NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("SECURITIES ACT"). NEITHER THIS WARRANT NOR THE
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE SOLD,
OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO OR IN A
TRANSACTION THAT IN THE OPINION OF COUNSEL TO THE HOLDER, WHICH OPINION
AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, IS EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT.
WARRANT
FOR THE PURCHASE OF
COMMON STOCK
OF
HK SYSTEMS, INC.
Warrant Number 1
THIS CERTIFIES that, subject to the terms and conditions set
forth herein, following the Effective Date, if any, WESTERN ATLAS INC., a
Delaware corporation, is entitled to subscribe for and purchase from HK
SYSTEMS, INC., a Wisconsin corporation formerly known as HEI Systems,
Inc., a number of shares of Common Stock equal to the Warrant Shares
Number at a price per share of Common Stock equal to the Per Share Warrant
Price; provided that the number of shares of Common Stock that may be
purchased upon the exercise of the rights represented by this Warrant
shall be adjusted from time to time as provided in Section 4 of this
Warrant. This Warrant is issued in consideration of the payment by the
Holder of One Dollar and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
1. Definitions. When used in this Warrant, the following
terms shall have the meanings specified:
(a) "Affiliate" shall mean any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with another Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract or otherwise.
(b) "Aggregate Purchase Price" shall mean product of the
Per Share Warrant Price and the Warrant Shares Number.
(c) "Common Stock" shall mean the class or series of
common stock of the Company sold as part of the Initial Public Offering,
if any.
(d) "Company" shall mean HK SYSTEMS, INC., a Wisconsin
corporation.
(e) "Effective Date" shall mean the date of the
consummation of the Initial Public Offering if at any future date such
event should occur. Prior to such date the Company is under no obligation
to sell Common Stock to the Holder or any other party.
(f) "Expiration Date" shall mean the earliest to occur of
the following: (i) the exercise of all of the rights represented by the
Warrant; (ii) the repurchase of the Warrant by the Company; (iii) the
termination of the Company as a legal entity, however effected, prior to
the Effective Date, including, but not limited to, (A) the merger or
consolidation of the Company with any Person, other than a merger or
consolidation that would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or any parent thereof) at least
75% of the combined voting power of the voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, (B) the sale or disposition of all or
substantially all of the Company's assets other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an
entity at least 75% of the combined voting power of the voting securities
of which are owned by persons in substantially the same proportions as
their ownership of the Company immediately prior to such sale, or (C)
dissolution of the Company; or (iv) November 15, 2003; provided, however,
that if the Company exercises its rights pursuant to Section 10(c) in
connection with a demand registration of the Holder under Section 10(b)
and, as a result of the Company's exercise of such rights, the Holder does
not have the opportunity to exercise this Warrant and dispose of Warrant
Shares pursuant to the registration statement contemplated by Section
10(b) prior to November 15, 2003, then the November 15, 2003 date set
forth in this clause (iv) shall be extended until such time as the Company
complies with its obligations pursuant to Section 10 in connection with
the demand registration.
(g) "Holder" shall mean WESTERN ATLAS INC., a Delaware
corporation.
(h) "Initial Public Offering" shall mean the first sale to
the public or an underwriter for cash of any class or series of common
stock of the Company pursuant to a registration statement filed by the
Company with the SEC under the Securities Act in a transaction that
results in the Company becoming subject to Section 12(b) or Section 12(g)
of the Securities Exchange Act of 1934.
(i) "Other Holders" shall mean (i) the holders of the
common or preferred stock of the Company as of the date hereof and/or
their transferees and (ii) employees of the Company or its subsidiaries
and/or their transferees.
(j) "Per Share Warrant Price" shall mean an amount equal
to 115% of the price to the public per share of Common Stock in the
Initial Public Offering, if any, or such greater or lesser number, as the
case may be, as may result pursuant to Section 4 of the Warrant.
(k) "Person" shall mean and include an individual,
partnership, corporation, trust, joint venture, incorporated organization
and a government or any department or agency thereof.
(l) "Registration Shares" shall mean the number of Warrant
Shares subject to the registration rights of the Warrant.
(m) "SEC" shall mean the Securities and Exchange
Commission or any successor agency thereto.
(n) "Securities Act" shall mean the Securities Act of
1933, as amended from time to time, and the rules and regulations issued
thereunder.
(o) "Warrant" shall mean this Warrant as the same shall be
amended or replaced from time to time in accordance with the terms hereof.
(p) "Warrant Shares" shall mean the shares of Common Stock
purchasable upon full exercise of the Warrant, or such greater or lesser
number, as the case may be, as may result pursuant to Section 4 of the
Warrant.
(q) "Warrant Shares Number" shall mean the number of
Warrant Shares purchasable under this Warrant which shall be a number
equal to (i) $2,000,000 divided by (ii) 115% of the price to the public
per share of Common Stock in the Initial Public Offering, if any.
2. Exercise: Issuance of Certificates; Payment for Shares.
This Warrant may be exercised by the Holder, in whole or in part, in
increments of at least 25% of the Warrant Shares Number, at any time
following the Effective Date and prior to the Expiration Date by the
surrender of this Warrant (properly endorsed if required), and payment by
the Holder of the Aggregate Purchase Price by certified check or bank
draft. Upon such surrender and payment, the Holder shall be entitled to
receive a certificate or certificates representing a number of Warrant
Shares equal to the Warrant Shares Number. The Company agrees that the
shares so purchased shall be and are deemed to be issued to the Holder as
the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such
shares as aforesaid. Certificates for the Warrant Shares so purchased
shall be delivered to the Holder within a reasonable time, not exceeding
thirty days, after the rights represented by this Warrant shall have been
so exercised. In lieu of any fractional share of Common Stock that may be
issuable upon the exercise of this Warrant, the Aggregate Purchase Price
payable by the Holder as provided herein shall be reduced by an amount
equal to the fair value of such fractional share, determined in any
reasonable manner by mutual agreement of the Company and the Holder.
3. Affirmative Covenants. The Company covenants and agrees
that following the Effective Date the Warrant Shares will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof except
as provided in Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law. The Company further covenants and agrees that, from and
after the Effective Date and until the Expiration Date, the Company will
at all times have authorized, and reserved for the purpose of issue or
transfer upon total or partial exercise of the rights represented by this
Warrant, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant. The Company will
take all such action as may be necessary to ensure that the Warrant Shares
may be so issued without violation of any applicable law or regulation, or
of any requirements of any domestic securities exchange upon which any
class of Common Stock of the Company may be listed, except that the
Company shall be under no obligation pursuant to the Warrant to register
the Warrant Shares under the Securities Act for issuance to the Holder,
and the Company may require as a condition precedent to any issuance of
the Warrant Shares that the Holder deliver to the Company, at the Holder's
expense, an opinion of counsel to the Holder, which opinion and counsel
shall be reasonably satisfactory to the Company, stating that such
issuance is exempt from registration under the Securities Act. Upon
acceptance of said opinion and issuance of the Warrant Shares, the Company
shall have duly complied with all formalities required to permit transfer
of title to the Warrant Shares free and clear of all claims, encumbrances
and defects in title, in accordance with this Warrant.
4. Adjustment of Number of Warrant Shares.
(a) If at any time following the Effective Date and prior
to the Expiration Date the Company shall (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock; (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares; (iii) combine its outstanding shares of Common Stock into a
smaller number of Shares; or (iv) issue by reclassification of its Common
Stock any shares of capital stock of the Company, then, and in each such
case, the Warrant Shares Number shall be adjusted immediately upon the
occurrence of such event, retroactive to the record date, if any, for such
event. Such adjustment shall be made by multiplying the Warrant Shares
Number by a fraction, the numerator of which shall be the number of shares
of Common Stock issued and outstanding immediately after the occurrence of
such event and the denominator of which shall be the number of shares of
Common Stock issued and outstanding immediately before the occurrence of
such event. Upon the occurrence of any reclassification described in (iv)
above, the Holder shall be entitled to receive upon exercise of the
Warrant that number of shares of capital stock of the Company that the
Holder would have been entitled to receive immediately following such
occurrence had all of the rights represented by this Warrant been
exercised immediately prior thereto or any record date with respect
thereto.
(b) If at any time after the Effective Date the Company
shall fix a record date for the issuance of rights, options or warrants to
all holders of Common Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) at a price per
share (or having a conversion price per share, if a security convertible
into Common Stock) less than the then current per share market price of
the Common Stock (as defined in Section 4(d)) on such record date, the Per
Share Warrant Price to be in effect after such record date shall be
determined by multiplying the Per Share Warrant Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of
Common Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In
case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company. Common Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not so
issued, the Per Share Warrant Price shall be adjusted to be the Per Share
Warrant Price which would then be in effect if such record date had not
been fixed.
(c) Notwithstanding anything to the contrary in this
Section 4, no adjustment to the Warrant Shares Number shall be required
unless such adjustment would require an increase or decrease of at least
one percent (1%) in the number of Warrant Shares issuable upon exercise of
the rights represented by this Warrant; provided, however, that any
adjustments which by reason of this Section 4(b) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 shall be made to the
nearest 1/100th of a share.
(d) For the purpose of any computation hereunder, the
"current per share market price" of the Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of Common
Stock for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the
event that the current per share market price of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (i) a dividend or distribution on such Common Stock
payable in Common Stock or securities convertible into Common Stock, or
(ii) any subdivision, combination or reclassification of Common Stock and
prior to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
per share market price shall be appropriately adjusted to reflect the
current market price per share of Common Stock. The closing price for
each Trading Day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("Nasdaq") or such
other system then in use, or, if on any such date the Common Stock is not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading or
Nasdaq, as the case may be, is open for the transaction of business or, if
the Common Stock is not listed or admitted to trading on any national
securities exchange or Nasdaq, as the case may be, a Business Day.
5. Reorganization, Reclassification, Consolidation, Merger or
Sale. If at any time from and after the Effective Date and prior to the
Expiration Date the Company is a party to any agreement providing for (i)
any capital reorganization or reclassification of the capital stock of the
Company, (ii) any consolidation or merger of the Company with another
corporation, or (iii) the sale, disposition or other conveyance of all or
substantially all of its assets, as the case may be, in such a way that
holders of Common Stock shall be entitled to receive cash, shares of stock
or securities or assets with respect to or in exchange for Common Stock,
then, as a condition to such reorganization, reclassification,
consolidation, merger, sale, disposition or other conveyance, lawful and
adequate provisions (in form determined in good faith by the Board of
Directors of the Company) shall be made whereby the Holder shall be given
the opportunity to elect to receive such cash, shares of stock or
securities or assets as may be issued or payable with respect to or in
exchange for a number of shares of Common Stock equal to the Warrant
Shares Number immediately purchasable upon the exercise of the rights
represented by this Warrant had such reorganization, reclassification,
consolidation, merger, sale, disposition or other conveyance not taken
place. In any such case, appropriate provision shall be made with respect
to the rights and interests of the Holder such that the provisions of this
Warrant (including without limitation provisions for adjustments to the
Warrant Shares Number) shall thereafter be applicable, as nearly as may
be, in relation to any cash, shares of stock or securities or assets
thereafter deliverable to the Holder pursuant to the provisions of this
Section 5. The Company shall not effect any such consolidation, merger,
sale, disposition or other conveyance unless prior to the consummation
thereof the successor corporation (if other than the Company) resulting
from such consolidation or merger or the Person purchasing or acquiring
such assets shall assume by written instrument (in form determined in good
faith by the Board of Directors of the Company) the obligation to deliver
to the Holder such cash, shares of stock or securities or assets in
accordance with the provisions of this Section 5. If a purchase, tender
or exchange offer is made to and accepted by the holders of more than 50%
of the outstanding shares of Common Stock, the Company shall not effect
any consolidation, merger or sale of shares of Common Stock to or with the
Person having made such offer or with any Affiliate of such Person, unless
prior to the consummation of such consolidation, merger or sale, lawful
and adequate provisions (in form determined in good faith by the Board of
Directors of Company) shall be made whereby the Holder shall be given the
opportunity to elect to receive the cash, shares of stock or securities or
assets then issuable or previously issued in accordance with such offer
with respect to or in exchange for the number of shares of Common Stock
theretofore immediately purchasable upon the exercise of the rights
represented by this Warrant. Upon the Holder's receipt of cash, shares of
stock or securities or assets in accordance with the provisions of this
Section 5, the Holder shall pay to the Company the amount of the Aggregate
Purchase Price that remains unpaid as of the date of such receipt and the
parties shall have no further rights or obligations hereunder. If the
Holder does not elect to receive such cash, shares of stock or securities
or assets, the rights and obligations of the Holder and the Company under
this Warrant shall remain in full force and effect pursuant to the terms
and conditions of this Warrant.
6. Notification of Change in Warrant Shares Number. Upon any
change in the Warrant Shares Number, then, and in each such case, the
Company shall give written notice thereof to the Holder within ten (10)
days after the date of such change, which notice shall set forth the
calculation of the Warrant Shares Number before and after such change and
the facts upon which such calculations are based. If at any time after
the Effective Date:
(a) The Board of Directors (or any committee thereof)
shall authorize or approve any capital reorganization, or reclassification
of the capital stock of the Company, or a dividend on Common Stock payable
in Common Stock, or consolidation or merger of the Company with, or sale,
disposition or other conveyance of all events or substantially all of its
assets to, any Person; or
(b) There shall be any purchase, tender or exchange offer
made to the Holders of Common Stock;
then, within ten (10) days of the date of any such occurrence, the Company
shall give the Holder written notice describing in reasonable detail such
occurrence.
7. Term of Warrant. This Warrant shall remain outstanding and
exercisable until the Expiration Date. If not previously exercised, the
rights represented by this Warrant shall thereupon terminate.
8. Issue Tax. The issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without
charge to the Holder for any issuance tax in respect thereof, provided
that the Company shall not be required to pay any tax that 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 original Holder of this
Warrant.
9. Transferability. This Warrant and any rights of the Holder
are not transferable or otherwise assignable to any third party at any
time without the written consent of the Company; provided, however, that
the Holder may transfer this Warrant (in whole and not in part) without
consent of the Company, to any affiliate of the Holder (other than an
affiliate formed for the purpose of effecting the transfer unless the
transfer is effected as part of the transfer of significant operating or
other assets to the same affiliate) or to any successor to the Holder in
connection with any business combination involving the Holder. Any
attempted prohibited transfer of all or part of this Warrant or any rights
of the Holder hereunder without such consent releases the Company from any
and all duties and obligations contained herein.
10. Registration Rights. The Holder shall have the following
registration rights:
(a) Piggyback.
(i) If at any time after the Effective Date
the Company proposes to register any shares of Common
Stock under the Act (otherwise than in connection with
the registration of securities issuable pursuant to an
employee stock option, stock purchase or similar plan
or pursuant to a merger, exchange offer or similar
transaction effected in accordance with the terms and
conditions of this Warrant), the Company shall give
the Holder notice of such proposed registration at
least thirty (30) days prior to the filing of a
registration statement. At the written request of the
Holder delivered to the Company within fifteen (15)
days after the receipt of such notice from the
Company, which request shall state the number of
Registration Shares that the Holder wishes to sell or
distribute publicly under the registration statement
proposed to be filed by the Company, the Company shall
use its best efforts to register under the Act such
Registration Shares, and to cause such registration to
become and remain effective as provided in this
Section 10. Shareholders owning a majority of the
shares of Common Stock requested to be registered in
connection with an underwritten secondary registration
shall have the right to select the underwriters and
managers to administer any such offering.
(ii) Subject to Section 10(a)(iv), if such a
registration is an underwritten primary registration
on behalf of the Company, and the managing underwriter
thereof advises the Company in writing that in its
opinion the number of shares requested to be included
in such registration exceeds the number which can be
sold in such offering, the Company will include in
such registration: (A) first, the shares of Common
Stock the Company proposes to sell; (B) second, the
shares of Common Stock the Other Holders propose to
sell in proportion to the number of shares each such
shareholder proposes to sell; and (C) third, the
Registration Shares.
(iii) Subject to Section 10(a)(iv),
if a registration under this Section 10(a) is an
underwritten secondary registration on behalf of
certain of the Company's shareholders, and the
managing underwriter thereof advises the Company in
writing that in its opinion the number of shares of
Common Stock requested to be included in such
registration exceeds the number which can be sold in
such offering, the Company will include in such
registration: (A) first, the shares of Common Stock
the Other Holders propose to sell in proportion to the
number of shares each such shareholder proposes to
sell; and (B) second, the shares of Common Stock the
Holder proposes to sell. In the event the Company
subsequently agrees to participate in such a secondary
registration, the shares of Common Stock the Company
proposes to sell will have priority over the shares
the Holder or the other shareholders of the Company
propose to sell in such registration.
(iv) If a registration under this Section
10(a) is an underwritten primary registration on
behalf of the Company that is not the Initial Public
Offering or the first underwritten registration of
Common Stock after the Initial Public Offering, and
the managing underwriter thereof advises the Company
in writing that in its opinion the number of shares
requested to be included in such registration exceeds
the number which can be sold in such offering, the
Company will include in such registration: (A) first,
the shares of Common Stock the Company proposes to
sell; (B) second, the shares of Common Stock the Other
Holders propose to sell and the Registration Shares
the Holder proposes to sell, all in proportion to the
number of shares each such shareholder proposes to
sell; and (C) third, any other shares of Common Stock
to be sold by any other shareholder. If a
registration under this Section 10(a) is an
underwritten secondary registration on behalf of
certain of the Company's shareholders that is not the
Initial Public Offering or the first underwritten
registration of Common Stock after the Initial Public
Offering, and the managing underwriter thereof advises
the Company in writing that in its opinion the number
of shares of Common Stock requested to be included in
such registration exceeds the number which can be sold
in such offering, the Company will include in such
registration: (A) first, the shares of Common Stock
the Other Holders propose to sell and the Registration
Shares the Holder proposes to sell, all in proportion
to the number of shares each such shareholder proposes
to sell; and (B) second, any other shares of Common
Stock to be sold by any other shareholder. In the
event the Company subsequently agrees to participate
in such a secondary registration, the shares of Common
Stock the Company proposes to sell will have priority
over the shares the Holder or the other shareholders
of the Company propose to sell in such registration.
(b) Demand. After the Effective Date and after the
earlier of November 15, 2000 or the third anniversary of the Effective
Date, the Company shall, upon written demand of the Holder, cause a
"shelf" registration statement on Form S-3 to be prepared and filed with
the SEC pursuant to Rule 415 (or any similar rule that may be adopted by
the SEC) under the Securities Act covering such number of Registration
Shares held by the Holder as shall be indicated in such written demand
provided that: (1) the Company will not be required to effect more than
one such demand registration for the Holder; (2) a demand registration
will not count as such until it has become effective (a demand
registration will, however, count as such if, after the filing of a
registration statement, the failure of such registration statement to
become effective is due solely to the Holder's actions, or, if once
effective, the effectiveness of a registration statement is withdrawn
solely because of the Holder's actions) and (3) such demand registration
may not be in connection with an underwritten public offering of any
Registration Shares. Upon receipt of such written demand, the Company
shall expeditiously effect the registration of the Registration Shares as
set forth in Section 10(e) and use its best efforts to have such
registration declared effective as soon as practicable after the filing
thereof.
(c) The obligation of the Company to cause the
Registration Shares to be registered under the Securities Act is subject
to the limitation that the Company shall be entitled to postpone for a
reasonable period of time, but not more than 120 days, the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant hereto, the effectiveness of a registration statement theretofore
filed by it or sales pursuant to an effective registration statement if,
the Company, based on advice of counsel, determines, in its reasonable
judgment exercised in good faith, that such registration and/or sale (i)
would interfere with any financing, acquisition, corporate reorganization
or other material transaction involving the Company or (ii) would require
the disclosure of material information, which disclosure could materially
and adversely affect Company, and, in either case, promptly gives written
notice of such determination. If the Company shall so postpone the filing
of a registration statement, then the Holder shall have the right to
withdraw the request for registration by giving written notice to the
Company within thirty calendar days after receipt of the notice of
postponement. After the expiration of any 120-day postponement period,
the Company will allow, during the immediately succeeding 120-day period,
the filing and effectiveness of a registration statement and sales
thereunder for a demand registration under this Section 10. Upon receipt
of any notice from the Company of the happening of any event of the kind
described in the first sentence of this Section 10(c), the Holder will
forthwith discontinue the disposition of its Registration Shares pursuant
to the registration statement until further notice from the Company.
(d) Indemnity. The Company will indemnify and hold
harmless the Holder, the officers and directors of the Holder and each
underwriter of Registration Shares sold by the Holder (and any person who
controls an underwriter within the meaning of Section 15 of the Act)
against all claims, losses, damages, liabilities, actions and expenses
resulting from any untrue statement or alleged untrue statement of a
material fact contained in a prospectus or in any related registration
statement, notification or the like or from any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
the same may have been based on information furnished in writing to the
Company by the Holder or such underwriter expressly authorized for use
therein and used in accordance with such authorization. The Company
agrees to reimburse each indemnified Person for any legal or any other
expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage, liability, action or expense. The Holder, by
acceptance of the registration provisions provided herein, agrees to: (a)
furnish to the Company such information concerning the Holder and the
proposed sale or distribution of Registration Shares as shall, in the
opinion of counsel for the Company, be necessary in connection with any
such registration or qualification; and (b) indemnify and hold harmless
the Company, its officers and directors and each of its underwriters (and
any person who controls an underwriter within the meaning of Section 10 of
the Act) against all claims, losses, damages, liabilities, actions and
expenses resulting from any untrue statement or alleged untrue statement
of a material fact furnished in writing to the Company by the Holder
pursuant to this Section 10(d), expressly authorized for use in connection
with such registration or qualification and used in accordance with such
authorization and from any omission therefrom or alleged omission
therefrom of a material fact needed to be furnished or necessary to make
the information furnished not misleading.
(e) Registration Covenants of the Company. In the event
that any Registration Shares are to be registered or qualified pursuant to
this Section 10, the Company covenants and agrees that the Company will
use reasonable efforts to effect the registration and/or qualification and
cooperate in the sale of the Registration Shares to be registered and
will:
(i) furnish to the Holder copies of any
registration statement with respect to the Registration
Shares (as well as any necessary amendments or supplements
thereto) and any prospectus forming a part thereof prior to
filing with the SEC;
(ii) notify the Holder, promptly after the
Company shall receive notice thereof, of the time when said
registration statement becomes effective or when any
amendment or supplement to any prospectus forming a part of
said registration statement has been filed;
(iii) notify the Holder promptly of any
request by the SEC for the amending or supplementing of
such registration statement or prospectus or for additional
information;
(iv) advise the Holder after the Company shall
receive notice or obtain knowledge thereof of the issuance
of any order by the SEC suspending the effectiveness of any
such registration statement or amendment thereto or of the
initiation or threatening of any proceeding for that
purpose, and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal
promptly if such stop order should be issued;
(v) prepare and file with the SEC such
amendments and supplements to such registration statement
and the prospectus forming a part thereof as may be
necessary to keep such registration statement effective for
the lesser of: (i) a period of time necessary to permit
the Holder pursuant to such registration statement to
dispose of all of such Registration Shares; (ii) 90 days;
or (iii) the maximum period of time permitted by law to
keep effective a registration statement;
(vi) furnish to the Holder such number of copies
of such registration statement, each amendment and
supplement thereto, the prospectus included in such
registration statement (including each preliminary
prospectus) and such other documents as the Holder may
reasonably request in order to facilitate the disposition
of the Registration Shares;
(vii) use its best efforts to register or
qualify such Registration Shares under such securities or
blue sky laws of such jurisdictions as determined by the
underwriter after consultation with the Company and the
Holder and do any and all other acts and things which may
be necessary or advisable to enable the Holder to
consummate the disposition in such jurisdictions of the
Registration Shares;
(viii) notify the Holder at any time when a
prospectus relating thereto is required to be delivered
under the Act of the happening of any event as a result of
which such registration statement contains an untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and, at the request of
the Holder, prepare a supplement or amendment to such
registration statement so that such registration statement
will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading;
(ix) cause all Registration Shares to be listed
on each securities exchange on which similar securities
issued by the Company are then listed;
(x) provide a transfer agent and (if required) a
registrar for all such Registration Shares not later than
the effective date of such registration statement;
(xi) enter into such customary agreements
(including an underwriting agreement in customary form) and
take all such other actions as the Holder or the
underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of the Registration
Shares;
(xii) make available for inspection by the
Holder, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney,
accountant or other agent retained by the Holder or such
underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to
supply all information reasonably requested by the Holder,
any such underwriter, attorney, accountant or agent in
connection with such registration statement;
(xiii) use its best efforts to cause the
Registration Shares covered by such registration statement
to be registered with or approved by such other
governmental agencies or authorities as may be necessary to
enable the Holder to consummate the disposition of such
Registration Shares; and
(xiv) obtain, in addition to such consents as
may be necessary, a comfort letter from the Company's
independent public accountants in customary form and
covering such matters of the type customarily covered by
comfort letters as the Holder may reasonably request.
(f) Registration Covenants of Holder. It shall be a
condition precedent to any obligation of the Company to register any
Registration Shares pursuant to this Section 10 that the Holder shall have
(i) furnished to the Company such information regarding the intended
disposition of the Registration Shares and other information concerning
the Holder as the Company shall reasonably request and as shall be
required in connection with any registration statement to be filed by the
Company; (ii) agreed to abide by such additional or customary terms
affecting any proposed offering of Common Stock as reasonably may be
requested by the managing underwriter of such offering, including a
requirement, if applicable, to withhold from the public market, for a
period of at least 270 days after any such offering, any shares of Common
Stock held by the Holder; and (iii) agreed in writing in form satisfactory
to the Company to pay all underwriting discounts and commissions
applicable to the Registration Shares.
(g) Expenses. The Company shall pay all of the expenses
in connection with any registration pursuant to this Section 10,
including, without limitation, costs of complying with federal and state
securities laws and regulations, attorneys' and accounting fees of the
Company, printing expenses and federal and state filing fees (except for
transfer taxes and underwriting commissions and discounts), but the
Company shall not be obligated to pay fees and disbursements of any
counsel for the Holder.
11. Descriptive Headings. The descriptive headings of the
several sections of this Warrant are inserted for convenience only and do
not constitute a part of this Warrant.
12. Notices. Any notice or other communication pursuant to
this Warrant shall be in writing and shall be deemed sufficiently given
upon receipt, if personally delivered or telefaxed (with receipt
acknowledged), or if mailed, upon deposit with the United States Postal
Service by first class, certified or registered mail, postage prepaid,
return receipt requested, addressed as follows:
(a) If to the Company, to HK Systems, Inc., 0000 Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx, Xxxxxxxxx 00000, Attention: Corporate Secretary,
or such other address as the Company has designated in writing to the
Holder.
(b) If to the Holder, to Western Atlas Inc., 000 Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, Attention: General Counsel, or
such other address as the Holder has designated in writing to the Company.
13. Replacement of Warrant. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation
of this Warrant, and upon receipt of written indemnification satisfactory
to the Company and reimbursement of the Company's expenses, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor
and denomination.
14. Governing Law. This Warrant shall be construed and
interpreted in accordance with the internal laws of the State of
Wisconsin.
15. Further Assurances. The Company agrees that it will
execute and record such documents as the Holder shall request to secure
for the Holder any of the rights represented by this Warrant.
16. Amendment and Modifications. This Warrant may be amended,
modified or supplemented only by written agreement of the Company and the
Holder.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officers under its corporate seal and this
Warrant to be dated as of the 15th day of November, 1996.
HK SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President
[Corporate Seal]
Attest: /s/ Xxxx X. Xxxxxxxxxx, Xx.
Xxxx X. Xxxxxxxxxx, Xx.
Secretary
