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EXHIBIT 4.3
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THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT.
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DEEPTECH INTERNATIONAL INC.
COMMON STOCK PURCHASE WARRANT
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This certifies that, for good and valuable consideration,
DeepTech International Inc., a Delaware corporation (the "Company"), grants to
Citicorp USA Inc. (the "Lender") or registered assigns (the "Warrantholder"),
the right to subscribe for and purchase from the Company 328,125 validly
issued, fully paid and nonassessable shares (the "Warrant Shares") of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), at the
purchase price per share of $4.00 (the "Exercise Price"), at any time and from
time to time prior to 5:00 p.m., New York City time, on December 15, 1998, all
subject to the terms, conditions, limitations and adjustments herein set forth.
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1. Duration and Exercise of Warrant; Limitation on Exercise; Payment of
Taxes.
1.1 Duration and Exercise of Warrant. This Warrant may be
exercised by the Warrantholder by (a) the surrender of this Warrant to the
Company, with a duly executed Exercise Form specifying the number of Warrant
Shares to be purchased, during normal business hours on any Business Day and
(b) the delivery of payment to the Company, for the account of the Company, by
cash or by certified check, of the Exercise Price for the number of Warrant
Shares specified in the Exercise Form in lawful money of the United States of
America. The Company agrees that such Warrant Shares shall be deemed to be
issued to the Warrantholder as the record holder of such Warrant Shares as of
the close of business on the date on which this Warrant shall have been
surrendered and payment made for the Warrant Shares as aforesaid. A stock
certificate or certificates for the Warrant Shares specified in the Exercise
Form shall be delivered to the Warrantholder as promptly as practicable, and in
any event within 10 days, thereafter. The stock certificate or certificates so
delivered shall be in denominations of 100 shares each or such lesser or
greater denominations as may be specified by the Warrantholder in the Exercise
Form. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the stock certificate or certificates,
deliver to the Warrantholder a new Warrant evidencing the rights to purchase
the remaining Warrant Shares, which new Warrant shall in all other respects be
identical with this Warrant. No adjustments shall be made on Warrant Shares
issuable on the exercise of this Warrant for any cash dividends paid or payable
to holders of record of Common Stock prior to the date as of which the
Warrantholder shall be deemed to be the record holder of such Warrant Shares.
1.2 Payment of Taxes. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock transfer
or other issuance tax in respect thereto; provided, however, that the
Warrantholder shall be required to pay any and all taxes which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Warrantholder as reflected
upon the books of the Company.
1.3 Divisibility of Warrant. This Warrant may be divided into
warrants of one share or multiples thereof, upon surrender at the principal
office of the Company, without charge to any Warrantholder. Upon such
division, the Warrants may be transferred of record as the then Warrantholder
may specify without charge to such Warrantholder (other than any applicable
transfer taxes).
1.4 Deferred Amount and Limitation on Exercise.
(a) Subject to section 1.4(b), if this Warrant has not
theretofore been exercised in whole or in part, the Warrantholder may,
at its option, on 30 days' prior written notice delivered to the
Company, elect to receive from the Company on December 15, 1995 an
amount (the "Deferred Amount") equal to the amount that would accrue
on the outstanding principal amount of the portion of the Loan made by
the Lender on a cumulative compounded basis at the rate of 10% per
annum from the date such portion of the Loan was made until the
earlier of (A) the date such portion of the Loan has been paid in full
and (B) December 15, 1995. Should the Warrantholder so elect to
receive the Deferred Amount and the Deferred Amount is paid to the
Warrantholder in full on December 15, 1995, this Warrant shall not
thereafter be exercisable and the Warrantholder shall promptly
surrender this Warrant to the Company for cancellation.
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(b) If a Default occurs at any time, this Warrant shall
continue to remain in effect and shall be exercisable in accordance
with the terms hereof and the Warrantholder shall receive the Deferred
Amount on the date the portion of the Loan made by the Lender is paid
in full.
(c) The Deferred Amount shall be calculated by the
Warrantholder and, absent manifest error, such calculation shall be
binding on the Company.
2. Restrictions on Transfer: Restrictive Legends. Except as otherwise
permitted by this section 2, each Warrant shall (and each Warrant issued upon
direct or indirect transfer or in substitution for any Warrant pursuant to
section 4 shall) be stamped or otherwise imprinted with a legend in
substantially the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT."
Except as otherwise permitted by this section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT."
Notwithstanding the foregoing, the Warrantholder may require the
Company to issue a Warrant or a stock certificate for Warrant Shares, in each
case without a legend, if such Warrant or such Warrant Shares, as the case may
be, have been registered for resale under the Securities Act.
3. Reservation and Registration of Shares, Etc,
The Company covenants and agrees that all Warrant Shares which are
issued upon the exercise of this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens, security
interests, charges, and other encumbrances with respect to the issuance
thereof, other than taxes in respect of any transfer occurring
contemporaneously with such issuance. The Company further covenants and agrees
that, during the period within which this Warrant may be exercised, the Company
will at all times have authorized and reserved, and keep available free from
preemptive rights, a sufficient number of shares of Common Stock to provide for
the exercise of the rights represented by this Warrant. The Company further
covenants and agrees that it will, from time to time, take all such action as
may be required to assure that the par value per share of the Warrant Shares is
at all times equal to or less than the then effective Exercise Price.
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4. Exchange, Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon surrender of-this
Warrant to the Company with a duly executed Assignment Form and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant or Warrants of like tenor in the name of the assignee
named in such Assignment Form and this Warrant shall promptly be canceled.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, of such bond or indemnification as the Company may
reasonably require, and, in the case of such mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new
Warrant of like tenor. The term "Warrant" as used herein shall be deemed to
include any warrants issued in substitution or exchange for this Warrant.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in
section 4.
6. Certain Adjustments.
6.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) Stock Dividends. If at any time after the date of
the issuance of this Warrant (i) the Company shall fix a record date
for the issuance of any stock dividend payable in shares of Common
Stock or (ii) the number of shares of Common Stock shall have been
increased by a subdivision or split-up of shares of Common Stock,
then, on the record date fixed for the determination of holders of
Common Stock entitled to receive such dividend or immediately after
the effective date of subdivision or split-up, as the case may be, the
number of shares to be delivered upon exercise of this Warrant will be
increased so that the Warrantholder will be entitled to receive the
number of Shares of Common Stock that such Warrantholder would have
owned immediately following such action had this Warrant been
exercised immediately prior thereto, and the Exercise Price will be
adjusted as provided below in paragraph (g)(i).
(b) Combination of Stock. If the number of shares of
Common Stock outstanding at any time after the date of the issuance of
this Warrant shall have been decreased by a combination of the
outstanding shares of Common Stock, then, immediately after the
effective date of such combination, the number of shares of Common
Stock to be delivered upon exercise of this Warrant will be decreased
so that the Warrantholder thereafter will be entitled to receive the
number of shares of Common Stock that such Warrantholder would have
owned immediately following such action had this Warrant been
exercised immediately prior thereto, and the
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Exercise Price will be adjusted as provided below in paragraph (g)(i).
(c) Reorganization. If any capital reorganization of the
Company, or any reclassification of the Common Stock, or any
consolidation of the Company with or merger of the Company with or
into any other person or any sale, lease or other transfer of all or
substantially all of the assets of the Company to any other person,
shall be effected in such a way that the holders of Common Stock shall
be entitled to receive stock, other securities or assets (whether such
stock, other securities or assets are issued or distributed by the
Company or another person) with respect to or in exchange for Common
Stock, then, upon exercise of this Warrant the Warrantholder shall
have the right to receive the kind and amount of stock, other
securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other
transfer that such Warrantholder would have been entitled to receive
upon exercise of this Warrant had this Warrant been exercised
immediately before such reorganization, reclassification,
consolidation, merger or sale, lease or other transfer, subject to
adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this section 6.
(d) Stock and Rights offering. (i) If at any time after
the date of issuance of this Warrant, the Company shall issue to all
holders of its Common Stock or sell or fix a record date for the
issuance to all holders of its Common Stock of (A) Common Stock or (B)
rights, options or warrants entitling the holders thereof to subscribe
for or purchase Common Stock (or securities convertible or
exchangeable into or exercisable for Common Stock), in any such case,
at a price per share (or having a conversion, exchange or exercise
price per share) that is less than the Exercise Price then,
immediately after the date of such issuance or sale, the number of
shares of Common Stock to be delivered upon exercise of this Warrant
shall be increased so that the Warrantholder thereafter will be
entitled to receive the number of shares of Common Stock determined by
multiplying the number of shares of Common Stock such Warrantholder
would have been entitled to receive immediately before the date of
such issuance or sale by a fraction, the denominator of which will be
the number of shares of Common Stock outstanding on such date plus the
number of shares of Common Stock that the aggregate offering price of
the total number of shares so offered for subscription or purchase (or
the aggregate initial conversion price, exchange price or exercise
price of the convertible securities or exchangeable securities or
rights, options or warrants, as the case may be, so offered) would
purchase at the Exercise Price, and the numerator of which will be the
number of shares of Common Stock outstanding on such date plus the
number of additional shares of Common Stock offered for subscription
or purchase (or into which the convertible or exchangeable securities
or rights, options or warrants so offered are initially convertible or
exchangeable or exercisable, as the case may be), and the Exercise
Price shall be adjusted as provided below in paragraph (g)(i).
(ii) If the Company shall, at any time after the
date of issuance of this Warrant distribute to all holders of
Common Stock any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness or
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assets (excluding cash dividends or distributions paid from
retained earnings of the Company) or rights or warrants to
subscribe for or purchase any of its securities (excluding
those referred to in paragraph (d)(i) above) (any of the
foregoing being hereinafter in this paragraph (d)(ii) called
the "Securities"), then in each such case, unless the Company
elects to reserve shares or other units of such Securities for
distribution to the Warrantholder upon exercise of this
Warrant so that, in addition to the shares of the Common Stock
to which such Warrantholder is entitled, such Warrantholder
will receive upon such exercise the amount and kind of such
Securities which such Warrantholder would have received if the
Warrantholder had, immediately prior to the record date for
the distribution of the Securities, exercised this Warrant,
then the number of shares of Common Stock to be delivered to
such Warrantholder upon exercise of this Warrant shall be
increased so that the Warrantholder thereafter shall be
entitled to receive the number of shares of Common Stock
determined by multiplying the number of shares the
Warrantholder would have been entitled to receive immediately
before such record date, had the Warrantholder exercised this
Warrant immediately prior thereto, by a fraction, the
denominator of which shall be the Closing Price (as
hereinafter defined) per share of Common Stock on such record
date minus the then fair market value (as reasonably
determined by the Board of Directors of the Company), of the
portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock and the numerator of
which shall be the Closing Price of the Common stock, and the
Exercise Price shall be adjusted as provided below in
paragraph (g)(i). The term "Closing Price" shall mean the
closing price per share of the Common Stock on the principal
national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or traded on
any such exchange, on the National Market System of the
National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), or if not listed or traded on
any such exchange or system, the average of the bid and asked
price per share on NASDAQ or, if there are no such quotations
for the Common Stock, the fair market value per share of the
Common Stock as reasonably determined by the Board of
Directors of the Company.
(iii) In case the Company shall, directly or
indirectly, issue or sell any Additional Securities at a price
per share (or having a conversion, exchange or exercise price
per share) lower than the Exercise Price then, immediately
after the date of such issuance or sale, the number of shares
of Common Stock to be delivered upon exercise of this Warrant
shall be increased so that the Warrantholder thereafter will
be entitled to receive the number of shares of Common Stock
determined by multiplying the number of shares of Common Stock
the Warrantholder would have been entitled to receive
immediately before the date of such issuance or sale by a
fraction, the denominator of which will be the number of
shares of Common Stock outstanding on such date plus the
number of shares of Common Stock that the aggregate offering
price of the total number of shares so offered for
subscription or purchase (or the aggregate
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initial conversion price, exchange price or exercise price of
the convertible securities or exchangeable securities or
rights, options or warrants, as the case may be, so offered)
would purchase at the Exercise Price, and the numerator of
which will be the number of shares of Common Stock outstanding
on such date plus the number of Additional Securities offered
for subscription or purchase (or into which the convertible or
exchangeable securities or rights, options or warrants so
offered are initially convertible, exchangeable or
exercisable, as the case may be), and the Exercise Price shall
be appropriately adjusted as provided below in paragraph
(g)(i).
(e) Fractional Shares. No fractional shares of Common
Stock or scrip shall be issued to the Warrantholder in connection with
the exercise of this Warrant. Instead of any fractional shares of
Common Stock that would otherwise be issuable to the Warrantholder,
the Company will pay to the Warrantholder a cash adjustment in respect
of such fractional interest in an amount equal to that fractional
interest of the then current Closing Price per share of Common Stock.
(f) Carryover. Notwithstanding any other provision of
this section 6, no adjustment shall be made to the number of shares of
Common Stock to be delivered to the Warrantholder (or to the Exercise
Price) if such adjustment represents less than 1% of the number of
shares to be so delivered, but any lesser adjustment shall be carried
forward and shall be made at the time and together with the next
subsequent adjustment which together with any adjustments so carried
forward shall amount to 1% or more of the number of shares to be so
delivered.
(g) Exercise Price Adjustment.
(i) Whenever the number of Warrant Shares
purchasable upon the exercise of this Warrant is adjusted, as
herein provided, the Exercise Price payable upon the exercise
of this Warrant shall be adjusted by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and of which the denominator shall
be the number of Warrant Shares purchasable immediately
thereafter.
(ii) The Exercise Price shall be reduced by the
per share amount of all cash dividends paid to holders of
Common Stock prior to the exercise of this Warrant. Such per
share amount shall be calculated by dividing all such cash
dividends paid by the number of shares of Common Stock issued,
outstanding, entitled to, and receiving such cash dividends.
(h) Superseding Adjustment. If, at any time after any
adjustment of the number of shares of Common Stock to be delivered
upon exercise of this Warrant and any corresponding adjustment to the
Exercise Price shall have been made pursuant to this section 6.1 as
the result of any issuance of rights, options or warrants, and such
rights, options or warrants shall thereafter expire and all or a
portion of such rights, options or warrants shall have not
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been exercised, then such previous adjustments shall be rescinded and
annulled and the number of shares of Common Stock to be delivered upon
exercise of this Warrant and the Exercise Price shall be recomputed to
give effect thereto.
6.2 Other Dilutive-Events. In case any event shall occur as to
which the provisions of section 6.1 are not strictly applicable but the failure
to make any adjustment would not fairly protect the purchase rights represented
by this warrant in accordance with the essential intent and principles of such
section, then, in each such case, the Company shall, at its expense, appoint a
firm of independent public accountants of recognized national standing (who
shall be appointed at the Company's expense and who may be the independent
public accountants regularly employed by the Company), to issue a report which
shall determine the adjustment, if any, on a basis consistent with the
essential intent and principles established in section 6.1, necessary to
preserve, without dilution, the purchase rights represented by this Warrant.
Upon receipt of such report, the Company will promptly mail a copy thereof to
the Warrantholder and shall make the adjustments described therein.
6.3 No Adjustment for Employee Stock Option Plan or Permitted
Issuances. Notwithstanding anything to the contrary contained elsewhere in
this section 6, no adjustment in the number of Warrant Shares purchasable upon
the exercise of this Warrant or in the Exercise Price shall be made (i) with
respect to Common Stock or Additional Securities issued to employees of the
Company pursuant to a qualified stock option plan of the Company which is
approved by the Board of Directors of the Company or (ii) as a result of a
Permitted Issuance. The provisions of this section 6 providing for the
adjustment in the number of Warrant Shares purchasable upon the exercise of
this Warrant and in the Exercise Price shall apply at any time only with
respect to the Warrant Shares that have not at such time been purchased by the
Warrantholder as a result of the exercise of this Warrant.
6.4 Notice of Adjustment. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments and a certificate of a
firm of independent public accountants of recognized national standing selected
by the Board of Directors of the Company (who shall be appointed at the
Company's expense and who may be the independent public accountants regularly
employed by the Company) setting forth the number of Warrant Shares and the
Exercise Price of such Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
7. Registration Rights.
7.1 Demand Registration.
(a) At any time after the effective date of the first
registration statement under the Securities Act for a public offering
of Securities of the Company to the general public, the holder of
Registrable Securities may deliver to the Company a written request
that the Company register any or all of the Registrable Securities.
The Company shall, as soon as practicable following receipt of such
request, effect the registration under
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the Securities Act of all Registrable Securities specified in the
request of such holder.
(b) The Company is obligated to effect only one
registration pursuant to this Section 7.1.
7.2 Piggyback Registration. In each and every registration of
Securities of the Company (other than shares of Common Stock for a qualified
employee stock option plan approved by the Board of Directors of the Company)
proposed to be effected under the Securities Act at any time, the Company will
give notice to the holder of Registrable Securities of such proposed
registration at least 60 days prior to the filing of any registration statement
and will, as soon as practicable following receipt of a written request of such
holder, include all Registrable Securities specified in the request of such
holder in such proposed registration.
7.3 Obligations of the Company. When required under the terms of
this Warrant to effect the registration of the Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement or
statements or similar documents (collectively, the "Registration
Statement") with respect to all Registrable Securities requested by
the holder of Registrable Securities to be included in such
registration, and use its best efforts to cause the Registration
Statement to become effective and keep the Registration Statement
effective pursuant to Rule 415 at all times, which Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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, in light
of the circumstances in which they were made, not misleading.
(b) Prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times until all Registrable Securities
covered by such Registration Statement have been disposed and to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by the Registration Statement.
(c) Furnish promptly to the holders of Registrable
Securities such numbers of copies of a prospectus, including a
preliminary prospectus, and all amendments and supplements thereto, in
conformity with the requirements of the Securities Act, and such other
documents as the holders of Registrable Securities may reasonably
request in order to facilitate the disposition of the Registrable
Securities.
(d) Subject to the provisions of section 7.3(e), use its
best efforts to register and qualify the Registrable Securities
covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested
by the holders of Registrable Securities and to prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements and to take such other
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actions as may be necessary to maintain such registration and
qualification in effect at all times, and to take all other actions
necessary or advisable to enable the disposition of such Registrable
Securities in such jurisdictions, 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 or to provide any
undertaking or make any change in its charter or bylaws which the
Board of Directors of the Company determines to be contrary to the
best interest of the Company and its stockholders.
(e) In the event any offering made pursuant to Section
7.1(a) is to be made through underwriters, select underwriters for the
offering who are reasonably satisfactory to the holders of the
Registrable Securities, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, including,
without limitation, customary indemnification and contribution
obligations, with the managing underwriters(s) of such offering. The
holders of Registrable Securities shall also enter into and perform
their customary obligations under any such agreement including,
without limitation, customary indemnification and contribution
obligations. If the managing underwriter of a proposed public
offering shall advise the Company in writing that, in its opinion, the
distribution of the Registrable Securities requested to be included in
the registration concurrently with the securities being registered by
the Company or any demanding security holder would materially and
adversely affect the distribution of such securities by the Company or
such demanding security holders, then all selling security holders
(including the holder of such Registrable Securities) shall reduce the
amount of securities each intended to distribute through such offering
on a pro rata basis.
(f) Notify the holders of Registrable Securities at any
time when a prospectus relating to Registrable Securities covered by
the Registration Statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in the 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 light of the circumstances then
existing. The Company shall promptly amend or supplement the
Registration Statement to correct any such untrue statement or
omission.
(g) Notify the holders of Registrable Securities of the
issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for
that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible time.
(h) Permit a single firm of counsel designated as
sellers' counsel by the holders of Registrable Securities to review
the Registration Statement and all amendments and supplements thereto
at a reasonable period of time prior to their filing, and, with
respect to any offering made pursuant to section 7.1(a), shall not
file any document in a form to which such counsel reasonably objects.
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(i) Make generally available to its security holders as
soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with
the provisions of Rule 158 under the Securities Act) covering a 12
month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration
Statement.
(j) Furnish on the date that Registrable Securities are
delivered to any underwriters for sale in connection with a
registration pursuant to this section 7 (i) an opinion, dated 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, addressed to the
underwriters and (ii) a letter dated 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, addressed to the
underwriters.
(k) Make available for inspection by any holder of
Registrable Securities, any underwriters participating in the offering
pursuant to the registration and the counsel, accountants or other
agents retained by any holder of Registrable Securities or any such
underwriter, all pertinent financial and other records, corporate
documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably
requested by the holders of Registrable Securities or any such
underwriters in connection with the registration.
(l) If the Common Stock is then listed on a national
securities exchange, use its best efforts to cause the Registrable
Securities to be listed on such exchange. If the Common Stock is not
then listed on a national securities exchange, use its best efforts to
facilitate the reporting of the Common Stock on NASDAQ.
(m) Provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
(n) Take all actions reasonably necessary to facilitate
the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be sold
pursuant to the Registration Statement and to enable such certificates
to be in such denominations and registered in such names as the
holders of Registrable Securities or any underwriters may reasonably
request.
(o) Take all other actions reasonably necessary to
expedite and facilitate disposition by the holders of Registrable
Securities of the Registrable Securities pursuant to the Registration
Statement.
7.4 Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
section 7 with respect to each holder of Registrable Securities that such
holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by such holder, and the intended method
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of disposition of such securities as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
7.5 Expenses of Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registration, filings or qualifications pursuant to sections 7.1, 7.2 and 7.3,
including, without limitation, all registration, listing, filing and
qualification fees, printers and accounting fees, the fees and disbursements of
counsel for the Company and the reasonable fees and disbursements of one firm
of counsel for the holders of Registrable Securities, shall be borne by the
Company.
7.6 Indemnification. In the event any Registrable Securities are
included in a Registration Statement pursuant to this section 7:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each holder of Registrable Securities, the
directors, if any, of such holders, the officers, if any, of such
holders who sign the Registration Statement, each person, if any, who
controls such holders, any underwriter (as defined in the Securities
Act) for such holders and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, expenses or liabilities
(joint or several) to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or
are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law; and the Company will
reimburse each holder of Registrable Securities and each such
underwriter or controlling person, promptly as such expenses are
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; provided, however, that the
indemnity agreement contained in this section 7.6(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 any such holder, underwriter or controlling
person, as the case may be. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
holders of Registrable Securities or any such underwriter or
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controlling person and shall survive the transfer of the Registrable
Securities by the original Warrantholder or any subsequent transferee.
(b) To the extent permitted by law, each holder of
Registrable Securities, severally and not jointly, 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 or the
Exchange Act, any underwriter and any other stockholder selling
securities pursuant to the Registration Statement or any of its
directors or officers or any person who controls such holder or
underwriter, against any losses, claims, damages or liabilities (joint
or several) to which any of them may become subject, under the
Securities Act, the Exchange 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 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 such holder will reimburse any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this section 7.6(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 such holder, which consent shall not be unreasonably
withheld; and provided further, that each holder of Registrable
Securities shall be liable under this paragraph (b) for only that
amount of losses, claims, damages and liabilities as does not exceed
the proceeds actually received by such holder as a result of the sale
of Registrable Securities pursuant to such registration.
(c) Promptly after receipt by an indemnified party under
this section 7.6 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 7.6, 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 control of 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, in the
reasonable opinion of counsel for the indemnified party 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 party
represented by counsel for the indemnifying party 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 any liability to the indemnified party
under this section 7.6 only to the extent prejudicial to its ability
to defend such action, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that it
may have to any
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indemnified party otherwise than under this section 7.6. The
indemnification required by this section 7.6 shall be made by periodic
payments of the amount thereof during the course of the investigation
or defense, promptly as such expense, loss, damage or liability is
incurred.
(c) To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees
to make the maximum contribution with respect to any amounts for which
it would otherwise be liable under this section 7.6 to the extent
permitted by law, provided that (i) no contribution shall be made
under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in this section
7.6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of
Registrable Securities who was not guilty of such fraudulent
misrepresentation and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
7.7 Reports Under Securities Exchange Act of 1934. With a view to
making available to the holders of Registrable Securities the benefits of SEC
Rule 144 promulgated under the Securities Act and any other rule or regulation
of the SEC that may at any time permit the Warrantholder to sell securities of
the Company to the public without registration, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after
90 days after the effective date of the first registration statement
filed by the Company for the offering of its securities to the general
public;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and
the Exchange Act; and
(c) furnish to each holder of Registrable Securities, so
long as such holder owns any Registrable Securities, forthwith upon
request (i) a written statement by the Company that it has complied
with the reporting requirements of SEC Rule 144 (at any time after 90
days after the effective date of the first registration statement
filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), (ii)
a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested in availing the
holders of Registrable Securities of any rule or regulation of the SEC
which permits the selling of any such securities without registration.
7.8 Assignment of Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this section 7 shall be
deemed to have been assigned by the Warrantholder to its transferee or assignee
upon the assignment or transfer of the Registrable Securities pursuant to
section 4 hereof without any action on the part of the Warrantholder or such
transferee or assignee and the provisions of this Warrant shall be binding upon
and accrue to the benefit of such assignee
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or transferee and its successors and assigns. For purposes of section 7 of
this Agreement (i) the term "Holders of Registrable Securities" as used shall
include permitted assignees and (ii) the terms "register," "registered" and
"registration" shall refer to a registration effected by preparing and filing a
registration statement or statements or similar documents in compliance with
the Securities Act and pursuant to Rule 415 and the declaration or ordering of
effectiveness of such registration statement or document by the SEC.
8. Notices of Corporate Action. In the event of
(a) any taking by the Company of a record of the holders
of any class of Securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger involving the Company and any
other party or any transfer of all or substantially all the assets of
the Company to any other party, or
(c) any voluntary or involuntary dissolution, liquidation
or winding up of the Company,
the Company will mail to the Warrantholder a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right and the amount and character of any such
dividend, distribution or right and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or other Securities) shall be entitled to exchange their shares of
Common Stock (or other securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 30 days prior to the date therein specified, in
the case of any date referred to in the foregoing subdivision (i), and at least
30 days prior to the date therein specified, in the case of the date referred
to in the foregoing subdivision (ii).
9. Put Option.
9.1 Put Option. The Company hereby grants to the Warrantholder
the right and option (the "Put Option") to require the Company upon the
occurrence of a Put Event, on the terms and conditions set forth herein, to
purchase this Warrant or, if this Warrant had theretofore been exercised, all,
but not less than all, of the Warrant Shares then held by the Warrantholder.
9.2 Notices. In addition to the obligations of the Company under
section 8, within two days following the occurrence of any action or event that
could result in the occurrence of a Put Event, including
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without limitation, the execution of a letter of intent or binding agreement,
the Company shall notify the Warrantholder of (i) such action or event, (ii)
the date on which the Put Event is expected to occur, (iii) the nature of the
Put Event, (iv) the consideration to be paid to the Company or any shareholder
of the Company on such Put Event and (v) such other information as the
Warrantholder shall reasonably request.
9.3 Exercise of Put Option. At any time within 10 days following
the delivery by the Company of the notice referred to in section 9.2 but in any
event, prior to the occurrence of the Put Event, the Warrantholder may, but
shall not be obligated to, deliver notice to the Company stating that the
Warrantholder is exercising the Put Option. If the Warrantholder delivers such
notice and a Put Event occurs, the Company shall purchase this Warrant or all,
but not less than all, of the Warrant Shares then held by the Warrantholder, as
the case may be, on the terms and in the manner specified in sections 9.4 and
9.5.
9.4 Purchase Price. The purchase price for this Warrant or the
Warrant Shares, as the case may be, shall be equal to the product of (i) the
number of Warrant Shares then issuable upon the exercise of this Warrant or the
number of Warrant Shares then held by the Warrantholder, as the case may be,
multiplied by (ii) in the event of the occurrence of a Put Event specified in
clause (i) or (ii)(A) of the definition of Put Event set forth below, the
highest price per share paid to shareholders of the Company in such Put Event
or, in the event of the occurrence of a Put Event specified in clause (ii)(B)
of the definition of Put Event set forth below, the quotient obtained by
dividing (x) the aggregate purchase price paid to the Company in such Put Event
less, in the case of any Put Event, the aggregate payment the Warrantholder
would make to the Company if the Warrants of such Warrantholder were exercised
by (y) the number of shares of Common Stock then outstanding calculated on a
fully diluted basis assuming all of the Warrants are exercised. For purposes
of determining the number of Warrant Shares issuable upon the exercise of this
Warrant in making the calculation set forth above, effect shall be given to any
adjustment provided herein in the number of Warrant Shares issuable upon the
exercise of this Warrant as a result of the occurrence of the Put Event. The
cash value of any non- cash consideration paid to the shareholders of the
Company in a Put Event specified in clause (i) or (ii)(A) of the definition of
Put Event set forth below or to the Company in a Put Event specified in clause
(ii)(B) of the definition of Put Event set forth below shall be determined by
the good faith mutual agreement of the Warrantholder and the Company, or if no
such agreement can be reached within 30 days following the date on which notice
of the exercise of the Put Option is received by the Company, by an investment
banking firm mutually agreeable to the Warrantholder and the Company and
experienced in evaluating companies engaged in the line of business which the
Company is then engaged. The determination of any such investment banking firm
hereunder shall be final and binding upon the Company and the Warrantholder.
The fees of any such investment banking firm shall be paid one-half by the
Warrantholder and one-half by the Company.
9.5 Closing. The closing of any purchase hereunder of this
Warrant or the Warrant Shares, as the case may be, shall be held at the offices
of the Company simultaneously with or immediately prior to the closing of the
Put Event. At such closing, the Warrantholder shall deliver to the Company
this Warrant or the Warrant Shares, as the case may be, duly endorsed for
transfer and the Company shall deliver to the Warrantholder a certified or
official bank check for the purchase price thereof.
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10. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
Additional Securities: all shares, (including treasury shares) of
Common Stock, rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock, issued or sold by the Company after the date hereof, excluding (i) any
shares of Common Stock, rights, options, warrants or convertible or
exchangeable securities (or shares of Common Stock issued upon conversion,
exchange or exercise, as the case may be, of such rights, options, warrants or
convertible or exchangeable securities) for which, an adjustment has been made
pursuant to section 6.1(a) or clauses (i) or (ii) of section 6.1(d), (ii) the
Warrant Shares and (iii) shares of Common Stock issued upon conversion,
exchange or exercise, as the case may be, of rights, options, warrants or
convertible or exchangeable securities, for which an adjustment has been made
in accordance with section 6.1(d)(iii) upon issuance of such rights, options,
warrants or convertible or exchangeable securities.
Assignment Form: an Assignment Form in the form annexed hereto as
Exhibit B.
Business Day: any day other than a Saturday, Sunday or a day on which
national banks are authorized by law to close in the City of New York.
Current Market Price: in respect of any share of Common Stock if there
shall then be a public market for the Common Stock, the average of the daily
market prices for 10 consecutive Business Days commencing 15 days before such
date; the daily market price for each such Business Day being (i) the last sale
price on such day on the principal stock exchange on which such Common Stock is
then listed or admitted to trading, (ii) if no sale takes place on such day on
any such exchange, the average of the last reported closing bid and asked
prices on such day as officially quoted on any such exchange, (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange,
the average of the last reported closing bid and asked prices on such day in
the over-the-counter market, as furnished by the NASDAQ, or the National
Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged
in the business of reporting such prices, as furnished by any similar firm then
engaged in such business, or (v) if there is no such firm, as furnished by any
member of the National Association of Securities Dealers, Inc. (the "NASD")
selected mutually by the Warrantholder and the Company or, if they cannot agree
upon such selection, as selected by two such members of the NASD, one of which
shall be selected by the Warrantholder and one of which shall be selected by
the Company.
Default: the occurrence of the event of default specified in
Section 12(a) of the Loan Agreement or the exercise of the acceleration rights
specified in clause (I) of Section 12 of the Loan Agreement.
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
Exercise Form: an Exercise Form in the form annexed hereto as
Exhibit A.
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Loan: as defined in the Loan Agreement.
Loan Agreement: the Loan and Security Agreement, dated as of December
15, 1992, among the Company, Citibank, N.A., as Agent, and the Lenders named
therein.
Permitted Issuances: (i) the issuance of shares of Common Stock upon
exercise of this Warrant, (ii) if there shall then be a public market for the
Common Stock, the issuance of shares of Common Stock upon receipt by the
Company of the Current Market Price therefor and (iii) at any time prior to the
time there is a public market for the Common Stock, the issuance of shares of
Common Stock in an arm's-length transaction with third persons not affiliated
with the Company for consideration equal to the fair value of such shares as
determined in good faith by the Board of Directors of the Company. Any
determination by the Board of Directors of the Company pursuant to the
preceding sentence may be challenged in good faith by the holders of all
remaining unexercised warrants issued pursuant to the Loan Agreement entitling
such holders to purchase at least 51% of the shares of Common Stock issuable
under such then exercised warrants and any dispute shall be resolved by an
investment banking firm of reorganized national standing selected and paid for
by the Company and reasonably acceptable to such holders or by any other method
as is then agreed to by the Company and such holders.
Put Event: the occurrence of any of the following: (i) the Company is
acquired by merger, consolidation or other business combination by any person
or group of persons (other than Xxxxxx X. Xxxxxx) or (ii) the acquisition,
directly or indirectly, by any person or group of persons (other than Xxxxxx X.
Xxxxxx) of (A) more than 50% of the capital stock of the Company or (B) more
than 50% of the assets of the Company, in either case, by way of negotiated
purchase or otherwise. For purposes hereof, the determination of whether
persons shall be deemed to be acting as a "group of persons" shall be made in
accordance with the provisions of Section 13(d)(3) of the Exchange Act.
Registrable Securities: (i) the Warrant Shares and other securities
issued or issuable upon exercise of this Warrant and (ii) any securities issued
or issuable with respect to any Common Stock or other securities referred to in
subdivision (i) by way of stock dividend or stock split or in connection with a
combination or other reorganization or otherwise.
Rule 415: Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous basis.
SEC: the Securities and Exchange commission or any other federal
agency at the time administering the Securities Act or the Exchange Act,
whichever is the relevant statute for the particular purpose.
Securities Act: the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the SEC thereunder, all as
the same shall be in effect at the time.
11. Miscellaneous.
11.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to the
Warrants.
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11.2 Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and
their respective heirs, legal representatives, successors and assigns. Nothing
in this Warrant, expressed or implied, is intended to or shall confer on any
person other than the Company and the Warrantholder, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies, obligations
or liabilities under or by reason of this Warrant.
11.3 Amendments and Waivers. This Warrant may not be modified or
amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought.
Either the Company or the Warrantholder may, by an instrument in writing, waive
compliance by the other party with any term or provision of this Warrant on the
part of such other party hereto to be performed or complied with. The waiver
by any such party of a breach of any term or provision of this Warrant shall
not be construed as a waiver of any subsequent breach.
11.4 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
11.5 Further Assurances. Each of the Company and the Warrantholder
shall do and perform all such further acts and things and execute and deliver
all such other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Agreement.
11.6 Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by mail, postage
prepaid, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other
party hereto:
(a) if to the Company, addressed to:
DeepTech International Inc.
0000 Xxxxx Xxxxxxxx Tower
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
(b) if to the Warrantholder, addressed to the
address of such Warrantholder appearing on the books of the
Company.
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
11.7 Separability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of
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any of the terms or provisions of this Warrant in any other jurisdiction.
11.8 GOVERNING LAW. THIS WARRANT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
11.9 No Rights or Liabilities as Stockholder. Nothing contained in
this Warrant shall be determined as conferring upon the Warrantholder any
rights as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
DEEPTECH INTERNATIONAL INC.
By:
-
Name:
Title:
Dated: January 21, 1997
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