Exhibit 4.2
NBI, INC.
WARRANT AGREEMENT
This Warrant Agreement (this "Agreement"), dated as of _________ __,
1998, is between NBI, Inc., a Delaware corporation (the "Company") and
__________________, as Warrant Agent.
R E C I T A L S:
WHEREAS, the Company proposes to issue and deliver warrant certificates
(the "Warrant Certificates") evidencing warrants (the "Warrants") to acquire
common stock of the Company ('Common Stock"), in connection with an offering
by the Company of up to 1,000,000 units (the "Units") each consisting of (a)
one share of Series A Cumulative Preferred Stock and (b) two Common Stock
Purchase Warrants, each of which entitles the holders thereof to purchase one
share of Common Stock. The Units have been issued and sold in a public
offering pursuant to a Registration Statement on Form SB-2, as filed with the
Securities and Exchange Commission on September __, 1998, amended on
____________, and declared effective on __________, 1998 (the "Registration
Statement"), and a Prospectus dated ____________, 1998, filed as a part of
such Registration Statement (references to which shall be deemed to include
any and all supplements and amendments there to, which Prospectus is referred
to herein as the "Prospectus"). Certain of the terms of the Warrants are
described in the Warrant Certificates. This Agreement describes certain
additional terms applicable to the Warrants.
NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights
and obligations thereunder of the Company, the Warrant Agent (as hereinafter
defined) and the record holders from time to time of the Warrants, the Company
and the Warrant Agent hereby agree as follows:
ARTICLE
Definitions
SECTION 1.1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Act" means the Securities Act of 1933, as amended, or any similar
federal statute enacted hereafter, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect from time to time.
"Affiliate" of any person means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For purposes of
this definition, "control," when used with
respect to any person means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Common Stock" means the common stock, $.01 par value, of the Company,
and any other capital stock of the Company into which such common stock may be
converted or reclassified or that may be issued in respect of, in exchange for
or in substitution for, such common stock by reason of any stock splits, stock
dividends, distributions, mergers, consolidations or other like events.
"Company" means NBI, Inc., a Delaware corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Holders" means each registered holder of a Warrant
Certificate and each holder of Common Stock issued pursuant to a Warrant
Certificate.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Purchase Price" means the exercise price of each Warrant, designated as
$1.20 per share of Common Stock, subject to adjustment as provided in Article
IV hereof.
"Transfer Agent" means _________________________, ______________, or any
duly appointed successor transfer agent for the Common Stock.
"Warrant Agent" means ____________________________, __________________,
or the successor or successors of such initial warrant agent appointed in
accordance with the terms hereof.
"Warrant Holders" means all of the holders of Warrants Certificates
issued under this Agreement.
"Warrant Stock" means the shares of Common Stock, issuable or issued upon
the exercise of the Warrants.
SECTION 1.2. Certain Other Defined Terms:
"Prospectus" Preamble
"Units" Preamble
"Warrant Certificates" Preamble
"Warrants" Preamble
ARTICLE II
Original Issue of Warrants
SECTION 2.1. Form of Warrant Certificates. The Warrant Certificates
shall be issued in registered form only and substantially in the form attached
hereto as Exhibit A, shall be dated the date of countersignature thereof by
the Warrant Agent (whether upon initial issuance, registration of transfer,
exchange or replacement) and shall bear the legend set forth in Exhibit A,
together with such other legends and endorsements typed, stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation pursuant
thereto or with any rule or regulation of any securities exchange on which the
Warrants may be listed, or to conform to customary usage.
Pending the preparation of definitive Warrant Certificates, temporary
Warrant Certificates may be issued, which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, and which will be
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates to the Warrant Agent,
without charge to the Holder. Until so exchanged the temporary Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
SECTION 2.2. Execution and Delivery of Warrant Certificates. The
Warrant Certificates shall be executed on behalf of the Company by its
Chairman, President, Chief Executive Officer, Chief Financial Officer or any
Vice President, either manually or by facsimile signature printed thereon.
The Warrant Certificates shall be manually countersigned by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company whose signature shall have been placed upon any of the
Warrant Certificates shall cease to be the Chairman, President, Chief
Executive Officer, Chief Financial Officer or a Vice President of the Company
before countersignature by the Warrant Agent and issue and delivery thereof,
such Warrant Certificates may, nevertheless, be countersigned by the Warrant
Agent and issued and delivered with the same force and effect as though such
person had not ceased to be such officer of the Company.
ARTICLE III
Certain Terms of Exercise of Warrants
SECTION 3.1. Method of Exercise. In order to exercise a Warrant or
to sell a Warrant to the Company, the Holder thereof must surrender the
Warrant Certificate evidencing such Warrant to the Company, with one of the
forms on the reverse of or attached
to the Warrant Certificate duly executed,
together with payment in cash or check payable to the Company for the full
amount of the exercise price.
If fewer than all of the Warrants represented by a Warrant Certificate
are surrendered, such Warrant Certificate shall be surrendered and, subject to
the provisions of Article V, a new Warrant Certificate of the same tenor and
for the number of Warrants that were not surrendered shall be signed by the
Company. The Warrant Agent shall countersign the new Warrant Certificate,
register it in such name or names as may be directed in writing by the Holder
and deliver the new Warrant Certificate to the person or persons entitled to
receive the same.
Upon surrender of a Warrant Certificate and payment of the Purchase Price
in conformity with the foregoing provisions, the Company shall cause the
Transfer Agent to issue to the Holder of such Warrant Certificate appropriate
evidence of ownership of any shares of Warrant Stock or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, such name or names as may be
directed in writing by the Holder, and shall deliver such evidence of
ownership and any other securities or property (including any money) to the
person or persons entitled to receive the same, together with an amount in
cash in lieu of any fraction of a share as provided in Section 4.4.
ARTICLE IV
Adjustments
SECTION 4.1. Adjustment of Exercise Price and Number of Shares of
Common Stock. The number and kind of shares purchasable upon the exercise of
Warrants and the Purchase Price shall be subject to adjustment from time to
time as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (i) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital
stock of any other class), (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassification of its shares of Common
Stock any shares of capital stock of the Company, the Purchase Price and
number of shares of Common Stock underlying the Warrant (if applicable) in
effect immediately prior to such action shall be adjusted so that the Holder
of any Warrant thereafter exercised shall be entitled to receive the number of
shares of capital stock of the Company which such Holder would have owned
immediately following such action had such warrant been exercised immediately
prior thereto. An adjustment made pursuant to this paragraph shall become
effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification. If, as a result of an
adjustment made pursuant to this paragraph, the Holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of capital stock of the Company, the Board of Directors (whose
determination shall be conclusive) shall determine the allocation of the
adjusted Purchase Price between or among shares of such classes of capital
stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
other than a change in par value, or from par value to no par value, or from
no par value to par value or as a result of a subdivision or combination), or
in case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants (other than a change in par value, or from par value
to no par value, or from no par value to par value or as a result of a
subdivision or combination)) or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety, then, as a condition of such reclassification, change,
consolidation, merger, sale or conveyance, the Company or such a successor or
purchasing corporation, as the case may be, shall forthwith make lawful and
adequate provision whereby the holder of such Warrant then outstanding shall
have the right thereafter to receive on exercise of such Warrant the kind and
amount of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock issuable upon exercise of such
Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. Such provisions shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article IV. The above provisions of this
paragraph (b) shall similarly apply to successive reclassifications and
changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances. This provision shall not limit the rights of the
Holders as specified in the Warrant Certificate to exercise the Warrants prior
to any of the events described herein.
(c) Other Adjustments. In the event that at any time, as a result of
an adjustment made pursuant to this Article IV, the Holders shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Purchase Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares
of Common Stock contained in this Article IV.
SECTION 4.2. Notice of Adjustment. Whenever the number of shares of
Common Stock or other stock or property issuable upon the exercise of each
Warrant or the Purchase Price is adjusted, as herein provided, the Company
shall cause the Warrant Agent promptly to mail by first class mail, postage
prepaid, to each Holder notice of such adjustment or adjustments and shall
deliver to the Warrant Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the Company (who may be the
regular accountants employed by the Company) setting forth the number of
shares of Common Stock or other stock or property issuable upon the exercise
of each Warrant or the Purchase Price after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the
same from time to time to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not
at any time be under
any duty or responsibility to any Holders to determine whether any facts exist
that may require any adjustment of the number of shares of Common Stock or
other stock or property issuable on exercise of the Warrants or the Purchase
Price, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment or the
validity or value (of the kind or amount) of any shares of Common Stock or
other stock or property which may be issuable on exercise of the Warrants.
The Warrant Agent shall not be responsible for any failure of the Company to
make any cash payment or to issue, transfer or deliver any shares of Common
Stock or stock certificates or other common stock or property upon the
exercise of any Warrant.
SECTION 4.3. Statement on Warrants. Irrespective of any adjustment
in the number or kind of shares issuable upon the exercise of the Warrants or
the Purchase Price, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 4.4. Fractional Interest. The Company shall not be required
to issue fractional shares of Common Stock on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full shares of Common Stock which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct its Transfer Agent to pay
an amount in cash calculated by it to equal the then current market value per
share multiplied by such fraction computed to the nearest whole cent. The
Holders, by their acceptance of the Warrant Certificates, expressly waive any
and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
ARTICLE V
Warrant Transfer Books
SECTION 5.1. Warrant Transfer Books. The Warrant Certificates shall
be issued in registered form only. The Company shall cause to be kept at the
office of the Warrant Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the
registration of Warrant Certificates and of transfers or exchanges of Warrant
Certificates by the Warrant Agent as herein provided.
At the option of the Holder thereof and except as provided herein,
Warrant Certificates may be exchanged at such office upon payment of the
charges hereinafter provided. Whenever any Warrant Certificates are so
surrendered for exchange, the Company shall execute, and the Warrant Agent
shall countersign and deliver, the Warrant Certificates that the Holder making
the exchange is entitled to receive.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the
Company, evidencing the same
obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such
registration of transfer or exchange.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by the Company or the Warrant Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be required of a Holder for any registration of
transfer or exchange of Warrant Certificates. The Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Warrant
Certificates.
Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable. The Holder of any Warrant Certificate duly endorsed in blank may
be treated by the Company, the Warrant Agent and all other persons dealing
therewith as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented thereby, or to the transfer
thereof on the register of the Company maintained by the Warrant Agent, any
notice to the contrary notwithstanding; but until such transfer on such
register, the Company and the Warrant Agent may treat the registered Holder
thereof as the owner for all purposes.
ARTICLE VI
Warrant Holders
SECTION 6.1. No Voting Rights. Prior to the exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to
any rights of a stockholder of the Company, including, without limitation, the
right to receive dividends or subscription rights, the right to vote, to
consent, to exercise any preemptive right, to receive any notice of meetings
of stockholders for the election of directors of the Company or any other
matter or to receive any notice of any proceedings of the Company, except as
may be specifically provided for herein.
SECTION 6.2. Right of Action. All rights of action in respect of
this Agreement are vested in the Holders of the Warrants, and any Holder of
any Warrant, without the consent of the Warrant Agent or the Holder of any
other Warrant, may, on such Holder's own behalf and for such Holder's own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, or otherwise in respect
of, such Holder's rights hereunder, including the right to exercise, exchange
or surrender for purchase such Holder's Warrants in the manner provided in
this Agreement.
ARTICLE VII
Warrant Agent
SECTION 7.1. Nature of Duties and Responsibilities Assumed. The
Company hereby appoints the Warrant Agent to act as agent of the Company as
set forth in this
Agreement. The Warrant Agent hereby accepts the appointment
as agent of the Company and agrees to perform that agency upon the terms and
conditions herein set forth, by all of which the Company and the Holders of
Warrants, by their acceptance thereof, shall be bound. The Warrant Agent
shall not by countersigning Warrant Certificates or by any other act hereunder
be deemed to make any representation as to validity or authorization of the
Warrants or the Warrant Certificates (except as to its countersignature
thereon) or of any securities or other property delivered upon exercise or
tender of any Warrant, or as to the number of kind or amount of stock or other
securities or other property deliverable upon exercise of any Warrant or the
correctness of the representations of the Company made in such certificates
that the Warrant Agent receives. The Warrant Agent shall not have any duty to
calculate or determine any adjustments with respect to the Purchase Price or
the kind and amount of shares or other securities or any property receivable
by Holders upon the exercise or tender of Warrants required from time to time,
and the Warrant Agent shall have no duty or responsibility in determining the
accuracy or correctness of any such calculation. The Warrant Agent shall not
(a) be liable for any recital or statement of fact contained herein or in the
Warrant Certificates or for any action taken, suffered or omitted by it in
good faith in the belief that any Warrant Certificate or any other document or
any signature is genuine or properly authorized, (b) be responsible for any
failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in the Warrant Certificates, (c) be
liable for any act or omission in connection with this Agreement except for
its own gross negligence or willful misconduct, or (d) have any responsibility
to determine whether a transfer of a Warrant complies with federal or state
securities laws. The Warrant Agent is hereby authorized to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Company (as
identified in a certificate signed by the Secretary of the Company) and to
apply to any such officer for instructions (which instructions will be
promptly given in writing when requested) and the Warrant Agent shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with the instructions of any such officer, except for its own
negligence or willful misconduct, but in its discretion the Warrant Agent may
in lieu thereof accept other evidence of such or may require such further or
additional evidence as it may deem reasonable.
The Warrant Agent may execute and exercise any of the rights and powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents, employees or selected firms which are licensed
securities broker-dealers, provided reasonable care has been exercised in the
selection and in the continued employment of any such attorney, agent or
employee. The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, but this provision shall
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without such indemnity. The
Warrant Agent shall promptly notify the Company in writing of any claim made
or action, suit or proceeding instituted against or arising out of or in
connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may
reasonably be required by the Warrant Agent
in order to enable it to carry out or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
SECTION 7.2. Right to Consult Counsel. The Warrant Agent may at any
time consult with legal counsel satisfactory to it (who may be legal counsel
for the Company), and the Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any action taken, suffered
or omitted by it in good faith in accordance with the opinion or advice of
such counsel.
SECTION 7.3. Compensation and Reimbursement. The Company agrees to
pay to the Warrant Agent from time to time compensation for all services
rendered by it hereunder as the Company and the Warrant Agent may agree from
time to time, and to reimburse the Warrant Agent for reasonable expenses and
disbursements incurred in connection with the execution and administration of
this Agreement, and further agrees to indemnity the Warrant Agent for, and
hold it harmless against, any loss, liability or expenses incurred without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
SECTION 7.4. Warrant Agent May Hold Company Securities. The Warrant
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of the
Company or its Affiliates or become pecuniarily interested in transactions in
which the Company or its Affiliates may be interested, or contract with or
lend money to the Company or its Affiliates or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other person.
SECTION 7.5. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Warrant Agent and no appointment of a
successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent as provided herein. The Warrant
Agent may resign its duties and be discharged from all further duties and
liability hereunder (except liability arising as a result of the Warrant
Agent's own negligence or willful misconduct) after giving at least 30 days'
prior written notice to the Company. In the event that the Warrant Agent does
not cure a breach of its duties or obligations hereunder within ten days of
the Company's written notice of such breach, the Company may remove the
Warrant Agent upon written notice, and the Warrant Agent shall thereupon in
like manner be discharged from all further duties and liabilities hereunder,
except as aforesaid. The Warrant Agent shall, at the Company's expense, cause
to be mailed (by first class mail, postage prepaid) to each Holder of a
Warrant at his last address as shown
on the register of the Company maintained
by the Warrant Agent a copy of said notice of resignation or notice of
removal, as the case may be. Upon such resignation or removal, the Company
shall appoint in writing a new warrant agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been notified in
writing of such resignation by the resigning Warrant Agent or after such
removal, then the resigning Warrant Agent or the Holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a new
warrant agent. Any new warrant agent, whether appointed by the Company or by
such a court, shall be a corporation doing business under the laws of the
United States or any state thereof, in good standing and having a combined
capital and surplus of not less than $50,000,000. The combined capital and
surplus of any such new warrant agent shall be deemed to be the combined
capital and surplus as set forth in the most recent annual report of its
condition published by such warrant agent prior to its appointment, provided
that such reports are published at least annually pursuant to law or to the
requirements of a federal or state supervising or examining authority. After
acceptance in writing of such appointment by the new warrant agent, it shall
be vested with the same powers, rights, duties and responsibilities as if it
had been originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning or
removed Warrant Agent. Not later than the effective date of any such
appointment, the Company shall give notice thereof to the resigning or removed
Warrant Agent. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of
the resignation of the Warrant Agent or the appointment of a new warrant
agent, as the case may be.
(b) Any corporation into which the Warrant Agent or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Warrant Agent or any new warrant agent shall be a party or any corporation to
which the Warrant Agent transfers substantially all of its corporate trust or
shareholder series business shall be a successor Warrant Agent under this
Agreement without any further act, provided that such corporation (i) would be
eligible for appointment as successor to the Warrant Agent under the
provisions of Section 7.5(a) or (ii) is a wholly-owned subsidiary of the
Warrant Agent. Any such successor Warrant Agent shall promptly cause notice
of its succession as Warrant Agent to be mailed (by first class mail, postage
prepaid) to each Holder at such Holder's last address as shown on the register
maintained by the Warrant Agent pursuant to Section 5.1.
ARTICLE VIII
Covenants of the Company
SECTION 8.1. Reservation of Common Stock for Issuance on Exercise of
Warrants; Listing. The Company covenants that it will at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock, solely for the purpose of issuance upon exercise of
Warrants as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be so issuable shall,
upon such issuance, be duly and validly issued and fully paid and
nonassessable, and that upon issuance
such shares shall be listed on each
national securities exchange (including NASDAQ/NMS), if any, on which any
other shares of outstanding Common Stock of the Company are then listed.
ARTICLE X
Miscellaneous
SECTION 10.1. Money and Other Property Deposited with the Warrant
Agent. Any moneys, securities or other property which at any time shall be
deposited by the Company or on its behalf with the Warrant Agent pursuant to
this Agreement shall be and are hereby assigned, transferred and set over to
the Warrant Agent in trust for the purpose for which such moneys, securities
or other property shall have been deposited; but such moneys, securities or
other property need not be segregated from other funds, securities or other
property except to the extent required by law. The Warrant Agent shall
distribute any money deposited with it for payment and distribution to the
Holders by mailing by first-class mail a check in such amount as is
appropriate, to each such Holder at the address shown on the Warrant register
maintained pursuant to Section 5.1, or as it may be otherwise directed in
writing by such Holder, upon surrender of such Holder's Warrants. Any money
or other property deposited with the Warrant Agent for payment and
distribution to the Holders that remains unclaimed for two years, less one
day, after the date the money was deposited with the Warrant Agent shall be
paid to the Company upon its request therefor.
SECTION 10.2. Payment of Taxes. The Company will pay all taxes and
other governmental charges that may be imposed on the Company or on the
Warrants or on any securities deliverable upon exercise of Warrants with
respect thereto, provided that the Company shall not be responsible for any
taxes payable by any Holder of Warrants. The Company will not be required,
however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
or other securities underlying the Warrants or payment of cash or other
securities underlying the Warrants or payment of cash or other property to any
person other than the Holder of a Warrant Certificate surrendered upon the
exercise thereof and in case of such transfer or payment, the Warrant Agent
and the Company shall not be required to issue any stock certificate or
security or pay any cash or distribute any property until such tax or charge
has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or other charge is due.
SECTION 10.3. Surrender of Certificates. Any Warrant Certificate
surrendered for exercise or purchased or otherwise acquired by the Company
shall, if surrendered to the Company, be delivered to the Warrant Agent, and
all Warrant Certificates surrendered or so delivered to the Warrant Agent
shall promptly be canceled by such Warrant Agent and shall not be reissued by
the Company. The Warrant Agent shall destroy such canceled Warrant
Certificates and deliver its certificate of destruction to the Company unless
the Company shall otherwise direct.
SECTION 10.4. Mutilated, Destroyed, Lost and Stolen Warrant
Certificates. If (a) any mutilated Warrant Certificate is surrendered to the
Warrant Agent or (b) the Company and the Warrant Agent receive evidence to
their satisfaction of the destruction, loss or theft of any Warrant
Certificate, and there is delivered to the Company and the Warrant Agent such
security or indemnity as may be reasonably required by them to save each of
them harmless, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request the Warrant
Agent shall countersign and deliver, in exchange for any such mutilated
Warrant Certificate or in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and for a like aggregate
number of Warrants.
Upon the issuance of any new Warrant Certificate under this Section 10.4,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
expenses (including the reasonable fees and expenses of the Warrant Agent and
of counsel to the Company in connection therewith).
Every new Warrant Certificate executed and delivered pursuant to this
Section 10.4 in lieu of any destroyed, lost or stolen Warrant Certificate
shall constitute an original contractual obligation of the Company, whether or
not the destroyed, lost or stolen Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly
executed and delivered hereunder.
The provisions of this Section 10.4 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, destroyed, lost or stolen Warrant Certificates.
SECTION 10.5. Miscellaneous Rights. The rights of Holders upon the
occurrence of the events set forth in this Agreement are cumulative. If more
than one such event shall occur and the periods following the occurrence of
such events and prior to the closing of the transactions that are the subject
of such events overlap, each Holder may exercise such rights arising therefrom
as such Holder may elect without any condition imposed upon such exercise not
contained in this Agreement.
Neither the Company nor any of its Affiliates involved in any proposed
transactions that is the subject of such an event shall have any obligation to
the Holders to consummate any such proposed transaction once an agreement or
agreement in principle or decision to proceed with respect thereto is reached,
whether on the terms first proposed or as revised, or to include any Holder
in, or apprise any Holder of, any negotiations or discussions concerning any
such proposed transaction among the prospective parties thereto, except as
expressly provided herein.
SECTION 10.6. Notices. (a) Except as otherwise provided in Section
10.6(b), any notice, demand or delivery authorized by this Agreement shall be
sufficiently given or made when mailed if sent by first-class mail, postage
prepaid, addressed to any Holder of a Warrant
at such Holder's address shown
on the register maintained by the Warrant Agent pursuant to Section 5.1 and to
the parties as follows:
If to the Company: NBI, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
If to the Warrant Agent:
or such address as shall have been furnished to the party given or making such
notice, demand or delivery.
(b) Any notice required to be given by the Company to the Holders shall
be made by mailing by registered mail, return receipt requested, to the
Holders at their respective addresses shown on the register of the Company
maintained by the Warrant Agent. The Company hereby irrevocably authorizes
the Warrant Agent, in the name and at the expense of the Company, to mail any
such notice upon receipt thereof from the Company. Any notice that is mailed
in the manner herein provided shall be presumed to have been duly given when
mailed.
SECTION 10.7. Persons Benefiting. This Agreement shall be binding upon
and inure to the benefit of the Company and the Warrant Agent, and their
respective successors, assigns, beneficiaries, executors and administrators,
and the Holders from time to time of the Warrants. Nothing in this Agreement
is intended or shall be construed to confer upon any person, other than the
Company, the Warrant Agent and the Holders of the Warrants, any right, remedy
or claim under or by reason of this Agreement or any part hereof.
SECTION 10.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
SECTION 10.9. Amendments. The Company may, without the consent of the
Holders of the Warrants, by supplemental agreement or otherwise, make any
changes or corrections in this Agreement that it shall have been advised by
counsel (a) are required to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein or (b) add to the covenants and agreements of the Company for
the benefit of the Holders, or surrender any rights or power reserved to or
conferred upon the Company in this Agreement; provided that, in the case of
(a) or (b), such changes or corrections shall not adversely affect the
interests of the Holders in any material respect. The Warrant Agent shall at
the request of the Company and without need of independent inquiry as to
whether such supplemental agreement is permitted by the terms of this Section
10.9, join with the Company in the execution and delivery of any such
supplemental agreements, unless it affects the Warrant Agent's own rights,
duties or immunities hereunder in which case such party may, but shall not be
required to, join in such execution and delivery.
SECTION 10.10. Termination. This Agreement (other than the Company's
obligations with respect to Warrants previously exercised or surrendered for
purchase under Article III, and with respect to indemnification under Section
7.3) shall terminate and be of no further force and effect on the Expiration
Date.
SECTION 10.11. Applicable Law. THIS AGREEMENT AND EACH WARRANT ISSUED
HEREUNDER AND ALL RIGHTS ARISING HEREUNDER SHALL BE GOVERNED BY THE LAW OF THE
STATE OF DELAWARE APPLICABLE TO CONTRACTS AND INSTRUMENTS EXECUTED AND TO BE
PERFORMED ENTIRELY IN SUCH STATE.
SECTION 10.12. Headings. The descriptive headings of the several
Sections of this Agreement are inserted for convenience and shall not control
or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
NBI, INC.
a Delaware corporation
By:_____________________________
Name:___________________________
Title:___________________________
_________________________________
as Warrant Agent
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT A
NBI, INC.
COMMON STOCK PURCHASE WARRANT
DATED: __________ ___, 1998
_______________
Holder: _____________________ Warrant No:______
Number of Warrants: ______________
_______________
THIS CERTIFIES THAT Holder is the owner of the number of Warrants set
forth above of NBI, Inc., a Delaware corporation (hereinafter called the
"Company"). Each Warrant entitles the registered holder (the "Holder") to
purchase one share (collectively, "Warrant Shares") of Common Stock of the
Company ("Common Stock") at an exercise price per share of $1.20 (the
"Purchase Price"), at any time during the period commencing on the date of
issuance hereof until 2:00 p.m., Mountain Standard Time, on December 31, 2004
(the "Expiration Date"). This Warrant is issued in connection with an
offering by the Company of up to 1,000,000 Units, each consisting of (a) one
share of Series A Cumulative Preferred Stock and (b) two Common Stock Purchase
Warrants, each of which entitles the holders thereof to purchase one share of
Common Stock. The Units have been issued and sold in a public offering
pursuant to a Registration Statement on Form SB-2, as filed with the
Securities and Exchange Commission on September __, 1998, amended on
____________, and declared effective on __________, 1998 (the "Registration
Statement"), and a Prospectus dated ____________, 1998, filed as a part of
such Registration Statement (references to which shall be deemed to include
any and all supplements and amendments thereto, which Prospectus is referred
to herein as the "Prospectus").
The Purchase Price and number of shares of Common Stock of the
Corporation purchasable upon exercise of each Warrant evidenced hereby shall
be subject to adjustment from time to time as set forth in the Warrant
Agreement (the "Warrant Agreement"), dated as of __________, 1998, by and
between the Corporation and __________________, as Warrant Agent (the "Warrant
Agent"). To the extent of any inconsistencies between this Warrant and the
Warrant Agreement, the Warrant Agreement shall control.
The Warrants evidenced hereby are issued under and subject to the terms
and provisions contained in the Warrant Agreement, to all of which the
Warrantholder by acceptance hereof consents. A copy of the Warrant Agreement
is on file at the corporate office of the Corporation.
The Warrants evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Purchase Form attached
hereto duly executed (with a signature guarantee as provided hereon) and
simultaneous payment of the Purchase Price at the principal office of the
Corporation. Payment of such price shall be made in cash, by certified or
official bank check or any combination thereof.
Upon any partial exercise of the Warrants evidenced hereby, there shall
be signed and issued to the Warrantholder a new Warrant Certificate in respect
of the shares of Warrant Stock as to which the Warrants evidenced hereby shall
not have been exercised. These Warrants may be exchanged at the office of the
Warrant Agent by surrender of this Warrant Certificate properly endorsed for
one or more new Warrants of the same aggregate number of shares of Warrant
Stock as evidenced by the Warrant or Warrants exchanged. No fractional
securities shall be issued upon the exercise of rights to purchase hereunder,
but the Corporation shall pay the cash value of any fraction upon the exercise
of one or more Warrants. These Warrants are transferable at the office of the
Warrant Agent in the manner and subject to the limitations set forth in the
Warrant Agreement.
This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a stockholder of the Corporation.
NBI, INC.
By:____________________________
Name:
Title:
Dated: _____________ __, 1998
ATTEST: [Seal]
_____________________________
Name:
Title:
NBI, INC.
COMMON STOCK PURCHASE WARRANT
PURCHASE FORM
NBI, INC. (the "Corporation")
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, _________ shares of common stock of NBI, Inc. (the "Corporation")
(the "Warrant Stock") provided for therein, and requests that certificates for
the Warrant Stock be issued in the name of:
__________________________________________
(Please print or Type Name, Address and Social Security Number)
__________________________________________
__________________________________________
and, if said number of shares of Warrant Stock shall not be all the Warrant
Stock purchasable hereunder, that a new Warrant Certificate for the balance of
the Warrant Stock purchasable under the within Warrant Certificate be
registered in the name of the undersigned Warrantholder or his assignee as
below indicated and delivered to the address stated below.
Dated:_________________
Name of Warrantholder
or Assignee: _________________________
(Please Print)
Address: _________________________
_________________________
Signature: _________________________
Note: The above signature must correspond with the name as it appears upon
the face of this Warrant Certificate in every particular, without alteration
or enlargement or any change whatever, unless these Warrants have been
assigned.
Signature Guaranteed:_____________________________
(Signature must be guaranteed by a bank, trust company or savings and loan
association, having an office or correspondent in the United States or by a
member firm of a registered securities exchange or the National Association of
Securities Dealers, Inc.)
ASSIGNMENT
(To be signed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
the right to purchase ______________ shares of Warrant Stock represented by
the within Warrant Certificate unto, and requests that a certificate for such
Warrant be issued in the name of:
_____________________________________
(Name and Address of Assignee Must be Printed or Typewritten)
_____________________________________
_____________________________________
hereby irrevocably constituting and appointing _______________ as attorney to
transfer said Warrants on the books of the Corporation, with full power of
substitution in the premises and, if said number of shares of Warrant Stock
shall not be all of the Warrant Stock purchasable under the within Warrant
Certificate, that a new Warrant Certificate for the balance of the Warrant
Stock purchasable under the within Warrant Certificate be registered in the
name of the undersigned Warrantholder and delivered to such Warrantholder's
address as then set forth on the Corporation's books.
Dated:_______________ ____________________________
Signature of Registered Holder
Note: The above signature must correspond with the name as it appears upon
the face of this Warrant Certificate in every particular, without alteration
or enlargement or any change whatever.
Signature Guaranteed:_____________________________
(Signature must be guaranteed by a bank, trust company or savings and loan
association having an office or correspondent in the United States or by a
member firm of a registered securities exchange or the National Association of
Securities Dealers, Inc.)