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EXHIBIT 10.86
WARRANT AGREEMENT
THIS AGREEMENT, made as of the 21st day of October, 1998, by and between
Financial Performance Corporation, a New York corporation having an address at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (hereinafter referred to as the
"Corporation") and each of the persons set forth on Schedule A annexed hereto
and made a part hereof (hereinafter collectively referred to as the "Warrant
Holders" and each as a "Warrant Holder").
W I T N E S S E T H:
Whereas, the Corporation has determined to issue and deliver to the Warrant
Holders warrants to purchase the Corporation's common stock (the "Warrants")
entitling the holder(s) thereof to purchase an aggregate of five hundred fifty
thousand (550,000) shares of the common stock of the Corporation (hereinafter,
the "Shares");
Whereas, the Corporation desires to provide for the form and provisions of the
Warrants, the terms upon which they will be issued and may be exercised, and the
respective rights, limitations of rights and immunities of the Corporation and
the Warrant Holders;
Whereas, the Corporation desires to make the Warrants, when executed on behalf
of the Corporation, the valid, binding and legal obligation of the Corporation,
and has done and performed all acts and things necessary to make the Warrants
the valid, binding and legal obligations of the Corporation; and
Whereas, the Corporation desires to act on its own behalf in connection with the
issuance, registration, transfer and exchange of the Warrants, the issuance of
certificates representing the Warrants and the exercise of the Warrants, except
to the extent that the Corporation's transfer agent may be required to issue the
Shares.
Now, therefore, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Corporation and the Warrant Holder agree as follows:
1. ISSUANCE OF WARRANTS. The Warrants are dated as of October 21, 1998 and
evidence the right of the Warrant Holders to purchase the Shares. For purposes
of this Agreement, "common stock" of the Corporation shall be defined as any and
all shares of common stock of the Corporation, whether now or hereafter
authorized or issued, shares issued by way of dividend or upon an increase,
reduction, substitution or reclassification of common stock, and upon any
merger, consolidation or reorganization of the Corporation. Each Warrant shall
be duly executed on behalf of the Corporation by the President or a Vice
President of the Corporation and by the Secretary or Assistant Secretary of the
Corporation. If any officer whose signature has been placed upon any of the
Warrants ceases to be that officer before any of the Warrants are issued, the
Warrants may be issued with the same effect as if the officer had not ceased to
be that officer on the date of issuance.
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2. WARRANT PRICE AND DURATION OF THE WARRANTS. The Warrants may be exercised
from time to time and at any time, in whole or in part, from and after the date
of issuance through October 31, 2001 ("Warrant Expiration Date"), except that if
notice has been given as provided in subsection 5(a) below in connection with
the liquidation, dissolution or winding up of the Corporation, the right to
exercise the Warrants shall expire on the date specified in such notice as the
record date for determining holders of stock of the Corporation entitled to
receive any distribution upon the liquidation, dissolution or winding up of the
Corporation. The Warrants shall entitle the Warrant Holders to purchase the
Shares at the price of fifty cents ($0.50) per share (the "Warrant Price"),
subject to adjustment as set forth in Section 4 below. Each of the Warrants
shall entitle a Warrant Holder to purchase one (1) of the Shares at the Warrant
Price, subject to adjustment as set forth in Section 4 below.
3. EXERCISE OF WARRANTS.
(a) The Warrants may be exercised by surrendering the original Warrant at the
office of the Corporation and by delivering to the Corporation a duly completed
and executed exercise form substantially in the form attached to the Warrant,
together with the Warrant Price for each full share of Common Stock as to which
the Warrants are exercised. The Warrant Price shall be paid in cash or by
certified or official bank check payable to the order of the Corporation.
(b) In addition to the method of payment set forth in subsection 3(a) above and
in lieu of any cash payment required thereunder, the Warrant Holder shall have
the right, at any time and from time to time, to exercise the Warrants, in whole
or in part, by means of a "cashless exercise" pursuant to which the Warrant
Holder may surrender the original Warrant together with the exercise notice in
the manner specified in subsection 3(a) above without payment of the Warrant
Price, in exchange for the number of shares of Common Stock equal to the product
of (x) the number of shares of Common Stock as to which the Warrants are being
exercised multiplied by (y) a fraction, the numerator of which is the Market
Price (as defined in subsection 3(g) below) of the Common Stock less the
Exercise Price and the denominator of which is the Market Price of the Common
Stock. For the purposes of this Section 3, Market Price shall be calculated
either (i) on the trading day immediately preceding the date on which the
exercise form is delivered to the Corporation as set forth in subsection 3(a)
above (the "Notice Date") or (ii) as the average of the Market Prices for each
of the five (5) trading days immediately preceding the Notice Date, whichever of
(i) or (ii) is higher.
(c) Upon the exercise of any of the Warrants, the Corporation shall, as promptly
as practicable (but in no event more than seven (7) business days after
exercise) issue and deliver to the Warrant Holder a certificate or certificates
for the number of full shares of Common Stock to which the Warrant Holder is
entitled, registered in the name or names specified by the Warrant Holder, and
cash with respect to any remaining fractional interest in a share as set forth
in subsection 3(d) below. If the Warrants are not exercised in full (except with
respect to a remaining fraction of a share), the Corporation shall also issue
and deliver new Warrants for the number of shares (including fractional shares)
as to which the Warrants have not been exercised.
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(d) The Corporation shall not be required to issue fractional shares upon the
exercise of the Warrants. If the Warrant Holder exercises the purchase rights
under the Warrants in a manner that leaves the right to purchase a fraction of a
share unexercised, the Corporation shall purchase the fractional interest for an
amount in cash equal to the then current market value of the fractional
interest, computed on the basis of the average closing bid and asked prices of
its shares of Common Stock on the date of exercise as furnished to the
Corporation by any member or member firm of a registered national securities
exchange or, if the Common Stock is not then being publicly traded, on another
reasonable basis determined by the Corporation.
(e) All of the Shares issued upon the exercise of the Warrants shall be duly and
validly issued, fully paid and nonassessable and the Corporation shall pay all
documentary, stamp or other taxes and governmental charges in connection with
the issuance of the Warrants and the issuance or delivery of any Shares upon
exercise of the Warrants. In addition, upon issuance, the Shares shall be free
and clear of any and all liens, encumbrances, adverse interests, claims,
charges, levies, restrictions, agreements and taxes of any nature whatsoever
except only for applicable restrictions under state and federal securities laws
with regard to the transfer of the Warrants and the Shares.
(f) Each person in whose name any certificate or certificates for shares of
Common Stock is issued shall for all purposes be deemed to have become the
holder of record of such shares on the date on which the Warrants were
surrendered in connection with the exercise of the Warrants and payment of the
Warrant Price was tendered, irrespective of the date of delivery of the
certificate or certificates, except that if the date of surrender and payment is
a date when the stock transfer books of the Corporation are closed, a person
shall be deemed to have become the holder of the Shares at the close of business
on the immediately preceding date on which the stock transfer books are open.
(g) For purposes of this Section 3, the Market Price for a specified date shall
mean the amount per share of the Common Stock equal to (i) the last reported
sale price of the Common Stock on such date or, in case no such sale takes place
on such date, the average of the closing bid and asked prices of the Common
Stock on such date, in either case as officially reported on the principal
national securities exchange on which such Common Stock is then listed or
admitted for trading, or (ii) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a
national market system security by the NASD, the last reported trading price of
the Common Stock on such date, or (iii) if there shall have been no trading on
such date or if the Common Stock is not so designated, the average of the
closing bid and asked prices of the Common Stock on such date as shown by the
NASD automated quotation system, or (iv) if such Common Stock is not then listed
or admitted for trading on any national exchange or quoted in the
over-the-counter market, the higher of (x) the book value thereof as determined
by any firm of independent public accountants of recognized standing selected by
the Board of Directors of the Corporation as of the last day of any month ending
within 60 days preceding the date as of which the determination is to be made
and (y) the fair value thereof (as of a date which is within 20 days of the date
as of which the determination is to be made) determined in good faith by the
Board of Directors of the Corporation.
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4. ADJUSTMENTS IN WARRANT PRICE AND SHARES.
(a) CHANGE IN CLASS OF SHARES. If, at any time or from time to time, the
Corporation, by stock dividend, stock split, subdivision, reverse split,
consolidation, reorganization, reclassification of shares, or otherwise, changes
as a whole its outstanding Common Stock into a different class of shares, the
class of shares into which the Common Stock has been changed shall replace the
Common Stock for the purposes of the Warrants so that the Warrant Holder shall
be entitled to receive, and shall receive upon the exercise of the Warrants,
shares of the class of stock into which the Common Stock has been changed.
(b) STOCK DIVIDENDS AND SPLIT-UPS. If at any time or from time to time, the
number of outstanding shares of Common Stock of the Corporation is increased by
a stock dividend payable in shares of Common Stock or by a stock split or
subdivision of Common Stock, or otherwise, then, on the day following the date
fixed for the determination of holders of Common Stock entitled to receive the
stock dividend or split-up, the number of Shares issuable on the exercise of
each Warrant shall be increased in proportion to the increase in outstanding
shares of Common Stock and the then applicable Warrant Price shall be
correspondingly decreased.
(c) AGGREGATION OF SHARES. If at any time or from time to time, the number of
outstanding shares of Common Stock of the Corporation is decreased by a reverse
split, consolidation or reclassification of shares of Common Stock, or
otherwise, then, after the effective date of the reverse split, consolidation or
reclassification, the number of Shares issuable on exercise of each Warrant
shall be decreased in proportion to the decrease in outstanding shares of Common
Stock and the then applicable Warrant Price shall be correspondingly increased.
(d) SPECIAL STOCK DIVIDENDS. If at any time or from time to time, shares of any
class of stock of the Corporation (other than Common Stock) are issued by way of
a stock dividend on outstanding Common Stock, then, commencing with the day
following the date fixed for the determination of holders of Common Stock
entitled to receive the stock dividend, in addition to any shares of Common
Stock receivable upon exercise of the Warrants, the Warrant Holder shall upon
exercise of the Warrants be entitled to receive, as nearly as practicable, the
same number of shares of dividend stock, plus any shares issued upon any
subsequent change, replacement, subdivision, or combination of the stock
dividend, to which the Warrant Holder would have been entitled if the Warrants
would have been exercised immediately prior to the stock dividend. No adjustment
in the Warrant Price shall be made by virtue of the happening of any event
specified in this Subsection 4(d).
(e) MERGER, CONSOLIDATION AND SALE. If at any time, a consolidation or merger of
the Corporation with or into another corporation (other than a consolidation or
merger in which the Corporation is the continuing corporation and which does not
result in any reclassification or change of outstanding shares issuable upon
exercise of the Warrants), or sale or transfer of all or substantially all of
its assets to another corporation, is effective, then, as a condition of the
consolidation, merger or sale, the holder(s) of the Warrants then outstanding
shall have the right to exercise the Warrants for the kind and amount of shares
and other securities and property receivable upon the consolidation, merger,
sale or transfer by a holder of the number of shares of Common Stock which might
have been purchased upon exercise of the Warrants immediately prior to the
consolidation, merger, sale or transfer and provision shall be made whereby the
Warrant Holder after the transaction shall have the right to purchase and
receive, upon the basis
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and upon the terms and conditions specified in the Warrants, the same number of
shares purchasable immediately prior to the transaction upon the exercise of the
rights represented by the Warrants. The Corporation shall not effect any
consolidation, merger, transfer or sale unless, prior to the consummation of the
transaction, the successor corporation (if other than the Corporation) resulting
from the consolidation or merger, or the corporation purchasing the assets of
the Corporation, assumes by written instrument executed and delivered to the
Warrant Agent and the Warrant Holder the obligation to deliver to the Warrant
Holder the shares of stock in accordance with the preceding sentence.
(f) PRE-EMPTIVE OR OTHER RIGHTS. If at any time prior to the exercise of all of
the Warrants, the Corporation offers any shares of its Common Stock to the
holders of its Common Stock as a class for subscription in accordance with the
preemptive or other rights of those stockholders, the Warrant Holder shall be
entitled to subscribe for the same number of shares of Common Stock as the
Warrant Holder would have been entitled to purchase, upon exercising the
Warrants and becoming a stockholder of the Corporation, immediately prior to the
record or effective date with respect to the preemptive or other rights.
(g) DISTRIBUTION OF ASSETS. If at any time after the date of this Agreement, the
Corporation makes any distribution of its assets upon or with respect to its
shares of Common Stock as a liquidating or partial liquidating dividend (other
than upon a liquidation, dissolution or winding up of the Corporation as
provided for in Subsection 5(a) below, or other than as a cash dividend payable
out of earnings or any surplus legally available for dividends), the holder(s)
of the Warrants then outstanding shall, upon exercise of the Warrants after the
record date of distribution or in the absence of a record date, after the date
of distribution, receive, in addition to the shares subscribed for, the amount
of the assets or a sum equal to the value of the assets at the time of the
distribution, which would have been distributed to the holder if the Warrants
had been exercised immediately prior to the record date for the distribution or,
in the absence of a record date, immediately prior to the date of the
distribution.
(h) OTHER CHANGE. If the Corporation takes any action with respect to its shares
of Common Stock, other than as set forth in this Agreement, which would
adversely affect the rights of the holder(s) of the Warrants, then the Shares
shall be changed in a manner which is equitable under the circumstances. Unless
the context otherwise indicates, all references to shares of Common Stock in
this Agreement and the Warrants shall, in the event of a change under this
Section 4, be deemed to refer to any other securities or property included in
the Common Stock pursuant to the change.
(i) FORM OF WARRANTS. The form of the Warrants need not be changed due to any
change pursuant to this Section 4, and warrants issued after a change may state
the same Warrant Price and the same number of shares as is stated in the
Warrants initially issued pursuant hereto.
(j) NOTICE OF ADJUSTMENT. Upon any adjustment of the Warrant Price or number of
shares issuable on exercise of the Warrants pursuant to the provisions of this
Section 4, then and in each case, the Corporation shall give prompt written
notice of adjustment to the Warrant Holder by certified mail, return receipt
requested at the address registered with the Corporation. The notice shall set
forth in reasonable detail the facts requiring the change, the Warrant Price
resulting from the adjustment and the increase or decrease if any, in the number
of Shares as so changed, setting forth in reasonable detail the method of
calculation and the facts upon which the calculation is based. Without limiting
the foregoing notice requirement, in case at any time:
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(i) the Corporation pays any dividends payable in stock upon its Common
Stock or makes any distributions (other than regular cash dividends) to the
holders of its Common Stock;
(ii) the Corporation offers for subscription pro-rata to the holders of
its Common Stock any additional shares of stock of any class or any other
rights; or
(iii) there is a capital reorganization, a reclassification of the
capital stock of the Corporation, or a consolidation or merger of the
Corporation with, or a sale of all or substantially all of its assets to another
corporation;
then, in any or more of these cases, the Corporation shall give written notice
to the Warrant Holder in the manner set forth above of the date on which (i) the
books of the Corporation close or a record is taken for the dividend,
distribution or subscription rights, or (ii) the reorganization,
reclassification, consolidation, merger or sale takes place. The notice also
shall specify the date as of which the holders of the Common Stock of record
shall participate in dividend distribution or subscription rights, or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon the reorganization, reclassification, consolidation, merger or
sale. The notice shall be given at least 30 days prior to the transaction in
question and not less than 20 days prior to the record date or the date on which
the Company's transfer books are closed with respect to the transaction.
5. PROVISIONS FOR PROTECTION OF WARRANT HOLDERS.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, a notice shall be filed by the Corporation with the Warrant Holder
at least 60 days before the record date (which shall be specified in the notice)
for determining holders of the shares of Common Stock entitled to receive any
distribution upon the liquidation, dissolution or winding up. The notice must
contain: (i) the date on which the transaction is to take place; (ii) the record
date (which must be at least 60 days after the giving of the notice) as of which
holders of Common Stock entitled to receive distributions upon the liquidation,
dissolution or winding up shall be determined; (iii) a brief description of the
transaction; (iv) a brief description of the distributions, if any, to be made
to holders of the Common Stock as a result of the transaction; and (v) an
estimate of the fair market value of the distributions. The notice shall also
specify the date on which the right to exercise the Warrants shall expire. A
copy of the notice shall be mailed to Warrant Holder and to each other holder of
Warrants at the address(es) registered with the Corporation not more than 30 and
not less than 20 days before the record date.
(b) The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock the number of shares that are
from time to time sufficient to permit the exercise of all outstanding Warrants
and the issuance of the Shares. If at any time the number of authorized but
unissued shares of Common Stock is not sufficient for these purposes, the
Corporation shall take all action that may be necessary to increase its
authorized but unissued shares to the number of shares sufficient for these
purposes.
(c) The Warrants may not be redeemed by the Corporation at any time.
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(d) If any of the Warrant Certificate(s) becomes lost, stolen, mutilated or
destroyed, the Corporation shall issue a new Warrant Certificate(s) of like
denomination, tenor and date as the Warrant Certificate(s) lost, stolen,
mutilated or destroyed. Any new Warrant shall constitute an original contractual
obligation of the Corporation, regardless of whether the allegedly lost, stolen,
mutilated or destroyed Warrant Certificate(s) is (are) at any time enforceable
by anyone.
6. REPRESENTATIONS OF THE CORPORATION.
The Corporation represents, warrants and covenants to the Warrant Holder as
follows:
(a) All shares of Common Stock that may be issued upon the exercise of the
Warrants shall, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all liens, encumbrances, adverse interests, claims,
charges, levies, restrictions, agreements and taxes of any nature whatsoever
with respect to the purchase and issuance of the Shares except only for
applicable restrictions under state and federal securities laws with regard to
the transferability thereof. The Corporation has done and performed all acts and
things necessary to make the Warrants the valid, binding and legal obligations
of the Corporation and the Warrants are the valid, binding and legal obligations
of the Corporation;
(b) The Corporation is a corporation duly organized and validly existing under
the laws of the State of New York, has all requisite corporate power and
authority to own, operate and carry on its business and to enter into this
Agreement and to perform all of its obligations hereunder and is duly qualified
and in good standing in the State of New York;
(c) The Corporation has obtained all necessary authorizations and approvals from
its Board of Directors required for the execution and delivery of this Agreement
and all collateral documents arising out of or relating to this transaction.
This Agreement has been duly executed and delivered by the Corporation and
constitutes the legal, valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its terms (except as may
be limited by applicable bankruptcy and insolvency laws);
(d) Neither the execution and delivery of this Agreement nor any of the other
instruments or documents contemplated hereby, nor the issuance of the Shares or
the Warrants, nor the incurrence of the obligations herein set forth (i) will
result in a violation of, or constitute a default under, the certificate of
incorporation or by-laws of the Corporation, or any material obligations,
agreements, covenants or conditions contained in any bond, debenture, mortgage,
loan agreement, lease, joint venture or other agreement or instrument, mortgage,
loan agreement, lease, joint venture or other agreement or instrument to which
the Corporation is a party or by which it or any of its properties may be bound,
or (ii) is in violation of any order, rule, regulation, writ, injunction, or
decree of any domestic government, governmental instrumentality or court;
7. TRANSFER AND OWNERSHIP OF WARRANTS.
(a) Title to the Warrants shall pass by delivery in the same manner as a
negotiable instrument payable to bearer, accompanied by a transfer form
substantially in the form annexed to the Warrant. Each holder of the Warrants
may be treated by the Corporation and the Corporation's transfer agent as the
absolute owner thereof for all purposes and as the person entitled to exercise
the Warrants or transfer title to it.
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(b) One or more Warrants may be surrendered to the Corporation for exchange and,
upon their cancellation, the Corporation shall countersign and deliver in
exchange one or more new Warrants, as requested by the bearer of the cancelled
Warrant or Warrants, for the same aggregate number of Shares as were evidenced
by the Warrant or Warrants so cancelled. The Corporation shall give notice to
the registered holders of the Warrants of any change in the address of, or in
the designation of the Corporation's transfer agent.
(c) The Warrant Holder represents to the Corporation that he is acquiring the
Warrants and will acquire the Shares for his own account for investment and not
with a view to, or for sale in connection with, any distribution thereof. If, in
the future, the Warrant Holder shall decide to dispose of the Warrants or the
Shares, any such disposition shall be made only in a transaction which is exempt
from registration under then applicable federal and state securities laws or
pursuant to registration under such laws.
8. ASSIGNABILITY. Neither this Warrant Agreement nor any of the Warrants may be
assigned by the Corporation. The Warrant Holder or any other holder(s) of the
Warrants may assign this Warrant Agreement and the Warrants, in whole or in
part, in compliance with applicable state and federal securities laws.
9. REGISTRATION RIGHTS. The Shares shall be entitled to customary "piggy-back"
registration rights and shall be registered by the Corporation, at the
Corporation's sole cost and expense, pursuant to next the registration statement
or amended registration statement to be filed by the Corporation with the
Securities and Exchange Commission. All of the terms of the "piggy-back"
registration rights hereby afforded to the Shares shall be as set forth in
Addendum A to this Warrant Agreement.
10. MISCELLANEOUS.
(a) APPLICABLE LAW. The validity, interpretation and performance of this
Agreement and of the Warrants shall be governed by the internal laws of the
State of New York.
(b) AGREEMENT. Copies of this agreement shall be available at the office of the
Corporation for examination by the Warrant Holder and all holder(s) of any of
the Warrants.
(c) NOTICES AND DEMANDS. Any and all notices, demands or other communications
provided for in this Agreement shall be given in writing and by registered or
certified mail, postage prepaid, return receipt requested, or by hand delivery
with receipt of delivery acknowledged, or by a recognized overnight courier
service furnishing evidence of delivery, addressed as follows:
To the Corporation: Financial Performance Corporation
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
President
To the Warrant Holders: at the address of each Warrant Holder on file with the
Corporation
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(d) ASSIGNS. The term "Warrant Holder" as used in this Agreement shall, unless
otherwise specifically indicated, mean and include the Warrant Holder, all
assignees of the Warrant Holder and all future holder(s) of any of the Warrants.
(e) NO MODIFICATIONS. This agreement shall not be changed, modified or amended
except by a writing signed by the party to be charged, and this agreement may
not be discharged except by performance in accordance with its terms or by a
writing signed by the party to be charged.
(f) NO WAIVER. It is agreed that a waiver by any party of a breach of any
provision of this agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.
(g) FURTHER PERFORMANCE. The Corporation agrees to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this agreement.
(h) COUNTERPARTS. This agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
In witness whereof, this Agreement has been duly executed on behalf of the
Corporation hereto the day, month and year first above written.
Witness: Financial Performance Corporation
________________________ By: /s/
______________________________
Xxxxxxx X. Xxxxxx
Its: President
________________________ By: /s/
______________________________
Xxxxxxx Xxxx
Its: Secretary
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SCHEDULE A
Name of Warrant Holder No. of Warrants Issued
Xxxxxx X. Xxxxx 100,000
Xxxxxxx Xxxx 100,000
Xxxxxxx Xxxxxx 200,000
Xxxx X. Xxxxxxxx 100,000
Xxxxxxxxx Xxxx 50,000
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ADDENDUM A TO WARRANT AGREEMENT
REGISTRATION RIGHTS
A. REGISTRATION RIGHTS. If and at such time that the Company shall next
elect to file with the Commission a registration statement under the Securities
Act with the Commission covering any of the Company's securities, the Company
shall use its best efforts to effect the registration of the shares of the
Company's common stock underlying the warrants which are the subject of this
Warrant Agreement pursuant to such registration statement as more particularly
provided in this Annex A (all of such shares being registered are hereinafter
referred to as the "Registrable Securities").
B. REGISTRATION PROCEDURES. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section A, the Company will:
(k) prepare and file with the Commission a registration
statement with respect to such Registrable Securities
and use its best efforts to cause such registration
statement to become effective as promptly as
reasonably practicable;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and
the prospectus used in connection therewith as may be
necessary to keep such registration statement
effective and to comply with the provisions of the
Securities Act with respect to the disposition of all
Registrable Securities covered by such registration
statement until the earlier of (a) such time as all
of such Registrable securities have been disposed of
in accordance with the intended methods of
disposition by the Warrant Holder who shall sell or
offer to sell any Registrable Securities pursuant to
such registration statement (hereinafter, a "Selling
Stockholder") set forth in such registration
statement or (b) the expiration of nine (9) months
after such registration statement becomes effective;
(iii) furnish to each Selling Stockholder, without charge,
such number of conformed copies of such registration
statement and of each such amendment and supplement
thereto (in each case including all exhibits), such
number of copies of the prospectus included in such
registration statement (including each preliminary
prospectus and any summary prospectus), in conformity
with the requirements of the Securities Act, such
documents incorporated by reference in such
registration statement or prospectus, and such other
documents as a Selling Stockholder may reasonably
request;
(iv) use its best efforts to register or qualify all
Registrable Securities covered by such registration
statement under the securities or "blue sky" laws of
such jurisdictions as a Selling Stockholder (or in an
underwritten offering, the managing underwriter)
shall reasonably request, and do any and all other
acts and things which may be necessary or advisable
to enable the Selling Stockholder to consummate the
disposition in such jurisdictions of his Registrable
Securities covered by such registration statement,
except
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that the Company shall not for any such purpose be
required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it is
not so qualified, or to subject itself to taxation in
any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(v) promptly notify the Selling Stockholder, at any time
when a prospectus related 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 any material fact required to
be stated therein or necessary to make the statement
therein not misleading in light of the circumstances
then existing, and at the request of such Selling
Stockholder prepare and furnish a reasonable number
of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances then
existing.
The Company may require the Selling Stockholder to furnish the
Company such reasonable information regarding the Selling Stockholder and the
distribution of his Registrable Securities as the Company may from time to time
reasonably request and as shall be required by law or by the Securities and
Exchange Commission in connection therewith.
C. COMPANY'S INDEMNIFICATION. In the event of any registration of any
Registrable Securities of the Company under the Securities Act, the Company
will, and hereby does, indemnify and hold harmless, the Selling Stockholder, and
each other person, if any, who controls the Selling Stockholder within the
meaning of the Securities Act against any losses, claims, damages, liabilities
and expenses, joint or several, to which the Selling Stockholder may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions or proceedings or investigations in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus included therein, or any amendment or supplement thereto, or any
document incorporated by reference therein, or (ii) any 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 (iii) any violation
by the Company of any securities laws, and the Company will reimburse the
Selling Stockholder for any legal or any other expenses reasonably incurred by
him in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, however, that the Company shall not
be liable to the Selling Stockholder, director, officer, participating person or
controlling person in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written
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information furnished to the Company in an instrument executed by or under the
direction of the Selling Stockholder, for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Selling Stockholder and shall survive the transfer
of such Registrable Securities by the Selling Stockholder.
D. STOCKHOLDERS' INDEMNIFICATION. The Company may require as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section A, that the Company shall have received an undertaking
satisfactory to it from the Selling Stockholder and the underwriters, if the
offering is underwritten, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in Section C) the Company, each director of the
Company, each officer of the Company who shall sign such registration statement,
the attorneys for the Company and each other person, if any, who controls the
Company within the meaning of the Securities Act, with respect to any statement
in or omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus included therein, or any amendment or
supplement thereto, but only if such statement or omission was made in reliance
upon and in conformity with written information furnished to the Company through
an instrument duly executed or provided by the Selling Stockholder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer, attorney or
controlling person and shall survive the transfer of such Registrable Securities
by the Selling Stockholder.
E. INDEMNIFICATION MECHANISM. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in either Section C or D, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under Section
C or D, as is applicable, except to the extent that the indemnifying party's
liabilities and obligations are increased as a result of such failure to give
notice. In case any such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnifying party shall have failed to retain counsel
for the indemnified party as aforesaid, (ii) representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other person represented by such counsel in such proceeding, or (iii)
the indemnified party shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to direct the defense of such action on behalf of the
indemnified party). In the circumstances described in subsection (ii) and (iii),
the Company shall pay for the reasonable legal or other expenses of no more than
one separate counsel. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation. The
indemnifying party shall not be liable for any settlement of any proceeding
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effected without the written consent of such indemnifying party, but if settled
with such consent or if there shall be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify each indemnified party from and against
any loss or liability by reason of such settlement or judgment.
F. OTHER INDEMNIFICATION. Indemnification similar to that specified
in Section C and Section D (with appropriate modifications) shall be given by
the Company and the Selling Stockholder with respect to any required
registration or other qualification of such Registrable Securities under any
federal or state law or regulation or governmental authority other than the
Securities Act.
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