1
EXHIBIT 4.3.17
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
SECURITIES LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR
TRANSFERRED OR OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL (WHICH OPINION
IS REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES), SUCH REGISTRATION
UNDER THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE
WARRANT NO. _______
SHARES
($0.001 PAR VALUE)
CLASS "AA" WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
PROBEX CORP.
(A DELAWARE CORPORATION)
PURCHASE PRICE PER SHARE: $3.12
EXPIRATION DATE: 5:00 P.M., DALLAS, TEXAS TIME, ON MAY 23, 2005
THIS CERTIFIES that, for value received,
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is the registered owner and is entitled, subject to the terms and conditions of
this Warrant, until the Expiration Date, to purchase the number of shares set
forth above of the Common Stock, $0.001 par value (the "Common Stock"), of
Probex Corp. (the "Corporation") from the Corporation at the purchase price set
forth above. The number of shares of Common Stock which may be received upon the
exercise of the Warrants and the price to be paid for each share of Common Stock
are subject to adjustment from time to time as hereinafter set forth.
1. EXERCISE PERIOD. The "Exercise Period" is the period beginning on the
date of this Warrant (the "Issuance Date") and ending at 5:00 p.m., Dallas,
Texas time, on the Expiration Date (the "Exercise Period"). This Warrant will
terminate automatically and immediately upon the expiration of the Exercise
Period. Notwithstanding the above, upon the occurrence of an acquisition of all
the issued and outstanding capital stock of the Company (by way of stock
purchase, merger or consolidation) or all or substantially all of the assets of
the Company, in each case in one transaction or a series of related
transactions, this Warrant shall terminate, unless on or prior to the date of
such occurrence, Holder exercises this Warrant (in
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which event, the portion of this Warrant which was not exercised shall
automatically expire, without any action on behalf of the Company).
2. EXERCISE OF WARRANT; CASHLESS EXERCISE. This Warrant may be exercised,
in whole or in part, at any time and from time to time during the Exercise
Period. Such exercise shall be accomplished by tender to the Company of the
purchase price set forth above as the warrant price (the "Warrant Price"),
either (a) in cash, by wire transfer or by certified check or bank cashier's
check, payable to the order of the Company, or (b) by surrendering such number
of shares of Common Stock received upon exercise of this Warrant with a current
market price equal to the Warrant Price (a "Cashless Exercise"), together with
presentation and surrender to the Company of this Warrant with an executed
subscription in substantially the form attached hereto as Exhibit A (the
"Subscription"). Upon receipt of the foregoing, the Company will deliver to the
Holder, as promptly as possible, a certificate or certificates representing the
shares of Common Stock so purchased, registered in the name of the Holder or its
transferee (as permitted under Section 3 below). With respect to any exercise of
this Warrant, the Holder will for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock purchased hereunder on
the date this Warrant, a properly executed Subscription and payment of the
Warrant Price is received by the Company (the "Exercise Date"), irrespective of
the date of delivery of the certificate evidencing such shares, except that, if
the date of such receipt is a date on which the stock transfer books of the
Company are closed, such person will be deemed to have become the holder of such
shares at the close of business on the next succeeding date on which the stock
transfer books are open. Fractional shares of Common Stock will not be issued
upon the exercise of this Warrant. In lieu of any fractional shares that would
have been issued but for the immediately preceding sentence, the Holder will be
entitled to receive cash equal to the current market price of such fraction of a
share of Common Stock on the trading day immediately preceding the Exercise
Date. In the event this Warrant is exercised in part, the Company shall issue a
new Warrant to the Holder covering the aggregate number of shares of Common
Stock as to which this Warrant remains exercisable for.
If the Holder elects to conduct a Cashless Exercise, the Company shall
cause to be delivered to the Holder a certificate or certificates representing
the number of shares of Common Stock computed using the following formula:
X = Y (A-B)
-----
A
Where:
X = the number of shares of Common Stock to be issued to
Holder;
Y = the portion of the Warrant (in number of shares
of Common Stock) being exercised by Holder (at the
date of such calculation);
A = the fair market value of one share of Common
Stock on the Exercise Date (as calculated below);
and
B = Warrant Price (as adjusted to the date of such
calculation).
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For purposes of the foregoing calculation, "fair market value of one share
of Common Stock on the Exercise Date" shall mean: (i) if the principal trading
market for such securities is a national or regional securities exchange, the
average closing price on such exchange for the ten (10) trading days immediately
prior to such Exercise Date; (ii) if sales prices for shares of Common Stock are
reported by the Nasdaq National Market System or Nasdaq Small Cap Market (or a
similar system then in use), the average last reported sales price for the ten
(10) trading days immediately prior to such Exercise Date; or (iii) if neither
(i) nor (ii) above are applicable, and if bid and ask prices for shares of
Common Stock are reported in the over-the-counter market by Nasdaq (or, if not
so reported, by the National Quotation Bureau), the average of the high bid and
low ask prices so reported for the ten (10) trading days immediately prior to
such Exercise Date. Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case may
be, for the period in question, then the current market price shall be
determined as of the latest ten (10) day period prior to such day for which such
closing price, last reported sales price, or bid and ask prices, as the case may
be, are available, unless such securities have not been traded on an exchange or
in the over-the-counter market for 30 or more days immediately prior to the day
in question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company. The Company acknowledges and agrees that this Warrant was issued on the
Issuance Date.
3. TRANSFERABILITY AND EXCHANGE.
(a) This Warrant, and the Common Stock issuable upon the exercise
hereof, may not be sold, transferred, pledged or hypothecated unless the Company
shall have been provided with an opinion of counsel, or other evidence
reasonably satisfactory to it, that such transfer is not in violation of the
Securities Act, and any applicable state securities laws. Subject to the
satisfaction of the aforesaid condition, this Warrant and the underlying shares
of Common Stock shall be transferable from time to time by the Holder upon
written notice to the Company. If this Warrant is transferred, in whole or in
part, the Company shall, upon surrender of this Warrant to the Company, deliver
to each transferee a Warrant evidencing the rights of such transferee to
purchase the number of shares of Common Stock that such transferee is entitled
to purchase pursuant to such transfer. The Company may place a legend similar to
the legend at the top of this Warrant on any replacement Warrant and on each
certificate representing shares issuable upon exercise of this Warrant or any
replacement Warrants. Only a registered Holder may enforce the provisions of
this Warrant against the Company. A transferee of the original registered Holder
becomes a registered Holder only upon delivery to the Company of the original
Warrant and an original Assignment, substantially in the form set forth in
Exhibit B attached hereto.
(b) This Warrant is exchangeable upon its surrender by the Holder to
the Company for new Warrants of like tenor and date representing in the
aggregate the right to purchase the number of shares purchasable hereunder, each
of such new Warrants to represent the right to purchase such number of shares as
may be designated by the Holder at the time of such surrender.
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4. ADJUSTMENTS TO WARRANT PRICE AND NUMBER OF SHARES SUBJECT TO WARRANT.
The Warrant Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4. For the purpose of
this Section 4, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right to participate in any distribution of the assets
or earnings of the Company without limit as to per share amount (excluding, and
subject to any prior rights of, any class or series of preferred stock).
(a) In case the Company shall (i) pay a dividend or make a distribution
in shares of Common Stock or other securities, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, then the Warrant Price in effect at the time of the record date for
such dividend or on the effective date of such subdivision, combination or
reclassification, and/or the number and kind of securities issuable on such
date, shall be proportionately adjusted so that the Holder of any Warrant
thereafter exercised shall be entitled to receive the aggregate number and kind
of shares of Common Stock (or such other securities other than Common Stock) of
the Company, at the same aggregate Warrant Price, that, if such Warrant had been
exercised immediately prior to such date, the Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants, the Warrant Price to be in effect after such
record date shall be determined by multiplying the Warrant Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price per share of Common Stock on such record date,
less the amount of cash so to be distributed (or the fair market value (as
determined in good faith by, and reflected in a formal resolution of, the Board
of Directors of the Company) of the portion of the assets or evidences of
indebtedness so to be distributed, or of such subscription rights or warrants,
applicable to one share of Common Stock, and the denominator of which shall be
such current market price per share of Common Stock. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Warrant Price shall again be adjusted to
be the Warrant Price which would then be in effect if such record date had not
been fixed.
(c) For the purpose of any computation under any subsection of this
Section 4, the "current market price" per share of Common Stock on any date
shall be the per share price of the Common Stock on the trading day immediately
prior to the event requiring an adjustment hereunder and shall be: (i) if the
principal trading market for such securities is a national or regional
securities exchange, the closing price on such exchange on such day; or (ii) if
sales prices for shares of Common Stock are reported by the Nasdaq National
Market System or Small Cap Market System (or a similar system then in use), the
last reported sales price so reported on
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Class "AA" Warrant No.
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such day; or (iii) if neither (i) nor (ii) above are applicable, and if bid and
ask prices for shares of Common Stock are reported in the over-the-counter
market by Nasdaq (or, if not so reported, by the National Quotation Bureau), the
average of the high bid and low ask prices so reported on such day.
Notwithstanding the foregoing, if there is no reported closing price, last
reported sales price, or bid and ask prices, as the case may be, for the day in
question, then the current market price shall be determined as of the latest
date prior to such day for which such closing price, last reported sales price,
or bid and ask prices, as the case may be, are available, unless such securities
have not been traded on an exchange or in the over-the-counter market for 30 or
more days immediately prior to the day in question, in which case the current
market price shall be determined in good faith by, and reflected in a formal
resolution of, the Board of Directors of the Company.
(d) Notwithstanding any provision herein to the contrary, no adjustment
in the Warrant Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Warrant Price; provided, however,
that any adjustments which by reason of this subsection (d) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 shall be made to the nearest
cent or the nearest one-hundredth of a share, as the case may be.
(e) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a) above, the Holder of any Warrant thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of 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 shares of Common Stock contained in this Section
4, and the other provisions of this Warrant shall apply on like terms to any
such other shares.
(f) If the Company merges or consolidates into or with another
corporation or entity, or if another corporation or entity merges into or with
the Company (excluding such a merger in which the Company is the surviving or
continuing corporation and which does not result in any reclassification,
conversion, exchange, or cancellation of the outstanding shares of Common
Stock), or if all or substantially all of the assets or business of the Company
are sold or transferred to another corporation, entity, or person, then, as a
condition to such consolidation, merger, or sale (a "Transaction"), lawful and
adequate provision shall be made whereby the Holder shall have the right from
and after the Transaction to receive, upon exercise of this Warrant and upon the
terms and conditions specified herein and in lieu of the shares of the Common
Stock that would have been issuable if this Warrant had been exercised
immediately before the Transaction, such shares of stock, securities, or assets
as the Holder would have owned immediately after the Transaction if the Holder
had exercised this Warrant immediately before the effective date of the
Transaction (it being acknowledged and agreed that the Warrant Price is not
subject to change in the event the Company issues securities at a price lower
than the Warrant Price, except as provided above in this Section 4).
(g) In case any event shall occur as to which the other provisions of
this Section 4 are not strictly applicable but the failure to make any
adjustment would not fairly protect the purchase rights represented by this
Warrant in accordance with the essential intent
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Class "AA" Warrant No.
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and principles hereof, then, in each such case, the Company shall effect such
adjustment, on a basis consistent with the essential intent and principles
established in this Section 4, as may be necessary to preserve, without
dilution, the purchase rights represented by this Warrant.
5. REGISTRATION RIGHTS. The Holder shall be entitled to the benefits of
the registration rights set forth in Exhibit C attached hereto.
6. RESERVATION OF SHARES. The Company agrees at all times to reserve and
hold available out of its authorized but unissued shares of Common Stock the
number of shares of Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.
7. NOTICES TO HOLDER. Upon any adjustment of the Warrant Price (or number
of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Warrant Price (and/or the number of shares of Common Stock purchasable upon the
exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company's method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 7.
In the event of (a) any fixing by the Company of a record date with
respect to the holders of any class of securities of the Company for the purpose
of determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event. Any such notice shall be given at least 10 days prior to the earliest
date therein specified.
8. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder to
any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth.
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Class "AA" Warrant No.
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9. ADDITIONAL COVENANTS OF THE COMPANY. At such time as the Common Stock
is listed for trading on any regional or national securities exchange or Nasdaq,
the Company shall, upon issuance of any shares for which this Warrant is
exercisable, at its expense, promptly obtain and maintain the listing of such
shares.
The Company shall comply with the reporting requirements of Sections 13
and 15(d) of the Exchange Act for so long as and to the extent that such
requirements apply to the Company.
The Company shall not, by amendment of its Articles or Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Company, the Holder and their respective successors and
permitted assigns.
11. NOTICES. The Company agrees to maintain a ledger of the ownership of
this Warrant (the "Ledger"). Any notice hereunder shall be given by registered
or certified mail if to the Company, at its principal executive office and, if
to the Holder, to its address shown in the Ledger of the Company; provided,
however, that the Holder may at any time on three (3) days written notice to the
Company designate or substitute another address where notice is to be given.
Notice shall be deemed given and received after a certified or registered
letter, properly addressed with postage prepaid, is deposited in the U.S. mail.
12. SEVERABILITY. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.
13. GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
principles of choice of laws thereof.
14. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
15. ENTIRE AGREEMENT. This Warrant (including the Exhibits attached
hereto) constitutes the entire understanding between the Company and the Holder
with respect to the subject matter hereof, and supersedes all prior
negotiations, discussions, agreements and understandings relating to such
subject matter.
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Witness the seal of the Corporation and the signatures of its authorized
officers.
Date (Seal) PROBEX CORP.
----------------------
ATTEST:
-------------------------------- ----------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxx X. Xxxx
Chief Executive Officer & President Chief Financial Officer & Secretary
9
EXHIBIT A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for _______ shares (the
"Stock") of the Common Stock of _______________________ (the "Company") pursuant
to and in accordance with the terms and conditions of the attached Warrant (the
"Warrant"), and hereby makes payment of $_______ therefor by [tendering cash,
wire transferring or delivering a certified check or bank cashier's check,
payable to the order of the Company] [surrendering _______ shares of Common
Stock received upon exercise of the Warrant, which shares have a current market
price equal to such payment as required in Section 2 of the Warrant]. The
undersigned requests that a certificate for the Stock be issued in the name of
the undersigned and be delivered to the undersigned at the address stated below.
If the Stock is not all of the shares purchasable pursuant to the Warrant, the
undersigned requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at the
address stated below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless the Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition. I agree that each certificate representing the
Stock delivered to me shall bear substantially the same legend as set forth on
the front page of the Warrant.
I further agree that the Company may place stop orders on the
certificates evidencing the Stock with the transfer agent, if any, to the same
effect as the above legend. The legend and stop transfer notice referred to
above shall be removed only upon my furnishing to the Company an opinion of
counsel (reasonably satisfactory to the Company) to the effect that such legend
may be removed.
Date: Signed:
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Address:
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Class "AA" Warrant No. A-1
10
EXHIBIT B
ASSIGNMENT
(TO BE EXECUTED BY THE HOLDER TO EFFECT TRANSFER OF THE ATTACHED WARRANT)
For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Warrant attached hereto and the
rights represented thereby to purchase _________ shares of Common Stock in
accordance with the terms and conditions hereof, and does hereby irrevocably
constitute and appoint _________________________ as attorney to transfer such
Warrant on the books of the Company with full power of substitution.
Date: Signed:
------------------------ -------------------------------
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
------------------------- --------------------------------------
-------------------------
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Class "AA" Warrant No. B-1
11
EXHIBIT C
REGISTRATION RIGHTS
1. DEFINITIONS
Affiliate: With reference to any designated Person, any Person that has
a relationship with such designated Person whereby either of such Persons
directly or indirectly controls or is controlled by or is under common control
with the other. For this purpose "control" means the power, direct or indirect,
of one Person to direct or cause direction of the management and policies of
another, whether by contract, through voting securities or otherwise.
Commission: The Securities and Exchange Commission or any other
governmental body at the time administering the Securities Act.
Common Stock: The Company's authorized common stock, no par value per
share, as constituted on the date of this Warrant, any stock into which such
Common Stock may thereafter be changed and any stock of the Company of any other
class, which is not preferred as to dividends or assets over any other class of
stock of the Company and which is not subject to redemption, issued to the
holders of shares of such Common Stock upon any re-classification thereof.
Company Securities: Any equity securities proposed to be sold by the
Company in the registration statement referred to.
Person: A corporation, an association, a partnership, a limited
liability company, a joint venture, a trust, an organization, a business, an
entity, an individual, a government or political subdivision thereof or a
governmental body.
Registrable Securities: Common Stock and any securities of the Company
issued with respect to the Common Stock by way of stock dividend or stock split
or in connection with a combination, recapitalization, share exchange,
consolidation or other reorganization of the Company. As to any Registrable
Securities, once issued 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, (ii) they
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, or (iv) they shall have
ceased to be outstanding.
Selling Expenses: All underwriting discounts, selling commissions and
stock transfer taxes applicable to the securities registered by the Holder and,
except as provided in Section 4 hereof, all fees and disbursements of counsel
for the Holder.
Class "AA" Warrant No. C-1
12
Capitalized terms used in this Exhibit C but not otherwise defined herein shall
have the meanings ascribed to such terms in the Warrant.
2. REGISTRATION RIGHTS
2.1. Registration on Request.
(a) Except as provided in subsection (b) of this Section 2.1, upon the
written request of Holders (which request must be initiated by either Stonegate
Securities, Inc. or any of its directors or officers who are Holders) owning at
least a majority of the then outstanding Registrable Securities of all Holders
requesting that the Company effect pursuant to this Section 2.1 the registration
of the requesting Holders' Registrable Securities under the Securities Act
(which request shall specify the number of Registrable Securities to be
registered), the Company shall, as expeditiously as reasonably possible, notify
all other Holders of such request (and allowing them to participate therein),
and use its best efforts to effect the registration under the Securities Act of
the Registrable Securities of all Holders which the Company has been so
requested to register.
(b) The Company shall not be obligated to take any action to effect any
registration requested by the Holders pursuant to subsection (a) above (i) after
two years from the date of this Warrant, or (ii) after the Company has effected
one (1) registration pursuant to this Section 2.1 and such registration has been
declared or ordered effective.
(c) Notwithstanding any other provision hereof to the contrary, a
registration requested pursuant to this Section 2.1 shall not be deemed to have
been effected (i) unless it has become effective and remains effective for at
least 180 days; provided, however, that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal by a requesting Holder, in its sole
discretion, to proceed with such registration shall be deemed to have been
effected by the Company at the request of the Holders unless the requesting
Holder shall have elected to pay all Company Registration Expenses (as defined
in Section 4 below) in connection with such registration, (ii) if after it has
become effective such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
govern-mental agency or court for any reason other than a misrepresentation or
an omission by any participating Holder, or (iii) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied other than by reason of some
wrongful act or omission, or act or omission in bad faith, by any participating
Holder.
(d) The Company shall not be obligated to effect any registration
pursuant to this Section 2.1 within 90 days after the effective date of any
underwritten public offering by the Company or of any previous registration
withdrawn at the request of the requesting Holders. The Company may postpone for
up to 90 days the filing or the effectiveness of a registration statement for a
registration pursuant to this Section 2.1 if the financial advisor and/or
underwriter to the Company certifies to the holders of the Registrable
Securities that such registration would reasonably be expected to have a
material adverse effect on the Company; provided, however, that in such event
the Holders of Registrable Securities requesting such Registration shall be
entitled to withdraw such request and, if such request is withdrawn, such
Registration shall not
Class "AA" Warrant No. C-2
13
count as the one permitted registration under this Section 2.1 and the Company
shall pay all Registration Expenses in connection with such postponed or
withdrawn registration. Notwithstanding the above, the Company may delay a
demand registration pursuant to this Section 2.1 only once in any twelve-month
period. In addition, upon written notice from the Company to Holder of the
effectiveness of an underwritten public offering, Holder agrees not to sell any
Registrable Securities under any registration statement effected under this
Section 2.1 for a period of thirty (30) days following such effective date.
2.2. Incidental Registration.
(a) If the Company at any time proposes to register any of its equity
securities under the Securities Act on any form other than Form S-4 or Form S-8
(or any similar or successor form then in effect), whether or not for sale for
its own account, and if the registration form proposed to be used may be used
for the registration of Registrable Securities, the Company will in each such
case give prompt written notice (and in any event at least 10 business days'
prior written notice prior to the filing of such registration statement) to the
Holders of the Company's intention to do so, such notice to specify the
securities to be registered, the proposed numbers and amounts thereof and the
date not less than 20 days thereafter by which the Company must receive the
Holders' written indication of whether the Holders wish to include their
Registrable Securities in such registration statement and advising the Holders
of their rights under this Section 2.2. Upon the written request of any Holder
made on or before the date specified in such notice (which request shall specify
the number of Registrable Securities intended to be disposed of by such Holder),
the Company will, to the extent permitted under Section 7, use its best efforts
to cause all such Registrable Securities, which the Holders have so requested
the registration thereof, to be registered under the Securities Act (with the
securities that the Company at the time proposes to register), to the extent
requisite to permit the sale or other disposition (in accordance with the
intended methods thereof as aforesaid) by the Holders of the Registrable
Securities to be so registered.
(b) No registration effected pursuant to a request referred to in this
Section 2.2 shall be deemed to have been effected pursuant to Section 2.1.
(c) Notwithstanding anything to the contrary in this Section 2.2, the
Company shall have the right to discontinue any registration under this Section
2.2 at any time prior to the effective date of such registration if the
registration of other securities giving rise to such registration under this
Section 2.2 is discontinued.
3. REGISTRATION PROCEDURES
If and whenever the Company is required by the provisions hereof to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided herein, the Company will, as expeditiously as
possible:
(a) prepare and file with the Commission (in the case of a registration
pursuant to Section 2.1, such filing to be made as soon thereafter as possible
but in any event within 60 days after the request by the requisite Holders to
register Registrable Securities) a registration statement with respect to such
Registrable Securities and use all commercially reasonable efforts
Class "AA" Warrant No. C-3
14
to cause such registration statement to become and remain effective (provided
that, before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to one counsel selected by the
Holders copies of all such documents proposed to be filed, which documents will
be subject to the review of such counsel);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of at least 180 days (or such shorter period as shall be necessary to
complete the distribution of the securities covered thereby) and to comply with
the pro-visions of the Securities Act with respect to the sale or other
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement;
(c) furnish to counsel for the Holders and each underwriter of the
securities being sold by the Holders such number of copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as such counsel may reasonably request, in substantially the form in
which they are proposed to be filed with the Commission, in order to facilitate
the public sale or other disposition of the Registrable Securities owned by the
participating Holders;
(d) use all commercially reasonable efforts to register or qualify such
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holders shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable the Holders and any underwriter to consummate
the disposition in such jurisdictions of such Registrable Securities owned by
the participating Holders, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction where, but for the requirements of this subsection(d), it
would not be obligated to be so qualified, or to subject itself to taxation in
any such jurisdiction;
(e) use all commercially reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the participating Holders to consummate the disposition of its
Registrable Securities;
(f) notify the participating Holders at any time when a prospectus
relating to its Registrable Securities is required to be delivered under the
Securities Act, of the Company's becoming aware that the prospectus included in
the related registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and promptly prepare and furnish to
the participating Holders and each underwriter a reasonable number of copies of
a prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
Class "AA" Warrant No. C-4
15
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing;
(g) otherwise use all commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission;
(h) use all commercially reasonable efforts (1) to cause all such
Registrable Securities covered by such registration statement to be listed on a
national securities exchange (if such Registrable Securities are not already so
listed) and on each additional national securities exchange on which similar
securities issued by the Company are then listed, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(2) to secure designation of all such Registrable Securities covered by such
registration statement as a Nasdaq "national market system security" or "small
cap system security" within the meaning of Rule 11Aa2-1 of the Commission or,
failing that, to secure Nasdaq authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register as such with respect to such Registrable
Securities with the National Association of Securities Dealers;
(i) enter into such agreements (including an underwriting agreement in
customary form) and take such other actions as the Holder shall reasonably
request in order to expedite or facilitate the disposition of its Registrable
Securities;
(j) in the case of a registration instituted pursuant section 2.1 (if
typically requested in a registration of the type being undertaken), to use its
best efforts to furnish to any participating Holder an opinion from the
Company's counsel and a "cold comfort" letter from the Company's independent
public accountants, addressed to such participating Holder, in customary form
and covering such matters of the type customarily covered by such opinions and
"cold comfort" letters as such participating Holder shall reasonably request;
(k) make available for inspection by any participating Holder and by
any underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent retained
by the Holder or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Company, and cause
all of the Company's officers, directors, employees and the independent public
accountants who have certified its financial statements to supply all
information reasonably requested by any participating Holder, underwriter,
attorney, accountant or agent in connection with such registration statement;
(l) permit the Holder (1) to participate in the preparation of such
registration or comparable statement, (2) to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of any participating Holder should be included and (3) to receive such documents
and make such requests as any participating Holder is entitled to under this
Section 3;
(m) in the case of an underwritten offering, enable the Registrable
Securities to be in such denominations and registered in such names as the
underwriters may request at least two business days prior to the sale of the
Registrable Securities; and
Class "AA" Warrant No. C-5
16
(n) notify the Holder of any stop order threatened or issued by the
Commission and take all actions reasonably necessary to prevent the entry of
such stop order or to remove it if entered.
The Holders shall be deemed to have agreed by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in subsection (f) above, the Holders will
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by said subsection and, if so directed by the Company, will deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies, then in the Holders' possession of the prospectus covering such
Registrable Securities current at the time of receipt of such notice. In the
event the Company shall give any such notice, the period mentioned in subsection
(b) above shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received the copies of the supplemented or amended
prospectus contemplated by subsection (f) above.
Each participating Holder shall furnish to the Company in writing such
information and documents regarding it and the distribution of its securities as
may reasonably be required to be disclosed in the registration statement in
question by the rules and regulations under the Securities Act or under any
other applicable securities or blue sky laws of the jurisdictions referred to in
subsection (d) above.
If any such registration or comparable statement refers to any
participating Holder by name or otherwise as the holder of any securities of the
Company, but such reference to such participating Holder by name or otherwise is
not required by the Securities Act or any similar federal statute then in force,
then such participating Holder shall have the right to require the deletion of
the reference to such participating Holder.
4. REGISTRATION EXPENSES
In connection with any registration of Registrable Securities pursuant
to Section 2.1 or 2.2, the Company will, whether or not any such registration
shall become effective, from time to time promptly upon receipt of bills or
invoices relating thereto, pay all expenses (other than Selling Expenses)
incident to its performance of or compliance herewith (the "Company Registration
Expenses"), including, without limitation, all registration, filing and NASD
fees, fees and expenses of compliance with securities or blue sky laws, word
processing, duplicating and printing expenses, messenger and delivery expenses,
fees and disbursements of counsel for the Company and all independent public
accountants (including the expenses of any audit and/or "cold comfort" letter)
and other Persons retained by the Company, reasonable fees and disbursements of
one counsel or firm of counsel retained by the Holders (as a group) (not to
exceed $3,000) and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities (excluding underwriting commissions and
discounts, except where they are customarily paid by issuers).
Class "AA" Warrant No. C-6
17
5. INDEMNIFICATION
(a) The Company will, and hereby does, indemnify, to the extent
permitted by law, each Holder and each Person, if any, who controls each Holder
within the meaning of Section 15 of the Securities Act (collectively, "Holder
Indemnified Parties"), from and against all losses, claims, damages, liabilities
and expenses, joint or several, to which any such Holder Indemnified Party may
become subject under the Securities Act, the Exchange Act and all rules and
regulations under each such Act, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement as contemplated hereby or 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, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iii) any violation by the Company of any federal, state or
common law rule or regulation applicable to the Company and relating to action
of or inaction by the Company in connection with any such registration; and in
each such case, the Company shall reimburse each such Holder Indemnified Party
for any reasonable legal or other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, however, that the Company shall not be
liable to any such Holder Indemnified Party insofar as such losses, claims,
damages, liabilities, expenses, actions or proceedings are caused by any untrue
statement or alleged untrue statement made in reliance on or in conformity with
any information furnished in writing to the Company by or on behalf of the
Holder Indemnified Party expressly for use therein.
If the offering pursuant to any registration statement provided for
hereunder is made through underwriters, no action or failure to act on the part
of such underwriters (whether or not any such underwriter is an Affiliate of any
Holder Indemnified Party) shall affect the Company's obligations to indemnify
the Holder Indemnified Parties pursuant to the preceding paragraph. If the
offering pursuant to any registration statement provided for hereunder is made
through underwriters, the Company agrees to enter into an underwriting agreement
in customary form with such underwriters and to indemnify such underwriters,
their officers and directors, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act to the same
extent as hereinbefore provided with respect to the indemnification of the
Holder Indemnified Parties; provided, however, that the Company shall not be
required to indemnify any such underwriter, or any officer or director of such
under-writer or any Person who controls such underwriter within the meaning of
Section 15 of the Securities Act, to the extent that the loss, claim, damage,
liability, expense, action or proceeding for which indemnification is claimed
results from such underwriter's failure to send or give a copy of the amended or
supplemented final prospectus, at or prior to the written confirmation of the
sale of Registrable Securities, to a Person asserting the existence of an untrue
statement or alleged untrue statement or omission or alleged omission if such
statement or omission was corrected in
Class "AA" Warrant No. C-7
18
such amended or supplemented final prospectus prior to such written confirmation
and the underwriter was given notice of the availability of such amended or
supplemented final prospectus.
In connection with any registration statement in which any Holder is
participating, such participating Holder will furnish to the Company in writing
such information as shall be reasonably requested by the Company for use in any
such registration statement or prospectus and will indemnify, to the extent
permitted by law, the Company, its officers and directors and each Person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages, liabilities, expenses, actions or
proceedings resulting from any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or preliminary prospectus
or any amendment thereof or supplement thereto, or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is made in reliance on or in conformity with any
information so furnished in writing by such participating Holder expressly for
use therein.
Any Person entitled to indemnification under the provisions of this
Section 5 shall (i) give prompt notice to the indemnifying party of any claim
with respect to which it seeks indemnification, and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, permit
such indemnifying party to assume the defense of such claim, with counsel
reasonably satisfactory to the indemnified party; and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement attributes liability to the
indemnified party and such indemnifying party shall not be subject to any
liability for any settlement made without its consent (which shall not be
unreasonably withheld); and any underwriting agreement entered into with respect
to any registration statement provided for hereunder shall so provide. In the
event an indemnifying party shall not be entitled, or elects not, to assume the
defense of a claim, such indemnifying party shall not be obligated to pay the
fees and expenses of more than one counsel or firm of counsel (plus one local
counsel or firm of counsel) for all parties indemnified by such indemnifying
party hereunder in respect of such claim, unless in the reasonable judgment of
any such indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties in respect to such
claim. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Holder Indemnified Party and shall
survive the transfer of such securities by such Holder Indemnified Party.
(b) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall con-tribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, or (ii) if the allocation provided by subdivision (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. Notwithstanding the
foregoing, no Holder shall be required to
Class "AA" Warrant No. C-8
19
contribute any amount in excess of the amount such Holder would have been
required to pay to an indemnified party if the indemnity under subdivision (a)
of this Section 5 was available. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The obligation of any underwriters to contribute
pursuant to this Section 5 shall be several in proportion to their respective
underwriting commitments and not joint.
(c) An indemnifying party shall make payments of all amounts required
to be made pursuant to the fore-going provisions of this Section 5 to or for the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due and payable.
6. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS
In the case of a registration under Section 2.1, if any Holder
determines to enter into an underwriting agreement in connection there-with or,
in the case of a registration under Section 2.2, if the Company determines to
enter into an underwriting agreement in connection therewith, all Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement and no Person may participate in such registration unless
such Person agrees to sell such Person's securities on the basis provided in
such underwriting agreement and completes and/or executes all questionnaires,
indemnities, and other reasonable documents which must be executed under the
terms of such underwriting agreement.
7. ALLOCATION OF SECURITIES INCLUDED IN REGISTRATION STATEMENT
In the case of a registration pursuant to Section 2.2, if the Company's
managing underwriter shall advise the Company and the Holders in writing that
the inclusion in any registration pursuant hereto of some or all of (a) the
Registrable Securities sought to be registered by the Holders, and (b) the
Company Securities sought to be registered creates a substantial risk that the
proceeds or price per unit that will be derived from such registration will be
reduced or that the number of securities to be registered is too large a number
to be reasonably sold, (i) first, the number of Company Securities (or
securities of other Persons exercising "demand rights") sought to be registered
shall be included in such registration, and (ii) next, the number of Registrable
Securities and other securities of holders exercising "piggyback rights" shall
be included in such registration to the extent permitted by the Company's
managing underwriter (if the offering is underwritten) with the number of
Registrable Securities and such other securities being registered being on a pro
rata basis based on the number of securities the participating Holders and each
such other holder desire to have registered; provided, however, that, if any
participating Holder would be required pursuant to the provisions of this
Section 7 to reduce the number of Registrable Securities that it may include in
such registration, such participating Holder may withdraw all or any portion of
its Registrable Securities from such registration.
Class "AA" Warrant No. C-9
20
8. LIMITATIONS ON SALE OR DISTRIBUTION OF SECURITIES
If a registration hereunder shall be in connection with an underwritten
public offering, the participating Holders shall be deemed to have agreed by
acquisition of their Registrable Securities not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the Securities Act,
of any Registrable Securities and to use their best efforts not to effect any
such public sale or distribution of any other equity security of the Company or
of any security convertible into or exchangeable or exercisable for any equity
security of the Company (other than as part of such underwritten public
offering) within 10 days before or 90 days after the effective date of such
registration statement. In such event, such participating Holders agree, if
requested, to sign a customary market stand-off letter with the Company's
managing underwriter, and to comply with applicable rules and regulations of the
Commission.
9. RULE 144
The Company covenants that it will file the reports required to be
filed under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder (or, in the event that the
Company is not required to file such reports, it will make publicly available
information as set forth in Rule 144(c)(2) promulgated under the Securities
Act), and it will take such further action as any Holder may reasonably request,
or to the extent required from time to time to enable the Holders to sell their
Registrable Securities without registration under the Securities Act within the
limitation of the exemption provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission (collectively, "Rule 144"). Upon
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
10. REGISTRATION RIGHTS OF OTHERS
If the Company shall at any time hereafter provide any Person any
Company rights with respect to the registration of any securities of the Company
under the Securities Act, such rights shall not be in conflict with any of the
rights provided herein to the Holders.
11. TRANSFER OF REGISTRATION RIGHTS
If and to the extent that any Holder sells or otherwise disposes of
Registrable Securities in any transaction that does not require registration
under the Securities Act (other than a transaction exempt under Rule 144), the
rights of the Holder hereunder with respect to such Registrable Securities will
be assignable to the transferee of such Registrable Securities; provided,
however, that such transferee agrees in writing to be bound by all the terms and
conditions of this Exhibit C.
Class "AA" Warrant No. C-10
