EXHIBIT 4.4
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of January 29, 1998 by and among MERGE
TECHNOLOGIES INCORPORATED, a Wisconsin corporation (the "Company"), and
X.X. XXXXXXXXXX & CO., INC. ("Xxxxxxxxxx" or the "Representative").
WHEREAS, the Company and the Representative have entered into an
Underwriting Agreement of even date herewith (the "Underwriting
Agreement"); and
WHEREAS, the Company proposes to issue to the Representative
warrants, as hereinafter described, (the "Warrants") to purchase an
aggregate of 190,000 shares, subject to adjustment as hereinafter provided
(the "Shares"), of the Company's common stock, par value $0.01 per share
(the "Common Stock").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration,
the parties hereto agree as follows:
I. ISSUANCE OF WARRANTS, FORM OF WARRANT. As more fully set forth below,
the Company will issue, sell and deliver the Warrants to the Representative
or its bona fide officers or partners, as named by the Representative in
accordance with Section 5(p) of the Underwriting Agreement, for an
aggregate price of $1.00, concurrently with the closing (the "Closing")
under the Underwriting Agreement relating to the public offering, pursuant
to a registration statement on Form SB-2 (File No. 333-39111) (the
"Registration Statement"), of 1,900,000 shares of Common Stock (plus an
option to purchase up to an additional 285,000 shares of Common Stock to
cover over-allotments) (the "Offering"). The form of the Warrants shall be
substantially as set forth on EXHIBIT A, attached hereto. The Warrants
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future Chairman of the Board, President or
Vice President of the Company, under its corporate seal, affixed or in
facsimile, attested by the manual or facsimile signature of the present or
any future Secretary or Assistant Secretary or Treasurer or Assistant
Treasurer of the Company.
II. The Warrants shall be numbered and shall be registered in a Warrant
register as they are issued. The Company shall be entitled to treat the
registered holder of any Warrant on the Warrant register (the "Warrant
Holder") as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person, and shall not be liable for any
registration of transfer of Warrants which are registered or are to be
registered in the name of or at the direction of a fiduciary or the nominee
of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration of
transfer, or with such knowledge of such facts that its participation
therein amounts to bad faith. The Warrants shall be registered initially
in the name of "X.X. Xxxxxxxxxx & Co., Inc." in such denominations as the
Representative may request in writing to the Company; PROVIDED, HOWEVER,
that prior to the Closing, the Representative may designate that its
Warrants be issued in varying amounts directly to its bona fide officers or
partners and not to it directly in accordance with Section 5(p) of the
Underwriting Agreement. Such designation will only be made by the
Representative if it determines such issuances would not violate the rules
and interpretations of the Board of Governors of the National Association
of Securities Dealers, Inc. (the "NASD") relating to the review of
corporate financing arrangements, and subject to applicable federal and
state securities law.
III. TRANSFER OF WARRANTS. The Warrants may not be transferred, assigned,
pledged, hypothecated, sold, made subject to a security interest, or
otherwise transferred, in part or in whole, prior to the first anniversary
of the effective date of the Registration Statement (the "Effective Date"),
except to the bona fide officers or partners of the Representative, and
subject to applicable federal and state securities law, and only on the
books of the Company upon delivery thereof duly endorsed by the Warrant
Holder or by his duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer. In
all cases of transfer by an attorney, the original power of attorney, duly
approved, or an official copy thereof, duly certified, shall be deposited
with the Company. In case of transfer by executors, administrators,
guardians or other legal representative, duly authenticated evidence of
their authority shall be produced and may be required to be deposited with
the Company in its discretion. Upon any registration of transfer, the
Company shall deliver a new Warrant or new Warrants to the persons entitled
thereto. A Warrant may be exchanged at the option of the Warrant Holder
thereof for another Warrant, or other Warrants, of different denominations,
of like tenor and representing in the aggregate the right to purchase a
like number of shares of Common Stock upon surrender to the Company or its
duly authorized agent. Notwithstanding the foregoing, the Company shall
have no obligation to cause a Warrant to be transferred on its books to any
person unless the Warrant Holder thereof shall furnish to the Company
evidence of compliance with the Securities Act of 1933, as amended (the
"Act"), and applicable state securities law, in accordance with the
provisions of Section 10 of this Agreement.
IV.TERM OF WARRANTS; EXERCISE OF WARRANTS. Each Warrant entitles the
Warrant Holder thereof to purchase one Share at a purchase price of $7.80
per Share (the "Exercise Price") at any time from the first anniversary of
the Effective Date (except as otherwise set forth herein) until 5:00 p.m.,
Boston time (the "Close of Business"), on the day immediately preceding the
fifth anniversary of the Effective Date (the "Expiration Date"). The
Exercise Price and the number of Shares issuable upon exercise of each
Warrant are subject to adjustment upon the occurrence of certain events,
pursuant to the provisions of Section 8 of this Agreement. Subject to the
provisions of this Agreement, each Warrant Holder shall have the right,
which may be exercised as set forth in such Warrant, to purchase from the
Company (and the Company shall issue and sell to such Warrant Holder) the
number of fully paid and nonassessable Shares specified in such Warrant
Holder's Warrant, upon surrender to the Company, or its duly authorized
agent, of such Warrant, with an election to purchase attached thereto in
the form of EXHIBIT B to this Agreement, duly completed and signed, with
(if requested by the Company within two business days of surrender of the
Warrant with the election to purchase) signatures guaranteed by a member
firm of a national securities exchange, a commercial bank (not a savings
bank or savings and loan association) or trust company located in the
United States or a member of the NASD, and upon payment to the Company of
the Exercise Price, as adjusted in accordance with the provisions of
Section 8 of this Agreement, for the number of Shares in respect of which
such Warrant is then exercised. Notwithstanding the method of exercise set
forth in any Warrant (or anything to the contrary herein), in the event
that the Warrant Holder thereof has not exercised such Warrant prior to the
Close of Business on the Expiration Date and the current market price per
share of Common Stock at the Close of Business on the Expiration Date (as
determined substantially in accordance with Section 8(d), but using the
closing prices or quotations, as the case may be, on such Expiration Date
rather than a 30-day average) is greater than the Exercise Price, then the
Warrant Holder thereof shall be deemed to have exercised such Warrant in
full immediately prior to the Close of Business on the Expiration Date (an
"Automatic Exercise"). Payment of the Exercise Price may be made in cash or
by check payable to the order of the Company in the amount obtained by
multiplying the number of Shares for which such Warrant is then being
exercised by the Exercise Price then in effect (such amount, the "Exercise
Payment"), except that the Warrant Holder may, at its option, elect to pay
the Exercise Payment by delivering to the Company the number of shares of
Common Stock determined by dividing the Exercise Payment by the current
market price (as defined in paragraph (d) of Section 8) of a share of
Common Stock on the date of exercise or by canceling a portion of such
Warrant that is equal to the number of shares determined by dividing the
Exercise Payment by the current market price (as defined in paragraph (d)
of Section 8) of a share of Common Stock as of the date of exercise. In
the event of an Automatic Exercise of any Warrant, the Warrant Holder
thereof shall be deemed to have chosen to cancel the portion of its Warrant
that is equal to the number of shares determined by dividing the Exercise
Payment by the current market price (as defined in paragraph (d) of Section
8) of a share of Common Stock as of the Close of Business on the Expiration
Date. Except as set forth in Section 8, no adjustment shall be made for
any dividends on any Shares issuable upon exercise of a Warrant. Upon each
surrender of Warrants and payment of the Exercise Payment as aforesaid, or
upon the occurrence of an Automatic Exercise, the Company shall issue and
cause to be delivered with all reasonable dispatch (but in any event within
three (3) business days) to or upon the written order of the Warrant Holder
and (subject to receipt of evidence of compliance with the Act and
applicable state securities laws in accordance with the provisions of
Section 10 of this Agreement) in such name or names as such Warrant Holder
may designate, a certificate or certificates for the number of full Shares
so purchased upon the exercise of such Warrant, together with cash, as
provided in Section 9 of this Agreement, in respect of any fractional
Shares otherwise issuable upon such surrender. Such certificate or
certificates shall be deemed to have been issued, and any person so
designated to be named therein shall be deemed to have become a holder of
record of such Shares, as of the date of the surrender of such Warrant and
payment of the Exercise Payment as aforesaid, or as of the date of the
Automatic Exercise; PROVIDED, HOWEVER, that if, at the date of surrender of
such Warrant and payment of such Exercise Payment, the transfer books for
the Common Stock or other class of stock purchasable upon the exercise of
such Warrant shall be closed, the certificates for the Shares shall be
issuable as of the date on which such books shall next be opened (whether
before, on or after the Expiration Date), and until such date the Company
shall be under no duty to deliver any certificate for such Shares; PROVIDED
FURTHER, HOWEVER, that the transfer books of record, unless otherwise
required by law, shall not be closed at any one time for a period longer
than four (4) days. The rights of purchase represented by a Warrant shall
be exercisable, at the election of the Warrant Holder thereof, either in
full or from time to time in part and, in the event that any Warrant is
exercised in respect of fewer than all of the Shares purchasable on such
exercise at any time prior to the Expiration Date, a new Warrant or new
Warrants will be issued for the remaining number of Shares specified in the
Warrant or Warrants so surrendered.
V.PAYMENT OF TAXES. The Company will pay all documentary stamp taxes, if
any, attributable to the issuance of Shares upon the exercise of a Warrant;
PROVIDED, HOWEVER, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the
issuance or delivery of any certificates for Shares in a name other than
that of the Warrant Holder who exercised the Warrant in respect of which
such Shares are issued.
VI.MUTILATED OR MISSING WARRANTS. In case any Warrant shall be mutilated,
lost, stolen or destroyed, the Company shall issue and deliver in exchange
and substitution for and upon cancellation of the mutilated Warrant, or in
lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction of such Warrant or an indemnity, also
reasonably satisfactory to the Company.
VII.RESERVATION OF SHARES, ETC. There have been reserved, and the Company
shall at all times keep reserved, out of the authorized and unissued Common
Stock, an aggregate number of shares of Common Stock sufficient to provide
for the exercise of the rights of purchase represented by the outstanding
Warrants. In addition, upon any adjustment to the number and kind of
securities purchasable upon exercise of the Warrants, the Company shall
reserve, and shall at all times thereafter keep reserved, out of the
authorized and unissued Common Stock or such other kind of securities, an
aggregate number of shares of Common Stock or shares, units or otherwise of
such other kind of securities sufficient to provide for the exercise of the
rights to purchase represented by the outstanding Warrants. After the
Effective Date, the transfer agent for the Common Stock (the "Transfer
Agent"), and every subsequent Transfer Agent, if any, for Shares issuable
upon the exercise of any of the rights of purchase represented by the
Warrants, will be irrevocably authorized and directed at all times until
the Expiration Date to reserve such aggregate number of authorized and
unissued shares of Common Stock as shall be required for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent
and with every subsequent Transfer Agent for any Shares issuable upon the
exercise of the rights of purchase represented by the Warrants. The
Company will supply any such Transfer Agent with duly executed stock
certificates for such purpose and will itself provide or otherwise make
available any cash which may be distributable as provided in Section 9 of
this Agreement. Any Warrant surrendered in the exercise of the rights
thereby evidenced shall be canceled, and until delivery to the person
surrendering such Warrant of stock certificates representing the Shares to
be issued to such person as a result of such exercise, such canceled
Warrant shall constitute sufficient evidence of the number of Shares that
have been issued upon the exercise of such Warrant. No shares of Common
Stock shall be subject to reservation in respect of any unexercised Warrant
subsequent to the Expiration Date.
VIII.ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number and kind of securities purchasable upon exercise of
each Warrant shall be subject to adjustment from time to time upon the
happening of certain events, as follows:
X.Xx case the Company shall (i) declare a dividend on its Common Stock in
shares of Common Stock or make a distribution in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a greater number
of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or (iv) issue by
reclassification of its shares of Common Stock other securities of the
Company, other than any such reclassification to which paragraph (j) of
this Section 8 applies, the number of Shares purchasable upon exercise of
each Warrant immediately prior thereto shall be adjusted so that the
Warrant Holder thereof shall be entitled to receive the kind and number of
shares of Common Stock or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event, retroactive
to the record date, if any, for such event.
X.Xx case the Company shall issue rights, options or warrants to all
holders of its Common Stock, entitling them to subscribe for or to purchase
shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than "poison pill" rights referred to in paragraph (1)
of this Section 8) at a price per share (or having a conversion price per
share) that is lower on the record date for the determination of
stockholders entitled to receive such rights, options or warrants than the
then current market price per share of Common Stock (as defined in
paragraph (d) below), the number of Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of
Shares theretofore purchasable upon exercise of such Warrant by a fraction,
of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the record date for the
determination of stockholders entitled to receive such rights, options or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible securities so
offered are initially convertible), and of which the denominator shall be
the number of shares of Common Stock outstanding at the close of business
on the record date for the determination of stockholders entitled to
receive such rights, options or warrants plus the number of shares which
the aggregate offering price of the total number of shares of Common Stock
so offered (or the aggregate initial conversion price of the convertible
securities so offered) would purchase at the then current market price per
share of Common Stock. Such adjustment shall be made whenever such rights,
options or warrants are issued, and shall become effective retroactively to
the record date for the determination of stockholders entitled to receive
such rights, options or warrants.
X.Xx case the Company shall distribute to all holders of its Common Stock
shares of stock (other than Common Stock) or evidences of its indebtedness
or assets (excluding cash dividends out of retained earnings and dividends
or distributions referred to in paragraph (a) of this Section 8) or rights,
options or warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock (excluding
those referred to in paragraph (b) above and paragraph (1) below), then in
each case the number of Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Shares
theretofore purchasable upon the exercise of such Warrant by a fraction, of
which the numerator shall be the current market price per share of Common
Stock (as defined in paragraph (d) below) on the record date mentioned
below in this paragraph (c), and of which the denominator shall be the
current market price per share of Common Stock on such record date, less
the then fair value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of the portion of the
shares of stock or assets or evidences of indebtedness so distributed or of
such subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution, retroactive to the record
date for the determination of stockholders entitled to receive such
distribution.
D.For the purpose of any computation under paragraphs (b) and (c) of this
Section 8 or under Section 4 or Section 9, the current market price per
share of Common Stock at any date shall be deemed to be the average of the
daily closing prices per share for the 30 consecutive trading days
commencing 45 trading days before the date of such computation. The
closing price for each day shall be the last reported sale price regular
way or, in case no such reported sale takes place on such day, the average
of the closing bid and asked prices regular way for such day, in either
case on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading, or if the Common Stock is
not listed or admitted to trading on any national securities exchange, but
is traded in the over-the-counter market, the closing sale price of the
Common Stock or, in case no sale is publicly reported, the average of the
closing bid and asked quotations for the Common Stock on the Nasdaq
National Market System ("NASDAQ") or any comparable system, or if the
Common Stock is not listed on NASDAQ or a comparable system, the closing
sale price of the Common Stock or, in case no sale is publicly reported,
the average of the closing bid and asked prices as furnished by two members
of the NASD selected from time to time by the Company for that purpose.
X.Xx adjustment in the number of Shares purchasable upon exercise of each
Warrant shall be required unless such adjustment would require an increase
or decrease of at least one percent (I%) in the number of Shares
purchasable upon the exercise of each Warrant; PROVIDED, HOWEVER, that any
adjustments which by reason of this paragraph (e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one thousandth
of a share.
F.Whenever the number of Shares purchasable upon the exercise of each
Warrant is adjusted, as herein provided, the Exercise Price shall be
adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, of which the numerator shall be the number of
Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment, and of which the denominator shall be the number of Shares
so purchasable immediately thereafter.
G.For the purpose of this Section 8, the term "shares of Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement or (ii) any other class of stock
resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time,
as a result of an adjustment made pursuant to paragraph (a) above, any
Warrant Holder shall become entitled to purchase any shares of capital
stock of the Company other than shares of Common Stock, thereafter the
number of such other shares so purchasable upon exercise of each Warrant
and the Exercise Price thereof 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 contained in this Section 8, and the
provisions of Sections 4, 5, 7, 9 and 12, with respect to the Shares, shall
apply on like terms to any such other shares.
H.The Company may, at its option, at any time during the term of a Warrant,
reduce, either temporarily or permanently, the then current Exercise Price
to any amount deem appropriate by the Board of Directors of the Company;
PROVIDED, HOWEVER, that any such reduction may be temporary only to the
extent that Warrant Holders receive written notice from the Company stating
the term of such temporary reduction; and FURTHER PROVIDED, that following
the expiration of such temporary reduction, the Exercise Price may not be
raised to an amount excess of the Exercise Price in effect immediately
prior to such temporary reduction.
I.Whenever the number of Shares purchasable upon the exercise of each
Warrant or the Exercise Price of such Shares is adjusted, as herein
provided, the Company shall promptly mail by first class mail, postage
prepaid, to each Warrant Holder notice of such adjustment or adjustments.
The Company may retain a firm of independent public accountants (who may be
the regular accountants employed by the Company) to make any computation
required by this Section 8 and shall cause such accountants to prepare a
certificate setting forth the number of Shares purchasable upon the
exercise of each Warrant and the Exercise Price thereof after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made. Such certificate shall be conclusive evidence of the correctness of
such adjustment, and each Warrant Holder shall have the right to inspect
such certificate during reasonable business hours.
X.xxxx of any consolidation of the Company with or merger of the Company
with and into another corporation or other entity or any consolidation with
or merger of any other corporation or other entity with and into the
Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of Shares and in which the Company is
the surviving corporation) or in case of any sale or conveyance to another
corporation or other person or entity of the property of the Company as an
entirety or substantially as an entirety, (i) notwithstanding the
provisions of Section 4 hereof, each Warrant Holder shall have the right to
exercise any Warrant then held immediately prior to such consolidation,
merger, sale or conveyance upon payment of the Exercise Price then in
effect an (ii) with respect to any Warrants which are not exercised as
provided in clause (i) above, the Company or such successor or purchasing
corporation or person or entity (or an affiliate of such successor or
purchasing corporation or person or entity), as the case may be, agrees
that each Warrant Holder shall have the right after the happening of any
such consolidation, merger, sale or conveyance (except for a consolidation,
merger, sale or conveyance in which the consideration received by the
Company's stockholders consists solely of cash) upon payment of the
Exercise Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of shares and other securities
and property which he would have owned or have been entitled to receive
after the happening of such consolidation, merger, sale or conveyance had
such Warrant been exercised immediately prior to such action and the
securities issued upon such exercise been held since the date of such
exercise. The provisions of this paragraph (j) shall similarly apply to
successive consolidations, mergers, sales or conveyances.
K.Notwithstanding any adjustment in the Exercise Price or the number or
kind of shares purchasable upon the exercise of a Warrant pursuant to this
Agreement, a certificate for a Warrant issued prior or subsequent to such
adjustment may continue to express the same price and number and kind of
shares as are initially issuable pursuant to this Agreement.
L.Notwithstanding the foregoing, in the event that the Company shall
distribute "poison pill" rights pursuant to a "poison pill" stockholder
rights plan (the "Rights"), the Company shall, in lieu of making any
adjustment pursuant to Section 8(b) or Section 8(c) hereof, make proper
provision so that each Warrant Holder who exercises a Warrant after the
record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such exercise, in addition
to the Shares issuable upon such exercise, a number of Rights to be
determined as follows: (i) if such exercise occurs on or prior to the date
for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights
to which a holder of a number of shares of Common Stock equal to the number
of Shares issuable upon such exercise at the time of such exercise in
accordance with the terms and provisions of and applicable to the Rights;
and (ii) if such exercise occurs after the Distribution Date, the same
number of Rights to which a holder of the number of Shares into which the
Warrant so exercised was exercisable immediately prior to the Distribution
Date would have been entitled on the Distribution Date in accordance with
the terms and provisions of and applicable to the Rights.
IX.FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of Shares on the exercise of a Warrant. If more than one Warrant
shall be presented for exercise in full at the same time by the same
Warrant Holder, the number of Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Share would, except for the provisions of this Section 9, be
issuable on the exercise of any Warrant (or specified portions thereof),
the Company shall purchase such fraction from the Warrant Holder for an
amount in cash equal to the same fraction of the current market price per
share of Common Stock (determined as provided in paragraph (d) of Section
8) on the date of exercise.
X.RESTRICTIONS ON DISPOSITION. The issuance of the Warrants has not been
registered under the Act pursuant to the Registration Statement. The
Representative represents and warrants to the Company that it understands
that neither the Warrants nor the Shares may be transferred except pursuant
to (i) an effective registration statement under the Act or (ii) any
available rule or exemption from registration under the Act permitting such
disposition.
XI.CERTIFICATES TO BEAR LEGENDS. Each Warrant shall be subject to a stop-
transfer order and the certificate or certificates therefor shall bear the
following legend:
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE WARRANTS REPRESENTED
BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE
OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR (ii) ANY AVAILABLE RULE OR EXEMPTION FROM REGISTRATION
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES.
The Shares or other securities issued upon exercise of a Warrant
shall be subject to a stop-transfer order and the certificate or
certificates evidencing any such Shares or securities shall bear a legend
in substantially the following form:
THE SHARES OR SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND THE SHARES OR OTHER
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
OR (ii) ANY AVAILABLE RULE OR EXEMPTION FROM REGISTRATION UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES.
XII.REGISTRATION RIGHTS.
A.DEMAND REGISTRATION RIGHTS. The Company covenants and agrees the
Representative and any other or subsequent Warrant Holder(s) or registered
holder(s) Shares or registered holder(s) of other securities for which the
Warrants become exercisable purposes of this Section 12, collectively, the
"Warrant Holders" and each a "Warrant Hold that, upon written request (a
"Registration Request") of the then Warrant Holder(s) of at least a
majority of the securities issued and issuable pursuant to the Warrants,
made at any time the period commencing on the first anniversary of the
Effective Date and ending at the Cl Business on the Expiration Date (which,
as set forth in Section 4 hereof is the day immediately preceding the fifth
anniversary of the Effective Date), the Company will file with all
deliberate speed and, in any event, within 45 days after receipt of such
Registration Request, at its so expense, no more than once, and at the
Warrant Holders' expense, no more than once, a registration statement or a
Regulation A offering statement (as requested by the Warrant and if
permitted under the Securities Act) registering or qualifying the Shares or
other sec for which the Warrants become exercisable for sale. Within 15
days after receiving any such notice, the Company shall give notice to the
other Warrant Holders advising that the Company is proceeding with such
registration statement or Regulation A offering statement and offering to
include therein the Shares or other securities for which the Warrants
become exercisable o Warrant Holders. The Company shall not be obligated
to any such other Warrant Holder such other Warrant Holder shall accept
such offer by notice in writing to the Company wit days after receipt of
such notice from the Company. No other securities of the Company s
entitled to participate in such registration or qualification. The Company
will use its best efforts, through its officers, directors, auditors and
counsel in all matters necessary or advisable, to file and cause to become
effective such registration statement or Regulation A offering statement
(if permitted under the Securities Act) as promptly as practicable and for
a period of two year thereafter to reflect in the registration statement or
Regulation A offering statement (if permitted under the Securities Act)
financial statements which are prepared in accordance with Section (a)(3)
of the Securities Act and any facts or events arising that, individually or
in the aggregate, represent a fundamental or material change in the
information set forth in the registration statement or Regulation A
offering statement to enable any Warrant Holder to exercise Warrants and to
sell Shares or other securities for which the Warrants become exercisable,
during such two-year period. If any registration pursuant to this
paragraph (a) underwritten offering, the Company will select an underwriter
(or managing underwriter if such offering should be syndicated) approved by
the Warrant Holders of a majority of the Warrants or Shares or other
securities for which the Warrants become exercisable to be included in such
registration; provided however, that if the Company selects an underwriter
of national stature, such approval will not be unreasonably withheld.
Notwithstanding the foregoing, the Company may postpone the filing of such
registration statement or offering statement for a reasonable period of
time after receipt of the original written Registration Request (not
exceeding 90 days) if, in the good faith opinion of the Company's Board of
Directors, effecting the registration would adversely affect a material or
other comparable transaction or would require the Company to make public
disclosure of information the public disclosure of which would have a
material adverse effect upon the Company.
B.PIGGYBACK REGISTRATION RIGHTS. The Company covenants and agrees with the
Representative and any other or subsequent Warrant Holder(s) that if, at
any time within the period commencing on the first anniversary of the
Effective Date and ending at the Close of Business on the day immediately
preceding the seventh anniversary of the Effective Date, it proposes to
register any class of security under the Act in a primary registration on
behalf of the Company or in a secondary registration on behalf of holders
of such securities and the registration form to be used may be used for
registration of the Shares or other securities for which the Warrants
become exercisable, the Company will give prompt written notice (which, in
the case of a registration pursuant to the exercise of demand registration
rights other than those provided in Section 12(a) of this Agreement, shall
be within 10 business days after the Company's receipt of notice of such
exercise and, in any event, shall be at least 45 days prior to such filing)
to each Warrant Holder (regardless of whether the Warrant Holder shall have
theretofore availed himself or herself of the right provided in Section
12(a)) at the addresses appearing on the records of the Company of its
intention to effect a registration. The Company will offer to include in
such registration such number of Shares or other securities for which the
Warrants are exercisable with respect to which the Company has received
written requests for inclusion therein within 10 days after receipt of
notice from the Company: PROVIDED that in the event that: (i) such
registration is to be underwritten; (ii) such registration is a primary
registration on behalf of the Company; and (iii) with the exception of the
Shares or other securities for which the Warrants become exercisable, such
registration is not a secondary registration on behalf of the holders of
outstanding securities of the Company, the Company shall not be required to
include the Shares or other securities for which the Warrants become
exercisable in such registration to the extent the managing underwriter(s)
determines in good faith that such inclusion would materially adversely
affect the offering being made by such registration. All registrations
requested pursuant to this Section 12(b) are referred to herein as
"Piggyback Registrations." This paragraph is not applicable to a
registration statement filed by the Company on Forms S-4 or S-8 or any
successor forms.
C.ACTION TO BE TAKEN BY THE COMPANY. In connection with the registration
of the Shares or other securities for which the Warrants become exercisable
in accordance with paragraphs (a) or (b) above, the Company agrees to:
1.bear the expense of any registration or qualification under paragraph
(a), on one occasion, or under paragraph (b), on any number of occasions,
including but not limited to legal, accounting and printing fees; PROVIDED,
HOWEVER, that in no event shall the Company be obligated to pay (A) any
fees and disbursements of more than one set of counsel for the Warrant
Holder(s) which reimbursement shall be limited to reasonable attorney's
fees in the event of a registration or qualification under paragraph (b),
or (B) any underwriters' discount or commission in respect to such Shares
or other securities for which the Warrants become exercisable, payment of
which shall, in each case, be the sole responsibility of the respective
Warrant Holder(s) thereof,
2.use its best efforts to register or qualify the Shares or other
securities for which the Warrants become exercisable for offer or sale
under state securities or blue sky laws of such jurisdictions as the
Warrant Holders shall reasonably request and do any and all other acts and
things which may be necessary or advisable to enable the Warrant Holders to
consummate the proposed sale, transfer or other disposition of such
securities in any jurisdiction;
3.furnish to each holder copies of any registration statement for the
Shares or other securities for which the Warrants become exercisable, any
prospectus included in any such registration statement and all amendments
and supplements to such documents, in each case as soon as available and in
such quantities as such Warrant Holder may from time to time reasonably
request; and
4.if registration is to be pursuant to an underwritten offering, enter into
a cross-indemnity agreement in customary form, with each underwriter, if
any, and each Warrant Holder of securities included in such registration
statement.
XIII.NOTICES TO WARRANT HOLDERS-, DISSOLUTION; EXERCISE RIGHTS.
A.Nothing contained in this Agreement or in any Warrant shall be construed
as conferring upon any Warrant Holder the right to vote or to receive
dividends or to consent or to receive notice as a stockholder in respect of
the meetings of stockholders or the election of directors of the Company or
any other matter, or any rights whatsoever as a stockholder of the Company;
PROVIDED, HOWEVER, that in the event that a meeting of stockholders shall
be called to consider and take action on a proposal for the voluntary
dissolution of the Company or a consolidation, merger or sale of all or
substantially all of its property, assets, business and goodwill as an
entirety, then, in that event, the Company shall cause a notice thereof to
be sent by first-class mail, postage prepaid, at least 20 business days
prior to the date fixed as a record date or the date of closing the
transfer books in relation to such meeting, to each Warrant Holder at such
Warrant Holder's address appearing on the Warrant register. If such notice
shall have been so given and if such a voluntary dissolution shall be
authorized at such meeting or any adjournment thereof, then (i)
notwithstanding the provisions of Section 4 hereof, each Warrant Holder
shall have the right, at the election of the Warrant Holder, (A) to
exercise any Warrant then held immediately prior to such voluntary
dissolution upon payment of the Exercise Price then in effect or (B) to
receive, as of the effective date of the dissolution, the fair value of
such Warrant as of the time immediately prior to the authorization of the
dissolution (without taking the dissolution into account) as determined by
the Board of Directors of the Company and (ii) from and after the date on
which such voluntary dissolution shall have been duly authorized by the
stockholders, the purchase rights represented by such Warrant and all other
rights with respect thereto shall cease and terminate.
X.Xx the event the Company intends to make any distribution on its Common
Stock (or other securities which may be purchasable in lieu thereof upon
the exercise of a Warrant), including, without limitation, any such
distribution to be made in connection with a consolidation or merger in
which the Company is the continuing corporation, or to issue subscription
rights or warrants to holders of its Common Stock, the Company shall cause
a notice of its intention to make such distribution to be sent by first-
class mail, postage prepaid, at least 10 business days prior to the date
fixed as a record date or the date of closing the transfer books in
relation to such distribution, to each registered Warrant Holder at such
Warrant Holder's address appearing on the Warrant register.
XIV.NOTICES. Any notice pursuant to this Agreement to be given or made by
any Warrant Holder to the Company shall be sufficiently given or made as of
the third business day following mailing if sent by first-class mail,
postage prepaid, or as of the day after mailing if sent by a nationally
recognized overnight courier, addressed as follows (or to such other
address as the Company may designate by notice given in accordance with
this Section 14 to the Warrant Holder(s)):
Merge Technologies Incorporated
0000 Xxxxx 00xx Xxxxxx
Xxxxx X000X
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: President
Notices or demands authorized by this Agreement to be given or made by the
Company to any Warrant Holder shall be sufficiently given or made (except
as otherwise provided in this Agreement) as of the third business day
following mailing if sent by first-class mail, postage prepaid, or as of
the day after mailing if sent by a nationally recognized overnight courier,
addressed to such Warrant Holder at the address of such Warrant Holder as
shown on the Warrant register, Common Stock register or the register for
such other security for which the Warrants become exercisable.
XV.COVENANT AS TO CERTAIN TRANSACTIONS. The Company shall not consummate
any consolidation, merger, sale or conveyance (as described in Section 80)
hereof) unless prior thereto (a) the successor or purchasing corporation
(or an affiliate of such successor or purchasing corporation), as the case
may be, shall have a sufficient aggregate number of authorized shares and
other securities which have not been issued or reserved for issuance to
permit the exercise in full of the Warrants in accordance with Section 80)
hereof and (b) the Company and such successor or purchasing corporation or
affiliate shall have executed and delivered to each Warrant Holder a
supplemental agreement confirming that the requirements of Section 80)
hereof shall be promptly performed in accordance with their terms and that
such consolidation, merger, sale or conveyance shall not result in a
default by the Company, such successor or purchasing corporation or such
affiliate under this Agreement (as the same shall have been assumed by such
successor or purchasing corporation or such affiliate) and further
providing that such successor or purchasing corporation or such affiliate
shall assume all obligations of the Company hereunder and agree to be bound
hereby. In the event of and after the happening of any such consolidation,
merger, sale or conveyance, the term "the Company," as used herein, shall
be deemed to refer to such successor or purchasing corporation or such
affiliate, as the case may be.
XVI.GOVERNING, LAW. This Agreement and each Warrant issued hereunder shall
be governed by and construed in accordance with the substantive laws of The
Commonwealth of Massachusetts without giving effect to the principles of
conflict of laws thereof.
XVII.COUNTERPARTS. The Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original;
but such counterparts together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day, month and year first above written.
MERGE TECHNOLOGIES INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
X.X. XXXXXXXXXX & CO., INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
EXHIBIT A
----------
(Form of Warrant Certificate)
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
OR (ii) ANY AVAILABLE RULE OR EXEMPTION FROM REGISTRATION UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES.
No.___________ _________ Warrants
VOID AFTER 5:00 P.M., BOSTON TIME
ON _____________, 200[ ]
MERGE TECHNOLOGIES INCORPORATED
Warrant Certificate
THIS CERTIFIES THAT, for value received, __________________, or
registered assigns, is the owner of the number of Warrants set forth above,
each of which entitles the owner thereof to purchase at any time from [
], (except as otherwise set forth in the Warrant Agreement referred to
below), until 5:00 p.m., Boston time on [ ] (the "Expiration Date"), one
fully paid and nonassessable share of the common stock, par value $.01 per
share (the "Common Stock"), of MERGE TECHNOLOGIES INCORPORATED, a Wisconsin
corporation (the "Company"), at the purchase price of $[ ] per share (the
"Exercise Price"), upon presentation and surrender of this Warrant
Certificate with the Form of Election to Purchase duly executed. The
number of Warrants evidenced by this Warrant Certificate (and the number of
shares of Common Stock which may be purchased upon exercise hereof) set
forth above, and the Exercise Price per share set forth above, are the
number and Exercise Price as of the date of original issuance of the
Warrants, based on the shares of Common Stock of the Company as constituted
at such date. As provided in the Warrant Agreement referred to below, the
Exercise Price and the number or kind of securities which may be purchased
upon the exercise of the Warrants evidenced by this Warrant Certificate
are, upon the happening of certain events, subject to modification and
adjustment.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of an agreement dated as of
[ ] (the "Warrant Agreement") by and among the Company and X.X.
Xxxxxxxxxx & Co., Inc., which Warrant Agreement is hereby incorporated
herein by reference and made a part hereof and to which Warrant Agreement
reference is hereby made for a full description of the rights, limitations
of rights, duties and immunities hereunder of the Company and the holder of
the Warrant Certificate. Copies of the Warrant Agreement are on file at
the principal office of the Company.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing Warrants entitling the holder to purchase a like aggregate
number of shares of Common Stock as the Warrants evidenced by the Warrant
Certificate or Warrant Certificates so surrendered entitled such holder to
purchase. If this Warrant Certificate shall be exercised in part, the
holder hereof shall be entitled to receive upon surrender hereof another
Warrant Certificate or Warrant Certificates for the number of whole
Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise
of any Warrant or Warrants evidenced hereby, but in lieu thereof, a cash
payment will be made by the Company, as provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issue of stock, reclassification of stock,
change of par value or change of stock to no par value, consolidation,
merger, conveyance, or otherwise) or, except as provided in the Warrant
Agreement, to receive notice of meetings or to receive dividends or
subscription rights or otherwise, until the Warrant or Warrants evidenced
by this Warrant Certificate shall have been exercised and the shares of
Common Stock or other securities shall have become deliverable as provided
in the Warrant Agreement.
If this Warrant shall be surrendered for exercise within any period
during which the transfer books for the Company's Common Stock or other
securities purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates
for the shares of Common Stock or other securities purchasable upon such
exercise until the date of the reopening of said transfer books, subject to
the terms of the Warrant Agreement.
IN WITNESS WHEREOF, MERGE TECHNOLOGIES INCORPORATED has caused the
signature of its President and Secretary to be printed hereon and its
corporate seal to be printed hereon.
Dated:
MERGE TECHNOLOGIES INCORPORATED
By: _______________________________
President
Attest:
__________________________
Secretary
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Warrant Certificates.)
FOR VALUE RECEIVED, ________________________________________ hereby
sells, assigns and transfers unto
____________________________________________, this Warrant Certificate,
together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _______________________________________
to transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: __________________, _____
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond in all
respects to the name a written upon the face of this Warrant Certificate,
without alteration, enlargement or any change whatsoever.
Accepted:
___________________________
Assignee:
EXHIBIT B
---------
FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate).
TO MERGE TECHNOLOGIES INCORPORATED:
The undersigned hereby irrevocably elects to exercise _____________
Warrants represented by this Warrant Certificate to purchase the shares of
Common Stock issuable upon the exercise of such Warrants and requests that
certificates for such shares be issued in the name of:
Please insert social security or other
identifying number
____________________________
_________________________________________________________________________
(Please print name and address)
_________________________________________________________________________
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of
such Warrants shall be registered in the name of and delivered to:
Please insert social security or other
identifying number
____________________________
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
Dated: _______________, ____
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing election to purchase must correspond
in all respects to the name as written upon the face of this Warrant
Certificate, without alteration, enlargement or any change whatsoever.
