Exhibit 4.04
INSCI CORP.
AND
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, INC.
ADVISOR'S WARRANT AGREEMENT
ADVISOR'S WARRANT CERTIFICATES
ADVISOR'S WARRANT REGISTRATION RIGHTS
ADVISOR'S WARRANT AGREEMENT dated as of April 22, 1999 by and between
INSCI CORP. (the "Company") and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, INC. (hereinafter
referred to as either "APR", the "Holder" or the "Advisor").
W I T N E S S E T H:
WHEREAS, the Advisor has agreed, pursuant to an engagement letter (the
"Engagement") dated April 22, 1999 by and between APR and the Company, to act as
Financial Advisor in connection with the Company's business activities and
strategic planning; and
WHEREAS, the Company proposes to issue to APR, in lieu of cash payments of
$4,000 per month for a period of six months, for services to be provided by the
Advisor, warrants (the "Advisor Warrants") to purchase an aggregate amount of
shares of Common Stock (the "Warrant Shares"); and
NOW, THEREFORE, in consideration of the premises, the payment by the
Advisor to the Company of $0.0001 per Advisor's Warrant, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Grant. The Advisor is hereby granted 200,000 Advisor's Warrants to
purchase 200,000 Warrant Shares; 100,000 shall be to purchase 100,000 Warrant
Shares at any time from October 22, 1999 until 5:00 pm, New York time on October
22, 2003 at an initial purchase price (subject to adjustment as provided in
Section 8 hereof) of $3.00 per Warrant Share; and 100,000 warrants shall be to
purchase 100,000 Warrant Shares at any time from April 22, 2000 until 5:00 pm,
New York time on April 22, 2004 at an initial purchase price (subject to
adjustment as provided in Section 8 hereof) of $4.00 per Warrant Share subject
to the terms and conditions of this Agreement. The expiration date (the
"Expiration Date") is the last date that each Advisor's Warrant can be
exercised. The Exercise Price (the "Exercise Price") is the price at which each
Adivsor's Warrant can be exercised.
2. Warrant Certificates. The Warrant Certificates (the "Advisor's Warrant
Certificates") to be delivered pursuant to this Agreement shall be in the form
set forth in Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Advisor's Warrants.
3.1 Exercise Form. In order to exercise this Advisor's Warrant, the
exercise form attached hereto must be duly executed and completed and
delivered to the Company, together with this Advisor's Warrant and payment
of the Exercise Price in cash or by certified or official bank check for
the securities being purchased. If the subscription rights represented
hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the
Expiration Date this Advisor's Warrant shall become and be void without
further force or effect, and all rights represented hereby shall cease and
expire.
3.2 Legend. Each certificate for the securities purchased under this
Advisor's Warrant shall bear a legend as follows unless such Securities
have been registered under the Securities Act of 1933, as amended (the
"Act"):
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") or applicable
state law. The securities may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement under
the Act, or pursuant to an exemption from registration under the Act and
applicable state law."
3.3 Cashless Exercise.
3.3.1 Determination of Amount. In lieu of the payment of the
Exercise Price in the manner required by Section 3.1, the Holder shall
have the right (but not the obligation) to pay the Exercise Price for the
shares of Common Stock being purchased with this Advisor's Warrant upon
exercise by the surrender to the Company of any exerciseable but
unexercised portion of this Advisor's Warrant having a "Value" (as defined
below), at the close of trading on the last trading immediately preceding
the exercise of this Advisor's Warrant, equal to the Exercise Price
multiplied by the number of shares being purchased upon exercise (Cashless
Exercise Right). The sum of (a) the number of shares being purchased upon
exercise of the non-surrendered portion of this Advisor's Warrant pursuant
to this Cashless Exercise Right and (b) the number of shares underlying
the portion of this Advisor's Warrant being surrendered, shall not in any
event be greater than the total number of shares of Common Stock
purchasable upon the complete exercise of this Advisor's Warrant if the
Exercise Price were paid in cash. The "Value" of the portion of the
Advisor's Warrant being surrendered shall equal the remainder derived from
subtracting (a) the Exercise Price multiplied by the number of shares
underlying the portion of this Advisor's Warrant being surrendered from
(b) the Market Price of the shares multiplied by the number of shares
underlying the portion of this Advisor's Warrant being surrendered. As
used herein, the term "Market Price" at any date shall be deemed to be the
last reported sale price of the Common Stock on such date, or, in case no
such reported sale takes place on such day, the average of the last
reported sale prices for the immediately preceding three trading days, in
either case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading, or, if the Common
Stock is not listed or admitted to trading on any national securities
exchange or if any such exchange on which the Common Stock is listed is
not its principal trading market, the last reported sale price as
furnished by the NASD through the Nasdaq National Market or SmallCap
Market, or, if applicable, the OTC Bulletin Board or similar organization,
as determined in good faith by resolution of the Board of Directors of the
Company, based on the best information available to it.
3.3.2 Mechanics of Cashless Exercise. The Cashless Exercise Right
for the respective warrants may be exercised during the periods specified
in paragraph 1 hereof by delivering the Advisor's Warrant with a duly
executed exercise form attached hereto with the cashless exercise section
completed to the Company, exercising the Cashless Exercise Right and
specifying the total number of shares of Common Stock the Holder will
purchase pursuant to such Cashless Exercise Right.
3.3.3 Validity. The foregoing provisions of this Section 3.3 shall
not apply if the securities to be issued upon exercise of the Cashless
Exercise Right may not be validly issued under the laws of the
jurisdiction of incorporation of the Company.
4. Issuance of Certificates. Upon the exercise of any Advisor's Warrants
and payment of the Exercise Price therefor, the issuance of one or more
certificates for the Warrant Shares or other securities, properties or rights
underlying such Advisor's Warrants shall be made forthwith (and in any event
within three (3) business days thereafter) without further charge to the Holder
thereof, and such certificates shall (subject to the provisions of Sections 5
and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Holder, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid. The
Advisor's Warrant Certificates and the certificates representing the Warrant
Shares or other securities, property or rights (if such property or rights are
represented by certificates) shall be executed on behalf of the Company by the
manual or facsimile signature of the then present Chairman or Vice Chairman of
the Board of Directors or President or Vice President of the Company under its
corporate seal reproduced thereon, attested to by the manual or facsimile
signature of the then present Secretary or Assistant Secretary or Treasurer or
Assistant Treasurer of the Company. Advisor's Warrant Certificates shall be
dated the date of issuance thereof by the Company upon initial issuance,
transfer or exchange, or in lieu of mutilated, lost, stolen or destroyed
Advisor's Warrant Certificates.
5. Restriction On Transfer of Advisor's Warrants. The Holder of an
Advisor's Warrant Certificates (and its Permitted Transferees, as defined
below), by its acceptance thereof, covenants and agrees that the Advisor's
Warrants are being acquired for investment and not with a view to the
distribution thereof; that the Advisor's Warrants may be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, to any
person (a "Permitted Transferee"), provided such transfer, assignment,
hypothecation or other disposition is made in accordance with the provisions of
the Act, and applicable state securities laws.
6. Initial and Adjusted Exercise Price. The Exercise Price of each
Advisor's Warrant initially shall be the prices listed in paragraph 1, subject
to adjustment from time to time in accordance with the provisions of Section 8
hereof.
7. Registration Rights.
a. Registration Under the Securities Act of 1933. The Advisor's
Warrants have not been registered under the Act. The Advisor's Warrant
Certificates and the certificates representing the Warrant Shares shall
bear the following legend:
"This Warrant and the securities issuable upon exercise of this warrant
have not been registered under the Securities Act of 1933, as amended (the
"Act") or any state securities laws, and may not be sold, offered for
sale, assigned, transferred or otherwise disposed of, unless registered
pursuant to the provisions of the Act and applicable state laws or an
opinion of counsel is obtained stating that such disposition is in
compliance with an available exemption from such registration."
b. Registration. The Warrant Shares shall be included in the
registration statements described in the Registration Rights Agreement to
be executed by the Company and the Holders, a form of which is attached as
Exhibit B hereto, the terms of which are incorporated herein and made a
part hereof.
c. Exercise of Warrants. Nothing contained in this Agreement shall
be construed as requiring the Holders to exercise their Advisor's Warrants
prior to the initial filing of any registration statement or the
effectiveness thereof, or at any time thereafter.
8. Adjustments to Purchase Price and Number of Securities.
a. Adjustment for Recapitalization. If the Company shall at any time
combine or subdivide its outstanding shares of Common Stock (or other
securities at the time receivable upon the exercise of the Advisor's
Warrant) by recapitalization, reclassification, split-up, combination or
reverse split thereof, the Exercise Price per share of the Advisor's
Warrant subject to the Advisor's Warrant immediately prior to such
combination or subdivision shall be proportionately increased or
decreased, as the case may be. Any such adjustment and adjustment to the
Exercise Price pursuant to this Section 8(a) shall be effective at the
close of business on the effective date of such subdivision or combination
or if any adjustment is the result of a stock dividend or distribution,
then the effective date for such adjustment based thereon shall be the
record date therefor.
Whenever the number of shares of Common Stock purchasable upon the
exercise of the Advisor's Warrant is adjusted as provided in this Section
8(a), the Exercise Price shall be adjusted to the nearest cent by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of shares of
Common Stock purchasable upon the exercise immediately prior to such
adjustment, and (y) the denominator of which shall be the number of shares
of Common Stock so purchasable immediately thereafter.
b. Adjustment for Reorganization, Consolidation, Merger, Etc. In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable on the exercise of the
Warrant Share) after the date of the Warrant Share or in case after such
date the Company (or any such other corporation) shall consolidate with or
merge into another corporation or convey all or substantially all of its
assets to another corporation, then, and in each such case, the Holder of
the Warrant Share upon the exercise thereof as provided in Section 3 at
any time after the consummation of such reorganization, consolidation,
merger or conveyance, shall be entitled to receive, in lieu of the
securities and property receivable upon the exercise of the Warrant Share
prior to such consummation, the securities or property to which such
Holder would have been entitled upon such consummation if such Holder had
exercised the Warrant Share immediately prior thereto; in each such case,
the terms of the Warrant Share shall be applicable to the securities or
property receivable upon the exercise of the Warrant Share after such
consummation.
c. Adjustment for Stock Dividends. Except as hereinafter provided,
in the event the Company shall, at any time or from time to time after the
date hereof, issue any shares of Common Stock, or issue any securities
convertible into or exchangeable for shares of Common Stock, as a stock
dividend to holders of the Company's securities, (any such issuance being
herein called a "Change of Shares"), then, and thereafter immediately
before the record date for each Change of Shares, the Exercise Price for
the Warrant Share (whether or not the same shall be issued and
outstanding) in effect immediately prior to such Change of Shares shall be
changed to a price (including any applicable fraction of a cent to the
nearest cent) determined by dividing (1) the product of (a) the Exercise
Price in effect immediately before such Change of Shares and (b) the total
number of shares of Common Stock outstanding immediately prior to such
Change of Shares, by (2) the total number of shares of Common Stock
outstanding immediately after such Change of Shares.
For the purposes of any adjustment to be made in accordance with
this Section 8 the following provisions shall be applicable:
i. Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have
been issued immediately after the opening of business on the day
following the record date for the determination of stockholders
entitled to receive such dividend or other distribution and shall be
deemed to have been issued without consideration.
ii. The number of shares of Common Stock at any one time
outstanding shall be deemed to include the aggregate maximum number
of shares issuable (subject to readjustment upon the actual issuance
thereof) upon the exercise of options, rights or warrants and upon
the conversion or exchange of convertible or exchangeable
securities.
iii. Upon each adjustment of the Exercise Price pursuant to
this Section 8, the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be the number derived by
multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment by the Exercise Price in effect
prior to such adjustment and dividing the product so obtained by the
applicable adjusted Exercise Price.
iv. In case the Company shall at any time after the date
hereof issue any securities convertible into or exchangeable for
shares of Common Stock, as a dividend, the Exercise Price for the
Warrants (whether or not the same shall be issued and outstanding)
in effect immediately prior to such issuance, shall be reduced to a
price determined by making the computation in accordance with the
provisions of this Section 8, provided that:
B. The aggregate maximum number of shares of Common
Stock issuable or that may become issuable upon conversion or
exchange of any convertible or exchangeable securities
(assuming conversion or exchange in full even if not then
currently convertible or exchangeable in full) shall be deemed
to be issued and outstanding at the time of issuance of such
securities, for a consideration equal to the minimum
consideration, if any, receivable by the Company upon the
conversion or exchange thereof; provided, however, that upon
the expiration or other termination of the right to convert or
exchange such convertible or exchangeable securities (whether
by reason of redemption or otherwise), the number of shares of
Common Stock deemed to be issued and outstanding pursuant to
this subsection (B) (and for the purposes of subsection (E) of
Section 8 iv. hereof) shall be reduced by the number of shares
as to which the conversion or exchange rights shall have
expired or terminated unexercised, and such number of shares
shall no longer be deemed to be issued and outstanding for
purposes of any subsequent adjustment in the Exercise Price,
which adjustment shall be made on the basis of the issuance
only of the shares actually issued plus the shares remaining
issuable upon conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
C. If any change shall occur in the exercise price per
share provided for in the price per share or ratio at which
the securities referred to in subsection (B) of this Section 8
iv. are convertible or exchangeable, such conversion or
exchange rights, to the extent not theretofore exercised,
shall be deemed to have expired or terminated on the date when
such price change became effective in respect of shares not
theretofore issued pursuant to the conversion or exchange
thereof, and the Company shall be deemed to have issued upon
such date new convertible or exchangeable securities.
D. In case of any reclassification or change of
outstanding shares of Common Stock issuable upon exercise of
the Advisor's Warrant (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 subdivision or combination), or in
case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a
Subsidiary in which merger 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 Advisor's
Warrant 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 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 successor or purchasing corporation, as the case may be,
shall make lawful and adequate provision whereby the Holder of
each Advisor's Warrant then outstanding shall have the right
thereafter to receive on exercise of such Advisor's Warrant
the kind and amount of securities and property receivable upon
such reclassification, change, consolidation, merger, sale or
conveyance by a Holder of the number of securities issuable
upon exercise of such Advisor's Warrant immediately prior to
such reclassification, change, consolidation, merger, sale or
conveyance and shall forthwith file at the Corporate Office of
the stock transfer agent, if any, a statement signed by its
President or a Vice President and by its Treasurer or an
Assistant Treasurer or its Secretary or an Assistant Secretary
evidencing such provision.
E. Irrespective of any adjustments or changes in the
Exercise Price or the number of shares of Common Stock
purchasable upon exercise of the Advisor's Warrant, the
Warrant Certificate theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new
Warrant Certificates pursuant to Section 9 hereof, continue to
express the Exercise Price per share and the number of shares
purchasable thereunder as the Exercise Price per share and the
number of shares purchasable thereunder were expressed in the
Warrant Certificates when the same were originally issued.
F. After each adjustment of the Exercise Price pursuant
to this Section 8, the Company will promptly prepare a
certificate signed by the Chairman or President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of shares of
Common Stock purchasable upon exercise of each Advisor's
Warrant, after such adjustment, and (iii) a brief statement of
the facts accounting for such adjustment. The Company will
promptly cause a brief summary thereof to be sent by ordinary
first class mail to each Holder at his last address as it
shall appear on the registry books of the Company. No failure
to mail such notice nor any defect therein or in the mailing
thereof shall affect the validity thereof except as to the
Holder to whom the Company failed to mail such notice, or
except as to the Holder whose notice was defective. The
affidavit of the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence
of fraud, be prima facie evidence of the facts stated therein.
G. No adjustment of the Exercise Price shall be made as
a result of or in connection with (i) the issuance or sale of
shares of Common Stock pursuant to options, warrants, stock
purchase agreements and convertible or exchangeable securities
outstanding or in effect on the date hereof, (ii) the issuance
or sale of shares of Common Stock upon the exercise of any
"incentive stock options" or "nonqualified stock options" (as
such terms are defined in the Internal Revenue Code of 1986,
as amended), whether or not such options were outstanding on
the date hereof, (iii) the issuance of, or grants of options
or warrants to purchase, up to a total of 5,000,000 shares of
Common Stock to officers, brokerage officers or directors of
the Company or otherwise pursuant to the Company's stock
option plans, (iv) the issuance or sale of shares of Common
Stock if the amount of said adjustment shall be less than
$.05, provided, however, that in such case, any adjustment
that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together
with the next subsequent adjustment that shall amount,
together with any adjustment so carried forward, to at least
$.05. In addition, Registered Holders shall not be entitled to
cash dividends paid by the Company prior to the exercise of
any Warrant Share held by them.
9. Exchange and Replacement of Warrant Certificates. Each Advisor's
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holders at the principal executive office of the Company, for
a new Advisor's Warrant Certificate of like tenor and date representing in the
aggregate the right to purchase the same number of Warrant Shares in such
denominations as shall be designated by the Holders thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Advisor's Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Advisor's Warrant
Certificates, if mutilated, the Company will make and deliver a new Advisor's
Warrant Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of Warrant Shares upon the exercise
of the Advisor's Warrants, nor shall it be required to issue scrip or pay cash
in lieu of fractional interests; provided, however, that if a Holders exercises
all Advisor's Warrants (as the case may be) held of record by such Holders the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of Warrant Shares or other securities, properties or
rights.
11. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Advisor's Warrants, such
number of shares of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Advisor's Warrants and payment of the Exercise Price
therefor, all the Warrant Shares and other securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder. As long as the Advisor's
Warrants shall be outstanding, the Company shall use its best efforts to cause
its Common Stock to be listed (subject to official notice of issuance) on all
securities exchanges on which the Warrant Shares issuable to the Advisor in
connection with this Agreement may then be listed.
12. Notices to Advisor's Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Advisor's Warrants and their exercise, any of the
following events shall occur:
a. the Company shall take a record of the Holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings,
as indicated by the accounting treatment of such dividend or distribution
on the books of the Company; or
b. the Company shall offer to all the Holders of its Common Stock
any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or
c. a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety
shall be proposed; then, in any one or more of said events, the Company
shall give written notice of such event at least fifteen (15) days prior
to the date fixed as a record date or the date of closing the transfer
books for the determination of the stockholders entitled to such dividend,
distribution, convertible or exchangeable securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation,
winding up or sale. Such notice shall specify such record date or the date
of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action
taken in connection with the declaration or payment of any such dividend,
or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
a. If to the registered Holders of the Advisor's Warrants, to the
address of such Holders as shown on the books of the Company, as well as
to the office of the Advisor, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; or
b. If to the Company, to TWO ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: Mr. E. ▇▇▇ ▇▇▇▇▇▇, Ph.D.; or to such other address as
the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the Advisor may from time
to time supplement or amend this Agreement without the approval of any Holders
of Advisor's Warrant Certificates (other than the Advisor) in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Advisor may deem necessary or desirable and which the Company and the
Advisor deem shall not adversely affect the interests of the Holders of
Advisor's Warrant Certificates.
15. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Advisor, the
Holders and their respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate on the Expiration Date.
Notwithstanding the foregoing, the indemnification provisions shall survive such
termination until the close of business on the later of the expiration of any
applicable statute of limitations or the Expiration Date.
17. Change of Control. The Advisor's Warrants covered under this Agreement
shall be exercisable immediately in the event of a change of control in the
Company.
18. Governing Law. This Agreement and each Advisor's Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
laws of said State without giving effect to the rules of said State governing
the conflicts of laws.
19. Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and thereof. Subject to Section 14, this Agreement may not be modified or
amended except by written notice duly signed by the party against whom
enforcement of the modification or amendment is sought.
20. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
21. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
22. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Advisor and any other Holders of the Advisor's Warrant Certificates or Advisor's
Shares any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Advisor and any other Holders of the Advisor Warrant Certificates or
Advisor's Shares.
23. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
24. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company, the Advisor and their respective successors and assigns
and the Holders from time to time of the Advisor's Warrant Certificates or any
of them.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, INC. INSCI CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ E. ▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ E. ▇▇▇ ▇▇▇▇▇▇, Ph.D.
Executive Vice President Chairman & CEO
EXHIBIT A
INSCI CORP.
WARRANT CERTIFICATE
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF
COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING October 22, 1999 THROUGH
5:00 P.M., NEW YORK TIME ON October 22, 2003
No. W-I-1 100,000 Warrants
This Warrant Certificate certifies that ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇,
Inc. is the registered holder of 100,000 warrants to purchase, at any time from
October 22, 1999 until 5:00 p.m., New York time on October 22, 2003 (the
"Expiration Date"), up to 100,000 shares of Common Stock (the "Warrant Shares"),
$.01 par value, of INSCI Corp., a DELAWARE corporation (the "Company"), at an
exercise price of $3.00 per Share (the "Exercise Price"), upon the surrender of
this Warrant Certificate and payment of the applicable Exercise Price at an
office or agency of the Company, but subject to the conditions set forth herein
and in the Advisor's Warrant Agreement dated as of April 1, 1999 by and between
the Company and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, Inc. (the "Warrant Agreement").
Payment of the Exercise Price shall be made by certified or cashier's check or
money order payable to the order of the Company.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are issued pursuant to
the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Holders (the words "Holders" or
"Holder" meaning the registered Holders or registered Holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and/or number of the Company's securities
issuable upon the exercise of this Warrant, may, subject to certain conditions,
be adjusted. In such event, the Company will, at the request of the Holder,
issue a new Warrant Certificate evidencing the adjustment in the Exercise Price
and the number and/or type of securities issuable upon the exercise of the
Warrants; provided, however, that the failure of the Company to issue such new
Warrant Certificates shall not in any way change, alter, or otherwise impair,
the rights of the Holder as set forth in the Warrant Agreement.
Upon request for registration of transfer of this Warrant Certificate at
an office or agency of the Company or of Company's counsel, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Advisor's Warrants shall be issued to the
transferee(s) in exchange as provided herein as soon as possible, but in no
event more than thirty (30) days, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue as soon as possible, but in no event more
than thirty (30) days, to the Holder hereof a new Warrant Certificate
representing such number of unexercised Warrants.
The Company may deem and treat the registered Holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the Holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this 22
nd day of April 1999.
INSCI Corp.
By: /s/ E. ▇▇▇ ▇▇▇▇▇▇
------------------------
Mr. E. ▇▇▇ ▇▇▇▇▇▇, Ph.D.
Chairman & CEO
ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------
Secretary
EXHIBIT A contd.
INSCI CORP.
WARRANT CERTIFICATE (2)
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF
COUNSEL IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE COMMENCING April 22, 2000 THROUGH
5:00 P.M., NEW YORK TIME ON April 22, 2004
No. W-I-1 100,000 Warrants
This Warrant Certificate certifies that ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇,
Inc. is the registered holder of 100,000 warrants to purchase, at any time from
April 22, 2000 until 5:00 p.m., New York time on April 22, 2004 (the "Expiration
Date"), up to 100,000 shares of Common Stock (the "Warrant Shares"), $.01 par
value, of INSCI Corp., a DELAWARE corporation (the "Company"), at an exercise
price of $4.00 per Share (the "Exercise Price"), upon the surrender of this
Warrant Certificate and payment of the applicable Exercise Price at an office or
agency of the Company, but subject to the conditions set forth herein and in the
Advisor's Warrant Agreement dated as of April 22, 1999 by and between the
Company and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, Inc. (the "Warrant Agreement").
Payment of the Exercise Price shall be made by certified or cashier's check or
money order payable to the order of the Company.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are issued pursuant to
the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the Holders (the words "Holders" or
"Holder" meaning the registered Holders or registered Holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and/or number of the Company's securities
issuable upon the exercise of this Warrant, may, subject to certain conditions,
be adjusted. In such event, the Company will, at the request of the Holder,
issue a new Warrant Certificate evidencing the adjustment in the Exercise Price
and the number and/or type of securities issuable upon the exercise of the
Warrants; provided, however, that the failure of the Company to issue such new
Warrant Certificates shall not in any way change, alter, or otherwise impair,
the rights of the Holder as set forth in the Warrant Agreement.
Upon request for registration of transfer of this Warrant Certificate at
an office or agency of the Company or of Company's counsel, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Advisor's Warrants shall be issued to the
transferee(s) in exchange as provided herein as soon as possible, but in no
event more than thirty (30) days, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall issue as soon as possible, but in no event more
than thirty (30) days, to the Holder hereof a new Warrant Certificate
representing such number of unexercised Warrants.
The Company may deem and treat the registered Holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the Holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this certificate this 22
nd day of April 1999.
INSCI Corp.
By: /s/ E. ▇▇▇ ▇▇▇▇▇▇
------------------------
Mr. E. ▇▇▇ ▇▇▇▇▇▇, Ph.D.
Chairman & CEO
ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------
Secretary
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of April 22, 1999 by and
between INSCI Corp., a DELAWARE corporation (the "Company"), and the person
whose name appears on the signature page attached hereto (individually a
"Holder" or collectively the "Holders", meaning the registered holder or
registered holders);
WHEREAS, pursuant to the terms of the Advisor's Warrant Agreement dated
APRIL 22, 1999 between the Company and the Holder to purchase an aggregate
amount of 200,000 shares of Common Stock (the "Warrant Shares"), the Company and
the Holder have agreed to enter into this Agreement;
WHEREAS, it is intended by the Company and the Holder that this Agreement
shall become effective immediately upon the signing of the Advisor's Warrant
Agreement by the parties thereto.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company hereby agrees as follows:
1 Registration Rights
(a) Right to Unlimited Piggyback. Whenever the Company proposes to
register any of its Registrable Securities under the Act (a "Piggyback
Registration"), either for the Company's own account or for the account of
any of its security holders (other than holders of Registrable Securities
in their capacity of Holders), the Company will give prompt written notice
to all Holders, of its intention to effect such a registration and will
include in such Piggyback Registration all Registrable Securities of
Holders with respect to which the Company has received written requests
for inclusion therein within twenty (20) days after receipt of the
Company's notice. Except as may otherwise be provided in this Agreement,
Registrable Securities with respect to which such request for registration
has been received will be registered by the Company and offered to the
public pursuant to this Section 1 on the same terms and conditions as any
similar securities of the Company included in the proposed registration.
(b) Registration Procedures. With respect to any Piggyback
Registration, the Company will, as expeditiously as practicable:
(1) prepare and file with the Securities and Exchange
Commission (the "Commission") a Registration Statement which
includes the Registrable Securities and use its best efforts to
cause such Registration Statement to become and remain effective as
provided herein; provided that before filing any amendments or
supplements to a Registration Statement or Prospectus, including
documents incorporated by reference after the initial filing of the
Registration Statement, the Company will furnish to the Holders and
the underwriters, if any, copies of all such documents proposed to
be filed at least three Business Days prior thereto, which documents
will be subject to the reasonable review of such Holders and
underwriters, and the Company will not file an amendment to a
Registration Statement or Prospectus or any supplement thereto
(including such documents incorporated by reference) to which
Holders holding a majority of the Registrable Securities covered by
such Registration Statement or the underwriters, if any, shall
reasonably object.
(2) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for a period
of not less than 90 days, or such shorter period which will
terminate when all Registrable Securities covered by such
Registration Statement have been sold or withdrawn (but not prior to
the expiration of the 90-day period referred to in Section 4(3) of
the Act and Rule 174 thereunder, if applicable); cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Act; and comply with the provisions of the Act applicable to it with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance
with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement or supplement to the
Prospectus; the Company shall be deemed to have used its best
efforts to keep a Registration Statement effective during the
applicable period if it complies with all rules and regulations
under the Act relating to it and the noncompliance with which would
result in Holders not being able to sell their Registrable
Securities covered by such Registration Statement during that
period;
(3) furnish to any Selling Holder and the underwriter or
underwriters, if any, without charge, at least one signed copy of
the Registration Statement and any post-effective amendment thereto,
upon request, and such number of conformed copies thereof and such
number of copies of the Prospectus (including each preliminary
Prospectus) and any amendments or supplements thereto, and any
documents incorporated by reference therein, as such Selling Holder
or underwriter may reasonable request in order to facilitate the
disposition of the Registrable Securities being sold by such Selling
Holder (it being understood that the Company consents to the use of
the Prospectus and any amendment or supplement thereto by each
selling Holder and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto);
(4) notify each Selling Holder at any time when a Prospectus
relating to Registrable Securities of any Selling Holder included in
a Registration Statement is required to be delivered under the Act,
when the Company becomes aware of the happening of any event as a
result of which the Prospectus included in such Registration
Statement (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein (in the case of the Prospectus or any
preliminary Prospectus, in light of the circumstances under which
they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the Securities and Exchange
Commission (the "Commission") and furnish to Holders a supplement or
amendment to such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(5) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities;
(6) make reasonably available for inspection by any Selling
Holder, any underwriter participating in any disposition pursuant to
the Registration Statement, if any, and any attorney, accountant or
other agent retained by any such Selling Holder or underwriter
(collectively, the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection
with such Registration Statement. Records and other information
which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless the release of such records is
ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. The Selling Holder agrees that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expenses, to undertake appropriate action
to prevent disclosure of the Records deemed confidential;
(7) use its best efforts to obtain an opinion or opinions from
counsel for the Company in customary form;
(8) use its best efforts to cause all Registrable Securities
included in such Registration Statement to be listed, by the date of
the first sale of Registrable Securities pursuant to such
Registration Statement, on each securities exchange on which the
Company's securities of the same class are then listed or proposed
to be listed, if any;
(9) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement
at the earliest possible moment;
(10) if requested by the managing underwriter or underwriters
or any Selling Holder promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the
managing underwriter or underwriters or such Selling Holder
reasonably requests to be included therein regarding Selling Holder,
including, without limitation, information with respect to the
number of Registrable Securities being sold by such Selling Holder
to such underwriter or underwriters, the Exercise Price being paid
therefor by such underwriter or underwriters and information with
respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as possible after being notified of the matters to
be incorporated in such Prospectus supplement or post-effective
amendment;
(11) as promptly as practicable after filing with the
Commission of any document which is incorporated by reference into a
Registration Statement, deliver a copy of such document to each
Selling Holder;
(12) on or prior to the date on which the Registration
Statement is declared effective, use its best efforts to register or
qualify, and cooperate with the Holders, the underwriter or
underwriters, if any, and their counsel, in connection with the
registration or qualification of, the Registrable Securities covered
by the Registration Statement for offer and sale under the
securities or blue sky laws of each state and other jurisdiction of
the United States that any Selling Holder or underwriter reasonably
requests in writing, to use its best efforts to keep each such
registration or qualification effective, including through new
filings, or amendments or renewals, during the period such
Registration Statement is required to be kept effective and to do
any and all other acts or things necessary or advisable to enable
the disposition in all such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided that the
Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (c)(14), (ii) consent to general
service of process in any such jurisdiction or (iii) subject itself
to general taxation in any such jurisdiction;
(13) cooperate with the Holders and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing securities to be sold under the Registration Statement,
and enable such securities to be in such denominations and
registered in such names as the managing underwriter or
underwriters, if any, or such Holders may request; and
(14) use its best efforts to cause the Registrable Securities
covered by the Registration Statement to be registered with or
approved by such other governmental agencies or enable the Holders
or the underwriter or underwriters, if any, to consummate the
disposition of such securities.
(d) Registration Expenses.
(1) All of the costs and expenses of each registration
hereunder will be borne by the Company, including the fees and
expenses of the counsel and accountants for the Company and all
other costs and expenses of the Company incident to the preparation,
printing and filing under the Act of the Registration Statement (and
all amendments and supplements thereto) and furnishing copies
thereof and of the Prospectus included therein, and the costs and
expenses incurred by the Company in connection with the
qualification of the Registrable Securities under the state
securities or blue sky laws of various jurisdictions.
(e) Indemnification.
(1) Indemnification by the Company. The Company agrees to
indemnify, to the full extent permitted by law, each Selling Holder,
its officers and directors and each Person who controls such Selling
Holder (within the meaning of the Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), against any losses,
claims, damages, liabilities and expenses (including attorneys'
fees) caused by any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or
preliminary Prospectus or any omission or alleged omission to state
therein a material fact necessary to make the statements therein (in
the case of the Prospectus or any preliminary Prospectus, in light
of the circumstances under which they were made) not misleading,
except insofar as the same are caused by or contained in any
information furnished to the Company by such Selling Holder
expressly for use in the preparation thereof or by such Selling
Holder's failure to deliver a copy of the Registration Statement or
Prospectus or any amendments or supplements thereto after the
Company has furnished such Selling Holder with a sufficient number
of copies thereof.
(2) Indemnification by Holders. Each Selling Holder agrees to
indemnify, to the full extent permitted by law, the Company, its
directors and officers and each Person who controls the Company
(within the meaning of the Act and the Exchange Act) against any
losses, claims, damages, liabilities and expenses (including
attorneys fees) resulting from any untrue or alleged omission to
state a material fact necessary to make the statements in the
Registration Statement or Prospectus or preliminary Prospectus ( in
the case of the Prospectus or any preliminary Prospectus, in light
of the circumstances under which they were made) not misleading, to
the extent, but only to the extent, that such untrue statement or
omission was made in reliance upon information furnished by such
Selling Holder specifically for use in the preparation thereof.
(3) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt written
notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest may exist between such
indemnified and indemnifying parties with respect to such claim,
permit such indemnifying party to assume the defense of such claim
with counsel reasonably satisfactory to the indemnified party.
Whether or not such defense is assumed by the indemnifying party,
the indemnifying party will not be subject to any liability for any
settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnifying party will consent to entry
of any judgment or enter into any settlement 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 of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to assume the defense of a claim will
not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall
be obligated to pay the fees and expenses of such additional counsel
(4) Contribution. If for any reasons the indemnification
provided for in the preceding clauses (1) and (2) is unavailable to
an indemnified party as contemplated by the preceding clauses (1)
and (2), then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnified
party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other
relevant equitable considerations.
(f) Definitions.
"Act" means the Securities Act of 1933, as amended.
"Business Day" means any day of the week other than a Saturday,
Sunday or legal holiday in New York City.
"Common Stock" means the Warrant Shares of Common Stock, $.01 par
value, of the Company.
"Prospectus" means the prospectus which is part of the Registration
Statement.
"Registrable Securities" means any share of Common Stock, only so
long as such share continues to be a "Restricted Security." A share of
Common Stock shall be deemed to be a Restricted Security until such time
as such share (i) has been effectively registered under the Act and
disposed of in accordance with the registration statement covering it, or
(ii) has been sold pursuant to Rule 144 (or any similar provision then in
force) under the Act.
"Registration Statement" means a registration statement filed with
the Commission under the Act which includes the Registrable Securities
being registered in a Piggyback Registration or a Demand Registration.
"Selling Holder" means a Holder whose Registrable Securities are
included in a Registration Statement.
(g) Amendment and Waivers. The provisions of this Section 1,
including the provisions of this paragraph (g), may not be amended,
modified or supplemented, and waivers of or consents to departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of the Holders of the outstanding Registrable Securities.
(h) Termination. This Section 1 shall continue in full force and
effect until this Agreement is terminated in accordance with Section 16 of
this Agreement, except that paragraph (e) shall survive any termination of
this Section 1.
(i) Cooperation with Company. Holders will cooperate with the
Company in all respects in connection with this Agreement, including,
timely supplying all information reasonably requested by the Company and
executing and returning all documents reasonably requested in connection
with the registration and sale of the Registerable Securities.
(j) Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive
the registration and sale of any Registerable Securities by any person
entitled to indemnification hereunder and the expiration or termination of
this Agreement.
2. Assignment of Registration Rights. The rights of the Holders under this
Agreement, including the rights to cause the Company to register Registerable
Securities may not be assigned without the written prior consent of the Company.
3. Remedies.
(a) Time is of Essence. The Company agrees that time is of the
essence of each of the covenants contained herein and that, in the event
of a dispute hereunder, this Agreement is to be interpreted and construed
in a manner that will enable the Holders to have the ability to sell their
Registerable Securities as quickly as possible after the registration
statement covering the Registerable Securities is to be filed in
accordance with the terms of this Agreement. Any delay on the part of the
Company not expressly permitted under this Agreement which exceeds five
(5) days, whether otherwise material or not, shall be deemed a material
breach of this Agreement.
(b) Remedies Upon Default or Delay. The Company acknowledges the
breach of any part of this Agreement may cause irreparable harm to a
Holder and that monetary damages alone may be inadequate. The Company
therefore agrees that the Holder shall be entitled to injunctive relief or
such other applicable remedy as a court of competent jurisdiction may
provide. Nothing contained herein will be construed to limit a Holder's
right to any remedies at law, including recovery of damages for breach of
any part of this Agreement.
4. Notices.
(a) All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid, or telegraphed or
telexed with confirmation of receipt or delivered by hand or by overnight
delivery service, (i) if to the Company at INSCI CORP., TWO ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: MR. E. ▇▇▇ ▇▇▇▇▇▇, PH.D.,
CHAIRMAN & CEO or at such other address as it may have furnished in
writing to the Holders of Registerable Securities at the time outstanding,
or (ii) if to any Holder of any Registerable Securities, to the address of
such Holder as it appears in the stock or warrant ledger of the Company.
(b) Any notice so addressed, when mailed by registered or certified
mail shall be deemed to be given three days after so mailed, when
telegraphed or telexed shall be deemed to be given when transmitted, or
when delivered by hand or overnight shall be deemed to be given when
delivered.
5. Successors and Assigns. Except as otherwise expressly provided herein,
this Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the Company and each of the Holders.
6. Amendment and Waiver. This Agreement may be amended, and the observance
of any term of this Agreement may be waived, but only with the written consent
of the Company and the Holders of securities representing a majority of the
Registerable Securities; provided, however, that no such amendment or waiver
shall take away any registration right of any Holder of Registerable Securities
or reduce the amount of reimbursable costs to any Holder of Registerable
Securities in connection with any registration hereunder without the consent of
such Holder; further provided, however, that without the consent of any other
Holder of Registerable Securities, any Holder may from time to time enter into
one or more agreements amending, modifying or waiving the provisions of this
Agreement if such action does not adversely affect the rights or interest of any
other Holder of Registerable Securities. No delay on the part of any party in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any party of any right, power or
remedy preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy.
7. Counterparts. One or more counterparts of this Agreement may be signed
by the parties, each of which shall be an original but all of which together
shall constitute one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York, without giving effect to
conflicts of law principles.
9. Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
10. Pronouns; Headings. Unless the context otherwise requires, all
personal pronouns used in this Agreement, whether in the masculine, feminine or
neuter gender, shall include all other genders, and if in the singular shall
include the plural, and in the plural, the singular. The headings in this
Agreement are for convenience of reference only and shall not be deemed to alter
or affect the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
22nd day of April, 1999.
INSCI CORP.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Signature of Holder
By: /s/ E. ▇▇▇ ▇▇▇▇▇▇
------------------------ ------------------------
Mr. E. ▇▇▇ ▇▇▇▇▇▇, Ph.D. Name of Holder
Chairman & CEO
------------------------
------------------------
Address of Holder
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Warrant Certificate.)
FOR VALUE RECEIVED___________________________
hereby sells, assigns and transfers unto _____________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Warrant Certificate on the books of INSCI
CORP., with full power of substitution.
Dated:
----------------------
---------------------------------
Signature
---------------------------------
Print Name
(Name and Signature must conform in
all respects to the name of holder as
specified on the face of the Warrant
Certificate.)
----------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase:
______________ Shares
and herewith tenders in payment for such securities a certified or cashier's
check or money order payable to the order of INSCI CORP., in the amount of
$_______________, all in accordance with the terms hereof. The undersigned
requests that certificates for such securities be registered in the name of
____________________________ whose address is ________________________________
_________________ and that such certificates be delivered to . whose address
is ______________________________________________________________.
Dated:
-----------------------
---------------------------------
Signature
---------------------------------
Print Name
(Signature must conform in all
respects to the name of holder as
specified on the face of the Warrant
Certificate.)
---------------------------------
(Insert Social Security or Other
Identifying Number of Holders)