EXHIBIT 4.2
EXECUTION COPY
WARRANT PURCHASE AGREEMENT dated as of May 7, 1997 between ORACLE
CORPORATION, a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED, a Delaware corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), as agent for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED ("MSIL").
WHEREAS, the Company proposes to enter into a Warrant Agreement (the
"Warrant Agreement"), substantially in the form of Exhibit I hereto, between the
Company and BankBoston, N.A., a national banking association, as Warrant Agent,
pursuant to which the Company proposes to issue up to 8,000,000 Equity Call
Warrants in one or more series (collectively, the "Warrants" or, individually a
"Warrant"), each representing the right to purchase, subject to the terms and
conditions set forth therein, one share of the common stock, par value $0.01 per
share (the "Common Stock"), of the Company;
WHEREAS, in connection with the purchase of the Warrants pursuant to
the terms hereof and one or more Pricing Agreements (as defined herein), the
Company proposes to repurchase on the Closing Date up to 3,500,000 shares of
Common Stock pursuant to one or more Repurchase Contracts to be entered into
between the Company, MSIL and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL (the "Repurchase
Contracts"); and
WHEREAS, capitalized terms not defined herein are used as defined in
the Warrant Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements and other considerations set forth herein, the parties hereto agree
as follows:
1. Representations and Warranties. (a) The Company hereby
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represents and warrants to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, as of the date
hereof, as of each Pricing Date (as defined herein) and as of each Closing Date
as follows:
(i) The Company has been duly incorporated, and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and authority to own its property
and conduct its business, and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(iii) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification,
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except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(iv) The shares of Common Stock outstanding prior to the issuance of the
Warrants have been duly authorized and are validly issued, fully paid and non-
assessable.
(v) The Company has all requisite power and authority (corporate and
other), and has taken all necessary corporate action, to authorize, execute,
deliver, and perform this Warrant Purchase Agreement, the Warrant Agreement,
each Pricing Agreement (as defined herein) and each Repurchase Contract; to
execute, issue, sell, and deliver the Warrants and a certificate or
certificates evidencing the Warrants; to authorize and reserve for issuance
and, upon payment from time to time of the Purchase Price, to issue, sell, and
deliver the shares of Underlying Common Stock issuable upon exercise of the
Warrants; and to perform all of its obligations under this Warrant Purchase
Agreement, the Warrant Agreement, each Pricing Agreement, the Warrants and
each Repurchase Contract.
(vi) Each of this Warrant Purchase Agreement, the Warrant Agreement, each
Pricing Agreement and each Repurchase Contract has been duly authorized by the
Company and this Warrant Purchase Agreement has been duly executed and
delivered by the Company. The Warrant Agreement, each Repurchase Contract and
each Pricing Agreement, when duly executed and delivered by the Company, will
be legal, valid and binding agreements of the Company enforceable in
accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability.
(vii) The Warrants have been duly authorized and, when duly executed and
countersigned in accordance with the provisions of the Warrant Agreement, will
be legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability.
(viii) The shares of Underlying Common Stock, when issued and delivered in
accordance with the terms of the Warrant Agreement and the Warrants, will be
validly issued, fully paid and non-assessable, and the issuance of such shares
will not be subject to any preemptive or similar rights.
(ix) Assuming the accuracy of the representations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ made
in the letter referred to in Section 3(d), the execution and delivery by the
Company of, and the performance by the Company of its obligations under, this
Warrant Purchase Agreement, the Warrant Agreement, each Pricing Agreement, the
Warrants and each Repurchase Contract will not contravene any provision of
applicable law.
(x) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Warrant Purchase Agreement, the
Warrant Agreement, each Pricing Agreement, the Warrants and each Repurchase
Contract will not contravene the certificate of incorporation or by-laws of
the Company or any agreement or
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other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of or qualification with any governmental body or
agency is required for the performance by the Company of its obligations under
this Warrant Purchase Agreement, the Warrant Agreement, each Pricing
Agreement, the Warrants or each Repurchase Contract, except such as may be
required by the Securities Act, the securities or Blue Sky laws of the various
states, the rules of the National Association of Securities Dealers, Inc. (the
"NASD") or the rules and regulations applicable to the listing of securities
on the Nasdaq National Market in connection with the reoffer and resale of the
shares of Underlying Common Stock by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or the issuance of shares
of Underlying Common Stock to any person other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(xi) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(xii) The Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1996, as amended, and its Quarterly Reports on Form 10-Q for the
periods ended August 31, 1996, November 30, 1996 and February 28, 1997 (the
"1934 Act Reports") (as previously furnished to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇), at the time
they were filed did not, and, giving effect as of the date hereof and as of
each of the Closing Dates to the transactions contemplated hereby and by the
Warrant Agreement and each Pricing Agreement do not, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(xiii) There has not occurred any material adverse change in the financial
condition, earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the 1934 Act Reports.
(xiv) Neither the Company nor any affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")) of the Company has
directly, or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any security (as defined in the
Securities Act) that is or will be integrated with the sale of any Warrants in
a manner that would require the registration under the Securities Act of the
offering contemplated by this Agreement and the Warrant Agreement. The Company
also agrees not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would be integrated with the sale of any Warrants in a manner that would
require the registration under the Securities Act of the offering contemplated
by this Agreement and the Warrant Agreement.
(xv) No form of general solicitation or general advertising (as those
terms are defined in Regulation D under the Securities Act) was used by the
Company or any of its representatives in connection with the offer and sale of
any Warrants.
(xvi) There are no material legal or governmental proceedings pending or
threatened to
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which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that would be
required to be described by Item 103 of Regulation S-K under the Securities
Act were such Item applicable to the 1934 Act Reports and are not described as
required in the 1934 Act Reports.
(xvii) The Company acknowledges and agrees that it is not relying, and has
not relied, upon ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL with respect to the legal, accounting,
tax or other implications of this Agreement and the Warrant Agreement and the
transactions contemplated hereby and thereby and that it has conducted its own
analysis of such transactions. The Company further acknowledges and agrees
that neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ nor MSIL has acted as its advisor in any capacity
in connection with this Agreement or the Warrant Agreement or the transactions
contemplated hereby or thereby. The Company understands and acknowledges that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL and their Affiliates may from time to time effect
transactions, and hold positions, for their own accounts or the accounts of
customers, in securities or options on securities of the Company and that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL and their Affiliates may continue to conduct such
transactions during the term of any Warrant.
(b) Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL agrees that it will not sell any
Warrants or any Underlying Common Stock except in compliance with the
registration requirements of Section 5 of the Securities Act or in a transaction
that is exempt from such registration.
Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL acknowledges that the Company and,
for purposes of the opinions to be delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Company
pursuant to Section 3 hereof, counsel to the Company and counsel to ▇▇▇▇▇▇
▇▇▇▇▇▇▇, will rely upon the accuracy and truth of the foregoing agreement and
hereby consents to such reliance.
2. Purchase and Sale of Warrants. (a) The Company and ▇▇▇▇▇▇
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▇▇▇▇▇▇▇, as agent for MSIL, propose to enter into one or more Pricing Agreements
(each a "Pricing Agreement") substantially in the form of Exhibit II hereto,
with such additions and deletions as the parties thereto may determine and
subject to the terms and conditions set forth herein, therein, and in the
Warrant Agreement, pursuant to which the Company will agree (i) to sell to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, will
agree to purchase from the Company, up to an aggregate of 8,000,000 Warrants to
purchase, subject to the terms and conditions set forth in the Warrant
Agreement, up to an aggregate of 8,000,000 shares of Underlying Common Stock and
(ii) to repurchase shares of Common Stock (the "Repurchased Shares") pursuant
to, and subject to the terms and conditions set forth in, one or more Repurchase
Contracts. The terms and conditions of each particular sale of Warrants shall
be as specified in the Pricing Agreement relating thereto and in or pursuant to
this Warrant Purchase Agreement and the Warrant Agreement. This Warrant
Purchase Agreement shall not be construed as an obligation of the Company to
sell any of the Warrants or as an obligation of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL to
purchase any of the Warrants. The obligation of the Company to issue and sell
any of the Warrants and the obligation of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, to
purchase any of the Warrants shall be evidenced by the Pricing Agreement with
respect to the Warrants specified therein. Each Pricing Agreement shall specify
the number of Warrants of each series being purchased and the purchase price per
Warrant of each series. The date of each Pricing Agreement is hereinafter
referred to as a "Pricing Date." A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of
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telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted.
(b) Payment by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, for each series of
Warrants sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, pursuant to the applicable
Pricing Agreement and payment by the Company to repurchase the Repurchased
Shares pursuant to the applicable Repurchase Contract shall be made in Federal
or other funds immediately available at the time and on the date as shall be
specified on the applicable Pricing Agreement and Repurchase Contract,
respectively, (or as may be otherwise agreed to by the parties thereto). The
payment obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, with respect to the
Warrants of any series may be netted against the payment obligations of the
Company with respect to the Repurchased Shares specified in the related
Repurchase Contract. The time and date of each such payment is hereinafter
referred to as a Closing Date.
3. Conditions to Parties' Obligations. The obligations of the
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Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, hereunder and under each Pricing
Agreement are subject to the following conditions:
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, shall have received on each
Closing Date an opinion of Venture Law Group, counsel for the Company, dated
such Closing Date, to the effect that:
(i) The Company has been duly incorporated, and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and authority to own its
property and conduct its business.
(iii) The Company has all requisite corporate power and authority, and
has taken all necessary corporate action, to authorize, execute, deliver, and
perform this Warrant Purchase Agreement, each Pricing Agreement, the Warrant
Agreement and each Repurchase Contract; to execute, issue, sell, and deliver
the Warrants and a certificate or certificates evidencing the Warrants; to
authorize and reserve for issuance and, upon payment from time to time of the
Purchase Price, to issue, sell, and deliver the shares of Underlying Common
Stock issuable upon exercise of the Warrants; and to perform all of its
obligations under the Warrant Purchase Agreement, each Pricing Agreement, the
Warrant Agreement, the Warrants and each Repurchase Contract.
(iv) Each of this Warrant Purchase Agreement, the Warrant Agreement, each
Pricing Agreement and each Repurchase Contract has been duly authorized by the
Company and each of this Warrant Purchase Agreement has been duly executed and
delivered by the Company; the Warrant Agreement, each Repurchase Contract and
each Pricing Agreement have been duly executed and delivered by the Company
and are legal, valid and binding agreements of the Company enforceable in
accordance with their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
(v) The Warrants have been duly authorized, executed and countersigned
in
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accordance with the provisions of the Warrant Agreement and are legal, valid
and binding obligations of the Company, enforceable in accordance with their
respective terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(vi) The shares of Underlying Common Stock, when issued and delivered in
accordance with the terms of the Warrant Agreement and the Warrants, will be
validly issued, fully paid and non-assessable, and the issuance of such shares
will not be subject to any preemptive or similar rights set forth in the
Company's certificate of incorporation.
(vii) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Warrant Purchase Agreement, each
Pricing Agreement, the Warrant Agreement, the Warrants and each Repurchase
Contract do not contravene any provision of applicable California or Delaware
General Corporate Law or federal law or the certificate of incorporation or
by-laws of the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is set forth as an exhibit to the 1934 Act Reports or, to
the best of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of or
qualification with any California or federal governmental body or agency is
required for the performance by the Company of its obligations under this
Warrant Purchase Agreement, each Pricing Agreement, the Warrant Agreement, the
Warrants or each Repurchase Contract, except such as may be required by the
Securities Act, securities or Blue Sky laws of the various states, the rules
of the NASD or the rules and regulations applicable to the listing of
securities on the Nasdaq National Market in connection with the reoffer and
resale of the shares of Underlying Common Stock by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent
for MSIL, or the issuance of shares of Underlying Common Stock to any person
other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL.
(viii) The Company is not an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended.
(ix) Such counsel does not know of any material legal or governmental
proceeding pending or threatened as of such Closing Date to which the Company
or any of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that would be required to be
described by Item 103 of Regulation S-K under the Securities Act were such
Item applicable as of such Closing Date and are not described as required in
the 1934 Act Reports.
(x) Such counsel believes that (except for financial statements and
schedules as to which such counsel need express no belief) the 1934 Act
Reports, as of the date of this Warrant Purchase Agreement, did not, and,
giving effect as of the date hereof and as of each of the Closing Dates to the
transactions contemplated hereby and by the Warrant Agreement and each Pricing
Agreement, as of such Closing Date do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
6
made, not misleading.
(xi) The sale by the Company of the Warrants to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent
for MSIL, in the manner contemplated by this Warrant Purchase Agreement and
the repurchase by the Company of the Repurchased Shares in the manner
contemplated by each Repurchase Contract and this Warrant Agreement do not
require registration under the Securities Act.
(b) Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the Company shall have received on
each Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ (who may rely as to all
matters of California law upon the opinion referred to in paragraph (a) above),
counsel for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated such Closing Date, covering the matters
referred to in subparagraphs (iv), (v), (vi) and (xi) of paragraph (a) above.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, shall have received on each
Closing Date a certificate dated such Closing Date and signed by an executive
officer of the Company, to the effect that the representations and warranties of
the Company contained in this Warrant Purchase Agreement are true and correct as
of such Closing Date and that the Company has complied in all material respects
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder, under the Warrant Agreement and under each
Pricing Agreement on or before such Closing Date and such other certificates and
documents as it may reasonably request.
(d) Counsel for the Company shall have received on each Closing Date
a letter dated such Closing Date and signed by an officer of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
substantially in the form of Exhibit III hereto.
(e) The Company shall have made available to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and
counsel, accountants or other professionals retained by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, such
financial and other information, books, records and properties of the Company
and its subsidiaries, and caused the officers, directors, employees, counsel and
independent certified public accountants of the Company and its subsidiaries to
respond to such inquiries and supply all information, as is reasonably
necessary, in the judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its counsel, to conduct a
reasonable investigation.
(f) On or prior to each Closing Date, the Company shall have
purchased from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, all the Repurchased Shares to
be purchased pursuant to the related Repurchase Contract.
4. Shelf Registration. (a) Subject to the terms hereof, the
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Company agrees that it shall file under the Securities Act a "shelf"
registration statement (the "Shelf Registration") providing for the registration
of the sale on a continuous or delayed basis by MSIL of all Underlying Common
Stock issuable upon exercise of all of the Warrants pursuant to Rule 415 under
the Securities Act and/or any similar rule that may be adopted by the SEC. The
Company agrees to use its best efforts (i) to cause the Shelf Registration to
become or be declared effective on or prior to the earliest First Exercise Date
of all Warrants issued under the Warrant Agreement and sold pursuant to this
Agreement and each Pricing Agreement and (ii) to keep such Shelf Registration
continuously effective for a period ending 90 days after the Final Expiration
Date, subject to Section 4(d) (such period being referred to as the "Effective
Period"). Notwithstanding
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the first two sentences of this Section 4(a), the Company may elect, in its sole
discretion, not to file such Shelf Registration, provided that if the Company so
elects or in the event that the Shelf Registration is not declared effective on
or prior to such First Exercise Date, the Company will exercise, with respect to
all Warrants issued under the Warrant Agreement and sold pursuant to this
Agreement and each Pricing Agreement, its right pursuant to Section 4(d) of the
Warrant Agreement to effect either a Cash Settlement or Net Share Settlement of
each exercise of such Warrants.
(b) The Company further agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration or by the Securities Act or rules and regulations thereunder,
and the Company agrees to furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ copies of any such
supplement or amendment prior to its being used and/or filed with the SEC and
that it will not file any such supplement or amendment to which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
reasonably objects. In connection with such registration of the Underlying
Common Stock, the Company will, upon the request of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for
MSIL, use all reasonable efforts to obtain a listing of the Underlying Common
Stock on the Nasdaq National Market or such national securities exchange or
other quotation system on which the Common Stock of the Company may at such time
be listed. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall notify (any such notice, a "Notice of Sale") the
Company not less than five Business Days prior to the date on which MSIL intends
to commence any sales of Underlying Common Stock pursuant to the Shelf
Registration (the "Resale Commencement Date").
(c) The Company's obligation to supplement or amend the Shelf
Registration pursuant to Section 4(b) hereof shall be subject to the terms
hereof (including Sections 4(d) and 4(e)) and the following limitations:
(i) in no event shall the Company be required to effect any such
supplement or amendment during the period beginning 14 Business Days prior
to the end of any fiscal quarter of the Company and ending two Business
Days after such time as the Company publicly releases its results of
operations for such fiscal quarter;
(ii) subject to the provisions of subparagraph (iii) and Section
4(e) below, the Company may on one or more occasions by notice to ▇▇▇▇▇▇
▇▇▇▇▇▇▇, as agent for MSIL, given in accordance with Section 13(c) hereof,
suspend its obligation to supplement or amend the Shelf Registration for a
period of time to be specified in such notice, it being understood that the
Company shall not indicate to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ the reasons for such
suspension; and
(iii) if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall deliver to the Company a Notice of
Sale, then the Company may not (x) commence a suspension of its obligations
to supplement or amend the Shelf Registration pursuant to Section 4(c)(ii)
hereof or (y) commence a suspension of the right to exercise Warrants
pursuant to Section 4(f) of the Warrant Agreement at any time during the
period commencing at 5:00 P.M., New York City time, on the Business Day
immediately preceding the Resale Commencement Date and ending at 5:00 P.M.,
New York City time, on the tenth Business Day following the Resale
Commencement Date (the "Final Resale Date").
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees that during the periods specified in Section 4(c)(i)
hereof and in any notice
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from the Company delivered pursuant to Section 4(c)(ii) hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
shall not dispose of Underlying Common Stock pursuant to a registration
statement applicable to such Underlying Common Stock. The Company agrees to
provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ with at least one Business Day's notice of the expiration
of any period of suspension under clause (ii) of paragraph (c) of this Section
2.
(d) The Company may on no more than one occasion by notice to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ given subsequent to the Final Expiration Date (after having given effect
to any and all extensions of the Expiration Date of any of the Warrants) extend
the Effective Period for a period of up to 90 days.
(e) Notwithstanding anything to the contrary in this Agreement or the
Warrant Agreement, the Company may not suspend its obligation to supplement and
amend the Shelf Registration or suspend Holders' rights to exercise any
outstanding Warrants unless during a period of no less than 10 consecutive
Business Days occurring after the sixtieth day following the Final Expiration
Date such obligations and rights are in full force and effect and free from any
such suspension.
5. Redemption Price. In the case of any redemption of Warrants made
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pursuant to Section 5 of the Warrant Agreement at a time when such Warrants are
owned by MSIL or by any affiliate of MSIL, the Redemption Price applicable to
such Warrants will also include a reasonable estimate by MSIL of its cost for
liquidating its hedge for the Warrants that the Company wishes to redeem.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, will advise the Company verbally and by
facsimile transmission of such cost to be included in the calculation of the
Redemption Price.
6. Registration Procedures. (a) In connection with the Company's
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obligations to register the reoffer and resale of the shares of Underlying
Common Stock by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of MSIL, the Company shall use all
reasonable efforts to effect or cause the applicable registration statement or
registration statements to permit the sale of the Underlying Common Stock by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in accordance with the intended method or methods of distribution
thereof described in the Shelf Registration, provided that the Company shall
have no such obligation during any suspension of the Company's obligation to
supplement or amend the Shelf Registration Statement under Section 4(c)(i) or
4(c)(ii). In connection therewith, the Company shall:
(i) comply with the provisions of the Securities Act with respect
to the disposition of all of the Underlying Common Stock covered by the
Shelf Registration in accordance with the intended methods of disposition
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL set forth therein;
(ii) provide ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and up to one other underwriter (as
shall be reasonably acceptable to the Company) participating in such sale
and any attorney, accountant or other professional retained by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or MSIL (collectively, the "Participants") the opportunity to
participate in the preparation of the Shelf Registration, each prospectus
included therein or filed with the SEC and each amendment or supplement
thereto;
9
(iii) in connection with each sale of Underlying Common Stock to be
registered pursuant to Section 4(a) hereof, make available for inspection
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and any other Participant such financial and other
information, books, records and properties of the Company, and cause the
officers, directors, employees, counsel and independent certified public
accountants of the Company to respond to such inquiries and supply all
information, as shall be reasonably necessary, in the judgment of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and its counsel or any underwriter participating in such sale, to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act; provided, however, that each such person shall be required
to maintain in confidence and not to disclose to any other person any
information or records reasonably designated by the Company in writing as
being confidential, until such time as (A) such information becomes a
matter of public record (whether by virtue of its inclusion in the Shelf
Registration or otherwise), or (B) such person shall be required so to
disclose such information pursuant to the subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter
(subject to the requirements of such order, and only after such person
shall have given the Company prompt prior written notice of such
requirement), or (C) such information is required to be set forth in the
Shelf Registration or each prospectus included therein or in any amendment
to the Shelf Registration or any amendment or supplement to such prospectus
in order that the Shelf Registration or such prospectus, amendment or
supplement, as the case may be, does not contain an untrue statement of a
material fact or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, further, that if the Company's obligation to effect and maintain
a registration statement is suspended pursuant to Section 4(c) hereof after
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has conducted an investigation contemplated by this Section
6(a)(iii) and prior to the time when ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL has sold such
Underlying Common Stock, then ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have the right, after
the time such suspension ends, to supplement its investigation with such
additional inspection of financial and other information, books, records
and properties and such additional inquiries as shall be reasonably
necessary, in the judgment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its counsel, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities
Act;
(iv) promptly notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and confirm such advice in
writing, (A) when the Shelf Registration or prospectus included therein or
any amendment or supplement thereto has been filed, and, with respect to
the Shelf Registration or any amendment, when the same has become
effective, (B) of any comments of the SEC and of the Blue Sky or securities
commissioner or regulator of any state with respect thereto or any request
by the SEC for amendments or supplements to the Shelf Registration or
prospectus or for additional information, (C) of the issuance by the SEC of
any stop order suspending the effectiveness of the Shelf Registration or
the initiation or threatening of any proceedings for that purpose, (D) if
at any time the representations and warranties of the Company contemplated
by Section 1 or Section 6(a)(xiii) hereof cease to be true and correct in
all material respects, (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Underlying Common Stock for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (F) at any time when a
prospectus is required to be delivered under the Securities Act, of the
occurrence and the nature of any event requiring the preparation of an
amendment to the Shelf Registration or a supplement to the prospectus
included therein so that, as thereafter delivered as required under the
Securities Act, the Shelf Registration, prospectus,
10
amendment or supplement or any document incorporated by reference in any of
the foregoing, will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading;
(v) use all reasonable efforts to prevent entry of any order
suspending the effectiveness of the Shelf Registration or any post-
effective amendment thereto or obtain at the earliest practicable date the
withdrawal of any such order if entered;
(vi) if requested by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, promptly incorporate in an
amendment to the Shelf Registration or in a supplement to the prospectus
included therein such information as is required by the applicable rules
and regulations of the SEC and as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ specifies relating to the
sale of such Underlying Common Stock and promptly make all required filings
of such amendment or supplement, as the case may be;
(vii) promptly furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ an executed copy of the
Shelf Registration, and any amendment thereto (in each case including all
exhibits thereto and documents incorporated by reference therein) and such
number of copies of the Shelf Registration (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇), any amendment thereto, the prospectus
included in the Shelf Registration (including each preliminary prospectus
and any summary prospectus), any supplement thereto, and such other
documents as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may reasonably request in order to facilitate
the offering and disposition of the Underlying Common Stock owned by ▇▇▇▇▇▇
▇▇▇▇▇▇▇, and to permit ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to satisfy the prospectus delivery
requirements of the Securities Act; and the Company hereby consents to the
use of such prospectus (including such preliminary and summary prospectus)
and any supplement thereto by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and by any agent or
underwriter, in each case in the form most recently provided to such party
by the Company, in connection with the offering and sale of the Securities
covered by such prospectus (including such preliminary and summary
prospectus) or supplement thereto;
(viii) use all reasonable efforts to (A) promptly register or qualify
the Underlying Common Stock to be included in the Shelf Registration under
such securities laws or Blue Sky laws of such United States jurisdictions
as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B) keep such
registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the periods the Shelf Registration is required to
remain effective under Section 4 above, and for so long as may be necessary
to enable ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MSIL or any agent or underwriter to complete its
disposition of Underlying Common Stock pursuant to such Shelf Registration
and (C) take any and all other actions as may be reasonably necessary or
advisable to enable ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MSIL, any agent, and any underwriter,
to consummate the disposition in such jurisdictions of such Underlying
Common Stock; provided, however, that the Company shall not be required for
any such purpose to (I) qualify as a foreign corporation in any
jurisdiction wherein it would not otherwise be required to qualify but for
the requirements of this Section 6(a)(viii) or (II) consent to general
service of process in any such jurisdiction;
11
(ix) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether United States federal, state or
local, which may be required to make the Shelf Registration effective or to
effect the offering or sale in connection therewith or to enable ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or MSIL to offer, or to consummate the disposition of, the
Underlying Common Stock;
(x) cooperate with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to facilitate the timely
preparation and delivery of certificates representing Underlying Common
Stock to be sold, which certificates shall be printed, lithographed or
engraved, or produced by any combination of such methods, and, in the case
of an underwritten offering, enable such Underlying Common Stock to be in
such denominations and registered in such names as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may
request at least 1 Business Day prior to any sale of the Underlying Common
Stock;
(xi) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or
similar agreements, as appropriate, including (without limitation)
customary provisions relating to indemnification and contribution, and take
such other actions in connection therewith as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall request
in order to expedite or facilitate the disposition of the Underlying Common
Stock;
(xii) whether or not an agreement of the type referred to in Section
(6)(a)(xi) hereof is entered into and whether or not any portion of the
offering contemplated by the Shelf Registration is an underwritten offering
or is made through a placement or sales agent or any other entity, (A) make
such representations and warranties to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL in form,
substance and scope as are customarily made in connection with an offering
of equity securities pursuant to any appropriate agreement and/or to a
registration statement filed on the form applicable to the Shelf
Registration (including, without limitation, representations to the effect
that (i) as of the date of such agreement or registration statement and as
of the date of the closing of the offering, there has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the applicable disclosure document
and (ii) the outstanding Common Stock is fully paid and non-assessable);
(B) obtain an opinion of outside counsel to the Company of recognized
standing in customary form and covering such matters of the type
customarily covered by such an opinion, as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ may reasonably
request, addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, and MSIL dated the
closing date of such offering (and if such Shelf Registration contemplates
an underwritten offering of a part or all of the Underlying Common Stock,
dated the date of the underwriting agreement relating thereto and addressed
to the underwriters) (it being agreed that the matters to be covered by
such opinion shall include, without limitation, the due incorporation and
good standing of the Company; the qualification of the Company to transact
business as a foreign corporation; the due authorization, execution and
delivery of this Agreement, each Pricing Agreement, the Warrant Agreement
and of any agreement of the type referred to in Section 6(a)(xi) hereof;
the conformity as to legal matters of the authorized capital stock of the
Company to the description thereof contained in the prospectus included in
the Shelf Registration, as then amended or supplemented; the due
authorization and issuance, and
12
status as fully paid and non-assessable, of the Underlying Common Stock;
the absence of material legal or governmental proceedings involving the
Company; the non-contravention (of law or organizational documents of the
Company) of the execution and delivery by the Company and performance by
the Company of its obligations under any agreement of the type referred to
in Section 6(a)(xi); the absence of governmental approvals required to be
obtained in connection with the Shelf Registration, the offering and sale
of the Underlying Common Stock, this Agreement, each Pricing Agreement, the
Warrant Agreement or any agreement of the type referred to in Section
6(a)(xi) hereof; the fair presentation in the Shelf Registration and the
prospectus included therein, as then amended or supplemented, of such legal
matters, documents and proceedings described therein as shall be specified;
the Company not being an "investment company" or an entity "controlled" by
an "investment company" as such terms are defined under the Investment
Company Act of 1940; the compliance as to form of the Shelf Registration,
the prospectus included therein, as then amended or supplemented, and any
documents incorporated by reference therein with the Securities Act and the
applicable rules and regulations of the SEC thereunder; and, as of the date
of the opinion and of the Shelf Registration or most recent post-effective
amendments thereto and the date of effectiveness thereof, as the case may
be, the absence from the Shelf Registration and each prospectus included
therein, as then amended or supplemented, and from the documents
incorporated by reference therein of any untrue statement of a material
fact or the omission to state therein a material fact necessary in order to
make the statements therein not misleading (in the case of each such
prospectus, in the light of the circumstances under which the statements
therein were made)); (C) obtain a "cold comfort" letter or letters from the
independent certified public accountants of the Company addressed to ▇▇▇▇▇▇
▇▇▇▇▇▇▇, as agent for MSIL, MSIL and any underwriter or agent and in form
and substance satisfactory to them, dated (I) as of the date of the
agreement to sell Securities and (II) the closing date of any sale of
Underlying Common Stock pursuant to any prospectus supplement to the
prospectus included in the Shelf Registration or post-effective amendment
to the Shelf Registration, such letter or letters to be in customary form
and covering such matters of the type customarily covered by letters of
such type; (D) deliver such documents and certificates, including officers'
certificates, as may be reasonably requested by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to evidence
the accuracy of the representations and warranties made pursuant to clause
(A) above and the compliance with or satisfaction of any agreements or
conditions contained in the underwriting agreement or other agreement
entered into by the Company; and (E) undertake such obligations relating to
expense reimbursement, indemnification and contribution as are provided in
Sections 8, 9, 10 and 11 hereof;
(xiii) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Underlying Common Stock or participate as
a member of an underwriting syndicate or selling group or "participate in
the distribution" (within the meaning of Section 2720 of the Conduct Rules
of the NASD) thereof, whether as an underwriter, a placement or sales agent
or a broker or dealer in respect thereof, or otherwise, assist such broker-
dealer in complying with the requirements of such Conduct Rules, including,
without limitation, by providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the
requirements of the Conduct Rules of the NASD; and
13
(xiv) comply in all material respects with all applicable rules and
regulations of the SEC and make generally available to its security holders
as soon as practicable, an earnings statement of the Company and its
subsidiaries covering a period of 12 months, beginning within three months
after the effective date of the Shelf Registration, complying with Section
11(a) of the Securities Act (including, at the option of the Company, Rule
158 thereunder).
(b) In the event that the Company would be required, pursuant to
Section 6(a)(iv)(F) above, to notify ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Company shall (subject
to its right to suspend its obligations pursuant to Sections 4(c)(i) or
4(c)(ii)) without delay prepare and furnish to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a reasonable
number of copies of a prospectus supplemented or amended in form and substance
reasonably satisfactory to it, so that, as thereafter delivered to purchasers of
Underlying Common Stock, such prospectus shall not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ agrees that upon receipt by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of any notice from the
Company pursuant to Section 6(a)(iv)(F) hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall forthwith
discontinue the disposition of Underlying Common Stock pursuant to the
registration statement applicable to such Securities until ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
have received copies of such amended or supplemented prospectus, and if so
directed by the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ possession of the prospectus covering such Underlying Common Stock at
the time of receipt of such notice.
(c) The Company may require ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to furnish to the Company
such information regarding ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or MSIL's
intended method of resale of the Underlying Common Stock as the Company may from
time to time reasonably request in writing, but only to the extent that such
information is required in order to comply with the Securities Act. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to
the Company or of the occurrence of any event in either case as a result of
which any prospectus relating to the Shelf Registration contains or would
contain an untrue statement of a material fact regarding ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MSIL or
▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or MSIL's intended method of distribution of such Underlying
Common Stock or omits to state any material fact regarding ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MSIL
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or MSIL's intended method of distribution of such Underlying
Common Stock required to be stated therein or necessary to make the statements
therein not misleading, and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
so that such prospectus shall not contain, with respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or
MSIL or the distribution of such Underlying Common Stock an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
7. Registration Expenses. (a) The Company agrees to bear and to
---------------------
pay or cause to be paid promptly upon request being made therefor all expenses
incident to filing and causing effectiveness of the Shelf Registration,
including, without limitation, (i) all SEC, stock exchange, Nasdaq National
Market or NASD registration and filing fees and expenses, (ii) all fees and
expenses (if any) in connection with the qualification of the Underlying Common
Stock for reoffering and resale under the state securities and Blue Sky laws
referred to in Section 6(a)(viii) hereof, including reasonable fees and
disbursements of counsel for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in connection
14
with such qualifications, (iii) all expenses relating to the preparation, word
processing, printing, distribution and reproduction of the Shelf Registration
(including the preliminary prospectus included therein) and each amendment to
the foregoing, (iv) internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing legal
or accounting duties), and (v) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company. Notwithstanding the
foregoing, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, shall pay all agency fees and
commissions and underwriting discounts and commissions attributable to the sale
of the Underlying Common Stock and the fees and disbursements of any counsel or
other advisors or experts retained by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(b) Notwithstanding the terms of Section 7(a) hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
as agent for MSIL, agrees to bear and to pay or cause to be paid promptly upon
request being made therefor all reasonable expenses incident to the takedown of
Underlying Common Stock off the Shelf Registration, including, without
limitation, (i) all expenses relating to the preparation, printing, distribution
and reproduction of each supplement to the preliminary prospectus included in
the Shelf Registration, and (ii) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company.
8. Indemnification by the Company. The Company agrees to indemnify
------------------------------
and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MSIL, their officers, directors, agents,
employees, and each person, if any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the 1934 Act Reports or any registration statement or prospectus relating to
the Underlying Common Stock (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or MSIL furnished in writing to the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL or on
▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or MSIL's behalf expressly for use therein. The Company also
agrees to indemnify any underwriters of the Underlying Common Stock, their
officers and directors and each person who controls such underwriters on
substantially the same basis as that of the indemnification of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
provided in this Section 8.
9. Indemnification by MSIL. MSIL agrees to indemnify and hold
-----------------------
harmless the Company, its officers, directors, employees and agents and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL, but only
with reference to information related to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL furnished in
writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL or on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ or MSIL's behalf
expressly for use in any registration statement or prospectus relating to
Underlying Common Stock, or any amendment or supplement thereto, or any
preliminary prospectus.
10. Conduct of Indemnification Proceedings. In case any proceeding
--------------------------------------
(including any governmental investigation) shall be instituted involving any
person in respect of which
15
indemnity may be sought pursuant to Section 8 or 9, such person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in respect of the legal expenses of any Indemnified Party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) at any time for the Indemnified Party, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Indemnified Party, such firm shall be designated in
writing by the Indemnified Party. The Indemnifying Party shall not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested an Indemnifying Party to reimburse the Indemnified Party
for fees and expenses of counsel as contemplated by the second and third
sentences of this Section 10, the Indemnifying Party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 Business Days after receipt
by such Indemnifying Party of the aforesaid request and (ii) such Indemnifying
Party shall not have reimbursed the Indemnified Party in accordance with such
request prior to the date of such settlement. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.
11. Contribution. To the extent the indemnification provided for in
------------
Sections 8, 9 and 10 of this Warrant Purchase Agreement is
unavailable to an Indemnified Party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein,
then each such Indemnifying Party under such Section, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute
to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and the Indemnified Party on
the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
MSIL on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission
16
to state a material fact relates to information supplied by the
Company or by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL agree that it would not be just or
equitable if contribution pursuant to this Section 11 were determined by pro
---
rata allocation or by any other method of allocation which does not take account
----
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 11, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL shall
not be required to contribute any amount in excess of the amount by which the
proceeds to MSIL of a sale of Underlying Common Stock exceed the amount of any
damages which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL have otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
12. Rule 144. The Company covenants that it will file any reports
--------
required to be filed by it under the Securities Act and the Exchange Act to the
extent required from time to time to enable ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL to sell
Underlying Common Stock without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC (as so amended and along with any such
similar rule or regulation, "Rule 144"). Upon the request of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
the Company will deliver to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ a written statement as to whether it
has complied with such requirements.
13. Miscellaneous. (a) No Inconsistent Agreements. The Company
------------- --------------------------
will not hereafter enter into any agreement with respect to its securities which
is inconsistent with the rights granted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL in this
Warrant Purchase Agreement.
(b) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Warrant Purchase Agreement may not be amended, modified or
supplemented, and waivers to or departures from the provisions hereof may not be
given unless consented to in writing by each party.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made by hand delivery, telex, telecopy, overnight
courier or registered first-class mail as follows:
(i) if to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇ ▇▇▇▇▇▇, with a copy to
the General Counsel;
(ii) if to MSIL: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited c/o
Morgan ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇;
17
(iii) if to the Company: Oracle Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: General Counsel.
All such notices and communications shall be deemed to have been duly
given: when delivered, if by hand, overnight courier or mail; when the
appropriate answer back is received, if by telex; when transmitted, if by
telecopy.
(d) Successors and Assigns; Transfer of Registration Rights. This
-------------------------------------------------------
Warrant Purchase Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties. The registration rights set forth
in this Warrant Purchase Agreement may be transferred in whole or in part from
time to time to any holder of Warrants.
(e) Counterparts. This Warrant Purchase Agreement may be executed in
------------
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(f) Headings. The headings to this Warrant Purchase Agreement are
--------
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Warrant Purchase Agreement shall be governed
-------------
by and construed in accordance with the laws of the State of California.
(h) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby.
(i) Survival. The indemnity and contribution provisions contained in
--------
Sections 8, 9, 10 and 11 and the representations and warranties of the Company
contained in this Agreement and in each Pricing Agreement shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL
or any person controlling ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or MSIL, or the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Warrants.
(j) Matters Related to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Agent. As a broker-dealer
-------------------------------------------
registered with the SEC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in its capacity as agent, will be
responsible for: (i) effecting the transactions between the Company and MSIL
contemplated in this Agreement, including all payments and deliveries of
Warrants, (ii) issuing all required notices, confirmations and statements to the
Company and MSIL and (iii) maintaining books and records relating to this
Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is acting in connection with this Agreement solely
as Agent for both MSIL and the Company and pursuant to instructions from them.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have no responsibility or personal liability to MSIL or the
Company arising from any failure by MSIL or the Company to pay or perform any
obligation hereunder or to monitor or to enforce
18
compliance by MSIL or the Company with any obligation hereunder. Each of MSIL
and the Company agrees to proceed solely against the other to collect or recover
any securities or money owing to it in connection with or as a result of this
Agreement. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall otherwise have no liability in respect of this
Agreement, except for its gross negligence or willful misconduct in performing
its duties as agent hereunder.
19
IN WITNESS WHEREOF, the parties have executed this Warrant Purchase
Agreement as of the date first written above.
ORACLE CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED, as agent
for MSIL
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INTERNATIONAL LIMITED
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
20
EXHIBIT II
PRICING AGREEMENT
-----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
May __, 1997
Dear Sirs/Mesdames:
Oracle Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), as
agent for you ("MSIL"), subject to the terms and conditions stated herein, in
the Warrant Agreement (the "Warrant Agreement"), to be entered into between the
Company and First BankBoston, N.A., as Warrant Agent, and in the Warrant
Purchase Agreement (the "Warrant Purchase Agreement"), dated as of May 7, 1997,
among the Company, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as your agent, and you, __________ Series _
Equity Call Warrants at a purchase price of $__ per Warrant.
Each provision of the Warrant Purchase Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement.
Unless otherwise defined herein, terms used herein and defined in the Warrant
Purchase Agreement are used herein as therein defined.
Subject to the terms and conditions set forth herein and in the
Warrant Purchase Agreement incorporated herein by reference, the Company agrees
to issue and sell to you, and you agree to purchase from the Company on the
third business day following the date hereof, at the time and place set forth in
the Warrant Purchase Agreement (or at such other time and place as may be agreed
to by the parties) and at the purchase price to you set forth above, __________
Series _ Equity Call Warrants.
The effectiveness of this Pricing Agreement is subject to the condition
that on or prior to the date hereof, the Company shall have entered into a
Repurchase Contract with respect to _______ shares of common stock of the
Company substantially in the form of Annex I hereto.
Very truly yours,
ORACLE CORPORATION
By:___________________________
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL
LIMITED
By:___________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED,
as agent for MSIL
By:___________________________
Name:
Title:
2
EXHIBIT III
LETTER OF REPRESENTATION
------------------------
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
In connection with (x) the sale (the "Sale") to, and the purchase by,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL," "we" or "us"), for whom
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") is acting as agent, of
________ Series ___ Equity Call Warrants, (collectively, the "Warrants" or,
individually a "Warrant"), each representing the right to purchase one share of
the common stock, par value $___ per share (the "Common Stock"), of Oracle
Corporation (the "Company"), pursuant to the Warrant Purchase Agreement (the
"Warrant Purchase Agreement") dated as of May 7, 1997, and the Pricing Agreement
(the "Pricing Agreement") dated as of May __, 1997, in each case among the
Company, MSIL and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as agent for MSIL, and (y) the repurchase by
the Company from MSIL of ________ shares of Common Stock pursuant to, and
subject to the terms and conditions of, the Warrant Purchase Agreement and the
Repurchase Contract dated May __, 1997, among the Company, MSIL and ▇▇▇▇▇▇
▇▇▇▇▇▇▇, as agent for MSIL, we hereby represent as follows:
1. We are aware that we must bear the risk of an investment in the
Warrants for an indefinite period of time, and we are able to bear such risk.
As of the time of the Sale, however, we have hedged our position in the Warrants
through the short sale of Common Stock pursuant to the Repurchase Contract[s]
referred to above. Under current market conditions, we do not expect to engage
in the short sale of shares of Common Stock in addition to the sales made
pursuant to the Repurchase Contract in order to hedge our position in the
Warrants. To the extent we or any affiliate of ours engage in short sales
("Short Sales") of shares of Common Stock to any person other than the Company
to hedge our position in the Warrants, (i) neither we nor any such affiliate
will engage in any special selling efforts or selling methods in connection with
any Short Sales and, (ii) to the extent required by applicable law, we and any
such affiliate (A) will not cover any Short Sales or repay any borrowing of
shares of Common Stock used to settle any Short Sales with any shares of Common
Stock issued on exercise of the Warrants ("Warrant Shares") and (B) will take
all reasonable steps so as not to (I) knowingly sell any Warrant Shares to any
person from whom we or any such affiliate purchase any shares of Common Stock
used to cover any Short Sales or (II) knowingly purchase any shares of Common
Stock to be used to settle any Short Sales or to repay any borrowing of shares
of Common Stock used to settle any Short Sales from: (x) any person to whom we
or any such affiliate has sold any Warrant Shares or (y) any person that we or
any such affiliate has reason to believe indirectly acquired Warrant Shares.
2. We have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing the
Warrants.
3. We are purchasing the Warrants for our own account. We are not
acquiring the Warrants with a view to distribution thereof, or with any present
intention of offering or selling the Warrants, subject, nevertheless, to the
disposition of our property being at all times within our control.
4. On the basis of the applicable Purchase Price, and other terms of
each series of Warrants, the historical volatility of the Common Stock and such
other factors as we have deemed advisable for the purposes of this letter, we
believe that with respect to each Warrant purchased pursuant to the Warrant
Purchase Agreement there exists at least a 50% probability that such Warrant
will expire worthless.
5. We are an "accredited investor" within the meaning of
subparagraph (a)(1) of Rule 501 under the Securities Act.
We acknowledge that for purposes of the opinion to be delivered to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as our agent, pursuant to Section 3(b) of the Warrant Purchase
Agreement, you will rely upon the accuracy and truth of the foregoing
representations and we hereby consent to such reliance.
Terms used herein but not otherwise defined herein are used herein as
defined in the Warrant Agreement dated as of May 7, 1997 between the Company and
BankBoston, N.A., as Warrant Agent.
Date: May __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL
LIMITED
By:_________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED,
as agent for MSIL
By:_________________________________
Name:
Title:
2