EXHIBIT 10.2
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC.
COHIG & ASSOCIATES, INC.
WARRANT AGREEMENT
Dated as of December 27, 1996
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of December 27, 1996, is
made and entered into by and between ▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, Inc., a
Colorado corporation (the "Company"), and COHIG & ASSOCIATES, INC. ("Cohig").
The Company agrees to issue and sell, and Cohig agrees to purchase, for the
price of $100, warrants to purchase up to an aggregate of 36,200 shares
("Shares") of the Company's Common Stock, subject to the terms and conditions
set forth below.
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, the Company and Cohig, for value received, hereby agree as follows:
SECTION 1. DEFINITIONS.
The following terms used in this agreement shall have the following
meanings (unless otherwise expressly provided herein):
1.1. The "Act." The Securities Act of 1933, as amended.
1.2. The "Commission." The Securities and Exchange Commission.
1.3. The "Company." ▇▇▇▇▇▇ Dental Management Services, Inc.
1.4. "Common Stock." The Company's Common Stock.
1.5. "Current Market Price." The Current Market Price shall be determined
as follows:
(i) if the security at issue is listed on a national securities
exchange or admitted to unlisted trading privileges on such an exchange or
quoted on the National Market System of the National Association of
Securities Dealers Automated Quotation System, Inc. ("NASDAQ") quotation
service, the current value shall be the last reported sale price of that
security on such exchange or system on the last business day prior to the
date of the applicable exercise of this Warrant or, if no such sale is made
on such day, the average of the highest closing bid and lowest asked price
for such day on such exchange or system; or
(ii) if the security at issue is not so listed or quoted or admitted
to unlisted trading privileges, the current market value shall be the
average of the last reported highest bid and lowest asked prices quoted on
NASDAQ or, if not so quoted, then by the National Quotation Bureau, Inc. on
the last business day prior to the day of the applicable exercise of this
Warrant; or
(iii) if the security at issue is not so listed or quoted or admitted
to unlisted trading privileges and bid and asked prices are not reported,
the current market value shall be determined in such reasonable manner as
may be prescribed from time to time by the Board of Directors of the
Company, subject to the objection and arbitration procedure as described in
Section (6) below.
1.6. "Exercise Date." December 27, 1996.
1.7. "Exercise Price." $5.00 per Share, as modified in accordance with
Section (4), below.
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1.8. "Expiration Date." December 27, 2001.
1.9. "Holder" or "Warrantholder." Cohig & Associates, Inc., and any
valid transferee thereof pursuant to Section (3.1) below.
1.10. "NASD." The National Association of Securities Dealers, Inc.
1.11. "NASDAQ." The automated quotation system operated by NASDAQ, Inc.
1.12. "Termination of Business." Any sale, lease or exchange of all, or
substantially all, of the Company's assets or business or any dissolution,
liquidation or winding up of the Company.
1.13. "Warrants." The warrants issued in accordance with the terms of
this Agreement and any Warrants issued in substitution for or replacement of
such warrants, including those evidenced by a certificate or certificates issued
upon division, exchange, substitution or transfer pursuant to this Agreement.
1.14. "Warrant Securities." The Common Stock purchasable upon exercise
of a Warrant including the Common Stock underlying unexercised portions of a
Warrant.
1.15. "1995 Warrant Agreement." The Warrant Agreement dated October 3,
1995, between the Company and Cohig & Associates, Inc.
1.16. "1995 Warrant Securities." The Common Stock purchasable upon
exercise of the Warrants issued pursuant to the 1995 Warrant Agreement, as
defined in the 1995 Warrant Agreement.
1.17. "1996 Warrant Agreement." The Warrant Agreement dated May 29,
1996, between the Company and Cohig & Associates, Inc.
1.18. "1996 Warrant Securities." The Common Stock purchasable upon
exercise of the Warrants issued pursuant to the 1996 Warrant Agreement, as
defined in the 1996 Warrant Agreement.
SECTION 2. TERM OF WARRANTS; EXERCISE OF WARRANT.
2.1. Exercise of Warrant. Subject to the terms of this Agreement, the
Warrantholder shall have the right, at any time during the period commencing at
9:00 a.m., Denver Time, on the Exercise Date and ending at 5:00 p.m., Denver
Time, on the Expiration Date, to purchase from the Company up to the number of
fully paid and nonassessable Shares to which the Warrantholder may at the time
be entitled to purchase pursuant to this Agreement, upon surrender to the
Company, at its principal office, of the certificate evidencing the Warrants to
be exercised, together with the purchase form on the reverse thereof, or the
Cashless Exercise Form in the case of a cashless exercise pursuant to Section
(2.2) herein, duly filled in and signed, and upon payment to the Company of the
Exercise Price for the number of Shares in respect of which such Warrants are
then exercised, but in no event for less than 100 Shares (unless fewer than an
aggregate of 100 shares are then purchasable under all outstanding Warrants held
by a Warrantholder).
2.2. Payment of Exercise Price. Payment of the aggregate Exercise Price
shall be made
(i) in cash or by check, or any combination thereof; or
(ii) upon the request of the Warrantholder and the acceptance by
the Company, which acceptance may be withheld by the Company in its sole
discretion, by means of a "Cashless Exercise." In the event of a
Cashless Exercise, the Warrantholder shall exchange its Warrant for such
number of shares of Common Stock determined by multiplying the number of
Shares by a fraction, the numerator of which shall be the difference
between the then-current market price per
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share of Common Stock and the Exercise Price, and the denominator of
which shall be the then-current market price per share of Common Stock.
For purposes of this Section (2.2) only, the "then current market price
per share of Common Stock" at any date shall be deemed to be the average
of the daily closing prices for 20 consecutive trading days commencing
the 21st trading day before such date. The closing price for each day
shall be the last sales price regular way or, in case no such reported
sales take place on such day, the average of the last reported bid and
asked prices regular way, in either case on the principal national
securities exchange on which the Common Stock is admitted to trading or
listed or, if not listed or admitted to trading on any such exchange,
the representative closing bid price as reported by Nasdaq or another
similar organization if Nasdaq is no longer reporting such information
or, if no such price is available, the fair market price as reasonably
determined by the Board of Directors.
2.3. Issuance of Shares. Upon such surrender of the Warrants and payment
of such Exercise Price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Warrantholder and in such name or names as the Warrantholder may designate, a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrant, together with cash, as provided in Section (12) hereof,
in respect of any fractional Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become the holder of
record of such securities as of the date of surrender of the warrants and be
divided or combined, upon request to the Company by the Warrantholder, into a
certificate or certificates representing the right to purchase the same
aggregate number of Shares.
SECTION 3. TRANSFERABILITY AND FORM OF WARRANT.
3.1. Limitation on Transfer. This Warrant may not be sold, transferred,
assigned, pledged or hypothecated until the Exercise Date, except in compliance
with Section (8) hereof. Any assignment or transfer of this Warrant shall be
made by the presentation and surrender of this Warrant to the Company at its
principal office or the office of its transfer agent, if any, accompanied by a
duly executed Assignment Form, in the form attached to and by this reference
incorporated in this Warrant as Exhibit B. Upon the presentation and surrender
of these items to the Company, the Company, at its sole expense, shall execute
and deliver to the new Holder or Holders a new Warrant or Warrants, containing
the same terms and conditions as this Warrant, in the name of the new Holder or
Holders as named in the Assignment Form, and this Warrant shall at that time be
canceled.
3.2. Exchange of Certificate. Any Warrant certificate may be exchanged
for another certificate or certificates entitling the Warrantholder to purchase
a like aggregate number of Shares as the certificate or certificates surrendered
then entitled such Warrantholder to purchase. Any Warrantholder desiring to
exchange a Warrant certificate shall make such request in writing delivered to
the Company, and shall surrender, properly endorsed, with signatures guaranteed,
the certificate evidencing the Warrant to be so exchanged. Thereupon, the
Company shall execute and deliver to the person entitled thereto a new Warrant
certificate as so requested.
3.3. Mutilated, Lost, Stolen, or Destroyed Certificate. In case the
certificate or certificates evidencing the Warrants shall be mutilated, lost,
stolen or destroyed, the Company shall, at the request of the Warrantholder,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Warrant certificate
or certificates of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Warrant and a bond of indemnity, if requested, also
satisfactory in form and amount, at the applicant's cost. Applicants for such
substitute Warrant certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
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3.4. Form of Certificate. The text of the Warrant and of the form of
election to purchase Shares shall be substantially as set forth in Exhibit A
attached hereto. The number of Shares issuable upon exercise of the Warrants is
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrants shall be executed on behalf of the Company by its
President or by a Vice President and attested to by its Secretary or an
Assistant Secretary. A Warrant bearing the signature of an individual who was at
any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such officer
prior to the delivery of such Warrant or did not hold such office on the date of
this Agreement.
The Warrants shall be dated as of the date of signature thereof by
the Company either upon initial issuance or upon division, exchange,
substitution or transfer.
SECTION 4. ADJUSTMENT OF NUMBER SHARES.
The number and kind of securities purchasable upon the exercise of the
Warrants and the Warrant Price shall be subject to adjustment from time to time
upon the happening of certain events, as follows:
4.1. Adjustments. The number of Shares purchasable upon the exercise of
the Warrants shall be subject to adjustments as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock to
Holders of Common Stock, (ii) make a distribution in shares of Common
Stock to holders of Common Stock, (iii) subdivide its outstanding Common
Stock into a greater number of shares, or (iv) combine its outstanding
Common Stock into a smaller number of shares, the Exercise Price in
effect immediately prior thereto shall be adjusted so that the holder of
any Warrant thereafter surrendered for exercise shall be entitled to
receive the number of Shares of Common Stock which it would have owned
had such Warrant been exercised immediately prior to the happening of
such event. An adjustment made pursuant to this subsection (4.1.(a))
shall become effective immediately after the record date in the case of
a dividend or distribution in shares and shall become effective
immediately after the effective date in the case of subdivision or
combination.
(b) No adjustment in the number of Shares purchasable pursuant to
the Warrants shall be required unless such adjustment would require an
increase or decrease of at least one percent in the number of Shares
then purchasable upon the exercise of the Warrants or, if the Warrants
are not then exercisable, the number of Shares purchasable upon the
exercise of the Warrants on the first date thereafter that the Warrants
become exercisable; provided, however, that any adjustments which by
reason of this subsection (4.1(b)) are not required to be made
immediately shall be carried forward and taken into account in any
subsequent adjustment.
(c) Whenever the number of Shares purchasable upon the exercise of
the Warrant is adjusted, as herein provided, the Exercise Price payable
upon exercise of the Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of
which the numerator shall be the number of Warrant Shares purchasable
upon the exercise of the Warrant immediately prior to such adjustment,
and of which the denominator shall be the number of Warrant Shares so
purchasable immediately thereafter.
(d) Whenever the number of Shares purchasable upon exercise of the
Warrants is adjusted as herein provided, the Company shall cause to be
promptly mailed to the Warrantholder by first class mail, postage
prepaid, notice of such adjustment and a certificate of the chief
financial officer of the Company setting forth the number of Shares
purchasable upon the exercise of the Warrants after such adjustment, a
brief statement of the facts requiring such adjustment and the
computation by which such adjustment was made.
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(e) For the purpose of this Section (4.1), the term "Common Stock"
shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. In the event that at any
time, as a result of an adjustment made pursuant to this Section (4),
the Warrantholder shall become entitled to purchase any securities of
the Company other than Common Stock, (y) if the Warrantholder's right to
purchase is on any other basis than that available to all holders of the
Company's Common Stock, the Company shall obtain an opinion of an
independent investment banking firm valuing such other securities and
(z) thereafter the number of such other securities so purchasable upon
exercise of the Warrants shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Shares contained in this Section (4).
(f) Upon the expiration of any rights, options, warrants, or
conversion privileges, if such shall have not been exercised, the number
of Shares purchasable upon exercise of the Warrants, to the extent the
Warrants have not then been exercised, shall, upon such expiration, be
readjusted and shall thereafter be such as they would have been had they
been originally adjusted (or had the original adjustment not been
required, as the case may be) on the basis of (i) the fact that the only
shares of Common Stock so issued were the shares of Common Stock, if
any, actually issued or sold upon the exercise of such rights, options,
warrants, or conversion privileges, and (ii) the fact that such shares
of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants, or
conversion privileges whether or not exercised; provided, however, that
no such readjustment shall have the effect of decreasing the number of
Shares purchasable upon exercise of the Warrants by an amount in excess
of the amount of the adjustment initially made in respect of the
issuance, sale, or grant of such rights, options, warrants, or
conversion rights.
4.2. No Adjustment for Dividends. Except as provided in Section (4.1),
no adjustment in respect of any dividends or distributions out of earnings shall
be made during the term of the Warrants or upon the exercise of the Warrants.
4.3. No Adjustment in Certain Cases. No adjustments shall be made
pursuant to Section (4) hereof in connection with the issuance of the Common
Stock upon exercise of the Warrants. No adjustments shall be made pursuant to
Section (4) hereof in connection with the exercise of Warrants presently
outstanding; or the issuance of shares upon conversion of the Company's 9%
Convertible Subordinated Debentures; or the grant or exercise of options to
purchase, or the issuance of shares upon exercise of such options, under the
Company's stock option plan for directors, employees, and consultants. No
adjustment shall be made pursuant to Section 4.4(b) or (c) hereof unless: (i)
the Current Market Price of the securities received in the merger or
consolidation as of its Effective Date pursuant to Section 4.4(b); or (ii) the
value of the consideration that would be received by a Warrantholder pursuant to
Section 4.4(c) if he exercised his Warrants immediately prior to the sale or
conveyance (and assuming the exercise of all outstanding Warrants and conversion
of all outstanding convertible stock that have an exercise price or conversion
price equal to or less than the Exercise Price); is less than the Exercise
Price. If the consideration to be received is other than cash, the value of the
consideration to be received shall be the Current Market Price as of the
Effective Date of such sale or conveyance of securities received; or the fair
market value of other assets received as determined by an independent appraisal
of such assets.
4.4. Effect of Reclassification, Consolidation, Merger, or Sale on
Exercise Privilege. If any of the following shall occur, namely: (a) any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of 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), (b) any consolidation or merger to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name, or par value, or from
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par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination) in, outstanding shares of Common Stock, or (c) any
sale or conveyance, of all or substantially all of the property or business of
the Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to Cohig as representative of each holder of a Warrant then unexercised
and outstanding, an amendment to this Agreement providing that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action, to receive, upon exercise of
the Warrants, the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock deliverable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
amendment shall provide for the adjustments of the Exercise Price which shall be
as nearly equivalent as may be practicable to the adjustments of the Exercise
Price provided for in this Section 4. If, in the case of any such
reclassification, change, consolidation, merger, sale or conveyance, the stock
or other securities and property (including cash) receivable thereupon by a
holder of Common Stock includes shares of stock or other securities and property
of a corporation other than the successor or purchasing corporation, as the case
may be, in such consolidation, merger, sale or conveyance, then such amendment
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Warrantholders as the
Board of Directors of the Company shall reasonably consider necessary by reason
of the foregoing. The provision of this Section 4.4 shall similarly apply to
successive consolidations, mergers, sales, or conveyances.
In the event the Company shall execute an amendment to this Agreement as
provided in this subsection (4.4), the Company shall promptly send each
Warrantholder an Officers' Certificate briefly stating the reasons for the
amendment, the kind or amount of shares of stock or securities or property
(including cash) receivable by Warrantholders upon exercise of their Warrants
after any such reclassification, change, consolidation, merger, sale or
conveyance, any adjustments to be made with respect thereto, and that all
conditions precedent have been complied with.
4.5. Par Value of Shares of Common Stock. Before taking any action which
would cause an adjustment effectively reducing the portion of the Exercise Price
allocable to each Share below the par value per share of the Common Stock
issuable upon exercise of the Warrants, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common Stock
upon exercise of the Warrants.
4.6. Independent Public Accountants. The Company may retain a firm of
independent public accountants of recognized national standing (which may be any
such firm regularly employed by the Company) to make any computation required
under this Section (4), and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made under this
Section (4).
4.7. Statement on Warrant Certificates. Irrespective of any adjustments in
the number of securities issuable upon exercise of the Warrants, Warrant
certificates theretofore or thereafter issued may continue to express the same
number of securities as are stated in the similar Warrant certificates initially
issuable pursuant to this Agreement. However, the Company may, at any time in
its sole discretion (which shall be conclusive), make any change in the form of
Warrant certificate that it may deem appropriate and that does not affect the
substance thereof; and any Warrant certificate thereafter issued, whether upon
registration of transfer of, or in exchange or substitution for, an outstanding
Warrant certificate, may be in the form so changed.
4.8. Treasury Stock. For purposes of this Section (4), shares of Common
Stock owned or held at any relevant time by, or for the account of, the Company,
in its treasury or otherwise, shall not be deemed to be outstanding for purposes
of the calculations and adjustments described.
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SECTION 5. NOTICE TO HOLDERS.
If, prior to the expiration of this Warrant either by its terms or by
its exercise in full, any of the following shall occur:
(i) the Company shall declare a dividend or authorize any
other distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the
shareholders of its Common Stock of rights to subscribe for or purchase
any securities or any other similar rights; or
(iii) any reclassification, reorganization or similar change of
the Common Stock, or any consolidation or merger to which the Company is
a party, or the sale, lease, or exchange of any significant portion of
the assets of the Company; or
(iv) the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(v) any purchase, retirement or redemption by the Company of
its Common Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 10 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(x) the date on which a record is to be taken for the purpose
of such dividend, distribution or rights, or, if a record is not to be
taken, the date as of which the shareholders of Common Stock of record
to be entitled to such dividend, distribution or rights are to be
determined;
(y) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding
up or purchase, retirement or redemption is expected to become
effective, and the date, if any, as of which the Company's shareholders
of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale, transfer,
dissolution, liquidation, winding up, purchase, retirement or
redemption; and
(z) if any matters referred to in the foregoing clauses (x)
and (y) are to be voted upon by shareholders of Common Stock, the date
as of which those shareholders to be entitled to vote are to be
determined.
SECTION 6. OFFICERS' CERTIFICATE.
Whenever the Exercise Price or the aggregate number of Warrant
Securities purchasable pursuant to this Warrant shall be adjusted as required by
the provisions of Section (4) above, the Company shall promptly file with its
Secretary or an Assistant Secretary at its principal office, and with its
transfer agent, if any, an officers' certificate executed by the Company's
President and Secretary or Assistant Secretary, describing the adjustment and
setting forth, in reasonable detail, the facts requiring such adjustment and the
basis for and calculation of such adjustment in accordance with the provisions
of this Warrant. Each such officers' certificate shall be made available to the
Holder or Holders of this Warrant for inspection at all reasonable times, and
the Company, after each such adjustment, shall promptly deliver a copy of the
officers' certificate relating to that adjustment to the Holder or Holders of
this Warrant. The officers' certificate described in this Section (6) shall be
deemed to be conclusive as to the correctness of the adjustment reflected
therein if, and only if, no Holder of this Warrant delivers written notice to
the Company of an objection to the adjustment within 30 days after the officers'
certificate is delivered to the Holder or Holders of this Warrant. The Company
will make its books and records available for inspection and copying during
normal business hours by the Holder so as to permit a determination as to the
correctness of the adjustment. If
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written notice of an objection is delivered by a Holder to the Company and the
parties cannot reconcile the dispute, the Holder and the Company shall submit
the dispute to arbitration pursuant to the provisions of Section 19 below.
Failure to prepare or provide the officers' certificate shall not modify the
parties' rights hereunder.
SECTION 7. RESERVATION OF WARRANT SECURITIES.
There has been reserved, and the Company shall at all times keep
reserved so long as the Warrants remain outstanding, out of its authorized and
unissued Common Stock, such number of shares of Common Stock as shall be subject
to purchase under the Warrants. Every transfer agent for the Common Stock and
other securities of the Company issuable upon the exercise of the Warrants will
be irrevocably authorized and directed at all times to reserve such number of
authorized shares and other securities as shall be requisite for such purpose.
The Company will keep a copy of this Agreement on file with every transfer agent
for the Common Stock and other securities of the Company issuable upon the
exercise of the Warrants. The Company will supply every such transfer agent with
duly executed stock and other certificates, as appropriate, for such purpose and
will provide or otherwise make available any cash which may be payable as
provided in Section 12 hereof.
SECTION 8. RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS.
8.1. Restrictions on Transfer. The Warrantholder agrees that prior to
making any disposition of the Warrants or the Shares, other than to officers of
Cohig, the Warrantholder shall give written notice to the Company describing
briefly the manner in which any such proposed disposition is to be made; and no
such disposition shall be made if the Company has notified the Warrantholder
that in the opinion of counsel a registration statement or other notification or
post-effective amendment thereto (hereinafter collectively a "Registration
Statement") under the Act is required with respect to such disposition and no
such Registration Statement has been filed by the Company with, and declared
effective, if necessary, by, the Commission.
8.2. Piggy-Back Registration Right. If at any time prior to the
Expiration Date the Company files a registration statement with the Commission
pursuant to the Act, or pursuant to any other act passed after the date of this
Agreement, which filing provides for the sale of securities by the Company to
the public, or files a Regulation A offering statement under the Act, the
Company shall offer to the Holder or Holders of this Warrant and the holders of
any Warrant Securities the opportunity to register or qualify the Warrant
Securities at the Company's sole expense, regardless of whether the Holder or
Holders of this Warrant or the holders of Warrant Securities or both may have
previously availed themselves of any of the registration rights described in
this Section (8); provided, however, that in the case of a Regulation A
offering, the opportunity to qualify shall be limited to the amount of the
available exemption after taking into account the securities that the Company
wishes to qualify. Notwithstanding anything to the contrary, this Section (8.2)
shall not be applicable to a registration statement registering securities
issued pursuant to an employee benefit plan or as to a transaction subject to
Rule 145 promulgated under the Act or which a form S-4 registration statement
could be used; nor shall it be applicable to the first underwritten registered
public offering of the Company.
The Company shall deliver written notice to the Holder or Holders of
this Warrant and to any holders of the Warrant Securities of its intention to
file a registration statement or Regulation A offering statement under the Act
at least 60 days prior to the filing of such registration statement or offering
statement, and the Holder or Holders and holders of Warrant Securities shall
have 30 days thereafter to request in writing that the Company register or
qualify the Warrant Securities or the Warrant Securities underlying the
unexercised portion of this Warrant in accordance with this Section (8.2). Upon
the delivery of such a written request within the specified time, the Company
shall be obligated to include in its contemplated registration statement or
offering statement all information necessary or advisable to register or qualify
the Warrant Securities or Warrant Securities underlying the unexercised portion
of this Warrant for a public offering, if the Company does file the contemplated
registration statement or offering statement; provided, however, that neither
the delivery of the notice by the Company nor the delivery of a request by a
Holder or by a holder of Warrant
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Securities shall in any way obligate the Company to file a registration
statement or offering statement. Furthermore, notwithstanding the filing of a
registration statement or offering statement, the Company may, at any time prior
to the effective date thereof, determine not to offer the securities to which
the registration statement or offering statement relates, other than the
Warrant, Warrant Securities and Warrant Securities underlying the unexercised
portion of this Warrant. Notwithstanding the foregoing, if, as a qualification
of any offering in any state or jurisdiction in which the Company (by vote of
its Board of Directors) or any underwriter determines in good faith that it
wishes to offer securities registered in the offering, it is required that
offering expenses be allocated in a manner different from that provided above,
then the offering expenses shall be allocated in whatever manner is most nearly
in compliance with the provisions set out above.
If the registration for which the Company gives notice is for a registered
public offering involving an underwriting, the Company shall so advise as part
of the written notice given pursuant to this Section. In such event, the right
of any Warrantholder or holder of Shares to registration pursuant to this
Section (8.2) shall be conditioned upon such holder's participation in such
underwriting, and the inclusion of Shares in the underwriting shall be limited
to the extent provided herein. All holders proposing to distribute their Shares
through such underwriting shall (together with the Company and the other holders
distributing their Shares through such underwriting) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by the Company. Notwithstanding any other provision of this
Section, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, such underwriter may
limit the amount of securities to be included in the registration and
underwriting by the holders of Company securities exercising "piggyback"
registration rights (including the Warrantholder and each holder of Warrants and
Shares). The Company shall so advise all such holders, and the number of shares
of such securities that may be included in the registration and underwriting
shall be allocated (a) first to investors who purchased securities in the
Company's private placement made pursuant to a Confidential Private Placement
Memorandum dated July 28, 1995; and (b) then if the limitation provides for
additional securities to be included, among all of the Warrantholders (including
the holders of the warrants pursuant to this Agreement and holders of warrants
issued pursuant to the 1995 and 1996 Warrant Agreement) in proportion, as nearly
as practicable, to the respective amounts of securities requested to be included
in such registration held by such holders at the time of filing the registration
statement, provided however, that no security holder other than one exercising a
demand registration right and other than as specifically referenced herein shall
have superior rights with respect to inclusion in a registration than those of
the Warrantholder and each holder of Warrants and Shares and if any party is
granted such superior rights hereafter the Warrantholder and each holder of
Warrants and Shares shall be deemed to be automatically granted similar rights.
The Company shall advise all such holders of any such limitations and of the
number or securities that may be included in the registration. Any securities
excluded or withdrawn from such underwriting shall not be transferred prior to
one hundred twenty (120) days after the effective date of the registration
statement relating thereto, or such shorter period of time as the underwriters
may require.
The Company shall comply with the requirements of this Section (8.2) and
the related requirements of Section (8.6) at its own expense. That expense shall
include, but not be limited to, legal, accounting, consulting, printing, federal
and state filing fees, NASD fees, out-of-pocket expenses incurred by counsel,
accountants and consultants retained by the Company, and miscellaneous expenses
directly related to the registration statement or offering statement and the
offering. However, this expense shall not include the portion of any
underwriting commissions, transfer taxes and the underwriter's accountable and
nonaccountable expense allowances attributable to the offer and sale of the
Warrant, Warrant Securities and the Warrant Securities underlying the
unexercised portion of this Warrant, or the fees and expenses of any legal
counsel retained by a Holder, all of which expenses shall be borne by the Holder
or Holders of this Warrant and the holders of the Warrant Securities registered
or qualified.
8.3. Inclusion of Information. In the event that the Company registers or
qualifies the Warrant Securities pursuant to Section (8.2) above, the Company
shall include in the registration statement or qualification, and the prospectus
included therein, all information and materials necessary or advisable to comply
with the applicable statutes and regulations so as to permit the public sale of
the Warrant Securities or the Warrant Securities underlying the unexercised
portion of this Warrant. As used in Section (8.2),
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reference to the Company's securities shall include, but not be limited to, any
class or type of the Company's securities or the securities of any of the
Company's subsidiaries or affiliates.
8.4. Registration Statement Filed by Holder. In addition to the
registration rights described in Section (8.2) above, at any time that the
Company has securities registered under the Securities Exchange Act of 1934,
upon the written request of Holders of warrants and holders of Warrant
Securities representing at least 70% of the aggregate number of Warrant
Securities and 1995 and 1996 Warrant Securities issued pursuant to this Warrant
Agreement and pursuant to the 1995 and 1996 Warrant Agreements, the Company, as
promptly as possible after delivery of such request, shall cooperate with the
requesting Holders or holders in preparing and signing any registration
statement or offering statement that the Holders or holders may desire to file
in order to sell or transfer the Warrant and Warrant Securities. Within 10 days
after the delivery of the written request described above, the Company shall
deliver written notice to all other Holders of this Warrant and holders of
Warrant Securities, if any, advising them that the Company is proceeding with a
registration statement or offering statement and that their Warrant and Warrant
Securities will be included therein if they so desire and agree to pay their pro
rata share of the cost of registration or qualification and provided that the
Holder or holder delivers written notice to the Company of their desire to be
included and their agreement to pay their pro rata share of the cost within 30
days after the delivery of the Company's notice to them. The Company will supply
all information necessary or advisable for any such registration statements or
offering statements; provided, however, that all the costs and expenses of such
registration statements or offering statements shall be borne, in a manner
proportionate to the number of securities for which they indicate a desire to
register, by the Holders of this Warrant and the holders of Warrant Securities
who seek the registration or qualification of their Warrant, Warrant Securities
or Warrant Securities underlying the unexercised portion of their Warrant. In
determining the amount of costs and expenses to be borne by those Holders or
holders, the only costs and expenses of the Company to be included are the
additional costs and expenses that would not have otherwise been incurred by the
Company if those Holders or holders had not desired to file a registration
statement or offering statement. As an example, and without limitation, audit
fees would not be charged to those Holders or holders if or to the extent that
the Company would have incurred the same audit fees for its year-end or other
use in the absence of the registration statement or offering statement. The
Holders or holders responsible for the costs and expenses shall reimburse the
Company for those reimbursable costs and expenses reasonably incurred by the
Company within 30 days after the initial effective date of the registration
statement or qualification at issue.
No other securities of the Company of any type shall be included in, be the
subject of, or be publicly offered pursuant to any registration statement or
offering statement filed within 180 days following the latest effective date of
any registration statement or offering statement filed pursuant to this Section
(8.4) unless (i) the Company obtains the prior written consent of Cohig upon
such terms and conditions as Cohig in its sole discretion may deem desirable,
and (ii) the owners or holders of those other securities, including, without
limitation, the Company, agree to bear an equitable portion, reasonably
acceptable to Cohig of the costs and expenses of the registration statement or
offering statement filed pursuant to this Section (8.4).
8.5. Payment of Exercise Price from Proceeds. In the event that any such
Registration Statement is utilized for a public offering of any of the Shares to
be received upon exercise of the Warrants pursuant to this Section (8), the
Warrantholder may elect to pay the exercise price of the Warrants to the Company
out of the proceeds of the sale of the Shares pursuant to the Registration
Statement concurrently with the closing of such sale of the Shares.
8.6. Condition of Company's Obligations. As to each registration statement
or offering statement, the Company's obligations contained in this Section (8)
shall be conditioned upon a timely receipt by the Company in writing of the
following:
(i) Information as to the terms of the contemplated public offering
furnished by and on behalf of each Holder or holder intending to make a
public distribution of the Warrant Securities or Warrant Securities
underlying the unexercised portion of the Warrant; and
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(ii) Such other information as the Company may reasonably require
from such Holders or holders, or any underwriter for any of them, for inclusion
in the registration statement or offering statement
8.7. Additional Requirements. In each instance in which the Company shall
take any action to register or qualify the Warrant Securities or the Warrant
Securities underlying the unexercised portion of this Warrant, if any, pursuant
to this Section (8), the Company shall do the following:
(i) supply to Cohig, as the representative of the Holders of the
Warrant and the holders of Warrant Securities whose Warrant Securities are being
registered or qualified, two (2) conformed copies of each registration statement
or offering statement, and all amendments thereto, and a reasonable number of
copies of the preliminary, final or other prospectus or offering circular, all
prepared in conformity with the requirements of the Act and the rules and
regulations promulgated thereunder, and such other documents as Cohig shall
reasonably request;
(ii) cooperate with respect to (A) all necessary or advisable
actions relating to the preparation and the filing of any registration
statements or offering statements, and all amendments thereto, arising from the
provisions of this Section (8), (B) all reasonable efforts to establish an
exemption from the provisions of the Act or any other federal or state
securities statutes, (C) all necessary or advisable actions to register or
qualify the public offering at issue pursuant to federal securities statutes and
the state "blue sky" securities statutes of each jurisdiction that the Holders
of the Warrant or holders of Warrant Securities shall reasonably request, and
(D) all other necessary or advisable actions to enable the Holders of the
Warrant Securities to complete the contemplated disposition of their securities
in each reasonably requested jurisdiction; and
(iii) keep all registration statements or offering statements to
which this Section (8) applies, and all amendments thereto, effective under the
Act for a period of at least 9 months after their initial effective date and
cooperate with respect to all necessary or advisable actions to permit the
completion of the public sale or other disposition of the securities subject to
a registration statement or offering statement.
8.8. Cohig as Representative. For purposes of subsection (8.7(i)) above, by
the receipt of this Warrant or any Warrant Securities, all Holders and all
holders of Warrant Securities acknowledge and agree that Cohig is and shall be
their representative.
8.9. Survival. The Company's obligations described in this Section (8)
shall continue in full force and effect regardless of the exercise, surrender,
cancellation or expiration of this Warrant.
SECTION 9. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes, if any, attributable to
the initial issuance of the Warrants or the securities comprising the Shares;
provided, however, the Company shall not be required to pay any tax which may be
payable in respect of any transfer of the Warrants or the securities comprising
the Shares.
SECTION 10. INDEMNIFICATION AND CONTRIBUTION.
10.1. Indemnification By Company. In the event of the filing of any
Registration Statement with respect to the Warrant Shares pursuant to Section
(8) hereof, the Company agrees to indemnify and hold harmless the Warrantholder
or any holder of Warrant Shares and each person, if any, who controls the
Warrantholder or any holder of Warrant Shares within the meaning of the Act,
against any and all loss, claim, damage or liability, joint or several (which
shall, for all purposes of this Agreement include, but not be limited to, all
costs of defense and investigation and all attorneys' fees), to which such
Warrantholder or any holder
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of Warrant Shares may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, or liability (or action with respect thereto) arises
out of or is based upon (a) any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus, or the Final Prospectus or any amendment
or supplement thereto; or (b) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus or
the Final Prospectus or any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein not
misleading; except that the Company shall not be liable in any such case to the
extent, but only to the extent, that any such loss, claim, damage, or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by such Warrantholder or the holder
of such Warrant Shares specifically for use in the preparation of the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus and
the Final Prospectus or any amendment or supplement thereto. This indemnity will
be in addition to any liability which the Company may otherwise have.
10.2. Indemnification By Warrantholders. The Warrantholders and the holders
of Warrant Shares agree that they, severally, but not jointly, shall indemnify
and hold harmless the Company, each other person referred to in subparts (1),
(2) and (3) of Section 11(a) of the Act in respect of the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act, against any and all loss, claim, damage or liability, joint or
several (which shall, for all purposes of this Agreement include, but not be
limited to, all costs of defense and investigation and all attorneys' fees), to
which the Company may become subject under the Act or otherwise, insofar as such
loss, claim, damage, liability (or action in respect thereto) arises out of or
are based upon (a) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or any amendment or
supplement thereto; or (b) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective Prospectus or
the Final Prospectus or any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements therein not
misleading; except that such indemnification shall be available in each such
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon information and in conformity with written information furnished to the
Company by the Warrantholder or the holder of Warrant Shares specifically for
use in the preparation thereof. This indemnity will be in addition to any
liability which such Warrantholder or holder of Warrant Shares may otherwise
have.
10.3. Right to Provide Defense. Promptly after receipt by an indemnified
party under Section (10.1) or (10.2) above of written notice of the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such section, notify
the indemnifying party in writing of the claim or the commencement of that
action; the failure to notify the indemnifying party shall not relieve it of any
liability which it may have to an indemnified party, except to the extent that
the indemnifying party did not otherwise have knowledge of the commencement of
the action and the indemnifying party's ability to defend against the action was
prejudiced by such failure. Such failure shall not relieve the indemnifying
party from any other liability which it may have to the indemnified party. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under such section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; except that Cohig shall
have the right to employ counsel to represent it and the other Warrantholders of
holders of Shares who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by such persons against the Company
under such section if, in Cohig's reasonable judgment, it is advisable for Cohig
and those Warrantholders or holders of Shares to be represented by separate
counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Company.
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10.4. Contribution. If the indemnification provided for in Sections (10.1)
and (10.2) of this Agreement is unavailable or insufficient to hold harmless an
indemnified party, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages, or liabilities referred to in Sections (10.1) or (10.2) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Warrantholders on the other; or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect the relative benefits referred to
in clause (i) above but also the relative fault of the Company on the one hand
and the Warrantholders on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Warrantholders shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
unitemized expenses received by the Underwriters, in each case as set forth in
the table on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether the untrue statement of
a material fact or the omission to state a material fact relates to information
supplied by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
untrue statement or omission. For purposes of this Section (10.4), the term
"damages" shall include any counsel fees or other expenses reasonably incurred
by the Company or the Underwriters in connection with investigating or defending
any action or claim which is the subject of the contribution provisions of this
Section (10.4). No person adjudged guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it shall promptly give
written notice of such service to the party or parties from whom contribution
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought from
any obligation it may have hereunder or otherwise (except as specifically
provided in Section (10.4) hereof).
SECTION 11. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.
This Warrant, the Warrant Securities, and all other securities issued or
issuable upon exercise of this Warrant, may not be offered, sold or transferred,
in whole or in part, except in compliance with the Act, and except in compliance
with all applicable state securities laws. The Company may cause substantially
the following legends, or their equivalents, to be set forth on each certificate
representing the Warrant Securities, or any other security issued or issuable
upon exercise of this Warrant, not theretofore distributed to the public or sold
to underwriters, as defined by the Act, for distribution to the public pursuant
to Section 8 above:
(i) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS ("STATE ACTS") AND ARE RESTRICTED
SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE
ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR
OTHERWISE TRANSFERRED) EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR QUALIFICATION UNDER THE ACT AND
APPLICABLE STATE ACTS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE ACTS, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY."
(ii) Any legend required by applicable state securities laws.
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Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Act"), or the securities
represented thereby) shall also bear the above legends unless, in the opinion of
the Company's counsel, the securities represented thereby need no longer be
subject to such restrictions.
SECTION 12. FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of all or any part of this Warrant. With respect to any
fraction of a share of any security called for upon any exercise of this
Warrant, the Company shall pay to the Holder an amount in money equal to that
fraction multiplied by the Current Market Price of that share.
SECTION 13. NO RIGHTS AS STOCKHOLDER; NOTICES TO WARRANTHOLDER.
Nothing contained in this Agreement or in the Warrants shall be construed
as conferring upon the Warrantholder or its transferees any rights as a
stockholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a stockholder in respect to any meeting of
stockholders for the election of directors of the Company or any other matter.
The Company covenants, however, that for so long as this Warrant is at least
partially unexercised, it will furnish any Holder of this Warrant with copies of
all reports and communications furnished to the shareholders of the Company. In
addition, if at any time prior to the expiration of the Warrants and prior to
their exercise, any one or more of the following events shall occur:
(i) any action which would require an adjustment pursuant to Section
(4.1) (except subsections (4.1(e)) and (4.1(h)) or (4.4); or
(ii) a dissolution, liquidation, or winding up of the Company (other
than in connection with a consolidation, merger, or sale of its property,
assets, and business as an entirety or substantially as an entirety) shall
be proposed:
then the Company shall give notice in writing of such event to the
Warrantholder, as provided in Section (16) hereof, at least 20 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 any relevant dividend,
distribution, subscription rights or other rights or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation, or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to mail or receive notice or any
defect therein shall not affect the validity of any action taken with respect
thereto.
SECTION 14. CHARGES DUE UPON EXERCISE.
The Company shall pay any and all issue or transfer taxes, including, but
not limited to, all federal or state taxes, that may be payable with respect to
the transfer of this Warrant or the issue or delivery of Warrant Securities upon
the exercise of this Warrant.
SECTION 15. WARRANT SECURITIES TO BE FULLY PAID.
The Company covenants that all Warrant Securities that may be issued and
delivered to a Holder of this Warrant upon the exercise of this Warrant and
payment of the Exercise Price will be, upon such delivery, validly and duly
issued, fully paid and nonassessable.
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SECTION 16. NOTICES.
Any notice pursuant to this Agreement by the Company or by a Warrantholder
or a holder of Shares shall be in writing and shall be deemed to have been duly
given if delivered or mailed by certified mail, return receipt requested:
(i) If to a Warrantholder or a holder of Shares, addressed to Cohig
& Associates, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Finance Department; or
(ii) If to the Company addressed to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: CEO.
Each party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other party.
SECTION 17. MERGER OR CONSOLIDATION OF THE COMPANY.
The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another
corporation, unless the provisions of Section (4.4) are complied with.
SECTION 18. APPLICABLE LAW.
This Warrant shall be governed by and construed in accordance with the laws
of the State of Colorado, and courts located in Colorado shall have exclusive
jurisdiction over all disputes arising hereunder.
SECTION 19. ARBITRATION.
The Company and the Holder, and by receipt of this Warrant or any Warrant
Securities, all subsequent Holders or holders of Warrant Securities, agree to
submit all controversies, claims, disputes and matters of difference with
respect to this Warrant, including, without limitation, the application of this
Section (19) to arbitration in Denver, Colorado, according to the rules and
practices of the American Arbitration Association from time to time in force;
provided, however, that if such rules and practices conflict with the applicable
procedures of Colorado courts of general jurisdiction or any other provisions of
Colorado law then in force, those Colorado rules and provisions shall govern.
This agreement to arbitrate shall be specifically enforceable. Arbitration may
proceed in the absence of any party if notice of the proceeding has been given
to that party. The parties agree to abide by all awards rendered in any such
proceeding. These awards shall be final and binding on all parties to the extent
and in the manner provided by the rules of civil procedure enacted in Colorado.
All awards may be filed, as a basis of judgment and of the issuance of execution
for its collection, with the clerk of one or more courts, state or federal,
having jurisdiction over either the party against whom that award is rendered or
its property. No party shall be considered in default hereunder during the
pendency of arbitration proceedings relating to that default.
SECTION 20. MISCELLANEOUS PROVISIONS.
(a) Subject to the terms and conditions contained herein, this Warrant
shall be binding on the Company and its successors and shall inure to the
benefit of the original Holder, its successors and assigns and all holders of
Warrant Securities and the exercise of this Warrant in full shall not terminate
the provisions of this Warrant as it relates to holders of Warrant Securities.
(b) If either party to this Agreement fails to perform any of its
obligations hereunder, it shall be liable to the other party for all damages,
costs and expenses resulting from the failure, including, but not limited to,
all reasonable attorney's fees and disbursements.
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(c) This Warrant cannot be changed or terminated or any performance or
condition waived in whole or in part except by an agreement in writing signed by
the party against whom enforcement of the change, termination or waiver is
sought; provided, however, that any provisions hereof may be amended, waived,
discharged or terminated upon the written consent of the Company and Cohig.
(d) If any provision of this Warrant shall be held to be invalid, illegal
or unenforceable, such provision shall be severed, enforced to the extent
possible, or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability shall not affect the remainder of
this Warrant.
(e) The Company agrees to execute such further agreements, conveyances,
certificates and other documents as may be reasonably requested by the Holder to
effectuate the intent and provisions of this Warrant.
(f) Paragraph headings used in this Warrant are for convenience only and
shall not be taken or construed to define or limit any of the terms or
provisions of this Warrant. Unless otherwise provided, or unless the context
shall otherwise require, the use of the singular shall include the plural and
the use of any gender shall include all genders.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
▇▇▇▇▇▇ DENTAL MANAGEMENT
SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
COHIG & ASSOCIATES, INC.
By: /s/ [SIGNATURE ILLEGIBLE]
--------------------------------------
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EXHIBIT A
---------
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES LAWS ("STATE ACTS") AND ARE
RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE ACT
AND APPLICABLE STATE ACTS, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT AND APPLICABLE STATE ACTS, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
Warrant Certificate No. CDW-7-
WARRANTS TO PURCHASE
_____ SHARES OF COMMON STOCK
▇▇▇▇▇▇ DENTAL MANAGEMENT SERVICES, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF COLORADO
This certifies that, for value received, _______________ , the registered
holder hereof or assigns (the "Warrantholder"), is entitled to purchase from
▇▇▇▇▇▇ Dental Management Services, Inc. (the "Company"), at any time during the
period commencing at 9:00 a.m., Colorado time, on December 27, 1996, and
expiring at 5:00 p.m., Colorado time, on December 27, 2001, at the purchase
price per Share of $5.00 (the "Exercise Price"), the number of shares of Common
Stock of the Company set forth above (the "Shares"). The number of shares of
Common Stock of the Company purchasable upon exercise of the Warrants evidenced
hereby shall be subject to adjustment from time to time as set forth in the
Warrant Agreement dated December 27, 1996.
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 and simultaneous payment of the Warrant Price at the principal
office of the Company. Payment of such price shall be made at the option of the
Warrantholder in cash or by check or by Cashless Exercise subject to the
provisions of Section 2.2 of the Warrant Agreement (as that term is defined
therein).
The Warrants evidenced hereby represent the right to purchase an aggregate
of up to 36,200 Shares and are issued under and in accordance with Warrant
Agreement dated as of December 27, 1996, between the Company and Cohig &
Associates, Inc. and are subject to the terms and provisions contained in the
Warrant Agreement, to all of which the Warrantholder by acceptance hereof
consents.
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 as to which the Warrants evidenced hereby shall not have been
exercised. These Warrants may be exchanged at the office of the Company by
surrender of this Warrant Certificate properly endorsed for one or more new
Warrants of the same aggregate number of Shares as here evidenced by the Warrant
or Warrants exchanged. No fractional shares of Common Stock will be issued upon
the exercise of rights to purchase hereunder, but the Company 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 Company in the manner and subject to the
limitations set forth in the Warrant Agreement.
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1997 Warrants
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This Warrant Certificate does not entitle any Warrantholder to any of the
rights of a stockholder of the Company.
▇▇▇▇▇▇ DENTAL MANAGEMENT
SERVICES, INC.
By: __________________________________________
Dated:
[Seal]
Attest:
_______________________________
Secretary
PURCHASE FORM
-------------
Dated _________ ___
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of purchasing ___________
Shares of ▇▇▇▇▇▇ Dental Management Services, Inc. (the "Company") and hereby
tenders payment of the exercise price thereof. If the number of Shares purchased
are not all the Shares purchasable pursuant to the Warrants represented by this
Warrant Certificate, a new Warrant Certificate should be issued and delivered to
the undersigned at the address stated below.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_______________________________________________________________________
(please type or print in block letters)
Address____________________________________________________________________
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1997 Warrants
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ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED,_______________________, hereby sells, assigns and
transfers unto
Name ______________________________________________________________________
(Please type or print in block letters)
Address ___________________________________________________________________
the right to purchase Shares of the Company represented by this Warrant
Certificate to the extent of ______ Shares as to which such right is exercisable
and does hereby irrevocably constitute and appoint ______________ attorney, to
transfer the same on the books of the Company with full power of substitution in
the premises. If the number of Shares assigned are not all the Shares
purchasable pursuant to the Warrants represented by this Warrant Certificate, a
new Warrant Certificate should be issued and delivered to the undersigned.
Signature______________________________ Dated ___________________________
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT 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.
▇▇▇▇▇▇ Dental Management
1997 Warrants
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CASHLESS EXERCISE FORM
----------------------
Pursuant to Section 2.2 of the Warrant Agreement, the Holder hereby
irrevocably elects to convert Warrants with respect to Shares of the Company
into __________ Shares of the Company. A conversion calculation is attached
hereto as Exhibit B-1.
The undersigned requests that certificates for such Shares be issued as
follows:
Name:__________________________________________________________________
Address:_______________________________________________________________
Deliver to:____________________________________________________________
and that a new Warrant Certificate for the balance remaining of the Warrants, if
any, subject to the Warrant be registered in the name of, and delivered to, the
undersigned at the address stated above.
Signature __________________________________ Dated ___________________
...............................................................................
Exhibit B-1
CALCULATION OF WARRANT CONVERSION
---------------------------------
Converted Securities = Net Value
---------
FMV
FMV = $ ____________
Net Value = Aggregate FMV - Aggregate Exercise Price
= $ ____________ - _____________
= $ ____________
Converted Shares = ______________
Fractional Converted Shares = ______________(1)
----------------------------------
(1) The Company to pay for fractional Shares in cash @ $________ per Share.
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1997 Warrants
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