steps necessary to amend its Certificate of Incorporation
to provide sufficient reserves of shares of Common Stock issuable upon exercise
of this Warrant. All such shares shall be duly authorized, and when
issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. Issuance of this Warrant shall constitute full authority to the
Company’s Officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock upon
the exercise of this Warrant.
8. TRANSFER AND
EXCHANGE. Subject to the terms and conditions of this Warrant
and compliance with all applicable securities laws, this Warrant and all rights
hereunder may be transferred to any Registered Holder’s parent, subsidiary or
affiliate, or, if the Registered Holder is a partnership, to any partner of such
Registered Holder, in whole or in part, on the books of the Company maintained
for such purpose at the principal office of the Company referred to above, by
the Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such
transfer. Upon any permitted partial transfer, the Company will issue
and deliver to the Registered Holder a new Warrant or Warrants with respect to
the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that when
this Warrant shall have been so endorsed, the person in possession of this
Warrant may be treated by the Company, and all other persons dealing with this
Warrant, as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented hereby, any notice to the contrary
notwithstanding; provided, however, that until a
transfer of this Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner for all
purposes. Notwithstanding anything to the contrary, this Warrant and
the Common Stock issued or issuable upon exercise hereof, shall be subject to
the restrictions on transfer contained in FINRA Rule 5110(g) and may not be sold
during the offering pursuant to which such Warrant was issued, or sold,
transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of the securities by any person for a period
of 180 days immediately following the Effective Date, except as provided in
subparagraph (g)(2) of FINRA Rule 5110.
6
9. RESTRICTIONS ON
TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the Securities and
Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities
Act”) covering the disposition or sale of this Warrant or the Common
Stock issued or issuable upon exercise hereof, as the case may be, and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer, pledge, or hypothecate any or all of this
Warrant or such Common Stock, as the case may be, unless either (i) the Company
has received an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such registration is not
required in connection with such disposition or (ii) the sale of such securities
is made pursuant to SEC Rule 144. Further, the Holder agrees that
this Warrant and the Common Stock issued or issuable upon exercise hereof
(including any shares issuable upon an adjustment hereunder), shall not be sold
during the offering, or sold, transferred, assigned, pledged, or hypothecated,
or be the subject of any hedging, short sale, derivative, put, or call
transaction that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately following the date
of effectiveness or commencement of sales of the public offering of the Company
pursuant to Registration Statement 333-165222 on Form S-1, as amended, except as
provided in FINRA Rule 5110(g)(2).
10. COMPLIANCE WITH SECURITIES
LAWS. By acceptance of this Warrant, the Holder hereby
represents, warrants and covenants that he/she/it is an “accredited investor” as
that term is defined under Rule 501 of Regulation D, that any shares of stock
purchased upon exercise of this Warrant shall be acquired for investment only
and not with a view to, or for sale in connection with, any distribution
thereof; that the Holder has had such opportunity as such Holder has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Holder to evaluate the merits and risks of its
investment in the Company; that the Holder is able to bear the economic risk of
holding such shares as may be acquired pursuant to the exercise of this Warrant
for an indefinite period; that the Holder understands that the shares of stock
acquired pursuant to the exercise of this Warrant will not be registered under
the Securities Act (unless otherwise required pursuant to exercise by the Holder
of the registration rights, if any, granted to the Registered Holder) and will
be “restricted securities” within the meaning of Rule 144, in its current form,
under the Securities Act and that the exemption from registration under Rule 144
will not be available for at least one (1) year from the date of exercise of
this Warrant, subject to any special treatment by the SEC for exercise of this
Warrant pursuant to Section 2.2, and even
then will not be available unless a public market then exists for the stock,
adequate information concerning the Company is then available to the public, and
other terms and conditions of Rule 144 are complied with; and that all stock
certificates representing shares of stock issued to the Holder upon exercise of
this Warrant or upon conversion of such shares may have affixed thereto a legend
substantially in the following form:
7
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY
STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
11. REGISTRATION
RIGHTS. All shares of Common Stock issuable upon exercise of
this Warrant shall be “Registrable
Securities” or such other definition of securities entitled to
registration rights pursuant to Exhibit C to this
Warrant.
12. NO RIGHTS OR LIABILITIES AS
STOCKHOLDERS. This Warrant shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company. In the
absence of affirmative action by such Holder to purchase Common Stock by
exercise of this Warrant or Common Stock upon conversion thereof, no provisions
of this Warrant, and no enumeration herein of the rights or privileges of the
Holder hereof shall cause such Holder hereof to be a stockholder of the Company
for any purpose.
13. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company hereby represents and warrants to Holder
that:
13.1 Due Authorization;
Consents. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for (a) the authorization,
execution and delivery of, and the performance of all obligations of the Company
under, this Warrant, and (b) the authorization, issuance, reservation for
issuance and delivery of all of the Common Stock issuable upon exercise of this
Warrant, has been duly taken. This Warrant constitutes a valid and
binding obligation of the Company enforceable in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors’ rights
generally and to general equitable principles.
13.2 Organization. The
Company is a corporation duly organized and validly existing under the laws of
the State of Delaware and has all requisite corporate power to own, lease and
operate its property and to carry on its business as now being conducted and as
currently proposed to be conducted.
14. NOTICES. Except as
may be otherwise provided herein, all notices, requests, waivers and other
communications made pursuant to this Agreement shall be in writing and shall be
conclusively deemed to have been duly given (a) when hand delivered to the other
party; (b) when received when sent by facsimile at the address and number set
forth below; (c) three business days after deposit in the U.S. mail with first
class or certified mail receipt requested postage prepaid and addressed to the
other party as set forth below; or (d) the next business day after deposit with
a national overnight delivery service, postage prepaid, addressed to the parties
as set forth below with next-business-day delivery guaranteed, provided that the
sending party receives a confirmation of delivery from the delivery service
provider.
8
To the
Company:
|
To the
Holder:
|
|
NIVS
Industry Park
Xx.
00-00, Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxx
Xxxxxx’x
Xxxxxxxx xx Xxxxx 516006
00-000-0000000
|
|
[0000
Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000]
[0000
Xxxxxx xx xxx Xxxxxxxx, 00xx
Xx
Xxx
Xxxx, XX 00000]
|
Each
person making a communication hereunder by facsimile shall promptly confirm by
telephone to the person to whom such communication was addressed each
communication made by it by facsimile pursuant hereto but the absence of such
confirmation shall not affect the validity of any such
communication. A party may change or supplement the addresses given
above, or designate additional addresses, for purposes of this Section 13 by giving
the other party written notice of the new address in the manner set forth
above.
15.
HEADINGS. The
headings in this Warrant are for purposes of convenience in reference only, and
shall not be deemed to constitute a part hereof.
16.
LAW
GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California, with
regard to conflict of law principles of such state.
17.
NO
IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or bylaws, or through reorganization,
consolidation, merger, dissolution, issue or sale of securities, sale of assets
or any other voluntary 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
action as may be necessary or appropriate in order to protect the rights of the
Registered Holder of this Warrant against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase the
par value of any shares of stock issuable upon the exercise of this Warrant
above the amount payable therefor upon such exercise, and (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock upon
exercise of this Warrant.
18. NOTICES OF RECORD
DATE. In case:
18.1 the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant), for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right; or
18.2 of
any consolidation or merger of the Company with or into another corporation, any
capital reorganization of the Company, any reclassification of the capital stock
of the Company, or any conveyance of all or substantially all of the assets of
the Company to another corporation in which holders of the Company’s stock are
to receive stock, securities or property of another corporation;
or
9
18.3 of
any voluntary dissolution, liquidation or winding-up of the Company;
or
18.4 of
any redemption or conversion of all outstanding Common Stock;
then, and
in each such case, the Company will mail or cause to be mailed to the Registered
Holder of this Warrant a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock or (such stock or securities
as at the time are receivable upon the exercise of this Warrant), shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities), for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. The Company shall use all
reasonable efforts to ensure such notice shall be delivered at least thirty (30)
days prior to the date therein specified.
19. SEVERABILITY. If
any term, provision, covenant or restriction of this Warrant is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Warrant shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
20. COUNTERPARTS. For
the convenience of the parties, any number of counterparts of this Warrant may
be executed by the parties hereto and each such executed counterpart shall be,
and shall be deemed to be, an original instrument.
21. NO INCONSISTENT
AGREEMENTS. The Company will not on or after the date of this
Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to holders of the Company’s securities under any other
agreements, except rights that have been waived.
22. SATURDAYS, SUNDAYS AND
HOLIDAYS. If the Expiration Date falls on a Saturday, Sunday
or legal holiday, the Expiration Date shall automatically be extended until 5:00
p.m. PST the next business day.
23. ENTIRE
AGREEMENT. This Warrant contains the sole and entire agreement
and understanding of the parties with respect to the entire subject matter of
this Warrant, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Warrant are hereby merged herein.
[Signatures
appear on following page.]
10
IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed as of the Effective
Date.
NIVS
INTELLIMEDIA
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TECHNOLOGY
GROUP, INC.
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By: Xxxxxx
Xx
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Its:
Chairman and Chief Executive
Officer
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SIGNATURE
PAGE TO WARRANT TO PURCHASE COMMON STOCK
11
EXHIBIT
A
NOTICE
OF EXERCISE
(To be
executed upon exercise of Warrant)
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of the Company, as provided for therein, and (check the
applicable box):
¨
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tenders
herewith payment of the exercise price in full in the form of cash or a
certified or official bank check in same-day funds in the amount of
$____________ for _________ such securities.
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¨
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elects
the Net Issue Exercise option pursuant to Section 2.2 of the Warrant, and
accordingly requests delivery of a net of ______________ of such
securities.
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Please
issue a certificate or certificates for such securities in the name of, and pay
any cash for any fractional share to (please print name, address and social
security number):
Name:
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Address:
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Signature:
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Note: The
above signature should correspond exactly with the name on the first page of
this Warrant Certificate or with the name of the assignee appearing in the
assignment form below.
If said
number of shares shall not be all the shares purchasable under the within
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher whole number of shares.
EXHIBIT
B
ASSIGNMENT
(To be
executed only upon assignment of Warrant Certificate)
For value
received, hereby sells, assigns and transfers unto ____________________________
the within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
____________________________ attorney, to transfer said Warrant Certificate on
the books of the within-named Company with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
Name(s) of Assignee(s)
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Address
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# of Warrants
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And if
said number of Warrants shall not be all the Warrants represented by the Warrant
Certificate, a new Warrant Certificate is to be issued in the name of said
undersigned for the balance remaining of the Warrants registered by said Warrant
Certificate.
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Dated:
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Signature:
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Notice: The
signature to the foregoing Assignment must correspond to the name as written
upon the face of this security in every particular, without alteration or any
change whatsoever; signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to Securities and Exchange Commission Rule 17Ad-15.
1
EXHIBIT
C
1. REGISTRATION
RIGHTS.
1.1 Definitions. For
purposes of this Section 1:
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(a)
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Registration. The
terms “register,”
“registered,”
and “registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended, (the
“Securities
Act”), and the declaration or ordering of effectiveness of such
registration statement
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(b)
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Registrable
Securities. The term “Registrable
Securities” means: (1) any Common Stock of the Company
issued or to be issued upon exercise of the Warrant and (2) any
shares of Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, any shares of Common Stock described in
clause (1) of this subsection (b). Notwithstanding the
foregoing, “Registrable Securities” shall exclude any Registrable
Securities sold by a person in a transaction in which rights under this
Section 1
are not assigned in accordance with this Warrant or any Registrable
Securities sold in a public offering, whether sold pursuant to
Rule 144 promulgated under the Securities Act, or in a registered
offering, or otherwise.
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(c)
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Registrable Securities
Then Outstanding. The number of shares of “Registrable
Securities then outstanding” shall mean the number of shares of
Common Stock of the Company that are Registrable Securities and (l) are
then issued and outstanding or (2) are then issuable pursuant to an
exercise of the Warrant or pursuant to conversion of securities issuable
pursuant to an exercise of the
Warrant.
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(d)
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Holder. For
purposes of this Section 1,
the term “Holder”
means any person owning of record Registrable Securities or any permitted
assignee of record of such Registrable Securities to whom rights under
this Section 1
have been duly assigned in accordance with this
Warrant.
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(e)
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Form. The
term “Form”
means any form under the Securities Act for the registration of securities
as is in effect on the date hereof or any successor registration form
under the Securities Act subsequently adopted by the SEC which permits
inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the
SEC.
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(f)
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SEC. The
term “SEC”
or “Commission”
means the U.S. Securities and Exchange
Commission.
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C-1
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1.2
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Piggyback
Registrations. The Company shall notify all Holders of Registrable
Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting
a public offering of securities of the Company (including, but not limited
to, registration statements relating to secondary offerings of securities
of the Company, but excluding
registration statements relating to any registration under Section 1.3,
below, or to any employee benefit plan or a corporate reorganization) and
will afford each such Holder an opportunity to include in such
registration statement all or any part of the Registrable Securities then
held by such Holder. Each Holder desiring to include in any
such registration statement all or any part of the Registrable Securities
held by such Holder shall within fifteen (15) days after receipt of the
above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration
statement. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by
the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and conditions
set forth herein.
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(a)
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Underwriting. If
a registration statement under which the Company gives notice under this
Section 1.2
is for an underwritten offering, then the Company shall so advise the
Holders of Registrable Securities. In such event, the right of
any such Holder’s Registrable Securities to be included in a registration
pursuant to this Section 1.2
shall be conditioned upon such Holder’s participation in such underwriting
and the inclusion of such Xxxxxx’s Registrable Securities in the
underwriting to the extent provided herein. All Holders
proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form
with the managing underwriter or underwriters selected for such
underwriting (including a market stand-off agreement of up to 180 days if
required by such underwriters). Notwithstanding any other
provision of this Exhibit C, if the managing underwriter(s) determine(s)
in good faith that marketing factors require a limitation of the number of
shares to be underwritten, then the Company shall include in such offering
(i) first, all the securities the Company proposes to register for its own
account, and (ii) second, Holder’s Registrable Securities and other shares
of Common Stock of the Company requested to be included by other investors
having written registration rights agreements with the Company respecting
such shares (“Other
Registrable Securities”), with Holder and each such investor
proposing to sell such shares participating in such registration on a
pro rata basis,
such participation to be based upon the number of shares of Registrable
Securities and Other Registrable Securities then held by the Holder and
each such investor, respectively; provided, however, that the right
of the underwriters to exclude shares (including Registrable Securities)
from the registration and underwriting as described above shall be
restricted so that all shares that are not Registrable Securities or Other
Registrable Securities and are held by any other person, including,
without limitation, any person who is an employee or officer of the
Company (or any subsidiary of the Company) shall first be excluded from
such registration and underwriting before any Registrable Securities and
Other Registrable Securities are so excluded. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect
to withdraw therefrom by written notice to the Company and the
underwriter(s), delivered at least ten (10) business days prior to the
effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded
and withdrawn from the registration. For any Holder that is a
partnership, the Holder and the partners and retired partners of such
Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons,
and for any Holder that is a corporation, the Holder and all corporations
that are affiliates of such Holder, shall be deemed to be a single
“Holder,” and any pro
rata reduction with respect to such “Holder” shall be based upon
the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such “Holder,” as defined in this
sentence.
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C-2
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(b)
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Expenses. All
expenses incurred in connection with a registration pursuant to this Section 1.2
(excluding underwriters’ and brokers’ discounts and commissions relating
to shares sold by the Holders and legal fees of counsel for the Holders),
including, without limitation all federal and “blue sky” registration,
filing and qualification fees, printers’ and accounting fees, and fees and
disbursements of counsel for the Company, shall be borne by the
Company.
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(c)
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No Limit on
Registrations. Except as otherwise provided herein,
there shall be no limit on the number of times the Holders may request
registration of Registrable Securities under this Section 1.2,
provided however, that such registration rights shall terminate of the
seventh anniversary of the Effective
Date.
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1.3
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Form
Registration. In case the Company shall at any time
during the period ending on the fifth anniversary of the Effective Date,
receive from any Holder or Holders of a majority of all Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-1 or any similar long form registration
statement or Form S-3 or any similar short form registration statement,
that the Company is qualified to use, and any related qualification or
compliance with respect to all or a part of the Registrable Securities
owned by such Holder or Holders, then the Company
will:
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(a)
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Notice. Promptly
give written notice of the proposed registration and the Holder’s or
Holders’ request therefor, and any related qualification or compliance, to
all other Holders of Registrable Securities;
and
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C-3
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(b)
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Registration. As
soon as practicable, effect such registration and all such qualifications
and compliances as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of such Holders or
Holders’ Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder
or Holders joining in such request as are specified in a written request
given within fifteen (15) days after the Company provides the notice
contemplated by Section 1.3(a);
provided, however, that the
Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 1.3:
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(1) [intentionally
deleted];
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(2)
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if
the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than
$1,000,000;
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(3)
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if
the Company shall furnish to the Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
materially detrimental to the Company and its shareholders for such Form
Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form Registration statement no
more than once during any twelve month period for a period of not more
than ninety (90) days after receipt of the request of the Holder or
Holders under this Section 1.3;
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(4)
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if
the Company has, within the six (6) month period preceding the date of
such request, already effected a registration under the Securities Act
other than a registration from which the Registrable Securities of Holders
have been excluded (with respect to all or any portion of the Registrable
Securities the Holders requested be included in such registration)
pursuant to the provisions of Section 1.2(a);
or
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(5)
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in
any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or
compliance.
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(c)
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Expenses. The
Company shall pay all expenses incurred in connection with one
registration requested pursuant to this Section 1.3,
(excluding underwriters’ or brokers’ discounts and commissions relating to
shares sold by the Holders and legal fees of counsel for the Holders and
excluding expenses required to be paid by a Holder pursuant to Section 1.4(g)
below), including without limitation federal and “blue sky” registration,
filing and qualification fees, printers’ and accounting fees, and fees and
disbursements of counsel.
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C-4
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(d)
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Deferral. Notwithstanding
the foregoing, if the Company shall furnish to Holders requesting the
filing of a registration statement pursuant to this Section 1.3,
a certificate signed by the President or Chief Executive Officer of the
Company stating that in the good faith judgment of the Board, it would be
materially detrimental to the Company and its stockholders for such
registration statement to be filed, then the Company shall have the right
to defer such filing for a period of not more than ninety (90) days after
receipt of the request of the initiating Holders; provided, however, that the
Company may not utilize this right more than once in any twelve (12) month
period.
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(e)
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Limit on
Registrations. The Holders shall be entitled to request
registration of Registrable Securities under this Section 1.3
on one (1) occasion.
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1.4
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Obligations of the
Company. Whenever required to effect the registration of
any Registrable Securities under this Warrant the Company shall, as
expeditiously as reasonably
possible:
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(a)
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Registration
Statement. Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its
commercially reasonable efforts to cause such registration statement to
become effective, provided, however, that the
Company shall not be required to keep any such registration statement
effective for more than ninety (90)
days.
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(b)
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Amendments and
Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration
statement.
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(c)
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Prospectuses. Furnish
to the Holders such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by
them that are included in such
registration.
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(d)
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Blue
Sky. Use its commercially reasonable efforts to register
and qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such states as shall be
reasonably requested by the Holders, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in any
such states or jurisdictions.
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(e)
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Underwriting. In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement in usual and customary form,
with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an
agreement.
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C-5
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(f)
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Notification. Notify
each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing.
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(g)
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Opinion and Comfort
Letter. Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities
are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and (ii) a “comfort”
letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the
underwriters, if any, provided however, that the Company’s obligation to
obtain a “comfort” letter shall be limited to commercially reasonable
efforts. If such securities are not being sold through
underwriters, then the Company shall furnish, at the request and at the
sole expense of any Holder requesting registration of Registrable
Securities, on the date that the registration statement with respect to
such securities becomes effective, an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable
Securities.
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1.5
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Furnish
Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 1.2 or
1.3 that
the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the
intended method of disposition of such securities as shall be required to
timely effect the Registration of their Registrable
Securities.
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1.6
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Indemnification. In
the event any Registrable Securities are included in a registration
statement under Sections 1.2 or
1.3:
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C-6
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(a)
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By the
Company. To the extent permitted by law; the Company
will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as determined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended, (the “1934
Act”), against any losses, claims, damages, or Liabilities (joint
or several) to which they may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a “Violation”):
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(i)
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any
untrue statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto;
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(ii)
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the
omission or alleged omission to state therein a material fact required to
be stated therein, or necessary to make the statements therein not
misleading, or
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(iii)
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any
violation or alleged violation by the Company of the Securities Act, the
1934 Act, any federal or state securities law or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any federal or state
securities law in connection with the offering covered by such
registration statement;
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and the
Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this subsection 1.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
C-7
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(b)
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By Selling
Holders. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder’s partners, directors or officers or any person who controls such
Holder within the meaning of the Securities Act or the 1934 Act, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter or
other such Holder, partner or director, officer or controlling person of
such other Holder may become subject under the Securities Act, the 1934
Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or
action: provided,
however, that the
indemnity agreement contained in this Section 1.6(b)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
and provided,
further, that the
total amounts payable in indemnity by a Holder under this Section 1.6(b)
in respect of any Violation shall not exceed the net proceeds received by
such Holder in the registered offering out of which such Violation
arises.
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(c)
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Notice. Promptly
after receipt by an indemnified party under this Section 1.6
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented
by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of
liability to the indemnified party under this Section 1.6
to the extent the indemnifying party is prejudiced as a result thereof,
but the omission so to deliver written notice to the indemnified party
will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.6.
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C-8
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(d)
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Defect Eliminated in
Final Prospectus. The foregoing indemnity agreements of
the Company and Holders are subject to the condition that, insofar as they
relate to any Violation made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the “Final
Prospectus”), such indemnity agreement shall not inure to the
benefit of any person if a copy of the Final Prospectus was timely
furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities
Act.
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(e)
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Contribution. In
order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which either (i) any Holder
exercising rights under this Warrant, or any controlling person of any
such Holder, makes a claim for indemnification pursuant to this Section 1.6
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 in such case notwithstanding the fact
that this Section 1.6
provides for indemnification in such case, or (ii) contribution under
the Securities Act may be required on the part of any such selling Holder
or any such controlling person in circumstances for which indemnification
is provided under this Section 1.6;
then, and in each such case, the Company and such Holder 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
such Holder is responsible for the portion represented by the percentage
that the public offering price of its Registrable Securities offered by
and sold under the registration statement bears to the public offering
price of all securities offered by and sold under such registration
statement, and the Company and other selling Holders are responsible for
the remaining portion; provided, however, that, in any
such case: (A) no such Holder will be required to contribute any amount in
excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement;
and (B) no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled
to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
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(f)
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Survival. The
obligations of the Company and Holders under this Section 1.6
shall survive until the fifth anniversary of the completion of any
offering of Registrable Securities in a registration statement, regardless
of the expiration of any statutes of limitation or extensions of such
statutes.
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1.7
|
Termination of the
Company’s Obligations. The Company shall have no
obligations pursuant to Sections 1.2
and 1.3
with respect to any Registrable Securities proposed to be sold by a Holder
in a registration pursuant to (a) Section 1.2
more than seven years or (b) Section 1.3
more than five years, respectively, after the date of this Warrant, or,
if, in the opinion of counsel to the Company, all such Registrable
Securities proposed to be sold by a Holder may then be sold under Rule 144
in one transaction without exceeding the volume limitations
thereunder.
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C-9