Exhibit 10.10
THIS SECURITY HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY PUBLIC
OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE ACT.
OPINION RESEARCH CORPORATION
______________________________
COMMON STOCK PURCHASE WARRANT
______________________________
Certificate No. ____
Dated as of May [__], 1999
1. Grant. For consideration of $100 and other value received, OPINION
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RESEARCH CORPORATION, a Delaware corporation (the "Corporation"), hereby grants
to ALLIED INVESTMENT CORPORATION or its assigns or transferees (the "Holder"),
at the exercise price set forth in Section 3 below, the right to purchase
207,589 shares (the "Basic Shares") plus, on the terms and conditions set forth
in Section 4(b) hereto, up to an additional 69,196 shares (the "Contingent
Shares," and, together with the Basic Shares, the "Warrant Shares") of Common
Stock (or other security issued in accordance with Section 8). This Warrant is
being issued at Closing under an investment agreement dated as of the date
hereof (the "Investment Agreement") by and among the Corporation and the Holder.
Capitalized terms used herein, but not elsewhere defined herein or in the
Investment Agreement, have the meanings set forth in Schedule 1.
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2. Exercise Period. The right to exercise this Warrant, in whole or in
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part, begins on the date hereof. The right to exercise this Warrant expires on
the later of (i) the eighth anniversary of the date hereof, or (ii) on the third
anniversary of the Repayment Date (the "Expiration Date").
3. Exercise Price. The exercise price of this Warrant is $5.422 per
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share, as adjusted from time to time as hereinafter set forth (the "Exercise
Price").
4. Anti-Dilution Adjustment.
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(a) Dilutive Transactions. If the Corporation enters into a Dilutive
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Transaction, other than a transaction described in Section 4(b) hereof, the
Exercise Price shall be decreased to the Weighted Average Per Share Value.
(b) Contingent Shares.
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(i) If any one of the following three events fails to occur
prior to the second anniversary of the date hereof, then the Holder shall have
the right to purchase 34,598 Contingent Shares (for a total of 242,187 Warrant
Shares purchasable hereunder) upon exercise of this Warrant:
(1) the Repayment Date has occurred;
(2) the Corporation has made to the Holder a Bona Fide
Offer to purchase all of the Warrants or Warrant Shares
at the Market Price (less the Exercise Price if such
Warrant has not been exercised at such time); and
(3) the Market Price at the time the Bona Fide Offer is
made is greater than or equal to the initial Exercise
Price set forth in Section 3 hereof, plus $5 per share.
(ii) If any one of the following three events fails to occur
prior to the third anniversary of the date hereof, then the Holder shall have
the right to purchase 34,598 Contingent Shares (in addition to any Warrant
Shares received pursuant to Section 1 and clause (i) above) upon exercise of
this Warrant;
(1) the Repayment Date has occurred;
(2) the Corporation has made to the Holder a Bona Fide
Offer to purchase all of the Warrants or Warrant Shares
at the Market Price (less the Exercise Price if such
Warrant has not been exercised at such time); and
(3) the Market Price at the time the Bona Fide Offer is
made is greater than or equal to the initial Exercise
Price set forth in Section 3 hereof, plus $8 per share.
(c) Readjustment.
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(i) Expiration of Option or Right to Subscribe For or Purchase.
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If any option or right issued in connection with a Dilutive
Transaction expires without having been exercised prior to
the exercise by Holder of its rights hereunder, the Exercise
Price shall forthwith be readjusted to such greater number
as would have been in effect had the option or right never
been issued.
(ii) Expiration of Right to Convert or Exchange. If any right to
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convert or exchange any Common Stock Equivalent issued in
connection with a Dilutive Transaction expires without
having been exercised
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prior to the exercise by Holder of its rights hereunder,
the Exercise Price shall forthwith be readjusted to such
greater number as would have been in effect had the Common
Stock Equivalent never been issued.
5. Other Adjustments.
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(a) Adjustment for Change in Common Stock.
-------------------------------------
(i) If the Corporation (A) pays a dividend or makes a
distribution on its Common Stock in shares of its Common
Stock, (B) subdivides or reclassifies its outstanding
shares of Common Stock into a greater number of shares, or
(C) combines or reclassifies its outstanding shares of
Common Stock into a smaller number of shares (each, an
"Adjustment Event"), the Exercise Price and the number of
Warrant Shares issuable hereunder immediately prior to such
action shall be proportionately adjusted to reflect such
Adjustment Event.
(ii) The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and
immediately after the effective date in the case of a
subdivision, combination or reclassification.
(iii) The adjustment shall be made successively whenever any
Adjustment Event occurs.
(b) Adjustment for Reorganization. If the Corporation consolidates or
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merges with or into another Person or enters into any other similar transaction,
recapitalization or reorganization (any such action, a "Reorganization"), there
shall thereafter be deliverable, upon exercise of this Warrant (in lieu of the
number of Warrant Shares theretofore deliverable) the number of shares of stock
or other securities or property to which a holder of the number of shares of
Common Stock that would otherwise have been deliverable upon exercise of this
Warrant would have been entitled upon such Reorganization if such Warrant has
been exercised in full immediately prior to such Reorganization.
6. Participation in Repurchases or Redemptions. If the Corporation
-------------------------------------------
repurchases or redeems any of its securities, the Corporation will offer to
include the Holder in such repurchase or redemption, as if the Holder had
exercised this Warrant immediately prior to the event (or any record date with
respect thereto). If the Holder elects to participate in a repurchase or
redemption, this Warrant shall be modified (as of the date of such event) so
that the Holder shall be entitled to receive, upon exercise, the number of
Warrant Shares issuable hereunder less the number of Warrant Shares redeemed or
repurchased.
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7. Prior Notice as to Certain Events.
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(a) Dividends, Distributions, Subscription Rights. If the Corporation
---------------------------------------------
(i) pays any dividend, or makes any distribution, or repurchases or redeems any
of its securities, or (ii) offers any subscription rights pro rata to the
--- ----
holders of its Common Stock, then at least 15 days prior to the record date for
such action, the Corporation will send written notice (by first class mail,
postage prepaid, addressed to the Holder at its address shown on the books of
the Corporation) of the dates on which (A) the Corporation will close its books
or take a record for such action and (B) the holders of Common Stock of record
will participate in such action.
(b) Reorganizations. If the Corporation (i) enters into any
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Reorganization or reclassification of its capital stock, or (ii) is the subject
of a voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, then at least 15 days prior to such action, the Corporation will
send written notice (by first class mail, postage prepaid, addressed to the
Holder at its address shown on the books of the Corporation) of the dates on
which (A) such action will occur and (B) the holders of Common Stock of record
may exchange their Common Stock for securities or other property deliverable
upon such action.
8. Alternate Class. In the event the Corporation consummates the
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registration of any of its securities other than Common Stock (the "Alternate
Class") in accordance with the Securities Act of 1933, as amended, upon the
request of the Holder:
(a) the Corporation will issue to Holder, upon exercise of this
Warrant, the equivalent number of shares of such Alternate Class, so long as the
holders of the shares of the Alternate Class have all of the xxx e rights as the
holders of shares of Common Stock, except for voting rights; and
(b) all references herein to Common Stock shall be deemed to refer to
the Alternate Class.
9. Reservation of Common Stock. The Corporation will reserve and keep
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available for issuance and delivery upon the exercise of this Warrant such
number of its authorized but unissued shares of Common Stock or other securities
of the Corporation as will be sufficient to permit the exercise in full of this
Warrant. Upon issuance, each of the Warrant Shares will be validly issued, fully
paid and nonassessable, free and clear of all liens, security interests, charges
and other encumbrances or restrictions on sale and free and clear of all
preemptive rights.
10. No Voting Rights; Limitations of Liability. Prior to exercise, this
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Warrant will not entitle the Holder to (a) any voting rights, or (b) other
rights as a stockholder of the Corporation not granted herein. No provision of
this Warrant, in the absence of affirmative action by the Holder to exercise
this Warrant, and no enumeration in this Warrant of the rights or privileges of
the Holder, will give rise to any liability of such Holder for the Exercise
Price.
11. Exercise Procedure. To exercise this Warrant, the Holder must deliver
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to the principal office of the Corporation (prior to the Expiration Date) this
Warrant, the subscription
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substantially in the form of Exhibit A attached hereto, and the Exercise Price
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(as adjusted pursuant to the terms hereof). The Holder may deliver the Exercise
Price by any of the following methods, at its option: (i) in legal tender, (ii)
by bank cashier's or certified check, (iii) by wire transfer to an account
designated by the Corporation, or (iv) in accordance with Section 12. Upon
exercise, the Corporation, at its sole expense (including the payment of any
documentary, stamp, issue or transfer taxes), will issue and deliver to Holder,
within 10 days after the date on which the Holder exercises this Warrant,
certificates for the Warrant Shares purchased hereunder. The Warrant Shares
shall be deemed issued, and the Holder deemed the holder of record of such
Warrant Shares, as of the opening of business on the date on which the Holder
exercises this Warrant.
12. Cashless Payment.
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(a) Right to Convert. In lieu of paying the applicable Exercise Price
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by legal tender, check, or wire transfer, the Holder may elect to receive, upon
exercise of this Warrant, that number of Warrant Shares equal to the quotient
obtained by dividing:
[(A-B)(X)] by (A), where:
A = the Conversion Value (as defined Stock on the date of
exercise; below) of a share of Common
B = the Exercise Price for a share of Common Stock;
X = the number of Warrant Shares (equal to Warrant Shares then
issuable is being exercised. or less than the number of
hereunder) as to which this Warrant
(b) Conversion Value. For purposes of this Section 12 only, the
---------------- ----
Conversion Value of a share of Common Stock means:
(i) if the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such
exchange or listed for trading on the Nasdaq National Market
System maintained by the National Association of Securities
Dealers, Inc., -- the last reported sale price of the Common
Stock on the last trading day prior to the date of exercise
of this Warrant (or the average closing bid and asked prices
for such day if no such sale is made on such day);
(ii) if clause (i) does not apply, and if the prices are reported
by the National Quotation Bureau, Inc., -- the mean of the
last reported bid and asked prices reported on the last
trading day prior to the date of exercise of this Warrant;
and
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(iii) in all other cases -- the per share value as determined by
the board of directors in good faith.
13. Sale of Warrant or Warrant Shares. Neither this Warrant nor any of the
---------------------------------
Warrant Shares have been registered under the Act or under the securities laws
of any state. Neither this Warrant nor any of the Warrant Shares (when issued)
may be sold, assigned, transferred, pledged or hypothecated or otherwise
disposed of except as permitted: (i) by any shareholders agreement then in
effect, (ii) by any effective registration statement under the Act and by the
securities laws of any state in question, or (iii) by an opinion of counsel
reasonably satisfactory to the Corporation stating that such registration under
the Act and registration or qualification under the securities laws of any state
is not required. Until the Warrant Shares have been registered under the Act and
registered and qualified under the securities laws of any state in question, the
Corporation shall cause each certificate evidencing any Warrant Shares to bear
the following legends:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE. THE SHARES MAY NOT BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH
REGISTRATION OR QUALIFICATION AS MAY BE NECESSARY UNDER THE
SECURITIES LAWS OF ANY STATE, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF INVESTMENT AGREEMENT BETWEEN THE HOLDER AND THE
CORPORATION DATED AS OF MAY [___], 1999.
14. Transfer. The Corporation will register this Warrant on its books and
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keep such books at its offices. To effect a transfer permitted by Section 13
hereof, the Holder must present (either in person, or by duly authorized
attorney) written notice substantially in the form of Exhibit B attached hereto.
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To prevent a transfer in violation of Section 13, the Corporation may issue
appropriate stop orders to its transfer agent.
15. Replacement of Warrant. If the Holder provides evidence that this
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Warrant or any certificate or certificates representing the Warrant Shares have
been lost, stolen, destroyed or mutilated, the Corporation (at the request and
expense of the Holder) will issue a replacement warrant upon reasonably
satisfactory indemnification by the Holder (if required by the Corporation).
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16. "Put" Rights.
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(a) Commencing on the fifth anniversary of the date hereof, in the event
that the Corporation no longer has any of its securities registered under the
Securities Exchange Act of 1934, the Holder may sell the Warrant or the Warrant
Shares to the Company (and the Company is obligated to purchase such shares) for
a price in cash that is equal to the Fair Market Value (less the Exercise Price
if such Warrant has not been exercised at such time). For the purposes of this
Section 16, Fair Market Value shall have the meaning set forth in clause (iv) of
the definition of "Fair Market Value" on Schedule 1.
(b) To exercise its rights hereunder, the Holder shall give the Company at
least 60 days' prior written notice of its desire to sell the Warrant or the
Warrant Shares. Any sale pursuant to this Section 16 shall be consummated as
soon as practical after the delivery of the notice of such election by the
Holder, but in any event, within 60 days after the delivery of such notice.
17. Governing Law. The laws of the State of Delaware (other than its
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conflict of law rules) govern this Warrant.
* * * *
Signatures on following page.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be signed on
its behalf, in its corporate name, by its President, and its corporate seal to
be hereunto affixed and the said seal to be attested by its Secretary, as of the
[___] day of May, 1999.
OPINION RESEARCH CORPORATION
a Delaware corporation
Attest: /s/ Xxxxxxx X. Xxx By: /s/ Xxxx X. Short [Seal]
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Xxxxxxx X. Xxx, Xxxx X. Short,
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Secretary President
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EXHIBIT A
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IRREVOCABLE SUBSCRIPTION
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To: Opinion Research Corporation
The undersigned hereby elects to exercise its right under the attached
Warrant by purchasing ____ shares of the Common Stock, and hereby irrevocably
subscribes to such issue. The certificates for such shares shall be issued in
the name of:
______________________________
(Name)
______________________________
(Address)
______________________________
(Taxpayer Number)
and delivered to:
______________________________
(Name)
______________________________
(Address)
The Exercise Price of $_______ is enclosed.
or
--
In lieu of payment of the Exercise Price, the undersigned hereby invokes
the provisions of Section 12 of the Warrant.
Date:_______________
Signed: ________________________________________
(Name of Holder, Please Print)
________________________________________
(Address)
________________________________________
(Signature)
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Exhibit B
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ASSIGNMENT
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For value received, the undersigned hereby sells, assigns and transfers
unto:
_______________________________
(Name)
_______________________________
(Address)
the attached Warrant, together with all right, title and interest therein
to purchase [__] shares of the Common Stock, and does hereby irrevocably appoint
_______________________ as attorney-in-fact to transfer said Warrant on the
books of Opinion Research Corporation with full power of substitution in the
premises.
Done this ______ day of ____________ 19____.
______________________________
(Signature)
______________________________
(Name and title)
______________________________
______________________________
(Address)
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SCHEDULE 1
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"Bona Fide Offer" means a bona fide written offer coupled with evidence
reasonably satisfactory to the Holder that the Corporation has the present
financial ability to pay the purchase price of the Warrant or Warrant
Shares (as the case may be) in full in cash at a closing to occur no more
than 30 days from the date such bona fide written offer was delivered to
the Holder.
"Common Stock Equivalent" means any equity interest of the Corporation that is
convertible or exchangeable into Common Stock at any time.
"Common Stock Deemed Outstanding" means, at any given time, the sum of:
(i) the number of shares of Common Stock and Common Stock
Equivalents (excluding the Contingent Shares) outstanding at such time,
plus
----
(ii) the number of shares of Common Stock and Common Stock
Equivalents subject to any options, warrants, convertible securities or
other commitments outstanding at such time.
"Consideration" means:
(i) if the Corporation issues Common Stock, -- the gross proceeds
received by the Corporation;
(ii) if the Corporation issues Common Stock Equivalents, -- the gross
proceeds received by the Corporation, plus the minimum aggregate amount of
gross proceeds, if any, payable to the Corporation upon exchange or
conversion;
(iii) if the Corporation issues options or rights to subscribe for or
to purchase Common Stock or any Common Stock Equivalents, -- the gross
proceeds, if any, received by the Corporation, plus the minimum aggregate
amount of gross proceeds, if any, payable to the Corporation upon exercise;
(iv) if the Corporation issues a combination of securities consisting
of Common Stock or Common Stock Equivalents and other securities of the
Corporation, and if the amount of gross proceeds allocable to the Common
Stock or Common Stock Equivalents is not determinable on its face at the
time of such issuance, -- the portion of gross proceeds received by the
Corporation, as determined in good faith by the Corporation's Board of
Directors; and
(v) if the Corporation receives any non-cash consideration, -- the
fair value of the non-cash consideration, as determined in good faith by
the Corporation's Board of Directors.
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"Dilutive Transaction" means any transaction (other than Exempt Transactions)
where the Corporation does any of the following, based on a Per Share Price
which is less than the Non-Dilutive Price:
(i) issues or sells any Common Stock or any Common Stock
Equivalents;
(ii) issues or sells any options, warrants or other rights to
purchase or otherwise acquire any Common Stock or any Common Stock
Equivalent; or
(iii) decreases the subscription, exercise, conversion or exchange
price of the securities described in (i) or (ii).
"Employee Options" means options to purchase shares of Common Stock issued by
the Board of Directors of the Corporation pursuant to a stock option plan
approved by the shareholders of the Corporation to employees of,
consultants to, contractors with, or members of the Board of Directors of
the Corporation, in connection with or as compensation for the performance
of services to the Corporation.
"Employee Option Shares" means shares of Common Stock into which Employee
Options are exercisable.
"Exempt Transaction" means any transaction where the Corporation:
(i) issues any Common Stock upon conversion or exercise of
securities outstanding or issued as of the date hereof,
(ii) issues Employee Options to acquire Employee Option Shares;
provided, however, that the exercise price for such Employee Options shall
-------- -------
be no less than the Fair Market Value of the shares of Common Stock at the
time of the issuance of such options, or
(iii) issues any Common Stock upon exercise of this Warrant.
"Fair Market Value" of a share of Common Stock means:
(i) if the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the Nasdaq National Market System maintained by the National
Association of Securities Dealers, Inc., -- the last reported sale price of
the Common Stock on the last trading day prior to the Dilutive Transaction
(or the average closing bid and asked prices for such day if no such sale
is made on such day);
(ii) if clause (i) does not apply, and if the prices are reported by
the National Quotation Bureau, Inc., -- the mean of the last reported bid
and asked prices reported on the last trading day prior to the Dilutive
Transaction;
(iii) if clauses (i) and (ii) do not apply, and if the transaction
involves the sale by the Corporation of securities to unaffiliated third
parties (utilizing the services of an investment banker acceptable to
Holder), -- the Per Share Price; and-
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(iv) in all other cases -- as determined based on earnings and book
value and other appropriate items in accordance with the following
procedures:
(A) the Holder will recommend three qualified, independent
appraisers to the Corporation;
(B) the Corporation will select and compensate one of the three
appraisers to determine a value;
(C) if either the Holder or the Corporation is dissatisfied with
the value determined by the first appraiser, that Person may designate
and compensate an appraiser of its choice to determine a second value;
(D) if the second value is within 10% of the first value or if
the Holder and the Corporation agree, the average of the two values
will be the "Fair Market Value";
(E) if the second value is not within 10% of the first value,
and if either the Holder or the Corporation is dissatisfied with the
second value, that Person may designate and compensate an appraiser of
its choice to determine a third value;
(F) the average of the two values that are nearest will be the
"Fair Market Value"; and
(G) In determining Fair Market Value, the Holder and the
Corporation agree that the independent appraiser shall be instructed,
among other things: (i) to consider recent relevant transactions
involving similar companies that provide services similar to those
provided by the Corporation, (ii) to consider the current market for
publicly traded companies that provide services similar to those
provided by the Corporation, (iii) to utilize all appropriate
valuation models and techniques employing a wide range of assumptions,
(iv) to consider the value of any options to acquire any interest in
any company, business or asset (whether by acquisition of stock,
assets or otherwise) to the extent the value of such interest exceeds
the exercise price (in cash, securities, other assets, assumption of
liabilities or otherwise) of such option, and further (v) that the
Fair Market Value of the Common Stock shall be determined on the basis
of the following assumptions: (a) without any reduction in value for
lack of control or the inherent lack of liquidity of non-public
minority interests, (b) giving full effect to the earnings history and
prospects of the Corporation, (c) that there were liquid public
markets for such securities capable of absorbing a sale of all such
securities with no discount from otherwise prevailing market prices or
for illiquidity, (d) the proceeds that would be realized would be
those realized upon the sale of all of the Corporation's assets,
without reduction for any taxes or transaction expenses that might
occur as a result of the sale or any refinancing, (e) that there is a
willing buyer with adequate recourse debt financing and a seller with
no compulsion to
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sell, (f) that all shares of the Common Stock have the same voting
rights (notwithstanding that there may be outstanding more than one
class or series of Common Stock with different voting rights), and (g)
otherwise on a basis which values all of the same class or having the
same terms at the same per share price.
"Market Price" means the average price of the Common Stock as listed on the
American Stock Exchange over the immediately preceding 20-day period.
"Non-Dilutive Price" means the initial Exercise Price set forth in Section 3
hereof as of the date hereof, adjusted (i) for stock splits, combinations,
similar events and (ii) to the Weighted Per Share Value each time the
Corporation enters into a Dilutive Transaction.
"Per Share Price" means the total Consideration for each share of Common Stock
or Common Stock Equivalent issued or issuable by the Corporation in
connection with a Dilutive Transaction.
"Repayment Date" means the date on which the Corporation has indefeasibly
repaid in full in cash all amounts owed under the Debenture issued by the
Corporation to the Holder on the date hereof.
"Weighted Average Per Share Value" means the amount determined by performing the
following calculation and rounding the resulting number to the nearest
whole cent: Divide:
(i) the sum of:
(a) the Non-Dilutive Price of a Warrant Share multiplied by the
number of shares of Common Stock Deemed Outstanding
immediately prior to the Dilutive Transaction, plus
----
(b) the aggregate Consideration, if any, received or to be
received by the Corporation in connection with the
Dilutive Transaction, by
--
(ii) the number of shares of Common Stock Deemed Outstanding
immediately after the Dilutive Transaction.
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