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EXHIBIT 10.48
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INMAC CORP.
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COMMON STOCK PURCHASE WARRANT
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JUNE 29, 1995
This Warrant and any shared acquired upon the exercise of this
Warrant have not been registered under the Securities Act of 1933 and
may not be transferred in the absence of such registration or on
exemption therefrom under such Act. This Warrant expires after the
close of normal business hours on September 15, 2001, unless exercised
prior to such time.
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TABLE OF CONTENTS
Page
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1. Exercise of Warrant........................................................................ 1
1.1. Manner of Exercise................................................................ 1
1.2. When Exercise Deemed Effected..................................................... 2
1.3. Delivery of Stock Certificates, etc............................................... 2
1.4. Company to Reaffirm Obligation.................................................... 2
1.5. Payment by Application of Notes or
Surrender of Warrant.............................................................. 3
2. Adjustment of Common Stock Issuable Upon Exercise.......................................... 4
2.1. Number of Shares; Warrant Price................................................... 4
2.2. Adjustment of Warrant Price....................................................... 4
2.3. Treatment of Options and Convertible Securities................................... 5
2.4. Treatment of Stock Dividends, Stock Splits, etc................................... 7
2.5. Computation of Consideration...................................................... 8
2.6. Adjustments for Combinations, etc................................................. 9
2.7. Dilution in Case of Other Securities.............................................. 10
2.8. Minimum Adjustment of Warrant Price............................................... 10
3. Consolidation, Merger, Sale of Assets, Reorganization, etc................................. 10
3.1. General Provisions................................................................ 10
3.2. Assumption of Obligations......................................................... 11
4. Other Dilutive Events...................................................................... 12
5. No Dilution or Impairment.................................................................. 12
6. Accountants' Report as to Adjustments...................................................... 13
7. Notices of Corporate Action................................................................ 13
8. Restrictions on Transfer................................................................... 14
8.1. Restrictive Legends............................................................... 14
8.2. Notice of Proposed Transfer; Removal of Legend.................................... 15
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8.3. Termination of Restrictions....................................................... 16
9. Registration under Securities Act, etc..................................................... 16
9.1. Registration on Request........................................................... 16
9.2. Incidental Registration........................................................... 19
9.3. Registration Procedures........................................................... 20
9.4. Underwritten Offerings............................................................ 24
9.5. Preparation; Reasonable Investigation............................................. 25
9.6. Indemnification................................................................... 25
9.7. Adjustments Affecting Registrable Securities...................................... 28
9.8. Covenants Relating to Rule 144.................................................... 28
10. Availability of Information................................................................ 28
11. Reservation of Stock, etc.................................................................. 29
12. Listing on Securities Exchanges............................................................ 29
13. Ownership, Transfer and Substitution of Warrants........................................... 29
13.1. Ownership of Warrants............................................................. 29
13.2. Transfer and Exchange of Warrants................................................. 30
13.3. Replacement of Warrants........................................................... 30
14. Definitions................................................................................ 30
15. Remedies................................................................................... 37
16. No Rights or Liabilities as Stockholder.................................................... 37
17. Notices.................................................................................... 38
18. Expiration; Notice......................................................................... 38
19. Miscellaneous.............................................................................. 38
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INMAC CORP.
Common Stock Purchase Warrant
Expiring September 15, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
June 29, 1995
No. W-1
Inmac Corp., a Delaware corporation (the "Company"), for value
received, hereby certifies that The Prudential Insurance Company of America, or
registered assigns (the "Purchaser"), is entitled to purchase from the Company
One Hundred Seventy-Five Thousand (175,000) duly authorized, validly issued,
fully paid and nonassessable shares of the Company's Common Stock, par value
$.01 per share (the "Common Stock"), at the initial purchase price per share of
$6.756 at any time or from time to time during the Exercise Period, all subject
to the terms, conditions and adjustments set forth below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the
"Warrants", such term to include all Warrants issued in substitution therefor)
originally issued in connection with the issue and sale by the Company of its
two series of its Senior Guaranteed Notes due September 15, 2001 (together with
all notes issued in substitution therefor, the "Notes"), pursuant to the Note
and Warrant Purchase Agreement (the "Note Agreement"), dated as of June 29, 1995
among Inmac, B.V., the Company and the Purchaser listed in the Purchaser
Schedule attached thereto. The Warrants originally so issued evidence rights to
purchase an aggregate of 175,000 shares of Common Stock, subject to adjustment
as provided herein. Certain capitalized terms used in this Warrant are defined
in section 14.
1. Exercise of Warrant. 1.1. Manner of Exercise. This Warrant
may be exercised by the holder hereof, in whole or in part, during Normal
Business Hours on any Business Day during the Exercise Period by surrender of
this Warrant, with the form of subscription at the end hereof (or a reasonable
facsimile thereof) duly executed by such holder, to the Company at its principal
office (or, if such exercise shall be in connection with an underwritten Public
Offering of shares of Common Stock (or Other Securities) issuable upon the
exercise of this Warrant, at the location at which the Company shall have agreed
to deliver the shares of Common Stock (or Other Securities) subject to such
underwritten Public Offering), accompanied by payment, in cash or by certified
or official bank check payable to the order of the Company or by the application
of Notes or surrender of this Warrant in the manner provided in section
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1.5 or by wire transfer of immediately available funds (or by any combination of
such methods), in the amount obtained by multiplying (a) the number of shares of
Common Stock (without giving effect to any adjustment therein) designated in
such form of subscription by (b) $6.756, and such holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) determined as
provided in sections 2 through 4.
1.2. When Exercise Deemed Effected. Each exercise of this
Warrant shall be deemed to have been effected immediately prior to the close of
Normal Business Hours on the Business Day during the Exercise Period on which
this Warrant shall have been surrendered to the Company (or, if such exercise
shall be in connection with an underwritten Public Offering of shares of Common
Stock (or Other Securities) issuable upon the exercise of this Warrant, at such
time as the holder hereof and the Company may agree to permit the holder hereof
to participate in such Public Offering) as provided in section 1.1, and at such
time the person or persons in whose name or names any certificate or
certificates for shares of Common Stock (or Other Securities) shall be issuable
upon such exercise as provided in section 1.3 shall be deemed to have become the
holder or holders of record thereof.
1.3. Delivery of Stock Certificates, etc. As soon as
practicable after the exercise of this Warrant, in whole or in part, and in any
event within three Business Days thereafter (unless such exercise shall be in
connection with an underwritten Public Offering of shares of Common Stock (or
Other Securities) subject to this Warrant, in which event concurrently with such
exercise), the Company at its expense (including the payment by it of any
applicable taxes payable by the Company) will cause to be issued in the name of
and delivered to the holder hereof or, subject to section 8, as such holder
(upon payment by such holder of any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such holder shall be
entitled upon such exercise plus, in lieu of any fractional share to
which such holder would otherwise be entitled, cash in an amount equal
to the same fraction of the Market Price per share of such Common Stock
(or Other Securities) on the Business Day next preceding the date of
such exercise, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal (without giving
effect to any adjustment therein) to the number of such shares called
for on the face of this Warrant minus the number of such shares
designated by the holder upon such exercise as provided in section 1.1.
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1.4. Company to Reaffirm Obligations. The Company will, at the
time of or at any time after each exercise of this Warrant, upon the request of
the holder hereof or of any shares of Common Stock (or Other Securities) issued
upon such exercise, acknowledge in writing its continuing obligation to afford
to such holder all rights (including, without limitation, any right of
registration of any shares of Common Stock (or Other Securities) issuable upon
exercise of this Warrant pursuant to section 9) to which such holder shall
continue to be entitled after such exercise in accordance with the terms of this
Warrant, provided that if any such holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
such rights to such holder.
1.5. Payment by Application of the Notes or Surrender of
Warrant. (a) Upon any exercise of this Warrant, the holder hereof may, at its
option, instruct the Company, by so specifying in the form of subscription
submitted therewith as provided in section 1.1, to apply to the payment required
by section 1.1 all or any part of the principal amount then unpaid and of the
interest on such principal amount then accrued on any one or more Notes at the
time held by such holder, in which case the Company will accept the aggregate
amount of principal and accrued interest on such principal specified in such
form of subscription in satisfaction of a like amount of such payment. In case
less than the entire unpaid principal amount of any Note shall be so specified,
the principal amount so specified shall be credited, as of the date of such
exercise, on a pro rata basis against all future installments of principal of
such Note. Within five days after receipt of any such notice, the Company will
pay to the holder of the Notes submitting such form of subscription, the manner
provided in such Notes and the Note Agreement, all unpaid interest accrued (but
not applied to the payment required by section 1.1 under this section 1.5) to
the date of exercise of such Warrant on the principal amount so specified in
such form of subscription. In the event that the entire unpaid principal amount
of any Note is applied to the payment required by section 1.1 under this section
1.5, such Note shall be promptly surrendered and cancelled and shall be deemed
no longer outstanding for all purposes of the Note Agreement, except as provided
in paragraph 4E thereof.
(b) Upon any exercise of this Warrant, the holder hereof may,
at its option, make the payment required by section 1.1 by surrendering this
Warrant, and making the appropriate instruction in the form of subscription
submitted therewith as provided in section 1.1, in which event the Company shall
issue to the holder hereof, and will otherwise comply with section 1.3 with
respect to, a number of shares of Common Stock computed using the following
formula:
(A-B)
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X = Y A
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where: X = the number of shares of Common Stock to be issued to
holder pursuant to this paragraph (b).
Y = the number of shares of Common
Stock issuable upon any exercise other than
pursuant to this paragraph (b).
A = the Market Price of one share of Common Stock.
B = the Warrant Price.
2. Adjustment of Common Stock Issuable Upon Exercise. 2.1.
Number of Shares; Warrant Price. The number of shares of Common Stock which the
holder of this Warrant shall be entitled to receive upon each exercise hereof
shall be determined by multiplying the number of shares of Common Stock which
would otherwise (but for the provisions of this section 2) be issuable upon such
exercise, as designated by the holder hereof pursuant to section 1.1, by a
fraction of which (i) the numerator is $6.756 and (ii) the denominator is the
Warrant Price in effect on the date of such exercise. The "Warrant Price" shall
initially be $6.756 per share, shall be adjusted and readjusted from time to
time as provided in this section 2 and, as so adjusted or readjusted, shall
remain in effect until a further adjustment or readjustment thereof is required
by this section 2.
2.2. Adjustment of Warrant Price. 2.2.1. Issuance of
Additional Shares of Common Stock. In case the Company, at any time or from time
to time after June 29, 1995 (the "Initial Date"), shall issue or sell Additional
Shares of Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to section 2.3 or 2.4) without consideration or for a
consideration per share less than the Base Price in effect, in each case, on the
date of and immediately prior to such issue or sale, then, and in each such
case, subject to section 2.8, the Warrant Price then in effect shall be reduced,
concurrently with such issue or sale, to a price (calculated to the nearest .001
of a cent) determined by multiplying such Warrant Price by a fraction,
(a) the numerator of which shall be (i) the number of shares
of Common Stock outstanding immediately prior to such issue or sale
plus (ii) the number of shares of Common Stock which the aggregate
consideration received (as determined pursuant to section 2.5) by the
Company for the total number of such Additional Shares of Common Stock
so issued or sold would purchase at the Base Price, and
(b) the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such issue or sale,
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provided that, for the purposes of this section 2.2.1 (x) shares of Common Stock
issuable pursuant to outstanding Convertible Securities or Options (other than
Additional Shares of Common Stock deemed to have been issued pursuant to section
2.3 or 2.4) shall be deemed to be outstanding, (y) immediately after any
Additional Shares of Common Stock are deemed to have been issued pursuant to
section 2.3 or 2.4, such Additional Shares shall be deemed to be outstanding,
and (z) treasury shares shall not be deemed to be outstanding.
2.2.2. Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the Initial Date shall declare,
order, pay or make, or shall fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution
(including, without limitation, any distribution of other or additional stock or
other securities or property or Options by way of dividend or spin-off,
reclassification, recapitalization or similar corporate rearrangement) on any
Common Stock , other than (a) a dividend payable in Additional Shares of Common
Stock or in Options for Common Stock or (b) a regular, periodic dividend payable
in cash and declared out of the earned surplus of the Company (not to exceed the
earned surplus as at the date thereof or otherwise the maximum amount then
permitted by applicable law), then, and in each such case, subject to section
2.8, the Warrant Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of any class of
securities entitled to receive such dividend or distribution shall be reduced,
effective as of the close of business on such record date, to a price
(calculated to the nearest .001 of a cent) determined by multiplying such
Warrant Price by a fraction,
(i) the numerator of which shall be the Current Market Price
in effect on such record date or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement of ex-dividend
trading, less the value of such dividend or distribution (as determined
in good faith by the Board of Directors of the Company) applicable to
one share of Common Stock, and
(ii) the denominator of which shall be such Current Market
Price.
2.3. Treatment of Options and Convertible Securities. In case
the Company at any time or from time to time after the Initial Date shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Shares of Common Stock (as set forth in the instrument relating
thereto, without regard to any provisions contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or, in the
case of Convertible Securities and Options therefor, the conversion or
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exchange of such Convertible Securities, shall be deemed to be issued for
purposes of section 2.1 as of the time of such issue, sale, grant or assumption
or, in case such a record date shall have been fixed, as of the close of
business on such record date (or, if the Common Stock trades on an ex-dividend
basis on such record date, on the date prior to the commencement of ex-dividend
trading), provided that such Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to section 2.5) of such shares would be less than the Base Price in
effect, in each case, on the date of and immediately prior to such issue, sale,
grant or assumption or immediately prior to the close of business on such record
date (or, if the Common Stock trades on an ex-dividend basis on such record
date, on the date prior to the commencement of ex-dividend trading), as the case
may be, and provided, further, that in any case in which Additional Shares of
Common Stock are so deemed to be issued,
(a) no further adjustment of the Warrant Price shall be made
upon the subsequent issue or sale of Additional Shares of Common Stock
or Convertible Securities upon the exercise of such Options or the
conversion or exchange of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be
recomputed to reflect such increase or decrease insofar as it affects
such Options, or the rights of conversion or exchange under such
Convertible Securities, which are outstanding at such time;
(c) upon the expiration of any such Options or of the rights
of conversion or exchange under any such Convertible Securities which
shall not have been exercised (or upon purchase by the Company and
cancellation or retirement of any such Options which shall not have
been exercised or of any such Convertible Securities the rights of
conversion or exchange under which shall not have been exercised), the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or date
prior to the commencement of ex-dividend trading, as the case may be,
with respect thereto), and any subsequent adjustments based thereon,
shall,
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upon such expiration (or such cancellation or retirement, as the case
may be), be recomputed as if:
(i) in the case of Options for Common Stock or of
Convertible Securities, the only Additional Shares of Common
Stock issued or sold were the Additional Shares of Common
Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was (x) in
the case of Options, an amount equal to (1) the consideration
actually received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus
(2) the consideration actually received by the Company upon
such exercise, minus (3) the consideration paid by the Company
for any purchase of such Options which were not exercised, or
(y) in the case of Convertible Securities, an amount equal to
(1) the consideration actually received by the Company for the
issue, sale, grant or assumption of all such Convertible
Securities which were actually converted or exchanged or
purchased by the Company, plus (2) the additional
consideration, if any, actually received by the Company upon
such conversion or exchange, minus (3) the consideration paid
by the Company for any purchase of such Convertible Securities
the rights of conversion or exchange under which were not
exercised, and
(ii) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually
issued or sold upon the exercise of such Options were issued
at the time of the issue, sale, grant or assumption of such
Options, and the consideration received by the Company for the
Additional Shares of Common Stock deemed to have then been
issued was an amount equal to (x) the consideration actually
received by the Company for the issue, sale, grant or
assumption of all such Options, whether or not exercised, plus
(y) the consideration deemed to have been received by the
Company (pursuant to section 2.5) upon the issue or sale of
the Convertible Securities with respect to which such Options
were actually exercised, minus (z) the consideration paid by
the Company for any purchase of such Options which were not
exercised;
(d) no readjustment pursuant to subdivision (b) or (c) above
shall have the effect of increasing the Warrant Price by an amount in
excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities; and
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(e) in the case of any such Options which expire by their
terms not more than 30 days after the date of issue, sale, grant or
assumption thereof, no adjustment of the Warrant Price shall be made
until the expiration or exercise of all such Options, whereupon such
adjustment shall be made in the manner provided in subdivision (c)
above.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the
Company at any time or from time to time after the Initial Date shall declare or
pay any dividend or other distribution on any class of stock of the Company
payable in Common Stock, or shall effect a subdivision of the outstanding shares
of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock),
then, and in each such case, Additional Shares of Common Stock shall be deemed
to have been issued (a) in the case of any such dividend or distribution,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend or
distribution, or (b) in the case of any such subdivision, at the close of
business on the day immediately prior to the day upon which such corporate
action becomes effective.
2.5. Computation of Consideration. For the purposes of this section 2:
(a) The consideration for the issue or sale of any Additional
Shares of Common Stock or for the issue, sale, grant or assumption of
any Options or Convertible Securities, irrespective of the accounting
treatment of such consideration, shall
(i) insofar as it consists of cash, be computed at
the amount of cash received by the Company, after deducting
any expenses paid or incurred by the company or any
commissions or compensation paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services and any accrued interest or dividends in connection
with such issue or sale,
(ii) insofar as it consists of consideration
(including securities) other than cash, be computed at the
Fair Value thereof at the time of such issue or sale, after
deducting any expenses paid or incurred by the Company for any
commissions or compensation paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services and any accrued interest or dividends in connection
with such issue or sale, and
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(iii) in case Additional Shares of Common Stock are
issued or sold or Options or Convertible Securities are
issued, sold, granted or assumed together with other stock or
securities or other assets of the Company for a consideration
which covers both, be the proportion of such consideration so
received, computed as provided in subdivisions (i) and (ii)
above, allocable to such Additional Shares of Common Stock,
Options or Convertible Securities, as the case may be, all as
determined in good faith by the Board of Directors of the
Company or, if the Requisite Holders of Warrants shall object
to such determination, by an independent investment banking
firm of national standing engaged by the Company that has not
rendered services to the Company, any Subsidiary or any
Affiliate within the three-year period preceding such
engagement and the determination by such investment banking
firm shall be final and binding. If such investment banking
firm allocates such consideration in a manner which is more
favorable to the holders of Warrants then the allocation
determined by the Board of Directors of the Company, the
Company shall pay the fees and expenses of such investment
banking firm; otherwise, the holders of Warrants objecting to
such determination shall pay the fees and expenses of such
investment banking firm.
(b) All Additional Shares of Common Stock, Options or
Convertible Securities issued in payment of any dividend or other
distribution on any class of stock of the Company and all Additional
Shares of Common Stock issued to effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock) shall be deemed to have been issued without
consideration.
(c) Additional Shares of Common Stock deemed to have been
issued for consideration pursuant to section 2.3, relating to Options
and Convertible Securities, shall be deemed to have been issued for a
consideration per share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issue, sale, grant or
assumption of the Options or Convertible Securities in
question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for
a subsequent adjustment of such consideration) payable to the
Company upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and
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the conversion or exchange of such Convertible Securities, in
each case computing such consideration as provided in the
foregoing subdivision (a),
by
(ii) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment
of such number) issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities.
(d) Additional Shares of Common Stock issued or deemed to have
been issued pursuant to the operation of anti-dilution provisions
applicable to Convertible Securities (other than the Warrants), Options
or other securities of the Company (either as a result of the
adjustments provided for by the Warrants or otherwise) shall be deemed
to have been issued without consideration.
2.6. Adjustments for Combinations, etc. In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Warrant Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
2.7. Dilution in Case of Other Securities. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in section 3) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis consistent with the standards established in the
other provisions of this section 2, the purchase rights granted by this Warrant,
then, and in each such case, the computations, adjustments and readjustments
provided for in this section 2 with respect to the Warrant Price shall be made
as nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable upon the exercise of the
Warrants, so as to protect the holders of the Warrants against the effect of
such dilution.
2.8. Minimum Adjustment of Warrant Price. If the amount of any
adjustment of the Warrant Price required pursuant to this section 2 would be
less than one one-hundredth (.01) of a cent, such amount shall be carried
forward for the next five years and adjustment with respect thereto made at the
time of and together with
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any subsequent adjustment which, together with such amount and any other amount
or amounts so carried forward, shall aggregate at least one one-hundredth (.01)
of a cent.
3. Change in Control Events, etc. 3.1. General Provisions. In
case the Company, after the Initial Date, shall consummate or announce its
intent to consummate a Change in Control Event, then, and in the case of each
such transaction, the Company shall give written notice thereof to each holder
of any Warrant not less than 30 days, if practicable, prior to the consummation
thereof and proper provision shall be made so that, upon the basis and the terms
and in the manner provided in this section 3, the holder of this Warrant, upon
the exercise hereof at any time after the consummation of such transaction shall
be entitled to receive, at the aggregate Warrant Price in effect at the time of
such consummation for all Common Stock (or Other Securities) issuable upon such
exercise immediately prior to such consummation, in lieu of the Common Stock (or
Other Securities) issuable upon such exercise prior to such consummation, either
of the following, as such holder shall elect by written notice to the Company on
or before the seventh day preceding the date of the consummation of such
transaction (and, in the absence of such notice, the provisions of subdivision
(ii) below shall be deemed to have been elected by such holder on such seventh
day):
(i) the highest amount of cash, securities or other property
to which such holder would actually have been entitled as a shareholder
upon such consummation if such holder had exercised this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments
provided for in section 2 and this section 3, provided that if a
purchase, tender or exchange offer shall have been made to and accepted
by the holders of Common Stock under circumstances in which, upon
completion of such purchase, tender or exchange offer, would result in
a Change in Control Event, and if the holder of this Warrant so
designates in such notice given to the Company, the holder of this
Warrant shall be entitled to receive the highest amount of cash,
securities or other property to which such holder would actually have
been entitled as a shareholder if the holder of this Warrant had
exercised this Warrant prior to the expiration of such purchase, tender
or exchange offer, accepted such offer and all of the Common Stock held
by such holder had been purchased pursuant to such purchase, tender or
exchange offer, subject to adjustments (from and after the consummation
of such purchase, tender or exchange offer) as nearly equivalent as
possible to the adjustments provided for in section 2 and this section
3; or
(ii) the number of shares of Voting Common Stock (or
equivalent equity interests) of the Acquiring Person or, if the
Acquiring Person fails to meet, but its Parent meets, the requirements
set forth in the proviso below, of its Parent, subject to adjustments
(subsequent to such corporate action) as nearly equivalent
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as possible to the adjustments provided for in section 2 and this
section 3, determined by dividing (x) the product obtained by
multiplying (1) the number of shares of Common Stock (or Other
Securities) to which the holder of this Warrant would have been
entitled had such holder exercised this Warrant immediately prior to
the consummation of such transaction, times (2) the greater of the
Acquisition Price and the Warrant Price in effect on the date
immediately preceding the date of such consummation, by (y) the Current
Market Price per share of the Voting Common Stock (or equivalent equity
interests) of the Acquiring Person or its Parent, as the case may be,
on the date immediately preceding the date of such consummation;
provided that the Company shall not effect any Change in Control Event unless,
immediately after the date of the consummation of such transaction, the
Acquiring Person or its Parent is required to file, by virtue of having an
outstanding class of Voting Common Stock (or equivalent equity interests),
reports with the Commission pursuant to section 13 or section 15(d) of the
Exchange Act, and such Voting Stock (or equivalent equity interests) is listed
or admitted to trading on a national securities exchange or is quoted in the
NASD automated quotation system. In the event that the Acquiring Person fulfills
the requirements contained in the immediately preceding proviso, then, if the
holder of this Warrant shall elect (or shall be deemed to elect) to receive
Voting Common Stock (or equivalent equity interests) pursuant to subdivision
(ii) above, such holder shall be entitled to receive, upon the basis stated in
such subdivision (ii), only the Voting Common Stock (or equivalent equity
interests) of the Acquiring Person.
3.2. Assumption of Obligations. Notwithstanding anything
contained in this Warrant or the Note Agreement to the contrary, the Company
will not effect any Change in Control Event unless, prior to the consummation
thereof, each Person (other than the Company) which may be required to deliver
any cash, stock or other securities or other property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the holder of this Warrant, (a) the obligations of
the Company under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of the Company
under this Warrant), and (b) the obligation to deliver to such holder such cash,
stock or other securities or other property as, in accordance with the foregoing
provisions of this section 3, such holder may be entitled to receive, and such
Person shall have similarly delivered to such holder an opinion of counsel for
such Person, which counsel shall be reasonably satisfactory to such holder,
stating that this Warrant shall thereafter continue in full force and effect and
the terms hereof (including, without limitation, all of the provisions of
section 2 and this section 3) shall be applicable to the cash, stock or other
securities or other property which such Person
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may be required to deliver upon any exercise of this Warrant or the exercise of
any rights pursuant hereto. Nothing in this section 3 or in section 7 shall be
deemed to authorize the Company to enter into any transaction not otherwise
permitted by the Note Agreement or the U.S. Guaranty.
4. Other Dilutive Events. In case any event shall occur as to
which the provisions of section 2 or section 3 are not strictly applicable but
the failure to make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles of such sections, then, in each such case, the Company shall appoint
a firm of independent public accountants of recognized national standing (which
may be the regular auditors of the Company) or an independent firm of investment
bankers, which shall give their opinion upon the adjustment, if any, on a basis
consistent with the essential intent and principles established in sections 2
and 3, necessary to preserve, without dilution, the purchase rights represented
by this Warrant, but in no event shall any such adjustment have the effect of
increasing the Warrant Price or decreasing the number of shares of Common Stock
issuable upon exercise of this Warrant. Upon receipt of such opinion, the
Company will promptly mail a copy thereof to the holder of this Warrant and
shall make the adjustments described therein.
5. No Dilution or Impairment. The Company will not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of stock upon the exercise
of all of the Warrants from time to time outstanding, and (c) will not take any
action which results in any adjustment of the Warrant Price if the total number
of shares of Common Stock (or Other Securities) issuable after the action upon
the exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
6. Accountants' Report as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of the Warrants, the Company at its expense will
promptly compute such
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adjustment or readjustment in accordance with the terms of the Warrants and the
chief financial officer of the Company will certify such computation and prepare
a report setting forth such adjustment or readjustment and showing in reasonable
detail the method of calculation thereof and the facts upon which such
adjustment or readjustment is based, including without limitation a statement of
(a) the consideration received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued,
(b) the number of shares of Common Stock, outstanding or deemed to be
outstanding, and (c) the Warrant Price in effect immediately prior to such issue
or sale and as adjusted and readjusted (if required by section 2) on account
thereof. The Company will forthwith mail a copy of each such certificate and
report to each holder of a Warrant and will, upon the written request at any
time of any holder of a Warrant, furnish to such holder a like certificate and
report setting forth the Warrant Price at the time in effect and showing in
reasonable detail how it was calculated. The Company will also keep copies of
all such reports at its principal office and will cause the same to be available
for inspection at such office during Normal Business Hours by any holder of a
Warrant or any prospective purchaser of a Warrant designated by the holder
thereof. At least once in each fiscal year of the Company, in connection with
the preparation of the Company's annual audited financial statements, the
Company will cause the auditors preparing such statements to review the
certificates and reports delivered pursuant to this section 6 and to confirm in
writing to each holder of a Warrant the correctness of the computations set
forth therein; provided, however, that such review and confirmation need not be
made if the aggregate amounts of adjustments in any fiscal year is less than
$0.10. Such confirmation may accompany or be part of the certificate delivered
by the auditors to the holders of the Notes pursuant to Section 4.1 of the U.S.
Guaranty.
7. Notices of Corporate Action. In the event of
(a) any taking by the Company of a record of the
holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive
any dividend (other than a regular periodic dividend payable
in cash out of earned surplus) or other distribution, or any
right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) 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 of all or
substantially all the assets of the Company to any other
Person, or
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(c) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, and (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place and the time,
if any such time is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for the securities or other property deliverable
upon such reorganization, reclassification, recapitalization, consolidation,
merger, transfer, dissolution, liquidation or winding-up. Such notice shall be
mailed at least 20 days prior to the date therein specified, in the case of any
date referred to in the foregoing subdivision (i), and at least 30 days prior to
the date therein specified, in the case of the date referred to in the foregoing
subdivision (ii).
8. Restrictions on Transfer. 8.1. Restrictive Legends. Except
as otherwise permitted by this section 8, each Warrant originally issued
pursuant to the Note Agreement and each Warrant issued upon direct or indirect
transfer or in substitution for any Warrant pursuant to section 13 shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"This Warrant and any shares acquired upon the exercise of
this Warrant have not been registered under the Securities Act of 1933
and may not be transferred in the absence of such registration or an
exemption therefrom under such Act."
Except as otherwise permitted by this section 8, each certificate for Common
Stock (or Other Securities) issued upon the exercise of any Warrant and each
certificate issued upon the direct or indirect transfer of any such Common Stock
(or Other Securities) shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be transferred
in the absence of such registration or an exemption therefrom under
such Act. Such shares are also subject to certain provisions regarding
transferability imposed by Common Stock Purchase Warrants expiring
September 21, 2001, a copy of which is on file at the offices of the
Company."
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8.2. Notice of Proposed Transfer; Removal of Legend. Prior to
any transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act (other than a transfer
pursuant to Rule 144, Rule 144A or any comparable rule under such Act), the
holder thereof will give written notice to the Company of such holder's
intention to effect such transfer and to comply in all other respects with this
section 8.2. Each such notice (a) shall describe the manner and circumstances of
the proposed transfer in reasonable detail, including the name and address of
the transferee, the number of shares covered by the Warrants to be transferred,
and the expected settlement date for the transaction, and (b) shall designate
counsel for the holder giving such notice (who may be in-house counsel for such
holder). The holder giving such notice will submit a copy thereof to the counsel
designated in such notice and the Company will promptly submit a copy thereof to
its counsel. The following provisions shall then apply:
(i) If in the opinion of each such counsel the proposed
transfer may be effected without registration, such holder shall
thereupon be entitled to transfer such Restricted Securities in
accordance with the terms of the notice delivered by such holder to the
Company. Each Warrant or certificate, if any, issued upon or in
connection with such transfer shall bear the appropriate restrictive
legend set forth in section 8.1 unless, in the opinion of each such
counsel, such legend is no longer required to ensure compliance with
the Securities Act. Without limiting the generality of the foregoing,
the Company agrees that any transfer of a Warrant to an Institutional
Investor shall be deemed to be in compliance with the Securities Act,
so long as such Institutional Investor executes and delivers to the
Company a writing containing (A) its representation and warranty that
it is acquiring such Restricted Securities for investment and not with
a view to the distribution thereof (subject, however, to any
requirement of law that the disposition thereof shall at all times be
within the control of such holder) and (B) its acknowledgement that the
Company is relying on such representation and warranty in removing said
restrictive legend.
(ii) If the opinion of either or both of such counsel is not
to the effect that the proposed transfer may legally be effected
without registration of such Restricted Securities under the Securities
Act (in which case, such counsel shall issue written opinion(s) stating
the basis of the legal conclusions reached therein), the Company will
promptly so notify the holder thereof and thereafter such holder shall
not be entitled to transfer such Restricted Securities (other than in a
transfer pursuant to Rule 144, Rule 144A or any comparable rule under
the Securities Act) until the conditions specified in subdivision (i)
above shall be satisfied or until registration of such Restricted
Securities under the Securities Act has become effective.
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The Company will pay the reasonable fees and disbursements of counsel (other
than in-house counsel) for any holder of Restricted Securities and of counsel
for the Company in connection with all opinions rendered by them pursuant to
this section 8.2 and pursuant to section 8.3.
8.3. Termination of Restrictions. The restrictions imposed by
this section 8 upon the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities (a) when such securities
shall have been effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering such Restricted
Securities, (b) when, in the opinions of both counsel for the holder thereof and
counsel for the Company, such restrictions are no longer required in order to
insure compliance with the Securities Act, or (c) when the holder of such
securities is entitled to distribute such securities to the public pursuant to
Rule 144(k) under the Securities Act. Whenever such restrictions shall terminate
as to any Restricted Subsidiaries, as soon as practicable thereafter and in any
event within five days, the holder thereof shall be entitled to receive from the
Company, without expense to such holder (other than transfer taxes, if any), new
securities of like tenor not bearing the applicable legend set forth in section
8.1 hereof.
9. Registration under Securities Act, etc. 9.1. Registration
on Request. (a) Request. Upon the written request of one or more Initiating
Holders, requesting that the Company effect the registration under the
Securities Act of all or part of such Initiating Holders' Registrable Securities
and specifying the intended method of disposition thereof, the Company will
promptly give written notice of such requested registration to all holders of
outstanding Registrable Securities, and thereupon will use its best efforts to
effect the registration under the Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holder or Holders for
disposition in accordance with the intended method of disposition
stated in such request, and
(ii) all other Registrable Securities the Holders of which
have made written requests to the Company for registration thereof
within 20 Business Days after the giving of such written notice by the
Company (which request shall specify the intended method of disposition
thereof),
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided that (A) the Company shall not be required to effect the
registration pursuant to this section 9.1 of any Warrants (but shall be required
to effect the registration of Registrable Securities described in clauses (b)
and (c) of the definition of Registrable Securities); (B) the Company shall not
be required to effect any registration pursuant to
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this section 9.1 if the aggregate number of Registrable Securities requested to
be registered pursuant to this section 9.1 does not equal or exceed the lesser
of (x) 40% (by number of shares) of the Registrable Securities outstanding on
the date of this Agreement (such outstanding Registrable Securities to be
adjusted from time to time to reflect the issuance of additional shares of
Common Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise by multiplying such number, as the same may have
been previously adjusted, by the percentage by which the number of outstanding
shares of Registrable Securities shall have increased or decreased as a result
of such stock dividend, stock split, combination of shares, recapitalization,
merger or consolidation or other reorganization) and (y) the amount of
Registrable Securities outstanding on the date of such request; (C) the Company
shall not be required to effect more than two registrations pursuant to this
section 9.1; and (D) the Company shall not be required to effect any
registration pursuant to this section 9.1 if within the 45-day period prior to
the date of the written request of any Initiating Holder a registration
statement in connection with a Public Offering shall have become effective under
the Securities Act. If the Board of Directors of the Company shall determine in
its good faith judgment that registration of Registrable Securities pursuant
hereto would be detrimental to the best interests of the Company and its
shareholders, the Company may delay proceeding with such registration for a
period not exceeding 90 days after its receipt of a request therefor. Subject to
subdivision (f), the Company may include in such registration other securities
for sale for its own account or for the account of any other Person.
(b) Registration Statement Form. Registrations under this
section 9.1 shall be on such appropriate registration form of the Commission
that shall be selected by the Company, and be reasonably acceptable to the
holders of more than 50% (by number of shares) of the Registrable Securities so
to be disposed of (it being understood that Form S-2 or Form S-3 or other
comparable "short-form" that the Company is then eligible to utilize is
acceptable unless (i) the managing underwriter, if any, for such distribution,
advises the Initiating Holder(s) that such registration is reasonably likely to
result in a sale of such Registrable Securities on materially less attractive
economic terms than would be the case in a sale pursuant to Form S-1 or similar
"long-form" registration or (ii) in the case of a non-underwritten distribution,
the Initiating Holder(s) reach the same determination, it being agreed, however,
that if, pursuant to clause (i) or (ii), a sale pursuant to Form S-1 or similar
"long form" registration is required by the Initiating Holder(s), such
Initiating Holder(s) shall pay all registration costs in excess of those which,
in the reasonable determination of the managing underwriter, or if there is no
managing underwriter, the Initiating Holder(s), would have been incurred in
connection with a Form ▇-▇, ▇▇▇▇ ▇-▇ or other comparable "short-form
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registration), and shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods specified in their request for
such registration.
(c) Expenses. The Company will pay all Registration Expenses
in connection with any registration requested and effected pursuant to this
section 9.1. In the event of registrations effected pursuant to this section 9.1
that includes both Registrable Securities and shares other than Registrable
Securities, the Registration Expenses (and underwriting discounts and
commissions and transfer taxes, if any) in connection with such registration
shall be allocated among all Persons on whose behalf securities of the Company
are included in such registration, pro rata among such Persons on the basis of
the respective amounts of the securities then being registered on their behalf.
(d) Selection of Underwriters. If, in the discretion of the
holders of a majority (by number of shares) of the Registrable Securities to be
registered, any offering pursuant to this section 9.1 shall constitute an
underwritten offering, the underwriter or underwriters thereof shall be selected
by such holders subject to the approval of the Company, which shall not
unreasonably withhold its acceptance of such underwriter or underwriters.
(e) Effective Registration Statement. A registration requested
pursuant to this section 9.1 will not be deemed to have been effected (i) unless
it has become effective, provided that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed of the Initiating Holders
shall be deemed to have been effected by the Company at the request of such
Initiating Holders, unless such Initiating Holders shall have elected to pay all
Registration Expenses in connection with such registration, (ii) if, after it
has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court, or (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied or waived.
(f) Priority in Requested Registrations. If a requested
registration pursuant to this section 9.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that in its
opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities)
exceeds the number which can be sold in such offering within a price range
acceptable to the Initiating Holders, the Company will include in any such
registration to the extent of the number which the Company is so advised can be
sold in
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such offering (i) first, Registrable Securities requested to be included in such
registration by the Initiating Holders, pro rata among such holders on the basis
of the number of shares of such securities requested to be included by such
holders, (ii) second, other Registrable Securities requested to be included in
such registration, pro rata among the holders thereof requesting such
registration on the basis of the number of shares of such securities requested
to be included by such holders, and (iii) third, other securities of the Company
proposed to be included in such registration, in accordance with the priorities,
if any, then existing among the Company and the holders of such other
securities.
9.2. Incidental Registration. (a) Right to Include Registrable
Securities. Notwithstanding any limitation contained in section 9.1, if the
Company at any time proposes to register any of its Common Stock under the
Securities Act (other than by a registration on Form ▇-▇, ▇-▇ or any successor
or similar forms), whether or not for sale for its own account, in a manner
which would permit registration of Registrable Securities for sale to the public
under the Securities Act, it will each such time give prompt written notice to
all holders of Registrable Securities of its intention to do so, specifying the
securities to be offered and the amount thereof proposed to be sold, and of such
holders' rights under this section 9.2. Upon the written request of any such
holder made within 15 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by such
holder and the intended method of disposition thereof), the Company will use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent requisite to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, by inclusion of such Registrable Securities in
the registration statement which covers the securities which the Company
proposes to register, provided that (A) the Company shall not be required to
effect the registration pursuant to this section 9.2 of any Warrants (but shall
be required to effect the registration of Registrable Securities described in
clauses (b) and (c) of the definition of Registrable Securities) and (B) if, at
any time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason
not to register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to each holder of
Registrable Securities and, thereupon, (x) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any holder or holders of Registrable Securities
entitled to do so to request that such registration be effected as a
registration under section 9.1, and (y) in the case of a determination to delay
registering, shall be permitted to delay registering any
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Registrable Securities for the same period as the delay in registering such
other securities. No registration effected under this section 9.2 shall relieve
the Company of its obligation to effect any registration statement upon request
under section 9.1. The Company will pay all Registration Expenses in connection
with each registration of Registrable Securities requested pursuant to this
section 9.2.
(b) Priority in Incidental Registrations. If a registration
pursuant to this section 9.2 involves an underwritten offering and the managing
underwriter advises the Company in writing that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the
Company, the Company will include in such registration to the extent of the
number which the Company is so advised can be sold in such offering securities
determined as follows:
(1) if such registration as initially proposed by the Company
was solely a primary registration of its securities, (x) first, the
securities proposed by the Company to be sold for its own account, and
(y) second, any Registrable Securities and any other securities of the
Company requested to be included in such registration, pro rata among
the holders thereof requesting such registration on the basis of the
number of shares of such securities requested to be included by such
holders, shall be determined pro rata in accordance with the respective
number of shares of all requesting holders entitled to be included in
such registration), and
(ii) if such registration as initially proposed by the Company
was in whole or in part requested by holders of securities of the
Company, other than holders of Registrable Securities, pursuant to
demand registration rights, (x) first, such securities held by the
holders initiating such registration and the holders of Registrable
Securities, pro rata among the holders thereof, on the basis of the
number of shares of such securities requested to be included by such
holders, (y) second, any other securities of the Company requested to
be included in such registration, pro rata among the holders thereof
requesting such registration on the basis of the number of shares of
such securities requested to be included by such holders, shall be
determined pro rata in accordance with the respective number of shares
of all requesting holders entitled to be included in such
registration).
9.3 Registration Procedures. If and whenever the Company is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in sections 9.1 and 9.2, the
Company will as expeditiously as possible:
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(a) prepare and file with the Commission the requisite
registration statement (including such audited financial statements as
may be required by the Securities Act or the rules and regulations
promulgated thereunder) to effect such registration and use its best
efforts to cause such registration statement to become effective,
provided that before filing such registration statement or any
amendments thereto, the Company will furnish to the counsel selected by
the holders of Registrable Securities whose Registrable Securities are
to be included in such registration copies of drafts of all such
documents proposed to be filed in reasonably final form, which
documents will be subject to the prompt review of such counsel;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to maintain the effectiveness
of such registration statement and to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement until the earlier of such time
as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set
forth in such registration statement or 180 days after such
registration statement becomes effective, provided that if less than
all the Registerable Securities are withdrawn from registration after
the relevant period, the shares to be so withdrawn shall be allocated
pro rata among the holders thereof on the basis of the respective
numbers of Registrable Securities held by them included in such
registration;
(c) furnish to each seller of Registrable Securities covered
by such registration statement such number of conformed copies of such
registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as such seller may reasonably request;
(d) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities or Blue Sky laws of
such jurisdictions as each seller thereof shall reasonably request and
to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and take any other
action which may be reasonably necessary or advisable to enable such
seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for
any such purpose be required to
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qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not, but for the requirements of this
subdivision (d), be obligated to be so qualified or to consent to
general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(f) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller (and the underwriters, if any),
of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated
the date of any closing under the underwriting agreement),
reasonably satisfactory in form and substance to such seller,
and
(ii) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration
includes an underwritten Public Offering, dated the date of
any closing under the underwriting agreement), signed by the
independent public accountants who have certified the
Company's financial statements included in such registration
statement,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in
the case of the accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten Public Offerings of securities and, in
the case of the accountants' letter, such other financial matters, as
such seller (or the underwriters, if any) may reasonably request;
(g) notify each holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made, and at the request of any such holder promptly prepare
and furnish to such seller a
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reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made;
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act, and not file any amendment or supplement to such
registration statement or prospectus to which any such seller shall
have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder, having been furnished with a copy thereof as soon as
practicable, but in any event at least two Business Days prior to the
filing thereof;
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement; and
(j) use of its best efforts, at its option, either (1) to
cause all such Registrable Securities covered by such registration
statement to be listed on a national securities exchange within the
United States (if such Registrable Securities are not already so
listed) and on each additional national securities exchange within the
United States on which similar securities issued by the Company are
then listed, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (2) to secure
designation of all such Registrable Securities covered by such
registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission and, without
limiting the generality of the foregoing, to arrange for at least three
market makers to register as such with respect to such Registrable
Securities with the NASD.
The Company may require each holder of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such holder and the distribution of such securities as the Company is advised by
its counsel is legally required in connection with such registration.
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Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that upon receipt of any notice from the Company of
the happening of any event of the kind described in subdivision (g) of this
section 9.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (g) of this
section 9.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the periods referred to in subdivision (b)
of this section 9.3 shall be extended by a number of days equal to the number of
days during the period from and including the giving of notice pursuant to
subdivision (g) of this section 9.3 to and including the date when each seller
of any Registrable Securities covered by such registration statement shall
receive the copies of the supplemented or amended or prospectus contemplated by
subdivision (g) of this section 9.3.
9.4 Underwritten Offerings. (a) Requested Underwritten
Offerings. If requested by the underwriters for any underwritten offering by
holders of Registrable Securities pursuant to the registration requested under
section 9.1, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to be satisfactory in substance
and form to the Company, each such holder and the underwriters and to contain
such representations and warranties by the Company and such other terms as are
customarily contained in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in section 9.6. The holders
of Registrable Securities to be distributed by such underwriters shall execute
and deliver and be parties to such underwriting agreement as a condition to such
holder's participation in the offering and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. No holder of Registrable
Securities shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder, such holder's ownership of the
Registrable Securities to be sold and such holder's intended method of
distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any
time proposes to register any of its securities under the Securities Act as
contemplated by
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section 9.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, subject to the provisions of section 9.2(b), use
its best efforts, if requested by any holder of Registrable Securities, to
arrange for such underwriters to include the Registrable Securities to be
offered and sold by such holder among the securities to be distributed by such
underwriters. The holders of Registrable Securities to be distributed by such
underwriters shall execute and deliver and be parties to the underwriting
agreement as a condition to such holder's participation in the offering between
the Company and such underwriters and may, at their option, require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such holders of Registrable Securities. No holder of Registrable Securities
shall be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's ownership of the Registrable
Securities to be sold and such holder's intended method of distribution and any
other representation required by law.
(c) Holdback Agreements. (i) Each holder of Registrable
Securities agrees by acquisition of such Registrable Securities, if so required
by the managing underwriter, not to effect any public sale or distribution of
such securities during the seven days prior to and such period of time as is
required by such managing underwriter (not to exceed 120 days) after any
underwritten registration pursuant to section 9.1 or 9.2 has become effective,
except as part of such underwritten registration, whether or not such holder
participates in such registration.
(ii) The Company agrees (x) not to effect any public sale or
distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the seven days
prior to and the 90 days after any underwritten registration pursuant to section
9.1 or 9.2 has become effective, except as part of such underwritten
registration and except pursuant to registrations on Form ▇-▇, ▇-▇ or any
successor or similar forms thereto, and (y) to cause each holder of its equity
securities or of any securities convertible into or exchangeable or exercisable
for any of such securities, in each case purchased from the Company at any time
after the date of this Agreement (other than in a Public Offering), to agree not
to effect any such public sale or distribution of such securities, during such
period, except as part of such underwritten registration.
9.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act, the Company will give the holders of Registrable Securities registered
under such
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registration statement, their underwriters, if any, and their respective counsel
and accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
9.6 Indemnification. (a) Indemnification by the Company. In
the event of any registration of any securities of the Company under the
Securities Act, the Company will, and hereby does, indemnify and hold harmless
the seller of Registrable Securities covered by any registration statement filed
pursuant to section 9.1 or 9.2, its directors and officers, each other Person
who participates as an underwriter in the offering or sale of such securities
and each other Person, if any, who controls any such seller or any such
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller or any
such director or officer or underwriter or controlling Person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such seller and each such director, officer, underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and strictly in conformity with written information (which information shall be
limited to a brief description of the seller, its holdings of the Registrable
Securities to be sold and its plan of distribution therefor) furnished by such
seller to the Company in an instrument duly executed by such seller specifically
stating that it is for use in the preparation thereof and provided further that
the Company shall not be liable to any Person who participates as an
underwriter, in the offering or sale of Registrable Securities or any other
Person, if any, who controls such underwriter
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within the meaning of the Securities Act, in any such case to the extent that
any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of such Person's failure to send or give a copy
of the final prospectus to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such seller or any such director, officer, underwriter or
controlling person and shall survive the transfer of such securities by such
seller. The Company shall agree to provide for such contribution relating to
such indemnity as shall be reasonably requested by any seller of Registrable
Securities or the underwriters.
(b) Indemnification by the Sellers. The Company may require,
as a condition to including any Registrable Securities in any registration
statement filed pursuant to section 9.3, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this section 9.6) the Company, each director of the
Company, each officer of the Company and each other Person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and strictly in conformity with written information (which
information shall be limited to a brief description of the seller, its holdings
of the Registrable Securities to be sold and its plan of distribution therefor)
furnished to the Company by such seller in an instrument duly executed by such
seller specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of such securities by such seller. Such seller shall agree to provide
for such contribution relating to such indemnity as shall be reasonably
requested by the Company or the underwriters, provided that such seller shall
not be required to make any contribution unless it is at fault under the
standards set forth in the first sentence of this section 9.6(b). The indemnity
and contribution provided by each seller of securities under this section 9.6(b)
shall be provided severally and not jointly or jointly and severally with any
other seller or prospective seller of securities and shall be limited in amount
to the net amount of proceeds received by such seller from the sale of
Registrable Securities pursuant to such registration statement.
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(c) Notices of Claims, etc.. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this section 9.6,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this section 9.6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, such indemnified
party shall have the right to employ counsel separate from counsel for the
indemnifying party, but the fees and expenses of such counsel shall be borne by
such indemnified party unless (i) the indemnifying party agrees to pay such fees
and expenses, (ii) the indemnifying party shall have failed to assume the
defense of such claim or engage experienced, independent, nationally-recognized
counsel on behalf of the indemnified party, or (iii) in the reasonable judgment
of the indemnified party, a conflict of interest is likely to exist between the
indemnified party and the indemnifying party with respect to such claims (in
such case, upon notice to the indemnifying party of such determination, the
indemnifying party shall not have the right to assume the defense of such
indemnified party). If none of the events described in clauses (i), (ii) or
(iii) of the preceding sentence exist, the indemnifying party shall be entitled
to participate in and to assume the defense of any action against an indemnified
party, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall consent to entry of any judgment or enter into any settlement
without the consent of the indemnified party which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) Indemnification Payments. The indemnification required by
this section 9.6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
9.7 Adjustments Affecting Registrable Securities. The Company
will not effect or permit to occur any combination or subdivision of shares
which would adversely affect the ability of the holders of Registrable
Securities to include such Registrable Securities in any registration of its
securities contemplated by this section 9 or the marketability of such
Registrable Securities under any such registration.
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9.8 Covenants Relating to Rules 144 and 144A. The Company will
file reports in compliance with the Exchange Act and will, at its expense,
forthwith upon the request of any holder of Restricted Securities, deliver to
such holder a certificate, signed by the Company's principal financial officer,
stating (a) the Company's name, address, and telephone number (including area
code), (b) the Company's Internal Revenue Service identification number, (c) the
Company's Commission file number, (d) the number of shares of Common Stock of
the Company outstanding as shown by the most recent report or statement
published by the Company, and (e) whether the Company has filed the reports
required to be filed under the Exchange Act for a period of at least 90 days
prior to the date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder. If at any time the Company is not
required to file reports in compliance with either section 13 or section 15 (d)
of the Exchange Act, the Company at its expense will, forthwith upon the written
request of the holder of any Restricted Securities, make available to (i) such
holder adequate current public information with respect to the Company within
the meaning of paragraph (c)(2) of Rule 144 of the General Rules and Regulations
promulgated under the Securities Act or (ii) such holder or a QIB designated by
such holder such financial and other information as such holder may reasonably
determine to be necessary in order to permit compliance with the information
requirements of Rule 144A under the Securities Act in connection with the resale
of the Registrable Securities.
10. Availability of Information. The Company will cooperate
with each holder of any Restricted Securities in supplying such
publicly-available information as may be necessary for such holder to complete
and file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any Restricted Securities. The Company will
furnish to each holder of any Warrants, promptly upon their becoming available
copies of all financial statements, reports, notices and proxy statements sent
or made available generally by the Company to its stockholders, and copies of
all regular and periodic reports and all registration statements and
prospectuses filed by the Company with any securities exchange or with the
Commission; it being understood that the Company shall not be obligated to
provide any such holder with material, non-public information unless such holder
executes and delivers a confidentiality agreement in the form of Schedule 10
hereto.
11. Reservation of Stock, etc. The Company will at all times
reserve and keep available, solely for issuance and delivery upon exercise of
the Warrants, the number of shares of Common Stock (or Other Securities) from
time to time issuable upon exercise of all Warrants at the time outstanding, and
if at any time the number of authorized but unissued shares of Common Stock is
insufficient to permit such issuance, the Company shall seek shareholder
approval to amend its certificate of
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incorporation or other charter, and shall take such other action as may be
necessary, to increase the number of authorized shares to such number of shares
as shall be sufficient for such purpose. All shares of Common Stock (or Other
Securities) shall be duly authorized and, when issued upon such exercise, shall
be validly issued and, in the case of shares, fully paid and nonassessable with
no liability on the part of the holders thereof.
12. Listing on Securities Exchanges. The Company will list on
each national securities exchange on which any Common Stock may at any time be
listed, subject to official notice of issuance upon exercise of the Warrants,
and will maintain such listing of, all shares of Common Stock from time to time
issuable upon exercise of the Warrants. During any period when the Common Stock
shall not be listed on any national securities exchange, the Company will
maintain the designation of the shares of Common Stock from time to time
issuable upon exercise of the Warrants as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 of the Commission and, without
limiting the generality of the foregoing, will arrange for at least three market
makers to register as such with respect to such shares with the NASD. The
Company will also so list on each national securities exchange, and will
maintain such listing of, or, as the case may be, will secure such designation
and such registration with respect to, any Other Securities if at the time any
securities of the same class shall be listed on such national securities
exchange by the Company or shall be so designated, as the case may be.
13. Ownership, Transfer and Substitution of Warrants. 13.1
Ownership of Warrants. The Company may treat the person in whose name any
Warrant is registered on the register kept at the principal office of the
Company as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes, notwithstanding
any notice to the contrary. Subject to section 8, a Warrant, if properly
assigned, may be exercised by a new holder without first having a new Warrant
issued.
13.2 Transfer and Exchange of Warrants. Upon the surrender of
any Warrant, properly endorsed, for registration of transfer or for exchange at
the principal office of the Company, the Company at its expense will (subject to
compliance with section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant or Warrants so surrendered.
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13.3 Replacement of Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant held by a Person other than the Purchaser or any
institutional investor, upon the execution and delivery of a written indemnity
agreement reasonably satisfactory to the Company in form and amount or, in the
case of any such mutilation, upon surrender of such Warrant for cancellation at
the principal office of the Company, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
14. Definitions. As used herein, unless the context otherwise
requires, the following terms have the respective meanings set forth in this
section 14. Capitalized terms not defined herein shall have the respective
meanings assigned to them in the Note Agreement or the U.S. Guaranty, as
applicable.
Acquiring Person: the continuing or surviving corporation of a
consolidation or merger with the Company (of other than the Company), the
transferee of substantially all of the properties and assets of the Company, the
corporation consolidating with or merging into the Company in a consolidation or
merger in connection with which the Common Stock is changed into or exchanged
for stock or other securities of any other Person or cash or any other property,
or, in the case of a capital reorganization or reclassification, the Company.
Acquisition Price: as applied to the Common Stock, with
respect to any transaction to which section 3 applied, (a) the price per share
equal to the greater of the following, determined in each case as of the date
immediately preceding the date of consummation of such transaction: (i) the
Market Price of the Common Stock and (ii) the highest amount of cash plus the
Fair Value of the highest amount of securities or other property which the
holder of this Warrant would have been entitled as a shareholder to receive upon
such consummation if such holder had exercised this Warrant, immediately prior
thereto, or (b) if a purchase, tender or an exchange offer is made by the
Acquiring Person (or by any of its affiliates) to the holders of the Common
Stock and such offer is accepted by the holders of more than 50% of the
outstanding shares of Common Stock, the greater of (i) the price determined in
accordance with the foregoing subdivision (a) and (ii) the price per share equal
to the greater of the following, determined in each case as of the date
immediately preceding the acceptance of such offer by the holders of more than
50% of the outstanding shares of Common Stock: (x) the Market Price of the
Common Stock and (y) the highest amount of cash plus the Fair Value of the
highest amount of securities or other property which the holder of this Warrant
would be entitled as a shareholder to receive pursuant to such offer if such
holder had exercised this Warrant immediately prior to the expiration of such
offer and accepted the same.
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of Common Stock: all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to section 2.3 or
2.4, deemed to be issued) by the Company after the Initial Date, whether or not
subsequently reacquired or retired by the Company, other than (A) shares of
Common Stock issued upon the exercise of Warrants, and (B) shares of Common
Stock issued to officers, directors and employees of and consultants to the
Company pursuant to (i) the 1988 Directors' Stock Option Plan; (ii) the 1992
Stock Option Plan; and (iii) the 1983 Incentive Stock Option Plan (each as
described in the Company's proxy statement dated November 8, 1994) and as
amended from time to time after such date by the Company's Board of Directors),
or (iv) other similar stock-based incentive or option plan approved by the
Company's Board of Directors and shareholders, so long as, in the case of clause
(B), the maximum number of shares issuable under all stock options plans
described in clauses (i) - (iv) above does not exceed by more than two million
shares (as adjusted for stock splits and combinations) the number of such shares
which are issuable under such plans on the date of this Warrant and all other
material terms of each stock option plan described in clauses (i) - (iii) above
remain substantially the same as exist on the date of this Warrant.
Base Price: on any date specified herein, the greater of (i)
the Current Market Price and (ii) the Warrant Price.
Business Day: any day other than a Saturday or a Sunday or a
day on which commercial banking institutions in the City of New York or the
State of California are authorized by law to be closed, provided that, in
determining the period within which certificates or Warrants are to be issued
and delivered pursuant to section 1.3 at a time when shares of Common Stock (or
Other Securities) are listed or admitted to trading on any national securities
exchange or in the over-the-counter market and in determining the Market Price
of any securities listed or admitted to trading on any national securities
exchange or in the over-the-counter market, "Business Day" shall mean any day
when the principal exchange in which securities are then listed or admitted to
trading is open for trading or, if such securities are traded in the
over-the-counter market in the United States, such market is open for trading,
and provided further that any reference to "days" (unless Business Days are
specified) shall mean calendar days.
Change in Control Event: any of the following: (i) a "person"
or "group" (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act), together with their "affiliates" and "associates" (within the meaning of
Rule 12b-2 under the Exchange Act), become the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of more than 50% of the Common Stock; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
director whose election by the Company's Board of Directors or whose nomination
for election by the Company's
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shareholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors then in office; (iii) the
Company consolidates with or merges into another corporation or conveys,
transfers or leases all or substantially all of its assets to any Person, or any
corporation consolidates with or merges into the Company, in either event
pursuant to a transaction in which Common Stock is changed into or exchanged for
cash, securities or other property, provided that such transactions (A) between
the Company and Subsidiaries or between Subsidiaries or (B) involving the
exchange of the Company's Voting Stock as consideration in the acquisition of
another business or businesses (without change or exchange of the outstanding
Common Stock into or for cash, securities or other property) shall be excluded
from the operation of this clause (iii); or (iv) the Company or any Subsidiary
of the Company purchases or otherwise acquires, directly or indirectly,
beneficial ownership of Common Stock if, after giving effect to such purchase or
acquisition, the Company (together with its Subsidiaries) acquires 50% or more
of the Common Stock within any 12-month period.
Commission: the Securities an Exchange Commission or any other
Federal agency at the time administering the Securities Act or the Exchange Act,
whichever is the relevant statute for the particular purpose.
Common Stock: the Company's Common Stock, par value $.01 per
share, as constituted on the date hereof, any stock into which such Common Stock
shall have been changed or any stock resulting from any reclassification of such
Common Stock, and all other stock of any class or classes (however designated)
of the Company the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference.
Company: Inmac Corp., a Delaware corporation.
Convertible Securities: any notes, debentures, other evidences
of indebtedness, shares of stock (other than Common Stock) or other securities
directly or indirectly convertible into or exchangeable for Additional Shares of
Common Stock.
Current Market Price: on any date specified herein, (a) with
respect to Common Stock or to Voting Common Stock (or equivalent equity
interests) of an Acquiring Person or its Parent, (i) the average daily Market
Price during the period of the most recent 10 consecutive Business Days ending
on the date immediately preceding such date, or (ii) if shares of Common Stock
or such Voting Common Stock (or equivalent equity interests), as the case may
be, are not then listed or admitted to
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trading on any national securities exchange and if the closing bid and asked
prices thereof are not then quoted or published in the over-the-counter market,
the Market Price on such date; and (b) with respect to any other securities, the
Market Price on such date.
Event of Default: an Event of Default as defined in the Note
Agreement, other than Events of Default arising from the breach of, or the
failure to perform, any covenant in paragraph 5 (other than paragraph 5D)
thereof.
Exchange Act: the Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as to the same shall be in effect at the time. Reference to a
particular section of the Securities Exchange Act of 1934 shall include a
reference to the comparable section, if any, of any such similar Federal
statute.
Exercise Period: the period commencing on the earliest to
occur of (a) June 29, 1996; (b) consummation of a Public Offering; (c) an Event
of Default; (d) a Change in Control Event or (e) to the extent not specified in
the preceding clauses (a) - (d), an event of the type described in section 3.1
hereof, and ending at the end of Normal Business Hours, on September 21, 2001.
Fair Value: with respect to any securities or other property,
the fair value thereof as of a date which is within 15 days of the date as of
which the determination is to be made as determined in good faith by the Board
of Directors of the Company or, if the Requisite Holders of Warrants shall
object to such determination, by an investment banking firm mutually acceptable
to the Company and such Holders and the determination by such investment banking
firm shall be final and binding.
Institutional Investor: (i) any bank, savings bank, savings
and loan association, finance company or insurance company, (ii) any pension
plan or portfolio, (iii) any mutual or investment fund, (iv) any registered
investment company, (v) any investment bank or licensed broker-dealer, or (vi)
to the extent not already specified, a QIB or accredited investor (the latter as
defined under Regulation D promulgated under the Securities Act).
Initial Date: the meaning specified in section 2.2.
Initiating Holders: any holder or holders of Registrable
Securities holding at least 33-1/3% (by number of shares outstanding or
purchasable) of Registrable Securities making a written request pursuant to
section 9.1 for the registration of all or part of the Registrable Securities
held by such holder or holders.
▇-▇▇
▇▇
▇▇▇▇▇▇ Price: on any date specified herein, (a) with respect
to Common Stock or Voting Common Stock (or equivalent equity interests) of an
Acquiring Person or its Parent, the amount per share equal to (i) the last sale
price of shares of such security, regular way, on such date or, if no such sale
takes place on such date, the average of the closing bid and asked prices
thereof on such date, in each case as officially reported on the principal
national securities exchange on which the same are then listed or admitted to
trading, or (ii) if no shares of such security are then listed or admitted to
trading on any national securities exchange but such security is designated as a
national market system security by the NASD, the last trading price of such
security on such date, or if such security is not so designated, the average of
the reported closing bid and asked prices thereof on such date as shown by the
NASD automated quotation system or, if no shares thereof are then quoted in such
system, as published by the National Quotation Bureau, Incorporated or any
successor organization, and in either case as reported by any member firm of the
New York Stock Exchange selected by the Company, or (iii) if no shares of such
security are then listed or admitted to trading on any national exchange or
designated as a national market system security and if no closing bid and asked
prices thereof are then so quoted or published in the over-the-counter market,
the higher of (x) the book value thereof as determined by any firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Company, as of the last day of any month ending within 60 days
preceding the date as of which the determination is to be made or (y) the Fair
Value thereof; and (b) with respect to any other securities, the Fair Value
thereof.
NASD: the National Association of Securities Dealers.
Normal Business Hours: with respect to any trading of
securities or settlement of any such trade, 9:30 A.M. to 4:00 P.M., New York
City time and, otherwise, 9:00 A.M. to 5:00 P.M. California time.
Note Agreement: the meaning specified in the second paragraph
of this Warrant.
Notes: the meaning specified in the opening paragraphs of this
Warrant.
Options: rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
Other Securities: any stock (other than Common Stock) and
other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any
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time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to section 3 or
otherwise.
Parent: as to any Acquiring Person, any corporation which (a)
controls the Acquiring Person directly or indirectly through one or more
intermediaries, (b) is required to include the Acquiring Person in its
consolidated financial statements under generally accepted accounting principles
and (c) is not itself included in the consolidated financial statements of any
other Person (other than its consolidated subsidiaries).
Person: an individual, a partnership, an association, a joint
venture, a corporation, a business, a trust, an unincorporated organization or a
government or any department, agency or subdivision thereof.
Public Offering: any offering of Common Stock to the public
pursuant to an effective registration statement under the Securities Act.
Purchaser: the meaning specified in the opening paragraphs of
this Warrant.
QIB: a qualified institutional buyer as defined in Rule 144A
promulgated under the Securities Act.
Registrable Securities: (a) the Warrants, (b) any shares of
Common Stock or Other Securities issued or issuable upon exercise of the
Warrants and (c) any securities issued or issuable with respect to any Common
Stock or Other Securities referred to in subdivision (b) by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
For purposes of section 9 and the definition of "Initiating Holders", holders of
Warrants shall be deemed to be the holders of the Registrable Securities which
are at the time issuable upon full exercise thereof whether or not such holders
are entitled to exercise such Warrants pursuant to the terms thereof, and such
Registrable Securities shall be deemed to be outstanding. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (x) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (y) they shall have been sold or otherwise distributed pursuant to
Rule 144 or Rule 144A (or any successor provisions) under the Securities Act, or
(z) they shall have ceased to be outstanding. As to any particular holder of
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when such holder shall be entitled to sell all of such
securities without restriction pursuant to Rule 144(k) (or any successor
provision)
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under the Securities Act, and such securities, once having ceased to be
Registrable Securities by operation of this sentence, shall be reinstated as
Registrable Securities at any time when the holder shall cease to be so entitled
for any reason.
Registration Expenses: all expenses incident to the Company's
performance of or compliance with section 9, including, without limitation, 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 fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "comfort" letters required by or incident to
such performance and compliance, the reasonable fees and disbursements of a
single counsel retained by the holders of the Registrable Securities being
registered, and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any, provided that, in any case where
Registration Expenses are not to be borne by the Company, such expenses shall
not include salaries of Company personnel or general overhead expenses of the
Company, auditing fees, premiums or other expenses relating to liability
insurance required by underwriters of the Company, or other expenses for the
preparation of financial statements or other data normally prepared by the
Company in the ordinary course of its business or which the Company would have
incurred in any event.
Requisite Holders of Warrants: the holders of at least 66-2/3%
of all the Warrants at the time outstanding determined on the basis of the
number of shares of Common Stock or Other Securities deliverable upon exercise
thereof.
Restricted Securities: (a) any Warrants bearing the applicable
legend set forth in section 8.1, (b) any shares of Common Stock (or Other
Securities) which have been issued upon the exercise of Warrants and which are
evidenced by a certificate or certificates bearing the applicable legend set
forth in such section, and (c) unless the context otherwise requires, any shares
of Common Stock (or Other Securities) which are at the time issuable upon the
exercise of Warrants and which, when so issued, will be evidenced by a
certificate or certificates bearing the applicable legend set forth in such
section.
Securities Act: the Securities Act of 1933, 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. Reference to a particular section of
the Securities Act of 1933 shall include a reference to the comparable section,
if any, of any such similar Federal statute.
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Transfer: unless the context otherwise requires, any sale,
assignment, pledge or other disposition of any security, or of any interest
therein, which could constitute a "sale" as that term is defined in section 2(3)
of the Securities Act.
U.S. Guaranty: the guaranty of the Notes by the Company dated
June 29, 1995, as the same is amended from time to time.
Voting Common Stock: with respect to any corporation,
association or other business entity, stock of any class or classes (or
equivalent interest), if the holders of the stock of such class or classes (or
equivalent interests) are ordinarily, in the absence of contingencies, entitled
to vote for the election of a majority of the directors (or persons performing
similar functions) of such corporation, association or business entity, even if
the right so to vote has been suspended by the happening of such a contingency.
Warrant Expiration Date: September 21, 2001.
Warrant Price: the meaning specified in section 2.1. The
Warrant Price represents an effective exercise premium (within the meaning of
Rule 144A(a)(7) and for the purposes of Rule 144A(d)(3)(i)) of 115% of the
Market Price of the common stock on the date the Warrants were priced.
Warrants: this Warrant and any warrants issued in replacement,
subdivision or substitution herefor.
15. Remedies. The Company stipulates that the remedies at law
of the holder of this Warrant in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
16. No Rights or Liabilities as Stockholder. Nothing contained
in this Warrant shall be construed as conferring upon the holder hereof any
rights as a stockholder of the Company or as imposing any liabilities on such
holder to purchase any securities or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors or stockholders of
the Company or otherwise.
17. Notices. All notices and other communications to the
Company shall be in writing and sent in the manner and to the locations as are
specified in the Note Agreement and the U.S. Guaranty. All notices and other
communications to any
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holder of any Warrant or any holder of any Common Stock (or Other Securities)
shall be mailed by registered or certified mail, return receipt requested,
addressed to such holder at its address set forth in the register kept at the
principal office of the Company; provided that the exercise of any Warrant shall
be effected in the manner provided in section 1.
18. Expiration; Notice. The Company will give the holder of
this Warrant no less than 45 days' nor more than 90 days' notice of the
expiration of the right to exercise this Warrant. The right to exercise this
Warrant shall expire at the end of Normal Business Hours on the Warrant
Expiration Date.
19. Miscellaneous. This Warrant and any term hereof may be
amended, changed or waived only with the written consent of the Requisite
Holders of Warrants, except that, without the written consent of the holder or
holders of all Warrants at the time outstanding, no amendment to this Warrant
shall change the number of shares purchasable hereunder; the Warrant Price or
the method set forth in section 2.1 for calculating adjustments thereto; the
Warrant Repurchase Price; the Warrant Expiration Date; or the definition of
Requisite Holders of Warrants. The agreements of the Company contained in this
Warrant other than those applicable solely to the Warrants and the holders
thereof shall inure to the benefit of and be enforceable by any holder or
holders at the time of any Common Stock (or Other Securities) issued upon the
exercise of Warrants, whether so expressed or not. THIS WARRANT SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK. The section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.
INMAC CORP.
By: ___________________________
Title:
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45
FORM OF SUBSCRIPTION
(To be executed only upon exercise of Warrant)
To ______________________________________
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder,
______________________ 1 shares of Common Stock of ___________________, [and
herewith makes payment of $________ therefor] [by application pursuant to
section 1.5(a) of such Warrant of $________ aggregate principal amount of Notes
(as defined in such Warrant) plus $________ accrued interest thereon] [by
surrender of the within Warrant pursuant to section 1.5(b) of such Warrant], 2
and requests that the certificates for such shares be issued in the name of, and
delivered to
_________________________________________ whose address is
___________________________________________________________.
Dated: __________________________________
______________________________
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant)
______________________________
(Street Address)
______________________________
(City) (State) (Zip Code)
_______________________________
1 Insert here the number of shares called for on the face of
this Warrant (or, in the case of a partial exercise, the portion
thereof as to which this Warrant is being exercised), in either case
without making any adjustment for additional Common Stock or any other
stock or other securities or property or cash which, pursuant to the
adjustment provisions of this Warrant, may be delivered upon exercise.
In the case of a partial exercise, a new Warrant or Warrants will be
issued and delivered, representing the unexercised portion of this
Warrant, to the holder surrendering the same.
2 Delete inapplicable language in brackets.
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