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EXHIBIT 4.3
EXECUTION COPY
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
No. W1
To Purchase Shares of $.01 Par Value Common Stock of
PLATO LEARNING, INC.
THIS CERTIFIES that, for value received, XXXXXXX ASSOCIATES,
L.P. (the "INVESTOR") is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to 5:00 p.m. New York City Time on July16, 2003 (the "TERMINATION DATE"), but
not thereafter, to subscribe for and purchase from PLATO LEARNING, INC., a
Delaware corporation (the "COMPANY"), 26,710 shares of Common Stock of the
Company (the "WARRANT SHARES"). The "EXERCISE PRICE" is $16.72. The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued in
connection with the Common Stock Investment Agreement dated July17, 2000 (the
"AGREEMENT") entered into between the Company and the Investor.
1. Title of Warrant. Prior to the expiration hereof and
subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in respect of the right to purchase any
part of the Warrant Shares, at the office or agency of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of this Warrant
together with (a) the Assignment Form annexed hereto properly endorsed, and (b)
any other documentation reasonably necessary to satisfy the Company that such
transfer is in compliance with all applicable securities laws.
2. Authorization of Shares. The Company covenants that all
shares of Common Stock which may be issued upon the exercise of rights
represented by this Warrant will, upon exercise of the rights represented by
this Warrant and payment of the Exercise Price as set forth herein will be duly
authorized, validly issued, fully paid and nonassessable and free
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from all taxes, liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously with such issue or
otherwise specified herein).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this
Warrant may be made at any time or times, in whole or in part before the close
of business on the Termination Date, or such earlier date on which this Warrant
may terminate as provided in paragraph 11 below, by the surrender on any
business day of this Warrant and the Notice of Exercise annexed hereto duly
completed and executed, at the principal office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company), together with delivery to the Company by such holder of all
certifications or documentation reasonably necessary to establish, to the
satisfaction of the Company, that any such exercise has been undertaken in
compliance with all applicable federal and state securities laws, and upon
payment of the full Exercise Price of the shares thereby purchased; whereupon
the holder of this Warrant shall be entitled to receive a certificate for the
number of shares of Common Stock so purchased. Certificates for shares purchased
hereunder shall be delivered to the holder hereof within three (3) Trading Days
after the date on which this Warrant shall have been exercised as aforesaid.
Payment of the Exercise Price of the shares shall be by certified check or
cashier's check or by wire transfer (of same day funds) to an account designated
by the Company in an amount equal to the Exercise Price multiplied by the number
of shares being purchased.
(b) Alternatively, the Warrant holder may exercise this
Warrant, in whole or in part in a "cashless" or "net-issue" exercise by
delivering to the offices of the Company or any transfer agent for the Common
Stock this Warrant, together with a Notice of Exercise specifying the number of
Warrant Shares to be delivered to such Warrant holder ("DELIVERABLE SHARES") and
the number of Warrant Shares with respect to which this Warrant is being
surrendered in payment of the aggregate Exercise Price for the Deliverable
Shares ("SURRENDERED SHARES").
The number of Deliverable Shares shall be calculated as
follows:
# of Deliverable Shares = # of Surrendered Shares x (Fair Market Value of Common Stock less Exercise Price)
------------------------------------------------------
(Fair Market Value of Common Stock)
"FAIR MARKET VALUE" shall have the meaning specified in
Section 12(c)
In the event that the Warrant is not exercised in full, the
number of Warrant Shares shall be reduced by the number of such Warrant Shares
for which this Warrant is exercised and/or surrendered, and the Company, at its
expense, shall within three (3) Trading Days issue and deliver to or upon the
order of the Warrant holder a new Warrant of like tenor in the name of Warrant
holder or as Warrant holder (upon payment by Warrant holder of any applicable
transfer taxes) may request, reflecting such adjusted Warrant Shares.
All exercises will be deemed to occur as of the date of the
Notice of Exercise, and certificates for shares of Common Stock purchased
hereunder shall be delivered to the holder hereof within three (3) Trading Days
after the date on which this Warrant shall have been exercised as aforesaid. The
Warrant holder may withdraw its Notice of Exercise under Section
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3(a) or 3(b) at any time thereafter if the Company fails to timely deliver the
applicable certificates to the Warrant holder as provided in this Agreement.
(c) In lieu of delivering physical certificates representing
the Common Stock issuable upon exercise, provided the Company's transfer agent
is participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Warrant Holder, the
Company shall use its best efforts to cause its transfer agent to electronically
transmit the Common Stock issuable upon exercise to the Warrant Holder by
crediting the account of Warrant Holder's prime broker with DTC through its
Deposit Withdrawal Agent Commission ("DWAC") system. The time periods for
delivery described in the immediately preceding paragraph shall apply to the
electronic transmittals described herein.
The term "TRADING DAY" means (x) if the Common Stock is listed
on the New York Stock Exchange or the American Stock Exchange, a day on which
there is trading on such stock exchange, or (y) if the Common Stock is not
listed on either of such stock exchanges but sale prices of the Common Stock are
reported on an automated quotation system, a day on which trading is reported on
the principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.
4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the holder of this Warrant or in such name or names as may be
directed by the holder of this Warrant; provided, however, that in the event
certificates for shares of Common Stock are to be issued in a name other than
the name of the holder of this Warrant, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the holder hereof; and provided further, that the Company shall not
be required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issuance of any Warrant certificates or any
certificates for the Warrant Shares other than the issuance of a Warrant
Certificate to the Investor in connection with the Investor's surrender of a
Warrant Certificate upon the exercise of less than all of the Warrants evidenced
thereby, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
6. Closing of Books. The Company will at no time close its
shareholder books or records in any manner which interferes with the timely
exercise of this Warrant.
7. No Rights as Shareholder until Exercise. Subject to Section
12 of this Warrant and the provisions of any other written agreement between the
Company and the Investor, the Investor shall not be entitled to vote or receive
dividends or be deemed the holder of Warrant Shares or any other securities of
the Company that may at any time be issuable on the
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exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Investor, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of
stock to no par value, consolidation, merger, conveyance or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised as provided herein.
However, at the time of the exercise of this Warrant pursuant to Section 3
hereof, the Warrant Shares so purchased hereunder shall be deemed to be issued
to such holder as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been exercised.
8. Assignment and Transfer of Warrant. This Warrant may be
assigned in whole or in part by the surrender of this Warrant and the Assignment
Form annexed hereto duly executed at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered holder hereof at the address of such holder appearing on the books of
the Company); provided, however, that this Warrant may not be resold or
otherwise transferred except (i) in a transaction registered under the
Securities Act of 1933, as amended (the "ACT"), or (ii) in a transaction
pursuant to an exemption, if available, from registration under the Act and
whereby, if requested by the Company, an opinion of counsel reasonably
satisfactory to the Company is obtained by the holder of this Warrant to the
effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of any Warrant or stock certificate
representing the Warrant Shares, and in case of loss, theft or destruction, of
indemnity reasonably satisfactory to it, and upon reimbursement to the Company
of all reasonable expenses incidental thereto. Upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or
appointed day for the taking of any action or the expiration of any right
required or granted herein shall be a Saturday, Sunday or a legal holiday, then
such action may be taken or such right may be exercised on the next succeeding
day not a legal holiday.
11. Effect of Certain Events. If at any time while this
Warrant or any portion thereof is outstanding and unexpired there shall be (i) a
sale or conveyance of all or substantially all of the Company's assets or (ii) a
transaction (by merger or otherwise) in which more than 50% of the voting power
of the Company is disposed of (collectively, a "SALE OR MERGER TRANSACTION"), in
which the consideration to be received by the Company or its shareholders
consists solely of cash, and in case the Company shall at any time effect a Sale
or Merger Transaction in which the consideration to be received by the Company
or its shareholders consists in part of consideration other than cash, the
holder of this Warrant shall have the right thereafter to purchase, by exercise
of this Warrant and payment of the aggregate Exercise Price in effect
immediately prior to such action, the kind and amount of shares and other
securities and
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property which it would have owned or have been entitled to receive after the
happening of such transaction had this Warrant been exercised immediately prior
thereto, subject to further adjustment as provided in Section 12.
Notwithstanding the above, a Sale or Merger Transaction shall not be deemed to
occur in the event the Company is the acquiring entity in connection with an
acquisition by the Company.
12. Adjustments of Exercise Price and Number of Warrant
Shares.
The number of and kind of securities purchasable upon exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Subdivisions, Combinations and other Issuances. If the
Company shall at any time after the date hereof but prior to the expiration of
this Warrant subdivide its outstanding securities as to which purchase rights
under this Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant exist, the
number of Warrant Shares as to which this Warrant is exercisable as of the date
of such subdivision, split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or proportionately
decreased in the case of a combination. Appropriate proportional adjustments
(decrease in the case of subdivision, increase in the case of combination) shall
also be made to the Exercise Price payable per share, so that the aggregate
Exercise Price payable for the total number of Warrant Shares purchasable under
this Warrant as of such date shall remain the same as it would have been before
such subdivision or combination.
(b) Stock Dividend. If at any time after the date hereof the
Company declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common Stock
("COMMON STOCK EQUIVALENTS") without payment of any consideration by holders of
Common Stock for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
exercise or conversion thereof), then the number of shares of Common Stock for
which this Warrant may be exercised shall be increased as of the record date (or
the date of such dividend distribution if no record date is set) for determining
which holders of Common Stock shall be entitled to receive such dividends, in
proportion to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities convertible into
Common Stock) of Common Stock as a result of such dividend, and the Exercise
Price shall be proportionately reduced so that the aggregate Exercise Price for
all the Warrant Shares issuable hereunder immediately after the record date (or
on the date of such distribution, if applicable), for such dividend shall equal
the aggregate Exercise Price so payable immediately before such record date (or
on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof
the Company distributes to holders of its Common Stock, other than as part of
its dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
Common Stock), then the number of Warrant Shares for which this Warrant is
exercisable shall be increased to equal: (i) the number of Warrant Shares for
which this Warrant is exercisable immediately prior to such event, (ii)
multiplied by a fraction, (A) the numerator of which shall be the Fair Market
Value (as defined below) per share of Common
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Stock on the record date for the dividend or distribution, and (B) the
denominator of which shall be the Fair Market Value price per share of Common
Stock on the record date for the dividend or distribution minus the amount
allocable to one share of Common Stock of the value (as jointly determined in
good faith by the Board of Directors of the Company and the Warrant holder) of
any and all such evidences of indebtedness, shares of capital stock, other
securities or property, so distributed. For purposes of this Warrant, "FAIR
MARKET VALUE" shall equal the 10 Trading Day average closing trading price of
the Common Stock on the Principal Market for the 10 Trading Days preceding the
date of determination or, if the Common Stock is not listed or admitted to
trading on any Principal Market, the average of the closing bid and asked prices
on the over-the-counter market as furnished by any New York Stock Exchange
member firm reasonably selected from time to time by the Company for that
purpose and reasonably acceptable to the Holder, or, if the Common Stock is not
listed or admitted to trading on the Principal Market or traded over-the-counter
and the average price cannot be determined as contemplated above, the Fair
Market Value of the Common Stock shall be as reasonably determined in good faith
by the Company's Board of Directors with the concurrence of the Holder. The
Exercise Price shall be reduced to equal: (i) the Exercise Price in effect
immediately before the occurrence of any event (ii) multiplied by a fraction,
(A) the numerator of which is the number of Warrant Shares for which this
Warrant is exercisable immediately before the adjustment, and (B) the
denominator of which is the number of Warrant Shares for which this Warrant is
exercisable immediately after the adjustment.
(d) Merger, etc. If at any time after the date hereof there
shall be a merger or consolidation of the Company with or into or a transfer of
all or substantially all of the assets of the Company to another entity, then
the Warrant Holder shall be entitled to receive upon or after such transfer,
merger or consolidation becoming effective, and upon payment of the Exercise
Price then in effect, the number of shares or other securities or property of
the Company or of the successor corporation resulting from such merger or
consolidation, which would have been received by Warrant Holder for the shares
of stock subject to this Warrant had this Warrant been exercised just prior to
such transfer, merger or consolidation becoming effective or to the applicable
record date thereof, as the case may be. The Company will not merge or
consolidate with or into any other corporation, or sell or otherwise transfer
its property, assets and business substantially as an entirety to another
corporation, unless the corporation resulting from such merger or consolidation
(if not the Company), or such transferee corporation, as the case may be, shall
expressly assume in writing the due and punctual performance and observance of
each and every covenant and condition of this Warrant to be performed and
observed by the Company.
(e) Reclassification, etc. If at any time after the date
hereof there shall be a reorganization or reclassification of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant Holder
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the Exercise Price then in
effect, the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the
Warrant Holder for the shares of stock subject to this Warrant had this Warrant
at such time been exercised.
(f) Exercise Price Adjustment. In the event that the Company
issues or sells any Common Stock or securities which are convertible into or
exchangeable for its Common
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Stock or any convertible securities, or any warrants or other rights to
subscribe for or to purchase or any options for the purchase of its Common Stock
or any such convertible securities (other than shares or options issued or which
may be issued pursuant to (i) the Company's current or future employee, director
or bona fide consultant option plans or shares issued upon exercise of options,
warrants or rights outstanding on the date of the Agreement and listed in the
Company's most recent periodic report filed under the Exchange Act (ii)
strategic corporate alliances not undertaken principally for financing purposes,
(iii) arrangements with the Investor, or (iv) acquisitions of other entities by
the Company) at an effective consideration or exercise price per share which is
less than the Exercise Price then in effect, then the Exercise Price in effect
immediately prior to such issue or sale shall be reduced effective concurrently
with such issue or sale to an amount determined by multiplying the Exercise
Price then in effect by a fraction, (x) the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding immediately prior to
such issue or sale, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such additional shares would
purchase at such Exercise Price, then in effect; and (y) the denominator of
which shall be the number of shares of Common Stock of the Company outstanding
immediately after such issue or sale.
For the purposes of the foregoing adjustment, in the case of
the issuance of any convertible securities, warrants, options or other rights to
subscribe for or to purchase or exchange for, shares of Common Stock
("CONVERTIBLE SECURITIES"), the maximum number of shares of Common Stock
issuable upon exercise, exchange or conversion of such Convertible Securities
shall be deemed to be outstanding, provided that no further adjustment shall be
made upon the actual issuance of Common Stock upon exercise, exchange or
conversion of such Convertible Securities.
The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Exercise Price pursuant to this
paragraph 12(f), so that after such adjustments the aggregate Exercise Price
payable hereunder for the increased number of shares shall be the same as the
aggregate Exercise Price in effect just prior to such adjustments.
In no event shall the Exercise Price be adjusted to a number
smaller than the par value per share of the Company's Common Stock as it exists
today.
13. Voluntary Adjustment by the Company. The Company may at
its option, at any time during the term of this Warrant, reduce but not increase
the then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant
Shares or number or kind of securities or other property purchasable upon the
exercise of this Warrant or the Exercise Price is adjusted, the Company shall
promptly mail to the holder of this Warrant a notice setting forth the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
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15. Authorized Shares. The Company covenants that during the
period the Warrant is outstanding and exercisable, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the American Stock Exchange or any domestic securities exchange upon which the
Common Stock may be listed.
16. 9.99% Limitation. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Investor upon exercise pursuant to the terms hereof shall not exceed a
number that, when added to the total number of shares of Common Stock deemed
beneficially owned by such holder (other than by virtue of the ownership of
securities or rights to acquire securities (including the Warrant) that have
limitations on the Investor's right to convert, exercise or purchase similar to
the limitation set forth herein), together with all shares of Common Stock
deemed beneficially owned (other than by virtue of the ownership of securities
or rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) by the holder's
"affiliates" (as defined Rule 144 of the Act) ("Aggregation Parties") that would
be aggregated for purposes of determining whether a group under Section 13(d) of
the Securities Exchange Act of 1934, as amended, exists, would exceed 9.99% of
the total issued and outstanding shares of the Company's Common Stock (the
"Restricted Ownership Percentage"). Each Holder shall have the right (w) at any
time and from time to time to reduce its Restricted Ownership Percentage
immediately upon notice to the Company and (x) at any time and from time to
time, to increase its Restricted Ownership Percentage immediately in the event
of the announcement as pending or planned of a Major Transaction (as such term
is defined in the Investment Agreement).
(a) The Investor covenants at all times on each day (each such
day being referred to as a "Covenant Day") as follows: During the balance of
such Covenant Day and the succeeding sixty-one (61) days (the balance of such
Covenant Day and the succeeding 61 days being referred to as the "Covenant
Period") such Investor will not acquire shares of Common Stock pursuant to any
right (including the exercise of the Warrant) existing at the commencement of
the Covenant Period to the extent the number of shares so acquired by such
holder and its Aggregation Parties (ignoring all dispositions) would exceed:
(x) the Restricted Ownership Percentage of the total number of
shares of Common Stock outstanding at the commencement of the
Covenant Period,
minus
(y) the number of shares of Common Stock owned by such holder and
its Aggregation Parties at the commencement of the Covenant
Period.
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A new and independent covenant will be deemed to be given by
the holder as of each moment of each Covenant Day. No covenant will terminate,
diminish or modify any other covenant. The holder agrees to comply with each
such covenant. This Section 16 controls in the case of any conflict with any
other provision of the Transaction Documents.
The Company's obligation to issue Shares of Common Stock which
would exceed such limits referred to in this Section 16 shall be suspended to
the extent necessary until such time, if any, as shares of Common Stock may be
issued in compliance with such restrictions.
17. Compliance with Securities Laws. (a) The holder hereof
acknowledges that the Warrant Shares acquired upon the exercise of this Warrant,
if not registered (or if no exemption from registration exists), will have
restrictions upon resale imposed by state and federal securities laws. Each
certificate representing the Warrant Shares issued to the Holder upon exercise
(if not registered or if no exemption from registration exists) will bear the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, BASED ON AN OPINION LETTER OF COUNSEL
SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND
EXCHANGE COMMISSION.
(b) Without limiting the Investor's right to transfer, assign
or otherwise convey the Warrant or Warrant Shares in compliance with all
applicable securities laws, the Investor of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
hereof are being acquired solely for the Investor's own account and not as a
nominee for any other party, and that the Investor will not offer, sell or
otherwise dispose of this Warrant or any Warrant Shares to be issued upon
exercise hereof except under circumstances that will not result in a violation
of applicable federal and state securities laws. Upon exercise of this Warrant,
the Investor shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares of Common Stock so
purchased are being acquired solely for the Investor's own account and not as a
nominee for any other party, for investment, and not with a view toward
distribution or resale.
(c) Neither this Warrant nor any Share of Common Stock issued
upon exercise of this Warrant may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale thereof
within the meaning of the Act, unless (i) such security has been registered for
sale under the Act and registered or qualified under applicable state securities
laws relating to the offer an sale of securities, or (ii) exemptions from the
registration requirements of the Act and the registration or qualification
requirements of all such
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state securities laws are available and the Company shall have received an
opinion of counsel that the proposed sale or other disposition of such
securities may be effected without registration under the Act, such counsel and
such opinion to be satisfactory to the Company.
(d) Investor recognizes that investing in the Warrant and the
Warrant Shares involves a high degree of risk, and Investor is in a financial
position to hold the Warrant and the Warrant Shares indefinitely and is able to
bear the economic risk and withstand a complete loss of its investment in the
Warrant and the Warrant Shares. The Investor is a sophisticated investor and is
capable of evaluating the merits and risks of investing in the Company. The
Investor has had an opportunity to discuss the Company's business, management
and financial affairs with the Company's management, has been given full and
complete access to information concerning the Company, and has utilized such
access to its satisfaction for the purpose of obtaining information or verifying
information and have had the opportunity to inspect the Company's operation.
Investor has had the opportunity to ask questions of, and receive answers from,
the management of the Company (and any person acting on its behalf) concerning
the Warrant and the Warrant Shares and the agreements and transactions
contemplated hereby, and to obtain any additional information as Investor may
have requested in making its investment decision. The initial Investor in this
Warrant is an "accredited investor", as defined by Regulation D promulgated
under the Act.
18. Miscellaneous.
(a) Issue Date; Choice Of Law; Venue; Jurisdiction. The
provisions of this Warrant shall be construed and shall be given effect in all
respects as if it had been issued and delivered by the Company on the date
hereof. This Warrant shall be binding upon any successors or assigns of the
Company. This Warrant will be construed and enforced in accordance with and
governed by the laws of the State of New York, except for matters arising under
the Act, without reference to principles of conflicts of law. Each of the
parties consents to the exclusive jurisdiction of the U.S. District Court
sitting in the State of City of New York in the State of New York in connection
with any dispute arising under this Warrant and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdiction.
Each party hereby agrees that if the other party to this Warrant obtains a
judgment against it in such a proceeding, the party which obtained such judgment
may enforce same by summary judgment in the courts of any country having
jurisdiction over the party against whom such judgment was obtained, and each
party hereby waives any defenses available to it under local law and agrees to
the enforcement of such a judgment. Each party to this Warrant irrevocably
consents to the service of process in any such proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address in accordance with Section 18(c). Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law. Each
party waives its right to a trial by jury.
(b) Modification and Waiver. This Warrant and any provisions
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought. Any
amendment effected in accordance with this paragraph shall be binding upon the
Investor, each future holder of this Warrant and the Company. No waivers of, or
exceptions to, any term, condition or provision of this Warrant, in
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any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
(c) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Investor or future holders hereof or
the Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Investor or each such holder at its
address as shown on the books of the Company or to the Company at the address
set forth in the Agreement. All notices under this Warrant shall be deemed to
have been given when received.
A party may from time to time change the address to which
notices to it are to be delivered or mailed hereunder by notice in accordance
with the provisions of this Section 18(c).
(d) Severability. Whenever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this Warrant
in such jurisdiction or affect the validity, legality or enforceability of any
provision in any other jurisdiction, but this Warrant shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(e) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: July17, 2000
PLATO LEARNING, INC.
By:
------------------------------
Name:
Title:
Agreed and Accepted
this 17th day of July, 2000
XXXXXXX ASSOCIATES, L.P.
By: Xxxxxxx Capital Advisors, L.P., as General Partner
By: Xxxxxxx Associates, Inc., as General Partner
By:
--------------------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
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NOTICE OF EXERCISE
To: PLATO LEARNING, INC.
(1) The undersigned hereby elects:
(A) to purchase shares of Common Stock of PLATO LEARNING, INC.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the Exercise Price in full, together with all applicable transfer taxes, if any.
(B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder, shares of Common Stock, and herewith makes payment therefor
with Surrendered Shares.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
Other Name:
--------------------
-------------------------------------
(Name)
-------------------- -------------------------------------
(Date) (Signature)
-------------------------------------
(Address)
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant of Plato
Learning, Inc., Inc. and all rights evidenced thereby are hereby assigned to
whose address is
---------------------------------------
---------------------------------------------------------------.
---------------------------------------------------------------
Dated: ,
--------------
Holder's Signature:
-----------------------------
Holder's Address:
-----------------------------
-----------------------------
Signature Guaranteed:
-------------------------------------------
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
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