1
EXHIBIT 4.N.5
=================================================================
SERIES A WARRANT
to Purchase Common Stock of
NORAND CORPORATION
=================================================================
Warrant No. A - 5
Original Issue
Date: November 20, 1996
2
TABLE OF CONTENTS
1. DEFINITIONS 1
2. EXERCISE OF WARRANT 11
2.1. Manner of Exercise 11
2.2. Payment of Transfer Taxes 12
2.3. Fractional Shares 12
2.4. Continued Validity and Application 13
2.5. Limitation on Regulated Holder's Exercise 13
3. TRANSFER, DIVISION AND COMBINATION 14
3.1. Transfer 14
3.2. Division and Combination 14
3.3. Expenses 14
3.4. Maintenance of Books 14
4. ANTIDILUTION PROVISIONS 14
4.1. Stock Dividends, Subdivisions and Combinations 14
4.2. Issuance of Additional Shares of Common Stock 15
4.3. Issuances of Stock Purchase Rights and
Convertible Securities 15
4.4. Adjustment of Number of Shares Purchasable 17
4.5. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets 17
4.6. Determination of Consideration 18
4.7. Other Dilutive Events 20
4.8. Other Provisions Applicable to Adjustments Under
this Section 21
5. NO IMPAIRMENT 22
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK 23
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS 23
7.1. Notices of Corporate Actions 23
7.2 Closing of Transfer Books 23
8. TRANSFER RESTRICTIONS 24
8.1. Restrictions on Transfers 24
8.2. Restrictive Legends 24
-i-
3
8.3. Termination of Securities Law Restrictions 25
9. REGISTRATION RIGHTS 26
9.1. Certain Definitions 26
9.2. Demand Registration 27
9.3. Piggyback Registration 29
9.4. Registration Procedures 30
9.5. Selling Holders' Obligations 34
9.6. Expenses of Registration 34
9.7. Indemnification; Contribution 35
9.8. Holdback 40
9.9. Additional Covenants of the Company 40
10. LOSS OR MUTILATION 42
11. OFFICE OF THE COMPANY 42
12. FINANCIAL AND BUSINESS INFORMATION 43
13. REPURCHASE BY THE COMPANY OF WARRANTS 43
14. MISCELLANEOUS 43
14.1. Nonwaiver
14.2. Notice Generally 43
14.3. Indemnification 44
14.4. Limitation of Liability 44
14.5. Remedies 44
14.6. Successors and Assigns 45
14.7. Amendment 45
14.8. Severability 45
14.9. Headings 45
14.10. GOVERNING LAW; JURISDICTION 45
45
ANNEX ASUBSCRIPTION FORM
48
ANNEX BASSIGNMENT FORM
49
SCHEDULE A RESERVED SHARES OF COMMON STOCK
SCHEDULE B UNDERWRITERS AND AGENTS
-ii-
4
NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE OR OF THE SECURITIES ISSUABLE UPON EXERCISE THEREOF SHALL
BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) THE HOLDER OF
THE SECURITIES PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO THE
COMPANY EITHER A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION OR AN OPINION OF COUNSEL EXPERIENCED IN SECURITIES MATTERS
AND REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH
PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR RULE 144A UNDER
THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE COMPANY A
CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE
PROPOSED TRANSFER.
Warrant No. A - 5
SERIES A WARRANT
NORAND CORPORATION
THIS IS TO CERTIFY THAT NORWEST BANK IOWA, NATIONAL
ASSOCIATION, or registered assigns, is entitled, at any time after May 31, 1997
and prior to the Expiration Date (such term, and certain other capitalized
terms used herein being hereinafter defined), to purchase from NORAND
CORPORATION, a Delaware corporation (the "Company"), Twenty-one Thousand Seven
Hundred Seventy-seven (21,777) shares of the Common Stock of the Company
(subject to adjustment as provided herein), at a purchase price of $21.15 per
share (the initial "Exercise Price", subject to adjustment as provided herein),
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.
5
1. DEFINITIONS
As used in this Warrant, the following terms have the
respective meanings set forth below:
"Affiliate" of any Person means a Person (a) which directly or
indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with such Person, (b) which
beneficially owns or holds more than ten percent of the outstanding
shares of any class of voting stock of such Person and has the power
to vote such shares or (c) more than ten percent of the outstanding
shares of any class of voting stock (or, in the case of a Person which
is not a corporation, more than ten percent of the equity interest) of
which is beneficially owned or held by such Person and such Person has
the power to vote such shares or equity interest. The term "control"
as used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"After-Tax Basis", when referring to a payment that is
required hereunder (the "target amount"), shall mean a total payment
(the "total amount") that, after deduction of all federal, state and
local taxes that are required to be paid by the recipient in respect
of the receipt or accrual of such total amount, is equal to the target
amount.
"Agreed Rate" shall mean a rate per annum equal to the
corporate base rate of interest announced by The First National Bank
of Chicago from time to time, changing when and as said corporate base
rate changes.
"Appraised Value" per share of Common Stock as of a date
specified herein shall mean the value of such share as of such date as
determined by an investment bank of nationally recognized standing
selected by the Majority Warrant Holders from Schedule B (or any
successor of any such entity), it being understood that the Majority
Warrant Holders shall use commercially reasonable efforts to select
one of the first three listed entities subject to arriving at
reasonably acceptable terms and conditions for the
-2-
6
appraisal. The Company shall pay the costs and fees of such
investment bank, and the decision of the investment bank making such
determination of Appraised Value shall be final and binding on the
Company and all affected holders of Warrants or Warrant Stock. Such
Appraised Value shall be determined as a pro rata portion of the value
of the Company taken as a whole, based on the higher of (A) the value
derived from a hypothetical sale of the entire Company as a going
concern by a willing seller to a willing buyer (neither acting under
any compulsion) and (B) the liquidation value of the entire Company.
No discount shall be applied on account of (i) any Warrants or Warrant
Stock representing a minority interest, (ii) any lack of liquidity of
the Common Stock or the Warrants, (iii) the fact that the Warrants or
Warrant Stock may constitute "restricted securities" for securities
law purposes or (iv) the existence of any call option.
"Bank Holding Company Act" shall mean the Bank Holding Company
Act of 1956, as amended.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be closed
in the State of Illinois.
"Call" shall have the meaning set forth in Section 13 hereof.
"Call Notice" shall have the meaning set forth in Section 13
hereof.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act and
other federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company, par value $.01 per share,
as constituted on the Original Issue Date, and any capital stock into
which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of any
Common Stock upon any reclassification thereof which is also not
preferred as to dividends or liquidation over any other
-3-
7
class of stock of the Company and which is not subject to redemption
and (ii) shares of common stock of any successor or acquiring
corporation (as defined in Section 4.5 hereof) received by or
distributed to the holders of Common Stock of the Company in the
circumstances contemplated by Section 4.5 hereof.
"Company" means Norand Corporation, a Delaware corporation,
and any successor corporation.
"Company Default" means (a) the breach of any warranty or the
inaccuracy in any material respect at the time when made of any
representation made by the Company herein or (b) the failure by the
Company to comply in any material respect with any covenant of the
Company contained herein.
"Continuously Effective", with respect to a specified
registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Warrant Stock thereunder for
the longer of either (i) any ten consecutive Business Days, or (ii) an
aggregate of fifteen Business Days during the period specified in the
relevant provision of Section 9 hereof.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities that are convertible into or
exchangeable for, with or without payment of additional consideration
in cash or property, shares of Common Stock, either immediately or
upon the occurrence of a specified date or a specified event.
"Credit Agreement" means the Second Amended and Restated
Credit Agreement dated as of January 25, 1996, as thereafter from time
to time amended, supplemented, restated or modified, among the
Company, the Lenders party thereto and The First National Bank of
Chicago, as agent.
"Current Market Price" shall mean as of any specified date the
average of the daily market prices of the Common Stock of the Company
for the shorter of (x) the twenty consecutive Business Days
immediately preceding such date or (y) the period commencing on the
Business Day next following the first public announcement of any event
giving rise to an adjustment of the Exercise Price pursuant to Section
4 below
-4-
8
and ending on such date. The "daily market price" for each such
Business Day shall be: (i) if the Common Stock is then listed on a
national securities exchange or is listed on NASDAQ and is designated
as a National Market System security, the last sale price, regular
way, on such day on the principal stock exchange or market system on
which such Common Stock is then listed or admitted to trading, or, if
no such sale takes place on such day, the average of the closing bid
and asked prices for the Common Stock on such day as reported on such
stock exchange or market system or (ii) if the Common Stock is not
then listed or admitted to trading on any national securities exchange
or designated as a National Market System security on NASDAQ but is
traded over-the-counter, the average of the closing bid and asked
prices for the Common Stock as reported on NASDAQ or the Electronic
Bulletin Board or in the National Daily Quotation Sheets, as
applicable.
"Demand Registration" shall have the meaning set forth in
Section 9.2(a) hereof.
"Demanding Holders" shall have the meaning set forth in
Section 9.2(a) hereof.
"Designated Office" shall have the meaning set forth in
Section 11 hereof.
"Equity" shall mean equity capital (not including the equity
capital attributable to the Settlement Stock, and any mandatory
redemption terms of which equity capital are acceptable to the
Majority Warrant Holders) raised by and/or contributed to the Company
subsequent to the Original Issue Date or new Indebtedness (as defined
in the Credit Agreement) subordinated to the Obligations (as defined
in the Credit Agreement), provided the terms of such Indebtedness
(including, without limitation, maturity, amortization, covenants,
defaults, remedies and subordination provisions) are acceptable to the
Majority Warrant Holders.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
-5-
9
"Exercise Notice" shall have the meaning set forth in Section
2.1 hereof.
"Exercise Period" shall mean the period during which this
Warrant is exercisable pursuant to Section 2.1 hereof.
"Exercise Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the initial Exercise Price set
forth in the preamble of this Warrant as adjusted from time to time
pursuant to Section 4 hereof.
"Expiration Date" shall mean August 31, 2002, unless extended
under the circumstances contemplated by Section 9.2(d) hereof.
"Fair Value" per share of Common Stock as of any specified
date shall mean (A) if the Common Stock is publicly traded on such
date, the Current Market Price per share or (B) if the Common Stock is
not publicly traded on such date, (1) the fair market value per share
of Common Stock as determined in good faith by the Board of Directors
of the Company and set forth in a written notice to each Holder or (2)
if the Majority Warrant Holders object in writing to such price as
determined by the Board of Directors within thirty days after
receiving notice of same, the Appraised Value per share as of such
date.
"Fully Diluted Outstanding" shall mean, when used with
reference to Common Stock, at any date as of which the number of
shares thereof is to be determined, all shares of Common Stock
Outstanding on such date and all shares of Common Stock issuable in
respect of (x) the Warrants outstanding on such date, (y) any
Convertible Securities outstanding on such date and (z) any other
Stock Purchase Rights outstanding on such date, in each case
regardless of whether or not the conversion, exchange, subscription or
purchase rights associated with such Convertible Securities or Stock
Purchase Rights are presently exercisable.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as from time to time in effect.
-6-
10
"Xxxxx-Xxxxxxxx Act" shall mean Section 24 (Seventh),
Section 78, Section 377 and Section 378 of Title 12 (12 U.S.C.
Section Section 24 (Seventh) 78, 377, 378), or any similar
federal legislation.
"Holder" shall mean (a) with respect to this Warrant, the
Person in whose name the Warrant set forth herein is registered on the
books of the Company maintained for such purpose and (b) with respect
to any other Warrant or shares of Warrant Stock, the Person in whose
name such Warrant or Warrant Stock is registered on the books of the
Company maintained for such purpose.
"Insolvency Event" shall mean any proceeding being instituted
by or against the Company seeking a declaration or order for relief,
or entailing a finding, that the Company is insolvent or bankrupt, or
seeking reorganization, liquidation, dissolution, winding-up, charter
revocation or other similar relief with respect to the Company or any
of its properties, assets or debts, or seeking the appointment of a
receiver, trustee, custodian, liquidator, sequestrator or similar
official for the Company or any of its properties or assets, or the
Company becoming insolvent or bankrupt or generally unable to pay its
debts as they become due, or the Company voluntarily suspending its
business or making a general assignment for the benefit of creditors;
provided that an Insolvency Event shall not be deemed to have occurred
on account of any such proceeding which is involuntary on the part of
the Company unless same shall not have been dismissed or stayed within
60 days.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any lease or title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security
interest under the Uniform Commercial Code or comparable law of any
jurisdiction).
-7-
11
"Majority Warrant Holders", with respect to a given
determination, shall mean the Holders of Warrants and/or Warrant Stock
representing at least seventy-six percent (76%) of all Warrants and/or
Warrant Stock (with any such Warrants being deemed to represent, for
the purposes of such calculation, the shares of Warrant Stock then
issuable upon exercise thereof) directly affected by such
determination.
"Majority Selling Holders" shall mean those Selling Holders
whose Warrants and/or Warrant Stock included in a registration under
Section 9 hereof represents a majority of the Warrants and/or Warrant
Stock (with any such Warrants being deemed to represent, for the
purposes of such calculation, the shares of Warrant Stock then
issuable upon exercise thereof) included therein by all Selling
Holders.
"NASD" shall mean the National Association of Securities
Dealers, Inc., or any successor corporation thereto.
"NASDAQ" shall mean the NASDAQ quotation system, or any
successor reporting system.
"Notes" shall mean any of the promissory notes issued by the
Company under the Credit Agreement.
"Opinion of Counsel" means a written opinion of counsel
experienced in Securities Act or bank regulatory matters, as the case
may be, chosen by the Holder of this Warrant or Warrant Stock issued
upon the exercise hereof and reasonably acceptable to the Company.
"Original Issue Date" shall mean the date on which the
Original Warrants were issued, as set forth on the cover page of this
Warrant.
"Original Warrants" shall mean the Warrants originally issued
by the Company on the Original Issue Date to each of The First
National Bank of Chicago, Fleet Bank of Massachusetts, N.A., The Daiwa
Bank, Limited, Norwest Bank Iowa, National Association and Caisse
Nationale de Credit Agricole.
"Other Property" shall have the meaning set forth in Section
4.5 hereof.
-8-
12
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock, except shares then
owned or held by or for the account of the Company or any Subsidiary
thereof, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional
interests in shares of Common Stock. "Outstanding", when used with
respect to Warrant Stock for the purposes of Section 9 hereof shall
have the meaning set forth in Section 9.1(d) hereof.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust,
incorporated organization, association, corporation, institution,
public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department
thereof).
"Piggyback Registration" shall have the meaning set forth in
Section 9.3(a) hereof.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act, and the
declaration or ordering by the Commission of effectiveness of such
registration statement or document.
"Registration Expenses" shall have the meaning set forth in
Section 9.6(a) hereof.
"Restricted Common Stock" shall mean shares of Common Stock
which are, or which upon their issuance on the exercise of this
Warrant would be, evidenced by a certificate bearing the restrictive
legend set forth in Section 8.2(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at
the time.
-9-
13
"Selling Holders" shall mean, with respect to a specified
registration under Section 9 hereof, WS Holders whose Registrable
Securities are included in such registration.
"Series A Warrants" shall mean all of the Series A Warrants to
Purchase Common Stock of Norand Corporation, issued concurrently with,
and having the same terms (other than the number of shares purchasable
upon the exercise thereof) as, this Warrant.
"Series B Warrants" shall mean all of the Series B Warrants to
Purchase Common Stock of Norand Corporation issued concurrently with
this Warrant.
"Settlement Stock" shall mean the shares of Common Stock
contemplated to be issued in settlement of the pending shareholders'
claims against the Company with respect to the litigation styled In re
Norand Corporation Securities Litigation, Master File No. C95- 323,
pending in the United States District Court for the Northern District
of Iowa, Cedar Rapids Division.
"Share Withholding Option" has the meaning set forth in
Section 2.1(c) hereof.
"Shelf Registration" shall have the meaning set forth in
Section 9.2(a) hereof.
"Stock Purchase Rights" shall mean any options, warrants or
other securities or rights to subscribe to or exercisable for the
purchase of shares of Common Stock or Convertible Securities, whether
or not immediately exercisable, other than the options, warrants or
other rights described in Schedule A hereto.
"Subsequent Issuance" shall mean any sale or issuance by the
Company of Common Stock, Convertible Securities or Stock Purchase
Rights after the Original Issue Date other than:
(i) Any issuance of Warrant Stock upon exercise of
the Warrants and any issuance of Common Stock, Convertible
Securities or Stock Purchase Rights (and
- 10 -
14
any issuance of Common Stock pursuant to the conversion,
exchange or exercise of any such Convertible Securities or
Stock Purchase Rights) deemed to have been issued as of the
Original Issue Date pursuant to the definition of Fully
Diluted Outstanding.
(ii) Any issuance of Common Stock pursuant to the
exercise of the options and warrants described in Schedule A
hereto, provided, however, that the exercise price of any such
option or warrant (other than warrants granted to Xxx Xxxx and
Associates and to Xxxxxx X. Xxxxxx for up to the respective
number of shares set forth on Schedule A) granted or issued
after the Original Issue Date shall not be less than the
"daily market price" (as that term is defined in the
definition of Current Market Price) of the Common Stock on the
date of grant or issue of the option or warrant.
(iii) The issuance of the Settlement Stock.
(iv) The issuance of Common Stock or Convertible
Securities directly related to the Company's receipt of Equity
if, and only if, the aggregate Equity actually received by the
Company between the Original Issue Date and August 31, 1997
equals or exceeds $20 million (otherwise, after August 31,
1997, all such issuances, both prior to and after August 31,
1996, shall be considered a Subsequent Issuance for purposes
of Section 4 hereof).
(v) Any other issuance of Common Stock, Convertible
Securities or Stock Purchase Rights with respect to which the
Majority Warrant Holders shall have waived application of the
provisions of Section 4 below.
"Subsidiary" means any corporation or association (a) more
than 50% (by number of votes) of the voting stock of which is at the
time owned by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries, or any other business entity in
which the Company or one or more Subsidiaries or the Company and one
or more Subsidiaries own more than a 50% interest either in the
-11-
15
profits or capital of such business entity or (b) whose net earnings,
or portions thereof, are consolidated with the net earnings of the
Company and are recorded on the books of the Company for financial
reporting purposes in accordance with GAAP.
"Transfer" shall mean any disposition of any Warrant or
Warrant Stock or of any interest in either thereof, which would
constitute a "sale" thereof within the meaning of the Securities Act.
"Triggering Event" shall mean the repayment in full of all
indebtedness under the Credit Agreement.
"Violation" has the meaning set forth in Section 9.7(a)
hereof.
"Warrant Price" shall mean an amount equal to (i) the number
of shares of Common Stock being purchased upon exercise of this
Warrant pursuant to Section 2.1 hereof, multiplied by (ii) the
Exercise Price as of the date of such exercise.
"Warrants" shall mean the Original Warrants and all warrants
issued upon transfer, division or combination of, or in substitution
for, such Original Warrants or any other such Warrant. All Warrants
shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may
be exercised.
"Warrant Stock" generally shall mean the shares of Common
Stock issued, issuable or both (as the context may require) upon the
exercise of Warrants until such time as such shares of Common Stock
have either been (i) Transferred in a public offering pursuant to a
registration statement filed under the Securities Act or (ii)
Transferred in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section
4(1) thereof with all transfer restrictions and restrictive legends
with respect to such Common Stock being removed in connection with
such transaction. "Warrant Stock", for the purposes of Section 9
hereof, shall have the meaning set forth in Section 9.1(b) hereof.
-12-
16
"XX Xxxxxx" shall have the meaning set forth in Section 9.1(a)
hereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. (a) From and after May 31, 1997
and until 5:00 P.M., Chicago time, on the Expiration Date, the Holder of this
Warrant may from time to time exercise this Warrant, on any Business Day, for
all or any part of the number of shares of Common Stock purchasable hereunder
(as determined pursuant to Section 2.2 below). In order to exercise this
Warrant, in whole or in part, the Holder shall (i) deliver to the Company at
the Designated Office a written notice of the Holder's election to exercise
this Warrant (an "Exercise Notice"), which Exercise Notice shall be irrevocable
and specify the number of shares of Common Stock to be purchased, together with
this Warrant and (ii) pay to the Company the Warrant Price (the date on which
both such delivery and payment shall have first taken place being hereinafter
sometimes referred to as the "Exercise Date"). Such Exercise Notice shall be
in the form of the subscription form appearing at the end of this Warrant as
Annex A, duly executed by the Holder or its duly authorized agent or attorney.
(b) Upon receipt of such Exercise Notice, Warrant and
payment, the Company shall, as promptly as practicable, and in any event within
five Business Days thereafter, execute (or cause to be executed) and deliver
(or cause to be delivered) to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as the
exercising Holder shall reasonably request in the Exercise Notice and shall be
registered in the name of the Holder or such other name as shall be designated
in the Exercise Notice. This Warrant shall be deemed to have been exercised
and such certificate or certificates shall be deemed to have been issued, and
the Holder or any other Person so designated to be named therein shall be
deemed to have become a holder of record of such shares for all purposes, as of
the Exercise Date.
-13-
17
(c) Payment of the Warrant Price shall be made at the option
of the Holder by one or more of the following methods: (i) by delivery of a
certified or official bank check in the amount of such Warrant Price, (ii) by
instructing the Company to withhold a number of shares of Warrant Stock then
issuable upon exercise of this Warrant with an aggregate Current Market Price
equal to such Warrant Price (the "Share Withholding Option"), (iii) by
surrendering to the Company shares of Common Stock previously acquired by the
Holder with an aggregate Current Market Price equal to such Warrant Price
or(iv) by delivery of a Note, duly endorsed by or accompanied by appropriate
instruments of transfer duly executed by the Holder or by the Holder's attorney
duly authorized in writing. In the event of any withholding of Warrant Stock
or surrender of Common Stock pursuant to clause (ii) or (iii) above where the
number of shares whose Current Market Price is equal to the Warrant Price is
not a whole number, the number of shares withheld by or surrendered to the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by or surrendered to the Company in an amount determined in
accordance with Section 2.3 hereof. For the purpose of making payment of the
Warrant Price, any Note surrendered to the Company shall be deemed to have a
value equal to 100% of the principal amount thereof plus any interest accrued
but unpaid thereon. If the Holder delivers a Note with a deemed value that
exceeds the Warrant Price, the Company shall reissue to the Holder a new Note
identical in all respects to the surrendered Note except that the principal
amount of such new Note shall be equal to the principal amount that, together
with any interest accrued but unpaid thereon, is equal to the deemed value of
the surrendered Note less the Warrant Price.
(d) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing the shares of Common Stock being issued, deliver to the Holder a
new Warrant evidencing the rights of the Holder to purchase the unpurchased
shares of Common Stock called for by this Warrant. Such new Warrant shall in
all other respects be identical with this Warrant.
2.2. Payment of Transfer Taxes. All shares of Common Stock
issuable upon the exercise of this Warrant pursuant to the terms hereof shall
be validly issued, fully paid and nonassess-
-14-
18
able, issued without violation of any preemptive rights and free and clear of
all Liens (other than any created by actions of the Holder). The Company shall
pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder and the Company shall reimburse
the Holder therefor on an After-Tax Basis.
2.3. Fractional Shares. The Company shall not be required to
issue a fractional share of Common Stock upon exercise of any Warrant. As to
any fraction of a share that the Holder of one or more Warrants, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same fraction of the
Current Market Price of one share of Common Stock on the Exercise Date, if the
Common Stock is then publicly traded.
2.4. Continued Validity and Application. (a) A Holder of
shares of Warrant Stock issued upon the exercise of this Warrant, in whole or
in part, including any transferee of such shares (other than a transferee in
whose hands such shares no longer constitute Warrant Stock as defined herein),
shall continue, with respect to such shares, to be entitled to all rights and
to be subject to all obligations that are applicable to such Holder by the
terms of this Warrant under Section 9 hereof. The Company shall, at the time
of any exercise of this Warrant or any transfer of Warrant Stock, upon the
request of the Holder of the shares of Warrant Stock issued in connection with
such exercise or transfer, acknowledge in writing, in a form reasonably
satisfactory to such Holder, its continuing obligation to afford to such Holder
such rights referred to in this Section 2.4; provided, however, that if such
Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such Holder all such rights.
-15-
19
2.5. Limitation on Regulated Holder's Exercise.
Notwithstanding anything in this Warrant to the contrary, the Holder of this
Warrant, if subject to the Bank Holding Company Act or any provision of the
Xxxxx-Xxxxxxxx Act, may exercise this Warrant only if the Notice of Exercise is
accompanied by an Opinion of Counsel of such Holder to the effect that, as of
the date of delivery of such opinion, no federal or state regulatory clearances
are required for such Holder to exercise this Warrant or, in the event any such
federal or state regulatory clearances are required prior to the exercise of
this Warrant, to the effect that all such clearances have been obtained or, if
not then obtained, that no statute or regulation or regulatory policy or
guidelines known to such counsel would by their terms preclude the obtaining of
such clearances or make it unlikely that such clearances would be obtained or
make it likely that such clearances would, if obtained, contain material
conditions adverse to such Holder. In the event that federal or state
regulatory clearances are required prior to the exercise of this Warrant by the
Holder hereof, the Company shall reasonably cooperate with such Holder in
providing such information to any regulatory agency as such agency may
reasonably require. In the event any such regulatory clearance is withheld or
denied, such Holder may continue to hold this Warrant until its expiration or
may sell or otherwise transfer this Warrant in accordance with the terms
hereof.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 8 hereof,
each transfer of this Warrant and all rights hereunder, in whole or in part,
shall be registered on the books of the Company to be maintained for such
purpose, upon surrender of this Warrant at the Designated Office, together with
a written assignment of this Warrant in the form of Annex B hereto duly
executed by the Holder or its agent or attorney. Upon such surrender and
delivery, the Company shall, subject to Section 8, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so
assigned and this Warrant shall promptly be canceled. A Warrant, if properly
assigned in compliance with Section 8, may be exercised by the new Holder for
the purchase of shares of Common Stock without having a new Warrant issued.
-16-
20
3.2. Division and Combination. Subject to compliance with
the applicable provisions of this Warrant, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the Designated Office,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with the applicable provisions of this Warrant as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.
3.3. Expenses. The Company shall prepare, issue and deliver
at its own expense any new Warrant or Warrants required to be issued under this
Section 3.
3.4. Maintenance of Books. The Company agrees to maintain,
at the Designated Office, books for the registration and transfer of the
Warrants.
4. ANTIDILUTION PROVISIONS
The number of shares of Common Stock for which this Warrant is
exercisable and the Exercise Price shall be subject to adjustment from time to
time as set forth in this Section 4.
4.1. Stock Dividends, Subdivisions and Combinations. If at
any time the Company shall:
(i) take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend payable in, or
other distribution of, additional shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into
a larger number of shares of such Common Stock, or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of such Common Stock,
then the Exercise Price shall be adjusted to equal the product of the Exercise
Price in effect immediately prior to such event multiplied by a fraction the
numerator of which is equal to the
-17-
21
number of shares of Common Stock Outstanding immediately prior to the
adjustment and the denominator of which is equal to the number of shares of
Common Stock Outstanding immediately after such adjustment.
4.2. Issuance of Additional Shares of Common Stock. (a) If
at any time the Company shall issue or sell any shares of Common Stock in a
Subsequent Issuance for a consideration per share that is less than the
Exercise Price in effect immediately prior to such issuance or sale, then,
forthwith upon such issuance or sale, the Exercise Price shall be reduced to a
price calculated by dividing (1) an amount equal to the sum of (x) the number
of shares of Common Stock Outstanding immediately prior to such Subsequent
Issuance multiplied by the then existing Exercise Price, plus (y) the aggregate
consideration (determined in accordance with the provisions of Section 4.6
hereof), if any, received by the Company in connection with such Subsequent
Issuance, by (2) the total number of shares of Common Stock Outstanding
immediately after such Subsequent Issuance.
(b) The provisions of this Section 4.2 shall not apply to (i)
any issuance of Common Stock for which an adjustment is provided for under
Section 4.1 or (ii) any issuance or sale of Common Stock pursuant to the
exercise of any Stock Purchase Rights or Convertible Securities to the extent
that an adjustment shall have been previously made hereunder in connection with
the issuance of such Stock Purchase Rights or Convertible Securities pursuant
to the provisions of Section 4.3 hereof.
4.3. Issuances of Stock Purchase Rights and Convertible
Securities. (a) In the event that the Company shall at any time issue, sell
or grant any Stock Purchase Rights to any Person in a Subsequent Issuance,
then, for the purpose of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock (without giving effect to any antidilution
provisions in such Stock Purchase Rights) that are or may become issuable upon
exercise of such Stock Purchase Rights (or upon exercise of any Convertible
Securities issuable upon exercise of such Stock Purchase Rights) for a
consideration per share equal to (i) the aggregate consideration per share
(determined in accordance with the provisions of Section 4.6 hereof) received
by the Company in connection with the issuance, sale or grant of such Stock
Purchase Rights plus (ii) the minimum
-18-
22
amount of such consideration per share receivable by the Company in connection
with the exercise of such Stock Purchase Rights (and the exercise of any
Convertible Securities issuable upon exercise of such Stock Purchase Rights).
(b) In the event that the Company shall at any time issue or
sell any Convertible Securities to any Person in a Subsequent Issuance, then,
for the purposes of Section 4.2 above, the Company shall be deemed to have
issued at that time a number of shares of Common Stock equal to the maximum
number of shares of Common Stock that are or may become issuable upon the
exercise of the conversion or exchange rights associated with such Convertible
Securities for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of
Section 4.6 hereof) received by the Company in connection with the issuance or
sale of such Convertible Securities plus (ii) the minimum amount of such
consideration per share receivable by the Company in connection with the
exercise of such conversion or exchange rights.
(c) If, at any time after any adjustment of the Exercise
Price shall have been made hereunder as the result of any issuance, sale or
grant of any Stock Purchase Rights or Convertible Securities, the maximum
number of shares issuable upon exercise of such Stock Purchase Rights or of the
rights of conversion or exchange associated with such Convertible Securities
shall increase, or the minimum amount of consideration per share receivable in
connection with such exercise shall decrease, whether by operation of any
antidilution rights pertaining to such Stock Purchase Rights or Convertible
Securities, by agreement of the parties or otherwise, the Exercise Price then
in effect shall first be readjusted to eliminate the effects of the original
issuance, sale or grant of such Stock Purchase Rights or Convertible Securities
on such Exercise Price and then readjusted as if such Stock Purchase Rights or
Convertible Securities had been issued on the effective date of such increase
in number of shares or decrease in consideration, but only if the effect of
such two-step readjustment is to reduce the Exercise Price below the Exercise
Price in effect immediately prior to such increase or decrease.
(d) If, at any time after any adjustment of the Exercise
Price shall have been made hereunder as the result of any issuance, sale or
grant of any Stock Purchase Rights or
-19-
23
Convertible Securities, any of such Stock Purchase Rights or the rights of
conversion or exchange associated with such Convertible Securities shall expire
by their terms or any of such Stock Purchase Rights or Convertible Securities
shall be repurchased by the Company or a Subsidiary thereof for a consideration
per underlying share of Common Stock not exceeding the amount of such
consideration received by the Company in connection with the issuance, sale or
grant of such Stock Purchase Rights or Convertible Securities, the Exercise
Price then in effect shall forthwith be increased to the Exercise Price that
would have been in effect if such expiring Stock Purchase Rights or rights of
conversion or exchange or such repurchased Stock Purchase Rights or Convertible
Securities had never been issued. Similarly, if at any time after any such
adjustment of the Exercise Price shall have been made pursuant to Section 4.2
(i) any additional consideration is received or becomes receivable by the
Company in connection with the issuance or exercise of such Stock Purchase
Rights or Convertible Securities or (ii) there is a reduction in the conversion
ratio applicable to such Convertible Securities so that fewer shares of Common
Stock will be issuable upon the conversion or exchange thereof or there is a
decrease in the number of shares of Common Stock issuable upon exercise of such
Stock Purchase Rights, the Exercise Price then in effect shall be forthwith
readjusted to the Exercise Price that would have been in effect had such
changes taken place at the time that such Stock Purchase Rights or Convertible
Securities were initially issued, granted or sold. In no event shall any
readjustment under this Section 4.3(d) affect the validity of any shares of
Warrant Stock issued upon any exercise of this Warrant prior to such
readjustment, nor shall any such readjustment have the effect of increasing the
Exercise Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been issued.
4.4. Adjustment of Number of Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in Section 4.1, 4.2 or 4.3 hereof,
the Holder hereof shall thereafter be entitled to purchase upon the exercise of
this Warrant, at the Exercise Price resulting from such adjustment, the number
of shares of Common Stock (calculated to the nearest 1/100th of a share)
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable on the exercise
hereof immediately prior to such
-20-
24
adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
4.5. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is any change whatsoever in, or distribution with respect to, the Outstanding
Common Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, (i) shares of common stock of the
successor or acquiring corporation or of the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property") are to be received by or distributed to the
holders of Common Stock of the Company who are holders immediately prior to
such transaction, then the Holder of this Warrant shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of
common stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In such event, the
aggregate Exercise Price otherwise payable for the shares of Common Stock
issuable upon exercise of this Warrant shall be allocated among the shares of
common stock and Other Property receivable as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets in proportion
to the respective fair market values of such shares of common stock and Other
Property as determined in good faith by the Board of Directors of the Company.
In case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other than
the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities
hereunder, subject to such modi-
-21-
25
fications as may be reasonably deemed appropriate (as determined by resolution
of the Board of Directors of the Company) in order to provide for adjustments
of any shares of the common stock of such successor or acquiring corporation
for which this Warrant thus becomes exercisable, which modifications shall be
as equivalent as practicable to the adjustments provided for in this Section 4.
For purposes of this Section 4.5, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class that is not
preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities that are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.5 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
4.6. Determination of Consideration. For purposes of
Sections 4.2, 4.3 and 4.4 hereof, the consideration received and/or receivable
by the Company in connection with the issuance, sale, grant or exercise of
additional shares of Common Stock, Stock Purchase Rights or Convertible
Securities, irrespective of the accounting treatment of such consideration,
shall be valued as follows:
(1) Cash Payment. In the case of cash, the net amount
received by the Company after deduction of any accrued interest or
dividends, expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company.
(2) Securities or Other Property. In the case of
securities or other property, the fair market value thereof as of the
date immediately preceding such issuance, sale, grant or exercise as
determined in good faith by the Board of Directors of the Company.
(3) Allocation Related to Common Stock. In the event
shares of Common Stock are issued or sold together with other
securities or other assets of the Company for a consideration which
covers both, the
-22-
26
consideration received (computed as provided in (1) and (2) above)
shall be allocable to such shares of Common Stock as determined in
good faith by the Board of Directors of the Company.
(4) Allocation Related to Stock Purchase Rights and
Convertible Securities. In case any Stock Purchase Rights or
Convertible Securities shall be issued or sold together with other
securities or other assets of the Company, together comprising one
integral transaction in which no specific consideration is allocated
to the Stock Purchase Rights or Convertible Securities, the
consideration allocable to such Stock Purchase Rights or Convertible
Securities shall be determined in good faith by the Board of Directors
of the Company.
(5) Dividends in Securities. In case the Company shall
declare a dividend or make any other distribution upon any stock of
the Company payable in either case in Common Stock or Convertible
Securities, such Common Stock or Convertible Securities, as the case
may be, issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
(6) Merger, Consolidation or Sale of Assets. In case any
shares of Common Stock, Stock Purchase Rights or Convertible
Securities shall be issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the
amount of consideration therefor shall be deemed to be the fair value
on the date of issuance of such security of such portion of the assets
and business of the non-surviving corporation attributable to such
Common Stock, Stock Purchase Rights or Convertible Securities, as is
determined in good faith by the Company's Board of Directors.
(7) Challenge to Good Faith Determination. Whenever the
Board of Directors of the Company shall be required to make a
determination in good faith of the fair value of any item under this
Section 4, such determination may be challenged in good faith by the
-23-
27
Majority Warrant Holders, and any dispute shall be resolved by an
investment banking or appraisal firm of recognized national standing
selected by the Company and reasonably acceptable to the Majority
Warrant Holders and whose decision shall be binding on the Company and
all holders of Warrants. The fees and expenses of such firm shall be
paid by the party or parties whose position is not chosen by such
firm.
4.7. Other Dilutive Events. In case any event shall occur as
to which the other provisions of this Section 4 are not strictly applicable but
as to which the failure to make any adjustment would not fairly protect the
purchase rights represented by this Warrant in accordance with the essential
intent and principles hereof (including, without limitation, the issuance of
securities other than Common Stock which have the right to participate in
distributions to the holders of Common Stock, the granting of "phantom stock"
rights or "stock appreciation rights" or the repurchase of outstanding shares
of Common Stock, Convertible Securities or Stock Purchase Rights for a
purchase price exceeding the fair market value thereof), then, in each such
case, the Majority Warrant Holders may select an independent investment banking
firm of nationally recognized standing and reasonably acceptable to the Company
to make a determination as to the adjustment, if any, required to be made on a
basis consistent with the essential intent and principles established herein as
a result of such event in order to preserve the purchase rights represented by
the Warrants. If the investment bank selected by the Majority Warrant Holders
is not reasonably acceptable to the Company, and the Company and the Majority
Warrant Holders cannot agree on a mutually acceptable investment bank, then the
Company and the Majority Warrant Holders shall each choose one such investment
bank and the respective chosen firms shall jointly select a third investment
bank, which shall make the determination. The Company shall pay the costs and
fees of each such investment bank (including any such investment bank selected
by the Majority Warrant Holders), and the decision of the investment bank
making such determination shall be final and binding on the Company and all
affected holders of Warrants or Warrant Stock. Promptly after receipt of the
opinion of such investment bank as to any such required adjustments, the
Company shall take any actions necessary to implement same.
-24-
28
4.8. Other Provisions Applicable to Adjustments Under this
Section. The following provisions shall be applicable to the adjustments
provided for pursuant to this Section 4:
(a) When Adjustments To Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified
event requiring such an adjustment shall occur. For the purpose of
any such adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its occurrence.
(b) Record Date. In case the Company shall take a record
of the holders of the Common Stock for the purpose of entitling them
(i) to receive a dividend or other distribution payable in Common
Stock, Convertible Securities or Stock Purchase Rights or (ii) to
subscribe for or purchase Common Stock, Convertible Securities or
Stock Purchase Rights, then all references in this Section 4 to the
date of the issuance or sale of such shares of Common Stock,
Convertible Securities or Stock Purchase Rights shall be deemed to be
references to such record date.
(c) Fractional Interests. In computing adjustments under
this Section 4, fractional interests in Common Stock shall be taken
into account to the nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take
a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution to which the
provisions of Section 4.1 would apply, but shall, thereafter and
before the distribution to stockholders thereof, legally abandon its
plan to pay or deliver such dividend or distribution, then thereafter
no adjustment shall be required by reason of the taking of such record
and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(e) Maximum Exercise Price. Except as provided in
Section 4.1 above, at no time shall the Exercise Price per share of
Common Stock exceed the amount set forth in the first paragraph of the
preamble of this Warrant.
-25-
29
(f) Certain Limitations. Notwithstanding anything herein
to the contrary, the Company agrees not to enter into any transaction
that, by reason of any adjustment under Section 4.1, 4.2 or 4.3 above,
would cause the Exercise Price to be less than the par value of the
Common Stock, if any, unless the Company first reduces the par value
of the Common Stock to be less than the Exercise Price that would
result from such transaction.
(g) Notice of Adjustments. Whenever the number of shares
of Common Stock for which this Warrant is exercisable or the Exercise
Price shall be adjusted pursuant to this Section 4, the Company shall
forthwith prepare a certificate to be executed by the President or
chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which
such adjustment was calculated, specifying the number of shares of
Common Stock for which this Warrant is exercisable and (if such
adjustment was made pursuant to Section 4.5) describing the number and
kind of any other shares of stock or Other Property for which this
Warrant is exercisable, and any related change in the Exercise Price,
after giving effect to such adjustment or change. The Company shall
promptly cause a signed copy of such certificate to be delivered to
each Holder in accordance with Section 15.2. The Company shall keep
at its principal office or at the Designated Office, if different,
copies of all such certificates and cause the same to be available for
inspection at said office during normal business hours by any Holder
or any prospective transferee of a Warrant designated by a Holder
thereof.
(h) Independent Application. Except as otherwise
provided herein, all subsections of this Section 4 are intended to
operate independently of one another (but without duplication). If an
event occurs that requires the application of more than one
subsection, all applicable subsections shall be given independent
effect without duplication.
5. NO IMPAIRMENT
-26-
30
The Company shall not by any action, including, without
limitation, amending its charter documents or through any reorganization,
reclassification, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other similar voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
reasonably appropriate to protect the rights of the Holder against impairment.
Without limiting the generality of the foregoing, the Company shall take all
such action as may be necessary or reasonably appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, free and clear of all Liens,
and shall use all commercially reasonably efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK
From and after the Original Issue Date, the Company shall at
all times reserve and keep available for issuance upon the exercise of the
Warrants such number of its authorized but unissued shares of Common Stock as
will be sufficient to permit the exercise in full of all outstanding Warrants.
All shares of Common Stock issuable pursuant to the terms hereof, when issued
upon exercise of this Warrant with payment therefor in accordance with the
terms hereof, shall be duly and validly issued and fully paid and
nonassessable, not subject to preemptive rights and shall be free and clear of
all Liens.
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS
7.1. Notices of Corporate Actions. In the event of: (a) any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger involving
the Company and any other Person or any transfer or other disposition of all or
substantially all the assets of the Company to another Person or
-27-
31
(b) any amendment of the Certificate of Incorporation of the Company, the
Company shall mail to each Holder of a Warrant in accordance with the
provisions of Section 14.2 hereof a notice specifying the date or expected date
on which any such reorganization, reclassification, recapitalization,
consolidation, merger, transfer or disposition is to take place, the time, if
any such time is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for the securities
or Other Property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, transfer or disposition, and a
description in reasonable detail of the transaction. Such notice shall be
mailed to the extent practicable at least thirty, but not more than ninety,
days prior to the date therein specified; provided, that, in no event shall the
Company be required to give the Holders notice of material non-public
information prior to the time such information is made available to the holders
of its Common Stock. In the event that the Company at any time sends any other
notice to the holders of its Common Stock, it shall concurrently send a copy of
such notice to each Holder of a Warrant.
7.2 Closing of Transfer Books. The Company shall not at any
time, except upon dissolution, liquidation or winding up of the Company, close
its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
8. TRANSFER RESTRICTIONS
The Holder, by acceptance of this Warrant, agrees to be bound
by the provisions of this Section 8.
8.1. Restrictions on Transfers. Neither this Warrant nor any
shares of Restricted Common Stock issued upon the exercise hereof shall be
Transferred other than pursuant to an effective registration statement under
the Securities Act or an exemption from the registration provisions thereof.
No Transfer of this Warrant or any such shares of Restricted Stock, other than
pursuant to such an effective registration statement, shall be valid or
effective unless (a) the holder of the securities proposed to be transferred
shall have delivered to the Company either a no-action letter from the
Commission or an Opinion of
-28-
32
Counsel to the effect that such proposed Transfer is exempt from the
registration requirements of the Securities Act or (b) such Transfer is being
made pursuant to Rule 144 or Rule 144A under the Securities Act and such holder
shall have delivered to the Company a certificate setting forth the basis for
applying such Rule to the proposed Transfer. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon any such
Transfer, other than in a public offering pursuant to an effective registration
statement, shall bear the restrictive legend set forth in Section 8.2(a), and
each Warrant issued upon such Transfer shall bear the restrictive legend set
forth in Section 8.2(b), unless the Holder delivers to the Company an Opinion
of Counsel to the effect that such legend is not required for the purposes of
compliance with the Securities Act. Holders of the Warrants or the Restricted
Common Stock, as the case may be, shall not be entitled to Transfer such
Warrants or such Restricted Common Stock except in accordance with this Section
8.1.
8.2. Restrictive Legends. (a) Except as otherwise provided
in this Section 8, each certificate for Warrant Stock initially issued upon the
exercise of this Warrant, and each certificate for Warrant Stock issued to any
subsequent transferee of any such certificate, shall be stamped or otherwise
imprinted with two legends in substantially the following forms:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS
MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
(B) THE HOLDER OF THE SECURITIES PROPOSED TO BE TRANSFERRED SHALL HAVE
DELIVERED TO THE COMPANY AN OPINION OF COUNSEL EXPERIENCED IN
SECURITIES MATTERS AND REASONABLY ACCEPTABLE TO THE COMPANY TO THE
EFFECT THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144
OR RULE 144A UNDER THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO
THE COMPANY A CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH
RULE TO THE PROPOSED TRANSFER."
-29-
33
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE
BENEFIT OF AND ARE SUBJECT TO CERTAIN OBLIGATIONS SET FORTH IN THE
WARRANT PURSUANT TO THE EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A
COPY OF SUCH WARRANT IS AVAILABLE AT THE EXECUTIVE OFFICES OF THE
COMPANY."
(b) Except as otherwise provided in this Section 8, each
Warrant shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE OR OF THE STOCK ISSUABLE UPON EXERCISE THEREOF SHALL BE
VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) THE HOLDER OF
THE SECURITIES PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO THE
COMPANY EITHER A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION OR AN OPINION OF COUNSEL EXPERIENCED IN SECURITIES MATTERS
AND REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH
PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR RULE 144A UNDER
THE ACT AND SUCH HOLDER SHALL HAVE DELIVERED TO THE COMPANY A
CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE
PROPOSED TRANSFER."
8.3. Termination of Securities Law Restrictions.
Notwithstanding the foregoing provisions of this Section 8, the restrictions
imposed by Section 8.1(b) upon the transferability of the Warrants and the
Restricted Common Stock and the legend requirements of Section 8.2 shall
terminate as to any particular Warrant or shares of Restricted Common Stock
when the Company shall have received from the Holder thereof an Opinion of
Counsel to the effect that such legend is not required in order to ensure
compliance with the Securities Act. Whenever the restrictions imposed by
Sections 8.1(b) and 8.2 shall terminate as to this Warrant, as hereinabove
provided, the Holder hereof shall be entitled to receive from the Company, at
the expense of the
-30-
34
Company, a new Warrant bearing the following legend in place of the restrictive
legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN SECTIONS 8.1(b) AND 8.2 HEREOF TERMINATED ON
______________, 19__, AND ARE OF NO FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Wherever the restrictions
imposed by this Section shall terminate as to any share of Restricted Common
Stock, as hereinabove provided, the Holder thereof shall be entitled to receive
from the Company, at the Company's expense, a new certificate representing such
Common Stock not bearing the restrictive legend set forth in Section 8.2(a).
9. REGISTRATION RIGHTS
9.1. Certain Definitions. For the purposes of this Section 9:
(a) The Holders of Warrants and the Series B Warrants and the
holders of Warrant Stock (as defined in Section 9.1(b)) are
collectively referred to as "WS Holders".
(b) "Warrant Stock" shall deemed to include (i) the
shares of Common Stock issued, issuable or both (as the context may
require) upon the exercise of Warrants and the Series B Warrants until
such time as such shares of Common Stock have either been (a)
Transferred in a public offering pursuant to a registration statement
filed under the Securities Act or (b) Transferred in a transaction
exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4(1) thereof with all transfer
restrictions and restrictive legends with respect to such Common Stock
being removed in connection with such transaction,(ii) any other
securities issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange by the Company
generally for, or in replacement by the Company generally
-31-
35
of, any shares of Warrant Stock and (iii) any securities issued in
exchange for any such Warrant Stock in any merger or reorganization of
the Company, but in the cases of clauses (ii) and (iii) only so long
as such securities have not been registered and Transferred pursuant
to the Securities Act or Transferred in a transaction exempt from the
registration and prospectus delivery requirements of the Securities
Act under Section 4(1) thereof so that all transfer restrictions and
restrictive legends with respect to such securities are removed in
connection with such Transfer.
(c) Each XX Xxxxxx shall be deemed to "hold", as of any
specified date, the aggregate of (i) the number of shares of Warrant
Stock held by such XX Xxxxxx as of such date plus (ii) the number of
shares of Warrant Stock issuable upon exercise of any Warrants and
Series B Warrants held by such XX Xxxxxx as of such date.
(d) The total number of shares of Warrant Stock deemed
"outstanding" as of a specified date will be equal to (i) the total
number of shares of Warrant Stock Outstanding as of such date plus
(ii) the number of shares of Warrant Stock issuable upon exercise of
all outstanding Warrants and Series B Warrants as of such date.
(e) "Registrable Securities" shall mean any Warrants, any
Series B Warrants and/or any shares of Warrant Stock.
9.2. Demand Registration. (a) In the event the Company
receives at any time after August 31, 1997 a written request from one or more
WS Holders holding in the aggregate at least seventy-six percent of the number
of shares of Warrant Stock then outstanding (the "Demanding Holders") that the
Company file a registration statement under the Securities Act for the sale or
other disposition of at least a majority of the Registrable Securities (a
"Demand Registration"), the Company shall promptly give written notice of such
request to each other XX Xxxxxx and each such XX Xxxxxx may elect, by giving
written notice of such election to the Company within ten (10) Business Days
after receipt of the Company's notice, to have some or all of the Registrable
Securities held by it included in such registration. At the option of the
Demanding Holders, such request may specify that the requested registration
will be for
-32-
36
an offering on a delayed or continual basis pursuant to Rule 415 under the
Securities Act (a "Shelf Registration").
(b) Following receipt of such a request for a Demand
Registration, the Company shall:
(1) File the requested registration statement with
the Commission as promptly as practicable, and shall use all
commercially reasonable efforts to have the registration declared
effective under the Securities Act as soon as reasonably practicable,
in each instance giving due regard to the need to prepare and file
current financial statements, conduct due diligence and complete other
actions that are reasonably necessary to effect a registered public
offering; and
(2) Use all commercially reasonable efforts to keep
the such registration statement Continuously Effective (x) if a Demand
Registration, for up to 90 days or until such earlier date as of which
all Registrable Securities covered by such registration statement
shall have been disposed of in the manner described in the
registration statement, and (y) if a Shelf Registration, for 270 days.
Notwithstanding the foregoing, if for any reason the effectiveness of
a Demand Registration is suspended or postponed as permitted by
Subsection (d) below, the foregoing period shall be extended by the
aggregate number of days of such suspension or postponement.
(c) The Company shall not be required to effect a
registration of Registrable Securities pursuant to a Demand Registration on
more than one occasion. For purposes of this Subsection (c), registration
shall not be deemed to have been effected (i) unless a registration statement
with respect thereto has become effective, (ii) if after such registration
statement has become effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Selling
Holders and such interference is not thereafter eliminated or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not
-33-
37
satisfied or waived, other than by reason of a failure on the part of the
Selling Holders. If the Company shall have complied with its obligations under
this Section 9, a right to demand a registration pursuant to this Section 9.2
shall be deemed to have been satisfied (i) if a Demand Registration other than
a Shelf Registration, upon the earlier of (x) the date as of which all of the
Registrable Securities included therein shall have been disposed of pursuant to
the registration statement and (y) the date as of which such Demand
Registration shall have been Continuously Effective for a period of 90 days,
and (ii) if a Shelf Registration, upon the effective date of a Shelf
Registration, provided no stop order or similar order, or proceedings for such
an order, is thereafter entered or initiated.
(d) The Company shall be entitled to postpone for up to 90
days the filing of any Demand Registration statement otherwise required to be
prepared and filed pursuant to this Section 9.2 or suspend any such Demand
Registration for up to 90 days, if the Board of Directors of the Company
determines, in its good faith reasonable judgment that such registration and
the Transfer of Warrant Stock contemplated thereby would materially interfere
with, or require premature disclosure of, any financing, acquisition or
reorganization involving the Company or any of its wholly owned subsidiaries
and the Company promptly gives the Demanding Holders notice of such
determination; provided, however, that the Company shall not have postponed
pursuant to this Subsection (d) the filing of any other Demand Registration
statement otherwise required to be prepared and filed pursuant to this Section
9.2, or suspended any such Demand Registration, during the 12 month period
ended on the date of the relevant request pursuant to Subsection (a) above and
provided further, that the Expiration Date shall be extended by the period of
any such postponement or suspension.
(e) A registration pursuant to this Section 9.2 shall be on
such appropriate registration form of the Commission available to the Company
as shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders and (ii) permit the disposition of the Warrant Stock
in accordance with the intended method or methods of disposition specified in
the request made pursuant to Subsection (a) above. If any registration
pursuant to this Section 9.2 involves an underwritten offering (whether on a
"firm", "best efforts" or
-34-
38
"all reasonable efforts" basis or otherwise), or an agented offering, the
Majority Selling Holders shall have the right to select the underwriter or
underwriters and manager or managers to administer such underwritten offering
or the placement agent or agents for such agented offering from among the
entities listed in Schedule B hereto (or any successors of any such entities),
it being understood that the Majority Selling Holders shall use commercially
reasonable efforts to select one or more of the first three listed entities
subject to arriving at reasonably acceptable terms and conditions for the
offering.
(f) The Company may elect to include shares of Common
Stock to be sold for its account in any such Demand Registration (including a
Shelf Registration); provided, however, if the managing underwriter shall
advise the Demanding Holders in writing (with a copy to the Company) that, in
its opinion, the number of shares of Common Stock requested to be included in
such Demand Registration would adversely affect such offering or the price to
be realized therefor, or the timing thereof, then the number of shares proposed
to be included in such Demand Registration by the Company shall be reduced, to
such number that the Demanding Holders are advised can be sold without such
effect in such Demand Registration.
9.3. Piggyback Registration. (a) If at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders of the Company other than the WS Holders) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form X-0, X-0 or S-3 (or any replacement or successor
forms), the Company shall promptly give each XX Xxxxxx written notice of such
registration (a "Piggyback Registration"). Upon the written request of each XX
Xxxxxx given within 20 days following the date of such notice, the Company
shall cause to be included in such registration statement and use its best
efforts to be registered under the Securities Act all the Registrable
Securities that each such XX Xxxxxx shall have requested to be registered. The
Company shall have the absolute right to withdraw or cease to prepare or file
any registration statement for any offering referred to in this Section 9.3
without any obligation or liability to any XX Xxxxxx.
-35-
39
(b) If the managing underwriter shall advise the Company in
writing (with a copy to each Selling Holder) that, in its opinion, the amount
of Registrable Securities requested to be included in such registration would
materially adversely affect such offering, or the timing thereof, then the
Company will include in such registration, to the extent of the amount and
class which the Company is so advised can be sold without such material adverse
effect in such offering: first, all securities proposed to be sold by the
Company for its own account; and second, the Warrant Stock requested to be
included in such registration by WS Holders and all other securities requested
to be included in such registration by Persons other than the Company and WS
Holders, the securities covered by this clause second to be included pro rata
based on the estimated gross proceeds from the sale thereof.
(c) Each XX Xxxxxx shall be entitled to have its Registrable
Securities included in an unlimited number of Piggyback Registrations pursuant
to this Section 9.3.
9.4. Registration Procedures. Whenever required under
Section 9.2 or Section 9.3 hereof to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as practicable:
(a) Prepare and file with the Commission a registration
statement with respect to such Warrant Stock and use the Company's
best efforts to cause such registration statement to become effective;
provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the
registration statement and prior to effectiveness thereof, the Company
shall furnish to one firm of counsel for the Selling Holders (selected
by Majority Selling Holders) copies of all such documents in the form
substantially as proposed to be filed with the Commission at least
four Business Days prior to filing for review and comment by such
counsel, which opportunity to comment shall include an absolute right
to control or contest disclosure if the applicable Selling Holder
reasonably believes that it may be subject to controlling person
liability under applicable securities laws with respect thereto.
-36-
40
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act and rules thereunder
with respect to the disposition of all securities covered by such
registration statement. If the registration is for an underwritten
offering, the Company shall amend the registration statement or
supplement the prospectus whenever required by the terms of the
underwriting agreement entered into pursuant to Section 9.4(e).
Subject to Rule 415 under the Securities Act, if the registration
statement is a Shelf Registration, the Company shall amend the
registration statement or supplement the prospectus so that it will
remain current and in compliance with the requirements of the
Securities Act for 270 days or after its effective date, and if during
such period any event or development occurs as a result of which the
registration statement or prospectus contains a misstatement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
the Company shall promptly notify each Selling Holder, amend the
registration statement or supplement the prospectus so that each will
thereafter comply with the Securities Act and furnish to each Selling
Holder of Registrable Securities such amended or supplemented
prospectus, which each such Holder shall thereafter use in the
Transfer of Warrant Stock covered by such registration statement.
Pending such amendment or supplement each such Selling Holder shall
cease making offers or Transfers of Registerable Securities pursuant
to the prior prospectus. In the event that any Registrable Securities
included in a registration statement subject to, or required by, this
Warrant remain unsold at the end of the period during which the
Company is obligated to use its best efforts to maintain the
effectiveness of such registration statement, the Company may file a
post-effective amendment to the registration statement for the purpose
of removing such Registrable Securities from registered status.
(c) Furnish to each Selling Holder of Registrable
Securities, without charge, such number of copies of the registration
statement, any pre-effective or post-effective amendment thereto, the
prospectus, including each
-37-
41
preliminary prospectus and any amendments or supplements thereto, in
each case in conformity with the requirements of the Securities Act
and the rules thereunder, and such other related documents as any such
Selling Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by such Selling Holder.
(d) Use all commercially reasonable efforts (i) to
register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such states
or jurisdictions as shall be reasonably requested by the managing
underwriter (as applicable, or if inapplicable, the Majority Selling
Holders), and (ii) to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of
the offer and transfer of any of the Registrable Securities in any
jurisdiction, at the earliest possible moment; provided, however, that
the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten or agented offering,
enter into and perform the Company's obligations under an underwriting
or agency agreement (including indemnification and contribution
obligations of underwriters or agents), in usual and customary form,
with the managing underwriter or underwriters of or agents for such
offering. The Company shall also cooperate with the Majority Selling
Holders and the managing underwriter for such offering in the
marketing of the Warrant Stock, including making available the
Company's officers, accountants, counsel, premises, books and records
for such purpose, but the Company shall not be required to incur any
material out-of-pocket expense pursuant to this sentence.
(f) Promptly notify each Selling Holder of any stop order
issued or threatened to be issued by the Commission in connection
therewith (and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
-38-
42
(g) Make generally available to the Company's security
holders copies of all periodic reports, proxy statements, and other
information referred to in Section 9.9(a) and an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no
later than 90 days following the end of the 12-month period beginning
with the first month of the Company's first fiscal quarter commencing
after the effective date of each registration statement filed pursuant
to this Section 9.
(h) Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of
such Selling Holder and underwriter (but not more than one firm of
counsel to such Selling Holders), all financial and other information
as shall be reasonably requested by them, and provide the Selling
Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and underwriter the opportunity
to discuss the business affairs of the Company with its principal
executives and independent public accountants who have certified the
audited financial statements included in such registration statement,
in each case all as necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided, however,
that information that the Company determines, in good faith, to be
confidential and which the Company advises such Person in writing, is
confidential shall not be disclosed unless such Person signs a
confidentiality agreement reasonably satisfactory to the Company or
the related Selling Holder of Registrable Securities agrees to be
responsible for such Person's breach of confidentiality on terms
reasonably satisfactory to the Company.
(i) Use the Company's best efforts to obtain a so-called
"comfort letter" from its independent public accountants, and legal
opinions of counsel to the Company, in customary form and covering
such matters of the type customarily covered by such letters, and in a
form that shall be reasonably satisfactory to the Majority Selling
Holders. The Company shall furnish to each Selling Holder a signed
counterpart of any such comfort letter or legal opinion. Delivery of
any such opinion or comfort letter shall be subject to the recipient
furnishing such written representations or acknowledgments as are
customarily
-39-
43
provided by selling shareholders who receive such comfort letters or
opinions.
(j) Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration statement.
(k) Use all reasonable efforts to cause the Registrable
Securities covered by such registration statement (i) if the Common
Stock is then listed on a securities exchange or included for
quotation in a recognized trading market, to continue to be so listed
or included for a reasonable period of time after the offering, and
(ii) to be registered with or approved by such other United States or
state governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable the
Selling Holders of Registrable Securities to consummate the
disposition of such Registrable Securities.
(l) Use the Company's reasonable efforts to provide a CUSIP
number for the Common Stock prior to the effective date of the first
registration statement including Registrable Securities.
(m) Take such other actions as are reasonably required in
order to expedite or facilitate the disposition of Registrable
Securities included in each such registration.
9.5. Selling Holders' Obligations. (a) It shall be a
condition precedent to the obligations of the Company to take any action
pursuant to this Section 9 with respect to the Registrable Securities of any
Selling Holder that such Selling Holder shall:
(i) Furnish to the Company such information regarding such
Selling Holder, the number of Registrable Securities owned by it, and
the intended method of disposition of such securities as shall be
required to effect the registration of such Selling Holder's
Registrable Securities, and to cooperate with the Company in preparing
such registration; and
-40-
44
(ii) Agree to sell their Registrable Securities to the
underwriters at the same price and on substantially the same terms and
conditions as the Company or the other Persons on whose behalf the
registration statement was being filed have agreed to sell their
securities, and to execute the underwriting agreement agreed to by the
Majority Selling Holders (in the case of a registration under Section
9.2) or the Company and the Majority Selling Holders (in the case of a
registration under Section 9.3).
(b) Each Selling Holder shall notify the Company of any
sales of such Selling Holder's shares registered for sale pursuant to
this Section 9; provided, however, it is understood that any failure
so to notify the Company shall not be deemed a default hereunder or to
subject any Selling Holder to any claim for damages or expenses
whatsoever.
9.6. Expenses of Registration. Expenses incurred in
connection with registrations under this Section 9 shall be allocated and paid
as follows:
(a) With respect to each Demand Registration (including any
Shelf Registration), the Company shall bear and pay all reasonable
expenses incurred in connection with any registration, filing, or
qualification of Registrable Securities with respect to such Demand
Registration for each Selling Holder, including all registration,
filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the reasonable
fees and disbursements of counsel for the Company, and of the
Company's independent public accountants, including the expenses of
"cold comfort" letters required by or incident to such performance and
compliance, and the reasonable fees and disbursements of one firm of
counsel for the Selling Holders of Registrable Securities (the
"Registration Expenses"), but excluding underwriting discounts and
commissions relating to Registrable Securities (which shall be paid on
a pro rata basis by the Selling Holders) provided, however, that the
Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 9.2 if the
registration is subsequently withdrawn at the request of the Majority
Selling Holders (in which case all Selling Holders shall bear such
expense),
-41-
45
unless WS Holders whose Registrable Securities constitutes a majority
of the Registrable Securities then outstanding agree that such
withdrawn registration shall constitute the exercise of their one
demand registration under Section 9.2 hereof. The counsel for the
Selling Holders shall be selected by Demanding Holders owning a
majority of the Registrable Securities owned by Demanding Holders to
be included in a Demand Registration and, in the case of a Piggyback
Registration, by Selling Holders owning a majority of the Registrable
Securities to be included in such registration; provided that in the
case of a Piggyback Registration, the Selling Holders shall use one
firm of counsel to represent all such holders and shall endeavor in
good faith, with any other holders of securities to be included in
such registration, to select one firm of counsel to represent all such
selling securities holders.
(b) The Company shall bear and pay all Registration Expenses
incurred in connection with any Piggyback Registrations pursuant to
Section 9.3 for each Selling Holder, but excluding underwriting
discounts and commissions relating to Registrable Securities (which
shall be paid on a pro rata basis by the Selling Holders of
Registrable Securities).
(c) Any failure of the Company to pay any Registration
Expenses as required by this Section 9.6 shall not relieve the Company
of its obligations under this Section 9.
9.7. Indemnification; Contribution. If any Registrable
Securities are included in a registration statement under this Section 9:
(a) To the extent permitted by applicable law, the Company
shall indemnify and hold harmless each Selling Holder, each Person, if
any, who controls such Selling Holder within the meaning of the
Securities Act, and each officer, director, partner, and employee of
such Selling Holder and such controlling Person, against any and all
losses, claims, damages, liabilities and expenses (joint or several),
including attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any
of the foregoing Persons may
-42-
46
become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations pursuant to a final
non-appealable order (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement
of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus
contained therein, or any amendments or supplements thereto;
(ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; or
(iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any
applicable state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any
applicable state securities law;
provided, however, that the indemnification required by this Section
9.7(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or expense to the
extent that it is determined by a court of competent jurisdiction by a
final non-appealable order to have solely arisen out of or be based
upon a Violation which occurred in reliance upon and in conformity
with written information furnished to the Company by the indemnified
party expressly for use in connection with such registration;
provided, further, that the indemnity agreement contained in this
Section 9.7(a) shall not apply to any underwriter to the extent that
any such loss is based on or arises out of an untrue statement or
alleged untrue statement of a material fact, or an omission or alleged
omission to state a material fact, contained in or omitted from any
preliminary prospectus if the final prospectus shall correct such
untrue statement or
-43-
47
alleged untrue statement, or such omission or alleged omission, and a
copy of the final prospectus has not been sent or given to such person
at or prior to the confirmation of sale to such person if such
underwriter was under an obligation to deliver such final prospectus
and failed to do so. The Company shall also indemnify underwriters,
selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers,
directors, agents and employees and each person who controls such
persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to the same extent as provided above
with respect to the indemnification of the Selling Holders.
(b) To the extent permitted by applicable law, each Selling
Holder shall indemnify and hold harmless the Company, each of its
directors, each of its officers and employees, each Person, if any,
who controls the Company within the meaning of the Securities Act, any
other Selling Holder, any controlling Person of any such other Selling
Holder and each officer, director, partner, and employee of such other
Selling Holder and such controlling Person, against any and all
losses, claims, damages, liabilities and expenses (joint and several),
including attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any
of the foregoing Persons may otherwise become subject under the
Securities Act, the Exchange Act or other federal or state laws,
insofar as such losses, claims, damages, liabilities and expenses are
determined by a court of competent jurisdiction by a final
non-appealable order to have solely arisen out of or be based upon a
Violation that occurred in reliance upon and in conformity with
written information furnished by such Selling Holder expressly for use
in connection with such registration; provided, however, that (x) the
indemnification required by this Section 9.7(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability
or expense if settlement is effected without the consent of the
relevant Selling Holder of Registrable Securities, which consent shall
not be unreasonably withheld, and (y) in no event shall the amount of
any indemnity under this Section 9.7(b) exceed the net
-44-
48
proceeds from the applicable offering received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under
this Section 9.7 of notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing for which
such indemnified party may make a claim under this Section 9.7, such
indemnified party shall deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees
and disbursements and expenses to be paid by the indemnifying party,
if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a
reasonable time following the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under
this Section 9.7 but shall not relieve the indemnifying party of any
liability that it may have to any indemnified party otherwise than
pursuant to this Section 9.7. Any reasonable fees and expenses
incurred by the indemnified party (including any fees and expenses
incurred in connection with investigating or preparing to defend such
action or proceeding) shall be paid to the indemnified party, as
incurred, within thirty (30) days of written notice thereof to the
indemnifying party (regardless of whether it is ultimately determined
that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ
separate counsel in any such action, claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii)
the indemnifying party shall have failed to promptly assume the
-45-
49
defense of such action, claim or proceeding or (iii) the named parties
to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying
party and that the assertion of such defenses would create a conflict
of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action, claim or proceeding on behalf of such
indemnified party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action, claim or
proceeding or separate but substantially similar or related actions,
claims or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such
indemnified parties, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels). No indemnifying party shall be
liable to an indemnified party for any settlement of any action,
proceeding or claim without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld.
(d) If the indemnification required by this Section 9.7 from
the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to in this Section 9.7:
(i) The indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute
-46-
50
to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall
be determined by reference to, among other things, whether any
Violation has been committed by, or relates to information
supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
Violation. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the
limitations set forth in Section 9.7(a) and Section 9.7(b),
any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section
9.7(d) were determined by pro rata allocation or by any other
method of allocation which does not take into account the
equitable considerations referred to in Section 9.7(d)(i)
above. 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.
(e) If indemnification is available under this Section 9.7,
the indemnifying parties shall indemnify each indemnified party to the
full extent provided in this Section 9.7 without regard to the
relative fault of such indemnifying party or indemnified party or any
other equitable consideration referred to in Section 9.7(d) above.
(f) The indemnification required by this Section 9.7 shall be
made by periodic payments of the amount thereof during the course of
the investigation or defense, as and
-47-
51
when bills are received or expense, loss, damage or liability is
incurred. In the event that it shall be subsequently determined that
the recipient of any such periodic payment shall not be entitled to
indemnification hereunder, such recipient promptly shall repay such
payments, together with interest thereon at the Agreed Rate from the
date of original receipt to the date of repayment.
(g) The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 9.7 shall survive the
completion of any offering of Registrable Securities pursuant to a
registration statement under this Section 9, and otherwise.
9.8. Holdback. Each XX Xxxxxx entitled pursuant to this
Section 9 to have Registrable Securities included in a registration statement
prepared pursuant to this Section 9, if so requested by the managing
underwriter in connection with an offering of any Registrable Securities, shall
not effect any public sale or distribution of shares of Common Stock,
Convertible Securities or Stock Purchase Rights (excluding any sale pursuant to
Rule 144 or Rule 144A under the Securities Act and any sale as part of such
underwritten or agented registration), during the 5-day period prior to, and
during the 45-day period beginning on, the date such registration statement is
declared effective under the Securities Act by the Commission, provided that
such XX Xxxxxx is timely notified of such effective date in writing by the
Company or such managing underwriter.
9.9. Additional Covenants of the Company. The Company hereby
agrees and covenants as follows:
(a) The Company shall file as and when applicable, on a
timely basis, all reports required to be filed by it under the
Exchange Act. If the Company is not required to file reports pursuant
to the Exchange Act, upon the request of any XX Xxxxxx, the Company
shall make publicly available the information specified in
subparagraph (c)(2) of Rule 144 of the Securities Act, and take such
further action as may be reasonably required from time to time and as
may be within the reasonable control of the Company, to enable the WS
Holders to Transfer Warrants or Registrable Securities without
registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the
-48-
52
Securities Act or any similar rule or regulation hereafter adopted by
the Commission. In addition, promptly upon the request of any XX
Xxxxxx, the Company shall provide such XX Xxxxxx with such publicly
available financial statements, reports and other information as may
be required to permit such XX Xxxxxx to Transfer shares of Registrable
Securities to Qualified Institutional Investors pursuant to Rule 144A
of the Securities Act.
(b) The Company shall not, and shall not permit its majority
owned subsidiaries to, effect any public sale or distribution of any
shares of Common Stock, Convertible Securities or Stock Purchase
Rights during the 5 Business Days prior to, and during the 90-day
period beginning on, the commencement of a public distribution of
Registrable Securities pursuant to any registration statement prepared
pursuant to this Section 9 (other than by the Company pursuant to such
registration if the registration is pursuant to Section 9.3 or by the
Company pursuant to any dividend reinvestment plan offered by it to
its stockholders). The Company shall not effect any registration of
its securities (other than on Form X-0, Xxxx X-0, or any successor
forms to such forms or pursuant to such other registration rights
agreements as may be approved in writing by the Majority Selling
Holders) or effect any public or private sale or distribution of any
of its securities, including a sale pursuant to Regulation D under the
Securities Act, whether on its own behalf or at the request of any
holder or holders of such securities from the date of a request for a
Demand Registration pursuant to Section 9.2 until 90 days following
the effective date of such Demand Registration statement, unless the
Company shall have previously notified in writing all Selling Holders
of the Company's desire to do so, and the Majority Selling Holders or
the managing underwriter, if any, shall have consented thereto in
writing.
(c) Any agreement entered into on or after August 31, 1997
pursuant to which the Company or any of its majority owned
subsidiaries issues or agrees to issue any Common Stock (including,
without limitation, any employee stock option, stock purchase
agreement, merger agreement or other agreement) shall contain a
provision whereby any holder receiving such Common Stock who will hold
more than one
-49-
53
percent (1%) of the amount of such Common Stock then outstanding shall
agree not to effect any public sale or distribution of any such Common
Stock during the periods described in the second sentence of Section
9.9(b), in each case including a sale pursuant to Rule 144 under the
Securities Act (unless such Person is prevented by applicable statute
or regulation from entering into such an agreement).
(d) Subject to Section 13, the Company shall not, directly or
indirectly, (x) enter into any merger, consolidation or reorganization
in which the Company shall not be the surviving corporation or (y)
Transfer or agree to Transfer all or substantially all the Company's
assets, unless prior to such merger, consolidation, reorganization or
asset Transfer, the surviving corporation or the Transferee,
respectively, shall have agreed in writing to assume the obligations
of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to include the
securities which the WS Holders would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger,
consolidation or reorganization.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and an indemnity reasonably
satisfactory to it (it being understood that the written indemnification
agreement of or affidavit of loss of Norwest Bank Iowa, National Association
shall be a sufficient indemnity) and, in case of mutilation, upon surrender and
cancellation hereof, the Company will execute and deliver in lieu hereof a new
Warrant of like tenor to such Holder; provided, however, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable form
is surrendered to the Company for cancellation.
11. OFFICE OF THE COMPANY
-50-
54
As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency, which may be the principal executive
offices of the Company (the "Designated Office"), where the Warrants may be
presented for exercise, registration of transfer, division or combination as
provided in this Warrant. Such Designated Office shall initially be the office
of the Company at Cedar Rapids, Iowa. The Company may from time to time change
the Designated Office to another office of the Company or its agent within the
United States by notice given to all registered holders of Warrants at least
ten Business Days prior to the effective date of such change.
12. FINANCIAL AND BUSINESS INFORMATION
Until the Expiration Date, the Company shall deliver to each
Holder of Warrants or of Warrant Stock one copy of each of the following items:
(i) promptly after filing thereof, copies of all regular
and periodic reports, proxy statements (other than preliminary) and
registration statements (other than registration statements on Forms
S-3 (relating to debt securities) and S-8) which the Company may file
with the Securities and Exchange Commission or any governmental agency
substituted therefor.
(ii) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available by the Company to the holders of any class of its
securities generally or by any Subsidiary of the Company to the
holders of any class of its securities generally; and
(iii) with reasonable promptness, such other public
information relating to the Company and its Subsidiaries as the Holder
may, from time to time, reasonably request.
-51-
55
13. REPURCHASE BY THE COMPANY OF WARRANTS
The Company shall have the right (the "Call"), upon written
notice (the "Call Notice") to the Holders of all outstanding Warrants given at
any time on or after the date of the occurrence of the Triggering Event and
before May 31, 1997, to repurchase on the date specified in the notice from
each Holder of a Warrant all of such Warrant for an amount equal to the result
(rounded to the nearest cent) obtained by multiplying One Dollar ($1.00) by a
fraction, the numerator of which shall be the aggregate number of shares for
which this Warrant may be exercised and the denominator of which shall be the
aggregate number of shares for which all outstanding Series A Warrants may be
exercised, and in all events not more than One Dollar ($1.00) for all Series A
Warrants. On the date of any repurchase of this Warrant pursuant to this
Section 13, the Holder shall assign to the Company such Warrant without any
representation or warranty (except as to title and the absence of Liens), by
the surrender of this Warrant at the Designated Office against payment of the
repurchase price therefor.
14. MISCELLANEOUS
14.1. Nonwaiver. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Company or the
Holder shall operate as a waiver of such right or otherwise prejudice the
rights, powers or remedies of such Person.
14.2. Notice Generally. Any notice, demand, request,
consent, approval, declaration, delivery or communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) if to any Holder of this Warrant or of Warrant Stock
issued upon the exercise hereof, at its last known address appearing
on the books of the Company maintained for such purpose;
(b) if to the Company, at its Designated Office;
-52-
56
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three Business Days after the same
shall have been deposited in the United States mail, or one Business Day after
the same shall have been delivered to Federal Express or another overnight
courier service.
14.3. Indemnification. If the Company fails to make, when
due, any payments provided for in this Warrant, the Company shall pay to the
Holder hereof (a) interest at the Agreed Rate on any amounts due and owing to
such Holder from the date due until the date of payment and (b) such further
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys' fees and expenses incurred by such Holder
in collecting any amounts due hereunder. The Company shall indemnify, save and
hold harmless the Holder hereof and the Holders of any Warrant Stock issued
upon the exercise hereof from and against any and all liability, loss, cost,
damage, reasonable attorneys' and accountants' fees and expenses, court costs
and all other out-of-pocket expenses incurred in connection with or arising
from a Company Default. This indemnification provision shall be in addition to
the rights of such Holder or Holders to bring an action against the Company for
breach of contract based on such Company Default.
14.4. Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Common Stock,
and no enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder to pay the Exercise Price for
any Warrant Stock other than pursuant to an exercise of this Warrant or any
liability as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
14.5. Remedies. Each Holder of Warrants and/or Warrant
Stock, in addition to being entitled to exercise its rights granted by law,
including recovery of damages, shall be entitled to specific performance of its
rights provided under this War-
-53-
57
rant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees, in an action for specific
performance, to waive the defense that a remedy at law would be adequate.
14.6. Successors and Assigns. Subject to the provisions of
Sections 3.1, 8.1 and 8.2, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the permitted successors and assigns of the Holder hereof. The provisions of
this Warrant are intended to be for the benefit of all Holders from time to
time of this Warrant and, in the case of Section 9, all Holders of shares of
Warrant Stock issued upon the exercise hereof (including transferees), and
shall be enforceable by any such Holder.
14.7. Amendment. This Warrant and all other Warrants may be
modified or amended or the provisions hereof waived with the written consent of
the Company and the Majority Warrant Holders, provided that no such Warrant may
be modified or amended to reduce the number of shares of Common Stock for which
such Warrant is exercisable or to increase the price at which such shares may
be purchased upon exercise of such Warrant (before giving effect to any
adjustment as provided therein) without the written consent of the Holder
thereof.
14.8. Severability. Wherever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Warrant.
14.9. Headings. The headings used in this Warrant are for
the convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
14.10. GOVERNING LAW; JURISDICTION. IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO
CONTRACTS MADE AND
-54-
58
PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO THE VALIDITY OF THIS WARRANT,
THE ISSUANCE OF WARRANT STOCK UPON EXERCISE HEREOF AND THE RIGHTS AND DUTIES OF
THE COMPANY WITH RESPECT TO REGISTRATION OF TRANSFER, WHICH SHALL BE GOVERNED
BY THE LAWS OF DELAWARE. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE
OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, SHALL HAVE, EXCEPT AS SET FORTH
BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS WARRANT
OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT
IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS.
-55-
59
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
NORAND CORPORATION
By:_________________________
Name:
Title:
[SEAL]
Attest:
By:___________________________
Name:
Title:
-56-
60
ANNEX A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ shares Common Stock of Norand
Corporation and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_________________ whose address is __________________________________________
and, if such shares of Common Stock shall not include all of the shares of
Common Stock issuable as provided in this Warrant, that a new Warrant of like
tenor and date for the balance of the shares of Common Stock issuable hereunder
be delivered to the undersigned.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
61
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all
of the rights of the undersigned under this Warrant, with respect to the number
of shares of Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint ________________________
attorney-in-fact to register such transfer onto the books of Norand Corporation
maintained for the purpose, with full power of substitution in the premises.
Dated:___________________ Print Name:___________________
Signature:____________________
Witness:______________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
