Exhibit 4(n)
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT AND LAWS OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M., NEW YORK TIME, ON MAY 2, 2003, OR IF NOT A BUSINESS DAY,
AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK TIME, ON THE NEXT FOLLOWING BUSINESS
DAY.
WARRANT TO PURCHASE
2,000,000
SHARES OF COMMON STOCK
OF
THE NETPLEX GROUP, INC.
No. W-2
This certifies that, for value received, TMP Interactive, Inc. and its
registered assigns (collectively, the "Warrantholder"), is entitled to purchase
from The Netplex Group, Inc., a corporation incorporated under the laws of the
State of New York (the "Company"), subject to the terms and conditions hereof,
at any time on or after the date hereof and before 5:00 p.m., New York time on
May 2, 2003 (or, if such day is not a Business Day, at or before 5:00 p.m., New
York time, on the next following Business Day), up to 2,000,000 fully paid and
nonassessable shares of Common Stock of the Company at the Exercise Price (as
defined herein). The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as provided in Article 3
hereof.
ARTICLE 1
DEFINITION OF TERMS
As used in this Warrant, the following capitalized terms shall have the
following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on
------------
which banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, par value $.001 per share, of the Company.
------------
(c) Common Stock Equivalents: Securities that are convertible into or
------------------------
exercisable for shares of Common Stock.
(c) Co-Branding Agreement: That certain Co-Branded Services Agreement,
---------------------
dated the date hereof, among TMP Interactive, Inc., The Netplex Group, Inc. and
Contractors Resources, Inc.
(d) Demand Registration: See Section 6.2.
-------------------
(e) Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
(f) Exercise Price: $9.00 per Warrant Share, as such price may be adjusted
--------------
from time to time pursuant to Article 3 hereof.
(g) Expiration Date: 5:00 p.m., New York time, on May 2, 2003, or if such
---------------
day is not a Business Day, the next succeeding day which is a Business Day.
(h) Holder: A Holder of Registrable Securities.
------
(i) NASD: National Association of Securities Dealers, Inc.
----
(j) Person: An individual, partnership, joint venture, corporation, trust,
------
unincorporated organization or government or any department or agency thereof.
(k) Piggyback Registration: See Section 6.1.
----------------------
(l) Prospectus: Any prospectus included in any Registration Statement, as
----------
amended or supplemented by any prospectus supplement, or to which a Term Sheet
(as defined in Rule 434 under the Securities Act) relates, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all materials incorporated
by reference in such Prospectus.
(m) Public Offering: A public offering of any of the Company's equity or
---------------
debt securities
2
pursuant to Registration Statement under the Securities Act.
(n) Registrable Securities: Any Warrant Shares issued to TMP Interactive,
----------------------
Inc. and/or its designees or transferees and/or other securities that may be or
are issued by the Company upon exercise of the Warrants, including those which
may thereafter be issued by the Company in respect of any such securities by
means of any stock splits, stock dividends, recapitalizations, reclassifications
or the like, and as adjusted pursuant to Article 3 hereof; provided, however,
that as to any particular security contained in Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such Registration Statement; or (ii) they shall have been
sold to the public pursuant to Rule 144(k) (or any successor provision) under
the Securities Act.
(o) Registration Expenses: Any and all expenses incurred in connection
---------------------
with any registration or action incident to performance of or compliance by the
Company with Article 6, including, without limitation, (i) all SEC, national
securities exchange and NASD registration and filing fees; all listing fees and
all transfer agent fees; (ii) all fees and expenses of complying with state
securities or blue sky laws (including the fees and disbursements of counsel of
the underwriters in connection with blue sky qualifications of the Registrable
Securities); (iii) all printing, mailing, messenger and delivery expenses; (iv)
all fees and disbursements of counsel for the Company and of its accountants,
including the expenses of any special audits and/or "cold comfort" letters
required by or incident to such performance and compliance; and (v) any
disbursements of underwriters customarily paid by issuers or sellers of
securities including the reasonable fees and expenses of any special experts
retained by the underwriters in connection with the requested registration, but
excluding underwriting discounts and commissions, brokerage fees and transfer
taxes, if any, and fees of counsel or accountants retained by the holders of
Registrable Securities to advise them in their capacity as Holders of
Registrable Securities.
(s) Registration Statement: Any registration statement of the Company
----------------------
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including all amendments
(including post-effective amendments) and supplements thereto, all exhibits
thereto and all material incorporated therein by reference.
(t) SEC: The Securities and Exchange Commission or any other federal
---
agency at the time administering the Securities Act and the Exchange Act.
(u) Securities Act: The Securities Act of 1933, as amended.
--------------
(v) 25% Holders: At any time as to which a Demand Registration is
-----------
requested, the Holder and/or the holders of any other Warrants and/or the
holders of Warrant Shares who have the right to acquire or hold, as the case may
be, not less than 25% of the combined total of Warrant Shares issuable and
Warrant Shares outstanding (other than Warrant Shares which are no longer
Registrable Securities by reason of the proviso to the definition of the term
"Registrable Securities") at the time such Demand Registration is requested.
3
(w) Warrant Shares: Common Stock, Common Stock Equivalents and other
--------------
securities purchased or purchasable upon exercise or conversion of the Warrants.
(x) Warrantholder: The person(s) or entity(ies) to whom this Warrant is
-------------
originally issued, or any successor in interest thereto, or any assignee or
transferee thereof, in whose name this Warrant is registered upon the books to
be maintained by the Company for that purpose.
(y) Warrants: This Warrant and all other warrants that may be issued in
--------
its place (together evidencing the right to purchase an aggregate of up to
2,000,000 shares of Common Stock), originally issued as set forth in the
definition of Registrable Securities.
ARTICLE 2
DURATION AND EXERCISE OF WARRANT
2.1 Duration of Warrant
The Warrantholder may exercise this Warrant at any time and from time to
time after 9:00 a.m., New York time, on the date which is two years from the
date hereof and before 5:00 p.m., New York time, on the Expiration Date.
Notwithstanding the foregoing sentence, if the Co-Branding Agreement is
terminated prior to May 2, 2002 by Contractors Resources, Inc. pursuant to
Section 9 thereto or by TMP Interactive, Inc. pursuant to Sections 9(a)(i),
(a)(ii), (a)(iii), (a)(iv), (a)(v) or (a)(vi) thereto, a portion of this Warrant
equal to the product of (a) 2,000,000 and (b) a fraction (i) the numerator of
which is equal to the number of months elapsed between the date hereof and the
date of such termination and (ii) the denominator of which is 24, shall become
immediately exercisable. Notwithstanding anything herein to the contrary, in
the event of a termination of the Co-Branding Agreement by Contractors
Resources, Inc. pursuant to Section 9 thereto, TMP Interactive, Inc. shall
solely be entitled to exercise, at any time and from time to time after 9:00
a.m., New York time, on May 2, 2002 and before 5:00 p.m., New York time, on the
Expiration Date, a portion of this Warrant equal to the product of (a) 2,000,000
and (b) a fraction (i) the numerator of which is equal to the number of months
elapsed between the date hereof and the date of such termination, and the
remaining portion shall become void, and all rights hereunder shall thereupon
cease.
2.2 Method of Exercise
(a) The Warrantholder may exercise this Warrant, in whole or in part,
by presentation and surrender of this Warrant to the Company at its corporate
office at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000-0000, or
at the office of its stock transfer agent, if any, with the Exercise Form
annexed hereto duly executed, accompanied by payment of the full Exercise Price
for each Warrant Share to be purchased in accordance with Section 2.3(a).
(b) Upon receipt of this Warrant with the Exercise Form fully executed
and
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accompanied by payment of the aggregate Exercise Price for the Warrant Shares
for which this Warrant is then being exercised, the Company shall cause to be
issued certificates for the total number of whole shares of Common Stock for
which this Warrant is being exercised in accordance with Section 2.3(a)
(adjusted to reflect the effect of the anti-dilution provisions contained in
Article 3 hereof, if any, and as provided in Section 2.4 hereof) in such
denominations as are requested for delivery to the Warrantholder, and the
Company shall thereupon deliver such certificates to the Warrantholder. The
Warrantholder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise as of the time of receipt of the Exercise Form
and payment in accordance with the preceding sentence, in the case of an
exercise for cash pursuant to Section 2.3(a), notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such shares of Common Stock shall not then be actually delivered to
the Warrantholder. If at the time this Warrant is exercised, a Registration
Statement is not in effect to register under the Securities Act the Warrant
Shares issuable upon exercise of this Warrant, the Company may, prior to the
satisfaction of any holding period required by Rule 144 promulgated under the
Securities Act, require the Warrantholder to make such representations, and may
place the legends on certificates representing the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to permit the
Warrant Shares to be issued without such registration.
(c) In case the Warrantholder shall exercise this Warrant with respect
to less than all of the Warrant Shares that may be purchased under this Warrant,
the Company shall execute as of the exercise date a new warrant in the form of
this Warrant for the balance of such Warrant Shares and deliver such new warrant
to the Warrantholder within 10 days following the exercise date (or, if later,
the Net Issuance Exercise Date).
(d) The Company shall pay any and all stock transfer and similar taxes
which may be payable in respect of the issuance of any Warrant Shares.
2.3 Exercise of Warrant
(a) Right to Exercise for Cash. This Warrant may be exercised by the
--------------------------
Holder by delivery of payment to the Company, for the account of the Company, by
cash, by certified or bank cashier's check or by wire transfer, of the Exercise
Price for the number of Warrant Shares specified in the Exercise Form in lawful
money of the United States of America.
2.4 Reservation of Shares
The Company hereby agrees that at all times there shall be reserved for
issuance and delivery upon exercise of this Warrant such number of shares of
Common Stock or other shares of capital stock of the Company from time to time
issuable upon exercise of this Warrant. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale (except as contemplated
by Sections 2.2(b) and 5.2) and free and clear of all preemptive and other
similar rights.
5
2.5 Fractional Shares
The Company shall not be required to issue any fraction of a share of its
capital stock in connection with the exercise of this Warrant, and in any case
where the Warrantholder would, except for the provisions of this Section 2.5, be
entitled under the terms of this Warrant to receive a fraction of a share upon
the exercise of this Warrant, the Company shall, upon the exercise of this
Warrant, pay to the Warrantholder an amount in cash equal to the fair market
value of such fractional share as of the exercise date.
2.6 Listing
Prior to the issuance of any shares of Common Stock upon exercise of this
Warrant, the Company shall use its best efforts to secure the listing of such
shares of Common Stock upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall use its best efforts to so list
on each national securities exchange or automated quotation system, and shall
maintain such listing of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of the
same class shall be listed on such national securities exchange or automated
quotation system.
ARTICLE 3
ADJUSTMENT OF SHARES OF COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article 3.
3.1 Mechanical Adjustments
(a) If at any time prior the exercise of this Warrant in full, the
Company shall (i) declare a dividend or make a distribution on the Common Stock
payable in shares of its capital stock (whether shares of Common Stock or of
capital stock of any other class); (ii) subdivide, reclassify or recapitalize
its outstanding Common Stock into a greater number of shares; (iii) combine,
reclassify or recapitalize its outstanding Common Stock into a smaller number of
shares; or (iv) issue any shares of its capital stock by reclassification of its
Common Stock (including any such reclassification in connection with a
consolidation or a merger in which the Company is the continuing corporation),
the number of Warrant Shares issuable upon exercise of the Warrant and/or the
Exercise Price in effect at the time of the record date of such dividend,
distribution, subdivision, combination, reclassification or recapitalization
shall be adjusted so that the Warrantholder shall be entitled to receive the
aggregate number and kind of shares which, if this Warrant had been exercised
6
in full immediately prior to such event, the Warrantholder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
distribution, subdivision, combination, reclassification or recapitalization.
Any adjustment required by this Section 3.1(a) shall be made successively
immediately after the record date, in the case of a dividend or distribution, or
the effective date, in the case of a subdivision, combination, reclassification
or recapitalization, to allow the purchase of such aggregate number and kind of
shares.
(b) If any time prior to the exercise of this Warrant in full, the
Company shall fix a record date for the issuance or making of a distribution to
all holders of the Common Stock (including any such distribution to be made in
connection with a consolidation or merger in which the Company is to be the
continuing corporation) of evidences of its indebtedness, any other securities
of the Company or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section 3.1(a), regular cash
dividends or cash distributions paid out of net profits legally available
therefor and in the ordinary course of business if the full amount thereof,
together with the value of other dividends and distributions made substantially
concurrently therewith or pursuant to a plan which includes payment thereof, is
equivalent to not more than 5% of the Company's net worth, or subscription
rights, options or warrants for Common Stock or Common Stock Equivalents
(excluding those referred to in Section 3.1(b)) (any such nonexcluded event
being herein called a "Special Dividend")), the Exercise Price shall be
decreased immediately after the record date for such Special Dividend to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the then current market price of the Common Stock
(as defined in Section 3.1(e)) on such record date less the fair market value
(as determined by the Company's Board of Directors) of the evidences of
indebtedness, securities or property, or other assets issued or distributed in
such Special Dividend applicable to one share of Common Stock or of such
subscription rights or warrants applicable to one share of Common Stock and the
denominator of which shall be the then current market price per share of Common
Stock (as so determined). Any adjustments required by this Section 3.1(b) shall
be made successively whenever such a record date is fixed and in the event that
such distribution is not so made, the Exercise Price shall again be adjusted to
be the Exercise Price that was in effect immediately prior to such record date.
(c) If at any time prior to the exercise of this Warrant in full, the
Company shall make a distribution to all holders of the Common Stock of stock of
a subsidiary or securities convertible into or exercisable for such stock, then
in lieu of an adjustment in the Exercise Price or the number of Warrant Shares
purchasable upon the exercise of this Warrant, each Warrantholder, upon the
exercise hereof at any time after such distribution, shall be entitled to
receive from the Company, such subsidiary or both, as the Company shall
determine, the stock or other securities to which such Warrantholder would have
been entitled if such Warrantholder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in this Article 3, and
the Company shall reserve, for the life of the Warrant, such securities of such
subsidiary or other corporation; provided, however, that no adjustment in
respect of dividends or interest on such stock or other securities shall be made
during the term of this Warrant or upon its exercise.
(d) Whenever the Exercise Price payable upon exercise of each Warrant
is
7
adjusted pursuant to one or more of paragraphs (a) and (b) of this Section
3.1, the Warrant Shares shall simultaneously be adjusted by multiplying the
number of Warrant Shares initially issuable upon exercise of each Warrant by the
Exercise Price in effect on the date thereof and dividing the product so
obtained by the Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.1, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing prices for 20 consecutive trading days
commencing 30 trading days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such reported sales take
place on such day, the average of the last reported bid and asked prices regular
way, in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed, or if not listed or admitted to
trading on such exchange, the representative closing bid price as reported by
Nasdaq, or other similar organization if Nasdaq is no longer reporting such
information, or if not so available, the fair market price as determined in good
faith by the Board of Directors of the Company.
(f) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.05)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.1 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.1 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to Section 3.1(a), the Warrantholder thereafter shall become entitled
to receive any shares of the Company other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in this Section 3.1.
(h) In case any event shall occur as to which the other provisions of
this Article 3 are not strictly applicable but as to which the failure to make
any adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent and principles hereof then, in
each such case, the Warrantholders representing the right to purchase a majority
of the Warrant Shares subject to all outstanding Warrants may appoint a firm of
independent public accountants of recognized national standing reasonably
acceptable to the Company, which shall give their opinion as to the adjustment,
if any, on a basis consistent with the essential intent and principles
established herein, necessary to preserve the purchase rights represented by the
Warrants. Upon receipt of such opinion, the Company will promptly mail a copy
thereof to the Warrantholder and shall make the adjustments described therein.
The fees and expenses of such independent public accountants shall be borne by
the Company.
8
(i) If, as a result of an adjustment made pursuant to this Article 3,
the Holder of any Warrant thereafter surrendered for exercise shall become
entitled to receive shares of two or more classes of capital stock or shares of
Common Stock and other capital stock of the Company, the Board of Directors
(whose determination shall be conclusive and shall be described in a written
notice to the Holder of any Warrant promptly after such adjustment) shall
determine the allocation of the adjusted Exercise Price between or among shares
or such classes of capital stock or shares of Common Stock and other capital
stock.
3.2 Notices of Adjustment
Whenever the number of Warrant Shares or the Exercise Price is adjusted as
herein provided, the Company shall prepare and deliver forthwith to the
Warrantholder a certificate signed by its President, and by any Vice President,
Treasurer or Secretary, setting forth the adjusted number of shares purchasable
upon the exercise of this Warrant and the Exercise Price of such shares after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which adjustment was made.
3.3 No Adjustment for Dividends
Except as provided in Section 3.1 of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
3.4 Preservation of Purchase Rights in Certain Transactions
In case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock (other than a subdivision or combination of
the outstanding Common Stock and other than a change in the par value of the
Common Stock) or in case of any consolidation or merger of the Company with or
into another corporation (other than merger with a subsidiary in which the
Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in the
case of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Holder of this Warrant shall have the right thereafter to receive
on the exercise of this Warrant the kind and amount of securities, cash or other
property which the Holder would have owned or have been entitled to receive
immediately after such reorganization, reclassification, consolidation, merger,
statutory exchange, sale or conveyance had this Warrant been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and in any such case, if necessary, appropriate adjustment shall be made in the
application of the provisions set forth in this Article 3 with respect to the
rights and interests thereafter of the Holder of this Warrant to the end that
the provisions set forth in this Article 3 shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, in relation to any shares of
stock or other securities or property thereafter deliverable on the exercise of
this Warrant. The provisions of this Section 3.4 shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers,
statutory exchanges, sales or conveyances. The issuer of
9
any shares of stock or other securities or property thereafter deliverable on
the exercise of this Warrant shall be responsible for all of the agreements and
obligations of the Company hereunder. Notice of any such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or conveyance
and of said provisions so proposed to be made, shall be mailed to the Holders of
the Warrants not less than 30 days prior to such event. A sale of all or
substantially all of the assets of the Company for a consideration consisting
primarily of securities shall be deemed a consolidation or merger for the
foregoing purposes.
3.5 Form of Warrant After Adjustments
The form of this Warrant need not be changed because of any adjustments in
the Exercise Price or the number or kind of the Warrant Shares, and Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in this Warrant, as initially issued.
3.6 Treatment of Warrantholder
Prior to due presentment for registration of transfer of this Warrant, the
Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
ARTICLE 4
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDER
4.1 No Rights as Shareholders; Notice to Warrantholders
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferees the right to vote or to receive
dividends or to consent or to receive notice as a shareholder in respect of any
meeting of shareholders for the election of directors of the Company or of any
other matter, or any rights whatsoever as shareholders of the Company. The
Company shall give notice to the Warrantholder by registered mail if at any time
prior to the expiration or exercise in full of the Warrants, any of the
following events shall occur:
(a) the Company shall authorize the payment of any dividend payable in
any securities upon shares of Common Stock or authorize the making of any
distribution (other than a cash dividend subject to the parenthetical set
forth in Section 3.1(b)) to all holders of Common Stock;
(b) the Company shall authorize the issuance to all holders of Common
Stock of any additional shares of Common Stock or Common Stock Equivalents
or of rights, options or warrants to subscribe for or purchase Common Stock
or Common Stock Equivalents or of any other subscription rights, options or
warrants (other than Common Stock or Common
10
Stock Equivalents or of rights, options or warrants to subscribe for or
purchase Common Stock or Common Stock Equivalents or of any other
subscription rights, options or warrants subject to the parenthetical set
forth in Section 3.1(b));
(c) a dissolution, liquidation or winding up of the Company shall be
proposed; or
(d) a capital reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common Stock
and other than a change in the par value of the Common Stock) or any
consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
change of Common Stock outstanding) or in the case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety.
Such giving of notice shall be initiated (i) at least 10 Business Days
prior to the date fixed as a record date or effective date or the date of
closing of the Company's stock transfer books for the determination of the
shareholders entitled to such dividend, distribution or subscription rights, or
for the determination of the shareholders entitled to vote on such proposed
merger, consolidation, sale, conveyance, dissolution, liquidation or winding up.
Such notice shall specify such record date or the date of closing the stock
transfer books, as the case may be. Failure to provide such notice shall not
affect the validity of any action taken in connection with such dividend,
distribution or subscription rights, or proposed merger, consolidation, sale,
conveyance, dissolution, liquidation or winding up.
4.2 Lost, Stolen, Mutilated or Destroyed Warrants
If this Warrant is lost, stolen, mutilated or destroyed, the Company may,
on such terms as to indemnity or otherwise as it may in its reasonable judgment
impose (which shall include reasonable costs and expenses and, in the case of a
mutilated Warrant, including the surrender thereof), issue a new Warrant of like
denomination and tenor as, and in substitution for, this Warrant.
ARTICLE 5
SPLIT-UP, COMBINATION, EXCHANGE AND
TRANSFER OF WARRANTS AND WARRANT SHARES
5.1 Split-Up, Combination and Exchange of Warrants
This Warrant may be split up, combined or exchanged for another Warrant or
Warrants containing the same terms to purchase a like aggregate number of
Warrant Shares. If the Warrantholder desires to split up, combine or exchange
this Warrant, he or it shall make such request in writing delivered to the
Company and shall surrender to the Company this Warrant and any other Warrants
to be so split-up, combined or exchanged. Upon any such surrender for a split-
up,
11
combination or exchange, the Company shall execute and deliver to the person
entitled thereto a Warrant or Warrants, as the case may be, as so requested.
The Company shall not be required to effect any split-up, combination or
exchange which will result in the issuance of a Warrant entitling the
Warrantholder to purchase upon exercise a fraction of a share of Common Stock or
a fractional Warrant. The Company may require such Warrantholder to pay a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any split-up, combination or exchange of Warrants.
5.2 Restrictions on Transfer, Restrictive Legends
Except as otherwise permitted by this Section 5.2, each Warrant shall (and
each Warrant issued upon direct or indirect transfer or in substitution for any
Warrant issued pursuant to Section 5.1 shall) be stamped or otherwise imprinted
with a legend in substantially the following form:
"THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED
UNDER SUCH ACT AND LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
Except as otherwise permitted by this Section 5.2, each stock certificate
for Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT AND LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED."
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a stock certificate for Warrant Shares, in each case without
a legend, if (i) the issuance of such Warrant Shares has been registered under
the Securities Act and any applicable state securities laws, (ii) such Warrant
or such Warrant Shares, as the case may be, have been registered for resale
under the Securities Act or sold pursuant to Rule 144 under the Securities Act
(or a successor thereto) or (iii) the Warrantholder has received an opinion of
counsel (who may be house counsel for such Warrantholder) reasonably
satisfactory to the Company that such registration is not required with respect
to such Warrant or such Warrant Shares, as the case may be.
12
ARTICLE 6
REGISTRATION UNDER THE SECURITIES ACT OF 1933
6.1 Piggyback Registration
(a) Right to Include Registrable Securities. If at any time or from
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time to time prior to the second anniversary of the Expiration Date, the Company
proposes to register any of its securities under the Securities Act on any form
for the registration of securities under such Act, whether or not for its own
account (other than by a registration statement on Form S-8 or other form which
does not include substantially the same information as would be required in a
form for the general registration of securities or would not be available for
the Registrable Securities) (a "Piggyback Registration"), it shall as
expeditiously as possible give written notice to all Holders of its intention to
do so and of such Holders' rights under this Section 6.1. Such rights are
referred to hereinafter as "Piggyback Registration Rights." Upon the written
request of any such Holder made within 10 days after receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder), the Company shall include in the Registration Statement the
Registrable Securities which the Company has been so requested to register by
the Holders thereof and the Company shall use its reasonable best efforts to
keep such registration statement in effect and maintain compliance with each
federal and state law or regulation for the period necessary for such Holder to
effect the proposed sale or other disposition (but in no event for a period
greater than 90 days); provided that the Company shall not be in breach of its
obligations hereunder or otherwise responsible for any failure to keep such
registration statement in effect caused by any act or omission of a Holder.
(b) Withdrawal of Piggyback Registration by Company. If, at any time
-----------------------------------------------
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give notice of such determination to
each Holder and, thereupon, shall be relieved of its obligation to register any
Registrable Securities in connection with such Piggyback Registration. All best
efforts obligations of the Company pursuant to Section 6.4 shall cease if the
Company determines to terminate prior to such effective date any registration
where Registrable Securities are being registered pursuant to this Section 6.1.
(c) Piggyback Registration of Underwritten Public Offering. If a
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Piggyback Registration involves an offering by or through underwriters, then (i)
all Holders requesting to have their Registrable Securities included in the
Company's Registration Statement must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as apply
to other selling shareholders and (ii) any Holder requesting to have his or its
Registrable Securities included in such Registration Statement may elect in
writing, not later than three Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
13
(d) Payment of Registration Expenses for Piggyback Registration. The
-----------------------------------------------------------
Company shall pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 6.1.
(e) Priority in Piggyback Registration. If a Piggyback Registration
----------------------------------
involves an offering by or through underwriters, the Company, except as
otherwise provided herein, shall not be required to include Registrable Shares
therein if and to the extent the underwriter managing the offering reasonably
believes in good faith and advises the Company (which shall promptly notify the
Holder) that such inclusion would materially adversely affect such offering;
provided that (i) if other selling shareholders without contractual registration
rights have requested registration of securities in the proposed offering, the
Company will reduce or eliminate such securities held by selling shareholders
without registration rights before any reduction or elimination of Registrable
Securities; and (ii) any such reduction or elimination (after taking into
account the effect of clause (i)) shall be pro rata to all other selling
shareholders with contractual registration rights.
6.2 Demand Registration
(a) Request for Registration. If, at any time prior to the Expiration
------------------------
Date, any 25% Holders request that the Company file a registration statement
under the Securities Act, as soon as practicable thereafter the Company shall
use its best efforts to file a registration statement with respect to all
Warrant Shares that it has been so requested to include and obtain the
effectiveness thereof, and to take all other action necessary under federal or
state law or regulation to permit the Warrant Shares that are held and/or that
may be acquired upon the exercise of the Warrants specified in the notices of
the Holders or holders hereof to be sold or otherwise disposed of, and the
Company shall maintain such compliance with each such federal and state law and
regulation for the period necessary for such Holders or Holders to effect the
proposed sale or other disposition; provided, however, the Company shall be
entitled to defer such registration for a period of up to 60 days if and to the
extent that its Board of Directors shall in good faith determine that such
registration would require disclosure of information not otherwise then required
to be disclosed and that such disclosure would adversely affect any material
business situation, transaction or negotiation then proposed, contemplated or
being engaged in by the Company. The Company shall also promptly give written
notice to the Holders and the holders of any other Warrants and/or the holders
of any Warrant Shares who or that have not made a request to the Company
pursuant to the provisions of this Section 6.2(a) of its intention to effect any
required registration or qualification, and shall use its best efforts to effect
as expeditiously as possible such registration or qualification of all such
other Warrant Shares that are then held and/or that may be acquired upon the
exercise of the Warrants, the Holder or holders of which have requested such
registration or qualification, within 15 days after such notice has been given
by the Company, as provided in the preceding sentence. The Company shall be
required to effect a registration or qualification pursuant to this Section
6.2(a) on one occasion only.
(b) Payment of Registration Expenses for Demand Registration. The
--------------------------------------------------------
Company shall pay all Registration Expenses in connection with the Demand
Registration.
14
(c) Selection of Underwriters. If any Demand Registration is
-------------------------
requested to be in the form of an underwritten offering, the managing
underwriter shall be selected and obtained by the Holders of a majority of the
Warrant Shares to be registered. Such selection shall be subject to the
Company's consent, which consent shall not be unreasonably withheld.
(d) Procedure for Requesting Demand Registration. Any request for a
--------------------------------------------
Demand Registration shall specify the aggregate number of the Registrable
Securities proposed to be sold and the intended method of disposition. Within
10 days after receipt of such a request the Company will give written notice of
such registration request to all Holders, and, subject to the limitations of
Section 6.2(b), the Company will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 Business Days after the date on which such notice is
given. Each such request shall also specify the aggregate number of Registrable
Securities to be registered and the intended method of disposition thereof.
6.3 Buy-Outs of Registration Demand
In lieu of carrying out its obligations to effect a Piggyback Registration
or Demand Registration of any Registrable Securities pursuant to this Article 6,
the Company may carry out such obligation by offering to purchase and purchasing
such Registrable Securities requested to be registered in an amount in cash
equal to the difference between (a) 95% of the last sale price of the Common
Stock on the day the request for registration is made and (b) the Exercise Price
in effect on such day; provided, however, that the Holder or Holders may
withdraw such request for registration rather than accept such offer by the
Company.
6.4 Registration Procedures
If and whenever the Company is required to use its best efforts to take
action pursuant to any Federal or state law or regulation to permit the sale or
other disposition of any Registrable Securities that are then held or that may
be acquired upon exercise of the Warrants in order to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Article 6, the Company shall, as expeditiously as practicable, use its
best efforts to:
(a) prepare and file with the SEC, as soon as practicable within 60
days after the end of the period within which requests for registration may be
given to the Company (but subject to the provision for deferral contained in
Section 6.2(a) hereof) a Registration Statement or Registration Statements
relating to the registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution thereof, and use
its best efforts to cause such Registration Statements to become effective;
provided that before filing a Registration Statement or Prospectus or any
amendment or supplements thereto, including documents incorporated by reference
after the initial filing of any Registration Statement, the Company will furnish
to the Holders of the Registrable Securities covered by such Registration
Statement and the underwriters, if any, copies of all such documents proposed to
be filed, which documents will be subject to the review of such Holders and
underwriters; provided, that the Company shall not be in breach of its
15
obligations hereunder or otherwise responsible for any failure to keep such
registration statement in effect caused by any act or omission of a Holder;
(b) prepare and file with the SEC such amendments and post-effective
amendments to a Registration Statement as may be necessary to keep such
Registration Statement effective for 180 days if the offering is not
underwritten, provided, that such 180 day period shall be extended by the number
of days a Prospectus is not available pursuant to Section 6.4(k) because of the
occurrence of an event set forth in Section 6.4(c)(vi); provided, that the
Company shall not be in breach of its obligations hereunder or otherwise
responsible for any failure to keep such registration statement in effect caused
by any act or omission of a Holder; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement or supplement to such Prospectus;
(c) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person)
confirm such advice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose; (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (m) below ceases to be true and correct in all
material respects; (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purposes; and (vi) of the happening of any event that makes
any statement of a material fact made in the Registration Statement, the
Prospectus or any document incorporated therein by reference untrue or which
requires the making of any changes in the Registration Statement or Prospectus
so that they will not contain any 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:
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment (subject to Section 6.4(a));
(e) if reasonably requested by the managing underwriters, immediately
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters believe (on advice of counsel) should
be included therein as required by applicable law relating to such sale of
Registrable Securities, including, without limitation, information with respect
to the purchase price being paid for the Registrable Securities by such
underwriters and with respect to any other terms of the underwritten (or "best-
efforts" underwritten)
16
offering; and make all required filings of such Prospectus supplement or post-
effective amendment as soon as notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;
(f) furnish to each selling Holder of Registrable Securities and each
managing underwriter, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(g) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each preliminary prospectus) any amendment or supplement
thereto as such Persons may reasonably request; the Company consents to the use
of such Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities and the underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, cooperate
with the selling Holders of Registrable Securities, the underwriters, if any,
and their respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any selling Holder or underwriter reasonably requests in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable Registration Statement;
provided that the Company will not be required to (i) qualify to do business in
any jurisdiction where it not then so qualified or (ii) to take any action which
would subject the Company to (a) general service of process in any jurisdiction
where it is not at the time so subject, or (b) taxation by any jurisdiction
where it is not at the time so subject;
(i) cooperate with the selling Holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends to the extent permitted by applicable law and
regulation; and enable such Registrable Securities to be in such denominations
and registered in such names as the managing underwriters may request at least
two Business Days prior to any sale of Registrable Securities to the
underwriters;
(j) use its best efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities within the United States as may
be necessary to enable the seller or sellers thereof or the underwriters, if
any, to consummate the disposition of such Registrable Securities;
(k) upon the occurrence of any event contemplated by Section
6.4(c)(vi) above, prepare a supplement or post-effective amendment to the
applicable Registration Statement or
17
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(l) with respect to each issue or class of Registrable Securities, use
its best efforts to cause all Registrable Securities covered by the Registration
Statements to be listed on each securities exchange or automated quotation
system, if any, on which similar securities issued by the Company are then
listed if requested by the Holders of a majority of such issue or class of
Registrable Securities;
(m) enter into such agreements (including an underwriting agreement)
and take all such other action reasonably required in connection therewith in
order to expedite or facilitate the disposition of such Registrable Securities
and in such connection, if the registration is in connection with an
underwritten offering (i) make such representations and warranties to the
underwriters (or the Holders of the Registrable Securities if such offering is
not underwritten), in such form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions in form, scope and substance shall be
reasonably satisfactory to the underwriters) addressed to the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
underwriters; (iii) obtain "cold comfort" letters and updates thereof from the
Company's accountants addressed to the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters by underwriters in connection with underwritten offerings; (iv)
set forth in full in any underwriting agreement entered into the indemnification
provisions and procedures of Section 6.5 hereof with respect to all parties to
be indemnified pursuant to said Section; and (v) deliver such documents and
certificates as may be reasonably requested by the underwriters to evidence
compliance with clause (i) above and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company; the
above shall be done at each closing under such underwriting or similar agreement
or as and to the extent required hereunder;
(n) make available for inspection by one or more representatives of
the Holders of Registrable Securities being sold, any underwriter participating
in any disposition pursuant to such registration, and any attorney or accountant
retained by such Holders or 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 any such representatives, in connection with such; and
(o) otherwise use its best efforts to comply with all applicable
Federal and state regulations; and take such other action as may be reasonably
necessary to or advisable to enable each such Holder and each such underwriter
to consummate the sale or disposition in such jurisdiction or jurisdiction in
which any such Holder or underwriter shall have requested that the Registrable
Securities be sold.
18
Except as otherwise provided in this Agreement, the Company shall have sole
control in connection with the preparation, filing, withdrawal, amendment or
supplementing of each Registration Statement, the selection of underwriters, and
the distribution of any preliminary prospectus included in the Registration
Statement, and may include within the coverage thereof additional shares of
Common Stock or other securities for its own account or for the account of one
or more of its other security holders.
The Company may require each Seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such securities and such other information as may
otherwise be required by the Securities Act to be included in such Registration
Statement.
6.5 Indemnification
(a) Indemnification by Company. In connection with each Registration
--------------------------
Statement relating to disposition of Registrable Securities, the Company shall
indemnify and hold harmless each Holder, its officers, directors and agents and
each underwriter of Registrable Securities and each Person, if any, who controls
such Holder or underwriter (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) against any and all losses, claims,
damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus or any amendment thereof or supplement thereto, or arise
out of or are based upon 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; provided, however, that such indemnity shall not inure
to the benefit of any Holder or underwriter (or any Person controlling such
Holder or underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) on account of any losses, claims, damages or
liabilities arising from the sale of the Registrable Securities if such untrue
statement or omission or alleged untrue statement or omission was made in such
Registration Statement, Prospectus or preliminary prospectus, or such amendment
or supplement, in reliance upon and in conformity with information furnished in
writing to the Company by such Holder or underwriter specifically for use
therein. The Company shall also indemnify selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holders of Registrable Securities, if requested. This indemnity agreement
shall be in addition to any liability which the Company may otherwise have.
(b) Indemnification by Xxxxxx. In connection with each Registration
-------------------------
Statement,
19
each Holder shall indemnify, to the same extent as the indemnification provided
by the Company in Section 6.5(a), the Company, its directors and each officer
who signs the Registration Statement and each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) but only insofar as such losses, claims, damages and liabilities
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which was made in the Registration Statement, the
Prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, in reliance upon and in conformity with information furnished in
writing by such Holder to the Company specifically for use therein. In no event
shall the liability of any selling Holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation. The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, to the same extent as
provided above, with respect to information so furnished in writing by such
Persons specifically for inclusion in any Prospectus, Registration Statement or
preliminary prospectus or any amendment thereof or supplement thereto.
(c) Conduct of Indemnification Procedure. Any party that proposes to
------------------------------------
assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6.5(a) or 6.5(b) shall be available to
any party who shall fail to give notice as provided in this Section 6.5(c) if
the party to whom notice was not given was unaware of the proceeding to which
such notice would have related and was prejudiced by the failure to give such
notice, but the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve it from any liability that it may
have to any indemnified party for contribution otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action within a
reasonable time after
20
notice of the commencement thereof, in each of which cases the fees and expenses
of counsel shall be at the expense of the indemnifying parties. An indemnified
party shall not be liable for any settlement of any action, suit, proceeding or
claim effected without its written consent.
(d) Contribution. In connection with each Registration Statement
------------
relating to the disposition of Registrable Securities, if the indemnification
provided for in subsection (a) hereof is unavailable to an indemnified party
thereunder in respect to any losses, claims, damages or liabilities referred to
therein, then the indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 6.5 in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. Notwithstanding anything
to the contrary in this Section 6.5(d), no selling Holder of Registrable
Securities shall be required to contribute any amount in excess of the net
proceeds it received in connection with its sale of Registrable Securities.
(e) Underwriting Agreement to Control. Notwithstanding the foregoing
---------------------------------
provisions of this Section 6.5, to the extent that the provisions on
indemnification and contribution contained in any underwriting agreement entered
into in connection with the underwritten public offering of the Registrable
Securities are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall control.
(f) Specific Performance. The Company and the Holder acknowledge that
--------------------
remedies at law for the enforcement of this Section 6.5 may be inadequate and
intend that this Section 6.5 shall be specifically enforceable.
(g) Survival of Obligations. The obligations of the Company and the
-----------------------
Holder under this Section 6.5 shall survive the completion of any offering of
Registrable Securities pursuant to a Registration Statement under this Article
6, and otherwise.
6.6 Reports Under Securities Exchange Act of 1934
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined us SEC Rule 144, at all times after 90 days after the
effective date of the first registration
21
statement filed by the Company for the offering of its securities to the general
public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company), the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
ARTICLE 7
OTHER MATTERS
7.1 Binding Effects; Benefits
This Warrant shall inure to the benefit of and shall be binding upon the
Company and the Warrantholder and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company and the
Warrantholder, or their respective heirs, legal representatives, successors or
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Warrant.
7.2 No Inconsistent Agreements
The Company will not on or after the date of this Warrant enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the Holders in this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to holders of
the Company's securities under any other agreements.
7.3 Adjustments Affecting Registrable Securities
The Company will not take any action outside the ordinary course of
business, or permit any change within its control to occur outside the ordinary
course of business, with respect to the Registrable Securities which is without
a bona fide business purpose, and which is intended to interfere with the
ability of the Holders of Registrable Securities to include such Registrable
Securities in a registration undertaken pursuant to this Agreement.
22
7.4 Integration/Entire Agreement
This Warrant is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Warrants.
This Warrant supersedes all prior agreements and understandings between the
parties with respect to such subject matter (other than warrants previously
issued by the Company to the Warrantholder).
7.5 Amendments and Waivers
The provisions of this Warrant, including the provisions of this sentence,
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of holders of at least a majority of the
outstanding Registrable Securities. Holders shall be bound by any consent
authorized by this Section whether or not certificates representing such
Registrable Securities have been marked to indicate such consent.
7.6 Counterparts
This Warrant may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
7.7 Governing Law
This Warrant shall be governed by and construed in accordance with the laws
of the State of New York.
7.8 Severability
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provisions
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
7.9 Attorneys' Fees
In any action or proceeding brought to enforce any provisions of this
Warrant, or where any provision hereof is validly asserted as a defense, the
successful party shall be entitled to recover reasonable attorneys' fees and
disbursements in addition to its costs and expenses and any other available
remedy.
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7.10 Computations of Consent
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or its affiliates (other than the Warrantholder or subsequent Holders if
they are deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
7.11 Notice
Any notices or certificates by the Company to the Holder and by the Holder
to the Company shall be deemed delivered if in writing and delivered in person
or by registered mail (return receipt requested) to the Holder addressed to him
in care of TMP Interactive, Inc., 0 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx 00000, or, if the Holder has designated, by notice in writing to
the Company, any other address, to such other address, and if to the Company,
addressed to it at: 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000-
0000, Attention: Secretary, or if the Company has designated, by notice in
writing to the Holder, any other address, to such other address.
The Company may change its address by written notice to the Holder and the
Holder may change its address by written notice to the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the 2nd day of May, 2000.
THE NETPLEX GROUP, INC.
By:
-------------------------------
Title:
Attest:
-----------------------
24
EXERCISE FORM
(To be executed upon exercise of Warrant)
Netplex Group, Inc.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-9992
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase Warrant Shares herewith tenders payment
for of the Warrant Shares to the order of The Netplex Group, Inc.
---------------
in the amount of $ in accordance with the terms of this Warrant; or
------
Please issue a certificate or certificates for such Warrant Shares in the
name of, and pay any cash for any fractional share to:
Name
(Please print Name, Address and Social
Security No.)
Signature
Federal Tax ID #
Note: The above signature should correspond
exactly with the name on the first page of
this Warrant Certificate or with the name of
the assignee appearing in the assignment
form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder.
25
ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, hereby sells, assigns and transfers
--------------------
unto the within Warrant, together with all right, title and
------------------
interest therein, and does hereby irrevocably constitute and appoint
attorney, to transfer said Warrant on the books of the
----------------------
within-named Company with respect to the number of Warrant Shares set forth
below, with full power of substitution in the premises:
Name(s) of No. of
Assignee(s) Address Warrant Shares
----------- ------- --------------
And if said number of Warrant Shares shall not be all the Warrant Shares
represented by the Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the Warrant Shares registered by said
Xxxxxxx.
Dated: , 20 Signature
------------ --
Note: The above signature should correspond
exactly with the name on the face
of this Warrant
26
