Exhibit 10.08
THIS WARRANT OR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
(i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF
COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THIS WARRANT.
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SERIES E WARRANT TO PURCHASE SHARES
OF COMMON STOCK (this "WARRANT")
Warrant No.: E-
Cytation Corporation, a Delaware corporation (the "COMPANY"), hereby certifies
that, for value received, (the "HOLDER"), or registered
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assigns, is the registered holder of a warrant (the "WARRANT") to subscribe for
and purchase shares of the fully paid and nonassessable Common
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Stock (as adjusted pursuant to Section 4 hereof, the "WARRANT SHARES") of the
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Company, at a price per share equal to three dollars ($3.00)(the "WARRANT
PRICE," as adjusted pursuant to Section 4 hereof), subject to the provisions and
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upon the terms and conditions hereinafter set forth.
As used herein, (a) the term "COMMON STOCK" shall mean the Company's
presently authorized Common Stock, par value $.001 per share, and any stock into
or for which such Common Stock may hereafter be converted or exchanged, (b) the
term "DATE OF GRANT" shall mean April __, 2006, and (c) the term "OTHER
WARRANTS" shall mean any warrant issued upon transfer or partial exercise of
this Warrant. The term "WARRANT" as used herein shall be deemed to include
Other Warrants unless the context hereof or thereof clearly requires otherwise.
The Warrant evidenced by this warrant certificate is a portion of a series of
like warrants (collectively, the "SERIES WARRANTS") exercisable for the purchase
of up to an aggregate of up to 2,000,000 shares of the Company's Common Stock
(the "SERIES WARRANT SHARES"), on the Date of Grant, which Series Warrants are
evidenced by certificates of like tenor (the "SERIES WARRANT CERTIFICATES") that
have been issued pursuant to that certain Securities Purchase and Exchange
Agreement of even date herewith (the "PURCHASE AGREEMENT").
1. Term. The purchase right represented by this Warrant is
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exercisable, in whole or in part, at any time after the earlier of (a) the date
the Registration Statement on Form SB-2 (or an alternative available form if the
Company is not eligible to file a Form SB-2) covering the Warrants and
underlying Warrant Shares is declared effective; or (b) twelve (12) months from
the Date of Grant (the "INITIAL EXERCISE DATE") and from time to time thereafter
through and including the close of business on the date three (3) years from the
Initial Exercise Date (the "EXPIRATION DATE"); provided, however, that in the
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event that any portion of this Warrant is unexercised as of the Expiration Date,
the terms of Section 2(b), below, shall apply.
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2. Exercise; Expiration; Redemption.
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a. Method of Exercise; Payment; Issuance of New Warrant. Subject to
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Section 1 hereof, the purchase right represented by this Warrant may be
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exercised by the holder hereof, in whole or in part and from time to time
after the Initial Exercise Date, by the surrender of this Warrant (with the
notice of exercise form attached hereto as Exhibit A duly executed) at the
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principal office of the Company and by the payment to the Company of an
amount equal to the then applicable Warrant Price multiplied by the number
of Warrant Shares then being purchased. The person or persons in whose
name(s) any certificate(s) representing shares of Common Stock shall be
issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record
holder(s) of, the shares represented thereby (and such shares shall be
deemed to have been issued) immediately prior to the close of business on
the date or dates upon which this Warrant is exercised. In the event of any
exercise of the rights represented by this Warrant, certificates for the
shares of stock so purchased shall be delivered to the holder hereof as
soon as possible and in any event within thirty (30) days after such
exercise and, unless this Warrant has been fully exercised, a new Warrant
representing the portion of the Warrant Shares, if any, with respect to
which this Warrant shall not then have been exercised shall also be issued
to the holder hereof as soon as possible and in any event within such
thirty (30)-day period.
b. Expiration. In the event that any portion of this Warrant is
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unexercised as of the Expiration Date, such portion of this Warrant shall
automatically expire, and the Holder shall have no rights with respect to
such unexercised portion of this Warrant.
c. Maximum. In no event shall any holder be entitled to exercise any
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Warrant Shares to the extent that, after such exercise, the sum of the
number of shares of Common Stock beneficially owned by any holder and its
affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised portion of the
Warrant Shares or any unexercised right held by any holder subject to a
similar limitation), would result in beneficial ownership by any holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock
(after taking into account the shares to be issued to the holder upon such
exercise). For purposes of this Section 2(c), beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended. Nothing herein shall preclude the holder from
disposing of a sufficient number of other shares of Common Stock
beneficially owned by the holder so as to thereafter permit the continued
exercise of this Warrant.
3. Stock Fully Paid; Reservation of Shares. All Warrant Shares that
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may be issued upon the exercise of the rights represented by this Warrant will,
upon issuance pursuant to the terms and conditions herein, be fully paid and
nonassessable, and free from all taxes (other than any taxes determined with
respect to, or based upon, the income of the person to whom such shares are
issued), liens and charges (other than liens or charges created by actions of
the holder of this Warrant or the person to whom such shares are issued), and
pre-emptive rights with respect to the issue thereof. During the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of the issue upon
exercise of the purchase rights evidenced by this Warrant, a sufficient number
of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.
4. Adjustment of Warrant Price and Number of Shares. The number and
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kind of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
a. Reclassification or Merger. In case of any reclassification, change
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or conversion of securities of the class issuable upon exercise of this
Warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision
or combination), or in case of any merger of the Company with or into
another corporation (other than a merger with another corporation in which
the Company is the acquiring and the surviving corporation and which does
not result in any reclassification or change of outstanding securities
issuable upon exercise of this Warrant), or in case of any sale of all or
substantially all of the assets of the Company, the Company, or such
successor or purchasing corporation, as the case may be, shall duly execute
and deliver to the holder of this Warrant a new Warrant (in form and
substance satisfactory to the holder of this Warrant), so that the holder
of this Warrant shall have the right to receive, at a total purchase price
not to exceed that payable upon the exercise of the unexercised portion of
this Warrant, and in lieu of the shares of Common Stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of
stock, other securities, money and property receivable upon such
reclassification, change or merger by a holder of the number of shares of
Common Stock then purchasable under this Warrant. Such new Warrant shall
provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 4.
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b. Subdivision or Combination of Shares. If at any time while this
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Warrant remains outstanding and unexpired the Company shall subdivide or
combine its outstanding shares of Common Stock, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the
case of a combination, effective at the close of business on the date the
subdivision or combination becomes effective.
c. Stock Dividends. If at any time while this Warrant is outstanding
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and unexpired the Company shall pay a dividend with respect to Common Stock
payable in Common Stock, then the Warrant Price shall be adjusted, from and
after the date of determination of stockholders entitled to receive such
dividend or distribution, to that price determined by multiplying the
Warrant Price in effect immediately prior to such date of determination by
a fraction (i) the numerator of which shall be the total number of shares
of Common Stock outstanding immediately prior to such dividend, and (ii)
the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend.
d. Adjustment of Number of Shares. Upon each adjustment in the Warrant
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Price, the number of Warrant Shares purchasable hereunder shall be
adjusted, to the nearest whole share, to the product obtained by
multiplying the number of Warrant Shares purchasable immediately prior to
such adjustment in the Warrant Price by a fraction, the numerator of which
shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately thereafter.
e. Excluded Transactions. Notwithstanding the foregoing, Section 4
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shall not apply to the issuance of stock dividend payable under the rights,
preferences and designations of the Series A Convertible Preferred Stock.
5. Notice of Adjustments. Whenever the Warrant Price or the number of
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Warrant Shares purchasable hereunder shall be adjusted pursuant to Section 4
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hereof, the Company shall deliver to the holder of this Warrant a certificate
signed by its chief financial officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Warrant Price and the number of
Warrant Shares purchasable hereunder after giving effect to such adjustment.
6. Fractional Shares. No fractional shares of Common Stock will be
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issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor based on the fair market
value of a share of Common Stock on the date of exercise, or round up to the
next whole number of shares, at the Company's option.
7. Compliance with Securities Act and Investor Rights Agreement;
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Disposition of Warrant or Warrant Shares.
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a. Compliance with Securities Act. The holder of this Warrant, by
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acceptance hereof, agrees that this Warrant and the shares of Common Stock
to be issued upon exercise hereof are being acquired for investment and
that such holder will not offer, sell or otherwise dispose of this Warrant,
or any shares of Common Stock to be issued upon exercise hereof except
under circumstances which will not result in a violation of the Securities
Act. Upon exercise of this Warrant, the holder hereof shall confirm in
writing, by executing the form attached as Schedule 1 to Exhibit A hereto,
that the shares of Common Stock so purchased are being acquired for
investment and not with a view toward distribution or resale. This Warrant
and all shares of Common Stock issued upon exercise of this Warrant (unless
registered under the Securities Act) shall be stamped or imprinted with a
legend in substantially the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE
OR DISPOSITION MAY BE EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR THE HOLDER,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED, (iii) RECEIPT OF A NO-ACTION LETTER(S) FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITY(IES), OR (iv) OTHERWISE COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE
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ISSUED DIRECTLY OR INDIRECTLY."
In addition, in connection with the issuance of this Warrant, the holder
specifically represents to the Company by acceptance of this Warrant as follows:
(1) The holder is aware of the Company's business affairs and
financial condition, and has acquired information about the Company
sufficient to reach an informed and knowledgeable decision to acquire this
Warrant. The holder is acquiring this Warrant for its own account for
investment purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Securities
Act.
(2) The holder understands that this Warrant and the Warrant Shares
have not been registered under the Securities Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other
things, the bona fide nature of the holder's investment intent as expressed
herein. In this connection, the holder understands that, in the view of the
SEC, the statutory basis for such exemption may be unavailable if the
holder's representation was predicated solely upon a present intention to
hold the Warrant and the Warrant Shares for the minimum capital gains
period specified under applicable tax laws, for a deferred sale, for or
until an increase or decrease in the market price of the Warrant and the
Warrant Shares, or for a period of one (1) year or any other fixed period
in the future.
(3) The holder further understands that this Warrant and the Warrant
Shares must be held indefinitely unless subsequently registered under the
Securities Act and any applicable state securities laws, or unless
exemptions from registration are otherwise available.
(4) The holder is aware of the provisions of Rule 144 and 144A,
promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly,
from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions, if
applicable, including, among other things: the availability of certain
public information about the Company, the resale occurring not less than
one (1) year after the party has purchased and paid for the securities to
be sold; the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term
is defined under the Securities Exchange Act of 1934, as amended) and the
amount of securities being sold during any three (3)month period not
exceeding the specified limitations stated therein.
(5) The holder further understands that at the time it wishes to sell
this Warrant and the Warrant Shares there may be no public market upon
which to make such a sale, and that, even if such a public market then
exists, the Company may not be satisfying the current public information
requirements of Rule 144 and 144A, and that, in such event, the holder may
be precluded from selling this Warrant and the Warrant Shares under Rule
144 and 144A even if the one (1)-year minimum holding period has been
satisfied.
b. Exchange. This Warrant may be exchanged, without payment of any
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service charge, for one (1) or more new Warrants of like tenor exercisable
for the same aggregate number of shares of Common Stock upon surrender to
the Company by the registered holder hereof in person or by legal
representative or by attorney duly authorized in writing and, upon issuance
of the new Warrant or Warrants, the surrendered Warrant shall be cancelled
and disposed of by the Company.
c. Disposition of Warrant or Warrant Shares. With respect to any
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offer, sale or other disposition of this Warrant, or any Warrant Shares
acquired pursuant to the exercise of this Warrant prior to registration of
such Warrant or Warrant Shares, the holder hereof and each subsequent
holder of this Warrant agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written
opinion of such holder's counsel, if reasonably requested by the Company,
to the effect that such offer, sale or other disposition may be effected
without registration or qualification (under the Securities Act as then in
effect or any federal or state law then in effect) of this Warrant or such
Warrant Shares and indicating whether or not under the Securities Act
certificates for this Warrant or such Warrant Shares to be sold or
otherwise disposed of require any restrictive legend as to applicable
restrictions on transferability in order to ensure compliance with
applicable laws. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as
practicable, shall notify such holder that such holder may sell or
otherwise dispose of this Warrant or such Warrant Shares, all in accordance
with the terms of the notice delivered to the Company. If a determination
has been made pursuant to this Section 7(d) that the opinion of counsel for
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the holder is not reasonably satisfactory to the Company, the Company shall
so notify the holder promptly after such determination has been made and
neither this Warrant nor any Warrant Shares shall be sold or otherwise
disposed of until such disagreement has been resolved. The foregoing
notwithstanding, this Warrant or such Warrant Shares may (i) as to such
federal laws, be offered, sold or otherwise disposed of in accordance with
Rule 144 and 144A under the Securities Act, provided that the Company shall
have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144
and 144A have been satisfied and (ii) be offered, sold, distributed or
otherwise transferred to Affiliates of the Holder without regard to this
Section 7(d), but only if the Company is in receipt of an opinion of
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counsel as to the permissibility of such transfer under federal and state
securities laws and an investor representation letter from the transferee,
in form and substance reasonably satisfactory to the Company. Each
certificate representing this Warrant or the Warrant Shares thus
transferred (except a transfer pursuant to Rule 144) shall bear a legend as
to the applicable restrictions on transferability in order to ensure
compliance with such laws, unless, in the aforesaid opinion of counsel for
the holder, such legend is not required in order to ensure compliance with
such laws. The Company may issue stop transfer instructions to its transfer
agent or, if acting as its own transfer agent, the Company may stop
transfer on its corporate books, in connection with such restrictions. As
used herein, "AFFILIATE OF THE HOLDER" shall mean (x) any owner,
shareholder, partner or member of the Holder, and (y) any other Person that
directly or indirectly, through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Holder.
8. Rights as Stockholders; Information. No holder of this Warrant, as
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such, shall be entitled to vote or be deemed the holder of Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of the
directors or upon any matter submitted to stockholders at any meeting thereof,
or to receive notice of meetings, until this Warrant shall have been exercised
and the Warrant Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein. The foregoing notwithstanding, the Company
will transmit to the holder of this Warrant such information, documents and
reports as are generally distributed to the holders of any class or series of
the securities of the Company concurrently with the distribution thereof to the
stockholders.
9. Additional Rights.
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a. Mergers. In the event that the Company undertakes to (i) sell,
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lease, exchange, convey or otherwise dispose of all or substantially all of
its property or business; or (ii) merge into or consolidate with any other
corporation (other than a wholly-owned Subsidiary), or effect any
transaction (including a merger or other reorganization) or series of
related transactions, in which more than fifty percent (50%) of the voting
power of the Company is disposed of, the Company will use its best efforts
to provide at least thirty (30) days notice to the holder of the terms and
conditions of the proposed transaction. The Company shall cooperate with
the holder in consummating the sale of this Warrant in connection with any
such transaction.
10. Modification and Waiver. This Warrant and any provision hereof may
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be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Unless otherwise specifically provided herein, all
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communications under this Warrant shall be in writing and shall be deemed to
have been duly given (i) on the date of service if served personally on the
party to whom notice is to be given; (ii) on the day of transmission if sent by
facsimile transmission to the number shown on the books of the Company, and
telephonic confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the day after delivery to Federal Express or similar
overnight courier; or (iv) on the fifth day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid, and properly addressed, return receipt requested, to
each such holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor on the signature page of this Warrant.
Any party hereto may change its address for purposes of this Section 11 by
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giving the other party written notice of the new address in the manner set forth
herein.
12. Binding Effect on Successors. This Warrant shall be binding upon
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any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets, and all of the obligations
of the Company relating to the Common Stock issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder
hereof. The Company will, at the time of the exercise or conversion of this
Warrant, in whole or in part, upon request of the holder hereof but at the
Company's expense, acknowledge in writing its continuing obligation to the
holder hereof in respect of any rights to which the holder hereof shall continue
to be entitled after such exercise or conversion in accordance with this
Warrant; provided, however, that the failure of the holder hereof to make any
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such request shall not affect the continuing obligation of the Company to the
holder hereof in respect of such rights.
13. Lost Warrants or Stock Certificates. The Company covenants to the
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holder hereof that, upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate and, in the case of any loss, theft or destruction, upon
receipt of an executed lost securities bond or indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
14. Descriptive Headings. The descriptive headings of the several
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paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
15. Governing Law. This Warrant shall be construed and enforced in
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accordance with, and the rights of the parties shall be governed by, the laws of
the State of Florida.
16. Remedies. In case any one (1) or more of the covenants and
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agreements contained in this Warrant shall have been breached, the holders
hereof (in the case of a breach by the Company), or the Company (in the case of
a breach by a holder), may proceed to protect and enforce their or its rights
either by suit in equity and/or by action at law, including, but not limited to,
an action for damages as a result of any such breach and/or an action for
specific performance of any such covenant or agreement contained in this
Warrant.
17. Acceptance. Receipt of this Warrant by the holder hereof shall
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constitute acceptance of and agreement to the foregoing terms and conditions.
18. No Impairment of Rights. The Company will not, by amendment of its
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Certificate of Incorporation or through any other means, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on
its behalf by one of its officers thereunto duly authorized.
CYTATION CORPORATION
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Xxxxxxx X. Xxxxxxx, Chief Executive Officer
Dated: April , 2006.
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NOTICE TO FLORIDA RESIDENTS:
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WHERE SALES ARE MADE TO FIVE OR MORE PERSONS IN FLORIDA (EXCLUDING CERTAIN
INSTITUTIONAL PURCHASERS DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT) (THE "ACT"), ANY SUCH SALE MADE PURSUANT
TO SECTION 517.061(11) OF THE ACT SHALL BE VOIDABLE BY THE PURCHASER EITHER
WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH
PURCHASER TO THE ISSUER, OR AN AGENT OF THE ISSUER, OR AN ESCROW AGENT OR WITHIN
THREE DAYS AFTER THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH
PURCHASER, WHICHEVER OCCURS LATER.
EXHIBIT A
NOTICE OF EXERCISE
To:
1. The undersigned hereby elects to purchase shares of Common Stock of
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Cytation Corporation (the "Company') pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
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(Name)
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(Address)
3. The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares. In support
thereof, the undersigned will execute an Investment Representation Statement
upon request of the Company, in form reasonably satisfactor to the company.
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(Signature)
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(Date)
ADDENDUM TO SERIES E- __ WARRANT
TO
PURCHASE SHARES OF COMMON STOCK
PIGGYBACK REGISTRATION
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This Addendum is attached to and made part of a Series E Warrant to
Purchase Shares of Common Stock, Warrant No.: E - (the "E Warrant"),
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made as of this day of April, 2006, issued by the Company. Unless
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otherwise defined in this Addendum, all capitalized terms used herein shall have
the meanings ascribed to them in the E Warrant. In the event of a conflict
between this Addendum and the E Warrant, the terms of this Addendum shall
control.
If the Company, at any time after the Initial Exercise Date and before the
Expiration Date (the "Exercise Period") registers (the "Registration") any of
its securities under the Securities Act of 1933 (the "Securities Act"), other
than by way of Commission Forms S-4 or S-8, or any successor form to either,
whether or not for its own account, the Company shall give prompt written notice
thereof to the Holder and, if the Holder shall so request in writing within 20
days after receipt of any such notice, the Company shall include in each
Registration all Warrant Shares the Holder so requests to be registered
thereunder, as well as all shares of the Company's common stock issuable upon
conversion of the Holder's Series D Convertible Preferred Stock (the "SERIES D
SHARES"). The Company may, in its sole discretion, include these shares in a
Registration without advance notice to, and consent from, the Holder.
All costs and expenses incident to the Company's registration of securities
under the Securities Act, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, and fees and disbursements
of counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other persons retained by
the Company, shall, to the extent permitted by applicable federal and state
securities laws, rules and regulations, be borne by the Company.
If the Registration is an underwritten primary registration on behalf of
the Company and the managing underwriters advise the Company in writing that, in
their opinion, the number of securities requested to be included in the
Registration exceeds the number which can be sold in such offering, the Company
will include in such Registration (i) first, the securities that the Company
proposes to sell and (ii) second, the Warrant Shares and Series D Shares
requested to be included in the Registration to the extent the managing
underwriter includes such Warrant Shares and Series D Shares in the offering.
If the Registration is an underwritten secondary registration on behalf of
holders of the Company's securities and the managing underwriter advises the
Company in writing that, in its opinion, the number of securities requested to
be included in the Registration exceeds the number which can be sold in such
offering, the Company will include in such Registration (i) first, the
securities requested to be included therein by the holders requesting the
Registration pursuant to a contractual right and (ii) second, the Warrant Shares
and Series D Shares requested to be included in the Registration to the extent
the managing underwriter includes such shares in the offering.
If the Warrant Shares and Series D Shares are included in a Registration
effected pursuant to the terms hereof, the Company shall indemnify and hold
harmless the Holder, to the extent permitted by law, from and against all
losses, claims, damages, liabilities and expenses (including, without
limitation, reasonable attorneys' fees except as limited hereinafter insofar as
such losses, claims, damages, liabilities and expenses arise out of or are based
upon any untrue or allegedly 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 the
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are caused by or contained in any information furnished in writing to the
Company by the Holder expressly for use therein or by the Holder's failure to
deliver a copy of the registration statement or prospectus or any amendments
thereof or supplements thereto after the Company has furnished the Holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify each underwriter, its officers and
directors and each person who controls such underwriter (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Holder. The indemnifying disbursements required by this
paragraph will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
If the Warrant Shares and Series D Shares are included in a Registration,
the Holder shall furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law,
the Holder shall indemnify and hold harmless the Company, its directors and
officers and each person who controls the Company (within the meaning of the
Securities Act), from and against all losses, claims, damages, liabilities and
expenses (including, without limitation, reasonable attorneys' fees except as
limited in the following paragraph) insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any untrue or alleged
untrue statement of a material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or arise out of or are based upon the omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished in writing by
the Holder and, furthermore, that the amount payable in connection with such
indemnification shall not exceed the net proceeds received by the Holder for the
Warrant Shares and Series D Shares owned by him and included in such
Registration.
The Holder's rights and obligations under this Addendum as to the Warrant
Shares are independent of the Holder's rights and obligations under this
Addendum as to the Series D Shares. If the Holder transfers this Warrant to a
transferee, then that transferee shall succeed to all of the Holder's
registration rights and obligations under this Addendum relating to the Warrant
Shares. If the Holder transfers his, her, or its Series D Convertible Preferred
Stock to a transferee, then that transferee shall succeed to all of the Holder's
registration rights and obligations under this Addendum relating to the Series D
Shares.
Any person entitled to indemnification will (a) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (b) unless, in such indemnified party's reasonable judgment,
a conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party will not be subject to
any liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the reasonable fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless, in the reasonable judgment of any indemnified party, a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
The indemnification provided for herein will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified
party or any officer, director or controlling person of such indemnified party
and will survive the transfer of the Warrant Shares and Series D Shares. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason. If all or any part of the Warrant
Shares and Series D Shares are included in a Registration covered hereunder, the
Holder shall enter into such agreements and shall provide the Company with such
information in connection with the Registration as shall be reasonably requested
by the Company and as shall be necessary to comply with federal and state
securities laws.
IN WITNESS WHEREOF, the Company has caused this Addendum to be executed on
its behalf by one of its officers thereunto duly authorized.
CYTATION CORPORATION
By:
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Name:
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Its:
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