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EXHIBIT 4.N.6
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SERIES B WARRANT
to Purchase Common Stock of
NORAND CORPORATION
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Warrant No. B - 1
Original Issue
Date: November 20, 1996
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TABLE OF CONTENTS
1. DEFINITIONS 1
2. EXERCISE OF WARRANT 11
2.1. Manner of Exercise 11
2.2. Payment of Transfer Taxes 12
2.3. Fractional Shares 12
2.4. Continued Validity and Application 13
2.5. Limitation on Regulated Holder's Exercise 13
3. TRANSFER, DIVISION AND COMBINATION 13
3.1. Transfer 13
3.2. Division and Combination. 14
3.3. Expenses. 14
3.4. Maintenance of Books 14
4. ANTIDILUTION PROVISIONS 14
4.1. Stock Dividends, Subdivisions and Combinations 14
4.2. Issuance of Additional Shares of Common Stock 15
4.3. Issuances of Stock Purchase Rights and Convertible Securities 15
4.4. Adjustment of Number of Shares Purchasable. 17
4.5. Reorganization, Reclassification, Merger, Consolidation
or Disposition of Assets 17
4.6. Determination of Consideration. 18
4.7. Other Dilutive Events 20
4.8. Other Provisions Applicable to Adjustments Under this Section 20
5. NO IMPAIRMENT 22
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK 23
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS 23
7.1. Notices of Corporate Actions. 23
7.2. Closing of Transfer Books. 23
8. TRANSFER RESTRICTIONS 23
8.1. Restrictions on Transfers 24
8.2. Restrictive Legends 24
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8.3. Termination of Securities Law Restrictions 25
9. REGISTRATION RIGHTS 26
9.1. Certain Definitions 26
9.2. Demand Registration 27
9.3. Piggyback Registration 29
9.4. Registration Procedures. 30
9.5. Selling Holders' Obligations. 34
9.6. Expenses of Registration. 34
9.7. Indemnification; Contribution. 35
9.8. Holdback. 40
9.9. Additional Covenants of the Company 40
10. LOSS OR MUTILATION 42
11. OFFICE OF THE COMPANY 42
12. FINANCIAL AND BUSINESS INFORMATION 43
13. REPURCHASE BY THE COMPANY OF WARRANTS 43
14. MISCELLANEOUS 43
14.1. Nonwaiver. 43
14.2. Notice Generally 44
14.3. Indemnification 44
14.4. Limitation of Liability. 44
14.5. Remedies 45
14.6. Successors and Assigns 45
14.7. Amendment. 45
14.8. Severability 45
14.9. Headings. 45
14.10. GOVERNING LAW; JURISDICTION. 45
ANNEX A
SUBSCRIPTION FORM 48
ANNEX B
ASSIGNMENT FORM 49
SCHEDULE A RESERVED SHARES OF COMMON STOCK
SCHEDULE B UNDERWRITERS AND AGENTS
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NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY
OF THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THE WARRANTS
REPRESENTED BY THIS CERTIFICATE OR OF THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH
TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR (B) THE HOLDER OF THE SECURITIES PROPOSED TO BE
TRANSFERRED SHALL HAVE DELIVERED TO THE COMPANY EITHER A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION
OF COUNSEL EXPERIENCED IN SECURITIES MATTERS AND REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH PROPOSED
TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT
OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR RULE 144A UNDER
THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE COMPANY A
CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE
PROPOSED TRANSFER.
Warrant No. B - 1
SERIES B WARRANT
NORAND CORPORATION
THIS IS TO CERTIFY THAT THE FIRST NATIONAL BANK OF CHICAGO, or registered
assigns, is entitled, at any time after August 31, 1997 and prior to the
Expiration Date (such term, and certain other capitalized terms used herein
being hereinafter defined), to purchase from NORAND CORPORATION, a Delaware
corporation (the "Company"), One Hundred Six Thousand Six Hundred Twenty-nine
(106,629) shares of the Common Stock of the Company (subject to adjustment as
provided herein), at a purchase price of $21.15 per share (the initial
"Exercise Price", subject to adjustment as provided herein), all on the terms
and conditions and pursuant to the provisions hereinafter set forth.
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1. DEFINITIONS
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Affiliate" of any Person means a Person (a) which directly or
indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with such Person, (b) which beneficially
owns or holds more than ten percent of the outstanding shares of any class
of voting stock of such Person and has the power to vote such shares or (c)
more than ten percent of the outstanding shares of any class of voting
stock (or, in the case of a Person which is not a corporation, more than
ten percent of the equity interest) of which is beneficially owned or held
by such Person and such Person has the power to vote such shares or equity
interest. The term "control" as used with respect to any Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"After-Tax Basis", when referring to a payment that is required
hereunder (the "target amount"), shall mean a total payment (the "total
amount") that, after deduction of all federal, state and local taxes that
are required to be paid by the recipient in respect of the receipt or
accrual of such total amount, is equal to the target amount.
"Agreed Rate" shall mean a rate per annum equal to the corporate base
rate of interest announced by The First National Bank of Chicago from time
to time, changing when and as said corporate base rate changes.
"Appraised Value" per share of Common Stock as of a date specified
herein shall mean the value of such share as of such date as determined by
an investment bank of nationally recognized standing selected by the
Majority Warrant Holders from Schedule B (or any successor of any such
entity), it being understood that the Majority Warrant Holders shall use
commercially reasonable efforts to select one of the first three listed
entities subject to arriving at reasonably acceptable terms and conditions
for the
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appraisal. The Company shall pay the costs and fees of such investment
bank, and the decision of the investment bank making such determination of
Appraised Value shall be final and binding on the Company and all affected
holders of Warrants or Warrant Stock. Such Appraised Value shall be
determined as a pro rata portion of the value of the Company taken as a
whole, based on the higher of (A) the value derived from a hypothetical
sale of the entire Company as a going concern by a willing seller to a
willing buyer (neither acting under any compulsion) and (B) the liquidation
value of the entire Company. No discount shall be applied on account of
(i) any Warrants or Warrant Stock representing a minority interest, (ii)
any lack of liquidity of the Common Stock or the Warrants, (iii) the fact
that the Warrants or Warrant Stock may constitute "restricted securities"
for securities law purposes or (iv) the existence of any call option.
"Bank Holding Company Act" shall mean the Bank Holding Company Act of
1956, as amended.
"Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks are required or permitted to be closed in the State of
Illinois.
"Call" shall have the meaning set forth in Section 13 hereof.
"Call Notice" shall have the meaning set forth in Section 13 hereof.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other
federal securities laws.
"Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company, par value $.01 per share, as
constituted on the Original Issue Date, and any capital stock into which
such Common Stock may thereafter be changed, and shall also include (i)
capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
liquidation over any other
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class of stock of the Company and which is not subject to redemption and
(ii) shares of common stock of any successor or acquiring corporation (as
defined in Section 4.5 hereof) received by or distributed to the holders of
Common Stock of the Company in the circumstances contemplated by Section
4.5 hereof.
"Company" means Norand Corporation, a Delaware corporation, and any
successor corporation.
"Company Default" means (a) the breach of any warranty or the
inaccuracy in any material respect at the time when made of any
representation made by the Company herein or (b) the failure by the Company
to comply in any material respect with any covenant of the Company
contained herein.
"Continuously Effective", with respect to a specified registration
statement, shall mean that it shall not cease to be effective and available
for Transfers of Warrant Stock thereunder for the longer of either (i) any
ten consecutive Business Days, or (ii) an aggregate of fifteen Business
Days during the period specified in the relevant provision of Section 9
hereof.
"Convertible Securities" shall mean evidences of indebtedness, shares
of stock or other securities that are convertible into or exchangeable for,
with or without payment of additional consideration in cash or property,
shares of Common Stock, either immediately or upon the occurrence of a
specified date or a specified event.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of January 25, 1996, as thereafter from time to time
amended, supplemented, restated or modified, among the Company, the Lenders
party thereto and The First National Bank of Chicago, as agent.
"Current Market Price" shall mean as of any specified date the average
of the daily market prices of the Common Stock of the Company for the
shorter of (x) the twenty consecutive Business Days immediately preceding
such date or (y) the period commencing on the Business Day next following
the first public announcement of any event giving rise to an adjustment of
the Exercise Price pursuant to Section 4 below
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and ending on such date. The "daily market price" for each such Business
Day shall be: (i) if the Common Stock is then listed on a national
securities exchange or is listed on NASDAQ and is designated as a National
Market System security, the last sale price, regular way, on such day on
the principal stock exchange or market system on which such Common Stock is
then listed or admitted to trading, or, if no such sale takes place on such
day, the average of the closing bid and asked prices for the Common Stock
on such day as reported on such stock exchange or market system or (ii) if
the Common Stock is not then listed or admitted to trading on any national
securities exchange or designated as a National Market System security on
NASDAQ but is traded over-the-counter, the average of the closing bid and
asked prices for the Common Stock as reported on NASDAQ or the Electronic
Bulletin Board or in the National Daily Quotation Sheets, as applicable.
"Demand Registration" shall have the meaning set forth in Section
9.2(a) hereof.
"Demanding Holders" shall have the meaning set forth in Section 9.2(a)
hereof.
"Designated Office" shall have the meaning set forth in Section 11
hereof.
"Equity" shall mean equity capital (not including the equity capital
attributable to the Settlement Stock, and any mandatory redemption terms of
which equity capital are acceptable to the Majority Warrant Holders) raised
by and/or contributed to the Company subsequent to the Original Issue Date
or new Indebtedness (as defined in the Credit Agreement) subordinated to
the Obligations (as defined in the Credit Agreement), provided the terms of
such Indebtedness (including, without limitation, maturity, amortization,
covenants, defaults, remedies and subordination provisions) are acceptable
to the Majority Warrant Holders.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to
time.
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"Exercise Notice" shall have the meaning set forth in Section 2.1
hereof.
"Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1 hereof.
"Exercise Price" shall mean, in respect of a share of Common Stock at
any date herein specified, the initial Exercise Price set forth in the
preamble of this Warrant as adjusted from time to time pursuant to Section
4 hereof.
"Expiration Date" shall mean August 31, 2002, unless extended under
the circumstances contemplated by Section 9.2(d) hereof.
"Fair Value" per share of Common Stock as of any specified date shall
mean (A) if the Common Stock is publicly traded on such date, the Current
Market Price per share or (B) if the Common Stock is not publicly traded on
such date, (1) the fair market value per share of Common Stock as
determined in good faith by the Board of Directors of the Company and set
forth in a written notice to each Holder or (2) if the Majority Warrant
Holders object in writing to such price as determined by the Board of
Directors within thirty days after receiving notice of same, the Appraised
Value per share as of such date.
"Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding on such date and all
shares of Common Stock issuable in respect of (x) the Warrants outstanding
on such date, (y) any Convertible Securities outstanding on such date and
(z) any other Stock Purchase Rights outstanding on such date, in each case
regardless of whether or not the conversion, exchange, subscription or
purchase rights associated with such Convertible Securities or Stock
Purchase Rights are presently exercisable.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
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"▇▇▇▇▇-▇▇▇▇▇▇▇▇ Act" shall mean Section 24 (Seventh), Section 78,
Section 377 and Section 378 of Title 12 (12 U.S.C. Section Section 24
(Seventh) 78, 377, 378), or any similar federal legislation.
"Holder" shall mean (a) with respect to this Warrant, the Person in
whose name the Warrant set forth herein is registered on the books of the
Company maintained for such purpose and (b) with respect to any other
Warrant or shares of Warrant Stock, the Person in whose name such Warrant
or Warrant Stock is registered on the books of the Company maintained for
such purpose.
"Insolvency Event" shall mean any proceeding being instituted by or
against the Company seeking a declaration or order for relief, or entailing
a finding, that the Company is insolvent or bankrupt, or seeking
reorganization, liquidation, dissolution, winding-up, charter revocation or
other similar relief with respect to the Company or any of its properties,
assets or debts, or seeking the appointment of a receiver, trustee,
custodian, liquidator, sequestrator or similar official for the Company or
any of its properties or assets, or the Company becoming insolvent or
bankrupt or generally unable to pay its debts as they become due, or the
Company voluntarily suspending its business or making a general assignment
for the benefit of creditors; provided that an Insolvency Event shall not
be deemed to have occurred on account of any such proceeding which is
involuntary on the part of the Company unless same shall not have been
dismissed or stayed within 60 days.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any lease or title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give,
any financing statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).
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"Majority Warrant Holders", with respect to a given determination,
shall mean the Holders of Warrants and/or Warrant Stock representing at
least seventy-six percent (76%) of all Warrants and/or Warrant Stock (with
any such Warrants being deemed to represent, for the purposes of such
calculation, the shares of Warrant Stock then issuable upon exercise
thereof) directly affected by such determination.
"Majority Selling Holders" shall mean those Selling Holders whose
Warrants and/or Warrant Stock included in a registration under Section 9
hereof represents a majority of the Warrants and/or Warrant Stock (with any
such Warrants being deemed to represent, for the purposes of such
calculation, the shares of Warrant Stock then issuable upon exercise
thereof) included therein by all Selling Holders.
"NASD" shall mean the National Association of Securities Dealers,
Inc., or any successor corporation thereto.
"NASDAQ" shall mean the NASDAQ quotation system, or any successor
reporting system.
"Notes" shall mean any of the promissory notes issued by the Company
under the Credit Agreement.
"Opinion of Counsel" means a written opinion of counsel experienced in
Securities Act or bank regulatory matters, as the case may be, chosen by
the Holder of this Warrant or Warrant Stock issued upon the exercise hereof
and reasonably acceptable to the Company.
"Original Issue Date" shall mean the date on which the Original
Warrants were issued, as set forth on the cover page of this Warrant.
"Original Warrants" shall mean the Warrants originally issued by the
Company on the Original Issue Date to each of The First National Bank of
Chicago, Fleet Bank of Massachusetts, N.A., The Daiwa Bank, Limited,
Norwest Bank Iowa, National Association and Caisse Nationale de Credit
Agricole.
"Other Property" shall have the meaning set forth in Section 4.5
hereof.
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"Outstanding" shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for
the account of the Company or any Subsidiary thereof, and shall include all
shares issuable in respect of outstanding scrip or any certificates
representing fractional interests in shares of Common Stock. "Outstanding",
when used with respect to Warrant Stock for the purposes of Section 9
hereof shall have the meaning set forth in Section 9.1(d) hereof.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, entity
or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division,
agency, body or department thereof).
"Piggyback Registration" shall have the meaning set forth in Section
9.3(a) hereof.
"Register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration
or ordering by the Commission of effectiveness of such registration
statement or document.
"Registration Expenses" shall have the meaning set forth in Section
9.6(a) hereof.
"Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be,
evidenced by a certificate bearing the restrictive legend set forth in
Section 8.2(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
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"Selling Holders" shall mean, with respect to a specified registration
under Section 9 hereof, WS Holders whose Registrable Securities are
included in such registration.
"Series A Warrants" shall mean all of the Series A Warrants to
Purchase Common Stock of Norand Corporation issued concurrently with this
Warrant.
"Series B Warrants" shall mean all of the Series B Warrants to
Purchase Common Stock of Norand Corporation, issued concurrently with, and
having the same terms (other than the number of shares purchasable upon the
exercise thereof) as, this Warrant.
"Settlement Stock" shall mean the shares of Common Stock contemplated
to be issued in settlement of the pending shareholders' claims against the
Company with respect to the litigation styled In re Norand Corporation
Securities Litigation, Master File No. C95-323, pending in the United
States District Court for the Northern District of Iowa, Cedar Rapids
Division.
"Share Withholding Option" has the meaning set forth in Section 2.1(c)
hereof.
"Shelf Registration" shall have the meaning set forth in Section
9.2(a) hereof.
"Stock Purchase Rights" shall mean any options, warrants or other
securities or rights to subscribe to or exercisable for the purchase of
shares of Common Stock or Convertible Securities, whether or not
immediately exercisable, other than the options, warrants or other rights
described in Schedule A hereto.
"Subsequent Issuance" shall mean any sale or issuance by the Company
of Common Stock, Convertible Securities or Stock Purchase Rights after the
Original Issue Date other than:
(i) Any issuance of Warrant Stock upon exercise of the Warrants
and any issuance of Common Stock, Convertible Securities or Stock
Purchase Rights (and
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any issuance of Common Stock pursuant to the conversion, exchange or
exercise of any such Convertible Securities or Stock Purchase Rights)
deemed to have been issued as of the Original Issue Date pursuant to
the definition of Fully Diluted Outstanding.
(ii) Any issuance of Common Stock pursuant to the exercise of the
options and warrants described in Schedule A hereto, provided,
however, that the exercise price of any such option or warrant (other
than warrants granted to ▇▇▇ ▇▇▇▇ and Associates and to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ for up to the respective number of shares set forth on Schedule
A) granted or issued after the Original Issue Date shall not be less
than the "daily market price" (as that term is defined in the
definition of Current Market Price) of the Common Stock on the date of
grant or issue of the option or warrant.
(iii) The issuance of the Settlement Stock.
(iv) Any other issuance of Common Stock, Convertible Securities
or Stock Purchase Rights with respect to which the Majority Warrant
Holders shall have waived application of the provisions of Section 4
below.
"Subsidiary" means any corporation or association (a) more than 50%
(by number of votes) of the voting stock of which is at the time owned by
the Company or by one or more Subsidiaries or by the Company and one or
more Subsidiaries, or any other business entity in which the Company or one
or more Subsidiaries or the Company and one or more Subsidiaries own more
than a 50% interest either in the profits or capital of such business
entity or (b) whose net earnings, or portions thereof, are consolidated
with the net earnings of the Company and are recorded on the books of the
Company for financial reporting purposes in accordance with GAAP.
"Transfer" shall mean any disposition of any Warrant or Warrant Stock
or of any interest in either thereof, which would constitute a "sale"
thereof within the meaning of the Securities Act.
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"Triggering Event" shall mean either the repayment in full of all
indebtedness under the Credit Agreement or the receipt by the Company of at
least $20 million in net cash proceeds from additional Equity.
"Violation" has the meaning set forth in Section 9.7(a) hereof.
"Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the date of
such exercise.
"Warrants" shall mean the Original Warrants and all warrants issued
upon transfer, division or combination of, or in substitution for, such
Original Warrants or any other such Warrant. All Warrants shall at all
times be identical as to terms and conditions and date, except as to the
number of shares of Common Stock for which they may be exercised.
"Warrant Stock" generally shall mean the shares of Common Stock
issued, issuable or both (as the context may require) upon the exercise of
Warrants until such time as such shares of Common Stock have either been
(i) Transferred in a public offering pursuant to a registration statement
filed under the Securities Act or (ii) Transferred in a transaction exempt
from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof with all transfer restrictions
and restrictive legends with respect to such Common Stock being removed in
connection with such transaction. "Warrant Stock", for the purposes of
Section 9 hereof, shall have the meaning set forth in Section 9.1(b)
hereof.
"▇▇ ▇▇▇▇▇▇" shall have the meaning set forth in Section 9.1(a) hereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. (a) From and after August 31, 1997 and
until 5:00 P.M., Chicago time, on the Expiration Date, the Holder of this
Warrant may from time to time exercise
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this Warrant, on any Business Day, for all or any part of the number of shares
of Common Stock purchasable hereunder (as determined pursuant to Section 2.2
below). In order to exercise this Warrant, in whole or in part, the Holder
shall (i) deliver to the Company at the Designated Office a written notice of
the Holder's election to exercise this Warrant (an "Exercise Notice"), which
Exercise Notice shall be irrevocable and specify the number of shares of Common
Stock to be purchased, together with this Warrant and (ii) pay to the Company
the Warrant Price (the date on which both such delivery and payment shall have
first taken place being hereinafter sometimes referred to as the "Exercise
Date"). Such Exercise Notice shall be in the form of the subscription form
appearing at the end of this Warrant as Annex A, duly executed by the Holder or
its duly authorized agent or attorney.
(b) Upon receipt of such Exercise Notice, Warrant and payment, the
Company shall, as promptly as practicable, and in any event within five Business
Days thereafter, execute (or cause to be executed) and deliver (or cause to be
delivered) to the Holder a certificate or certificates representing the
aggregate number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereafter provided.
The stock certificate or certificates so delivered shall be, to the extent
possible, in such denomination or denominations as the exercising Holder shall
reasonably request in the Exercise Notice and shall be registered in the name of
the Holder or such other name as shall be designated in the Exercise Notice.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
Person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the Exercise Date.
(c) Payment of the Warrant Price shall be made at the option of the
Holder by one or more of the following methods: (i) by delivery of a certified
or official bank check in the amount of such Warrant Price, (ii) by instructing
the Company to withhold a number of shares of Warrant Stock then issuable upon
exercise of this Warrant with an aggregate Current Market Price equal to such
Warrant Price (the "Share Withholding Option"), (iii) by surrendering to the
Company shares of Common Stock previously acquired by the Holder with an
aggregate Current
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Market Price equal to such Warrant Price or(iv) by delivery of a Note, duly
endorsed by or accompanied by appropriate instruments of transfer duly executed
by the Holder or by the Holder's attorney duly authorized in writing. In the
event of any withholding of Warrant Stock or surrender of Common Stock pursuant
to clause (ii) or (iii) above where the number of shares whose Current Market
Price is equal to the Warrant Price is not a whole number, the number of shares
withheld by or surrendered to the Company shall be rounded up to the nearest
whole share and the Company shall make a cash payment to the Holder based on the
incremental fraction of a share being so withheld by or surrendered to the
Company in an amount determined in accordance with Section 2.3 hereof. For the
purpose of making payment of the Warrant Price, any Note surrendered to the
Company shall be deemed to have a value equal to 100% of the principal amount
thereof plus any interest accrued but unpaid thereon. If the Holder delivers a
Note with a deemed value that exceeds the Warrant Price, the Company shall
reissue to the Holder a new Note identical in all respects to the surrendered
Note except that the principal amount of such new Note shall be equal to the
principal amount that, together with any interest accrued but unpaid thereon, is
equal to the deemed value of the surrendered Note less the Warrant Price.
(d) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
the shares of Common Stock being issued, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased shares of Common
Stock called for by this Warrant. Such new Warrant shall in all other respects
be identical with this Warrant.
2.2. Payment of Transfer Taxes. All shares of Common Stock issuable
upon the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of any preemptive
rights and free and clear of all Liens (other than any created by actions of the
Holder). The Company shall pay all expenses in connection with, and all taxes
and other governmental charges that may be imposed with respect to, the issue or
delivery thereof, unless such tax or charge is imposed by law upon the Holder,
in which case such taxes or charges shall be paid by the Holder and the Company
shall reimburse the Holder therefor on an After-Tax Basis.
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2.3. Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share that the Holder of one or more Warrants, the rights under
which are exercised in the same transaction, would otherwise be entitled to
purchase upon such exercise, the Company shall pay a cash adjustment in respect
of such final fraction in an amount equal to the same fraction of the Current
Market Price of one share of Common Stock on the Exercise Date, if the Common
Stock is then publicly traded.
2.4. Continued Validity and Application. (a) A Holder of shares of
Warrant Stock issued upon the exercise of this Warrant, in whole or in part,
including any transferee of such shares (other than a transferee in whose hands
such shares no longer constitute Warrant Stock as defined herein), shall
continue, with respect to such shares, to be entitled to all rights and to be
subject to all obligations that are applicable to such Holder by the terms of
this Warrant under Section 9 hereof. The Company shall, at the time of any
exercise of this Warrant or any transfer of Warrant Stock, upon the request of
the Holder of the shares of Warrant Stock issued in connection with such
exercise or transfer, acknowledge in writing, in a form reasonably satisfactory
to such Holder, its continuing obligation to afford to such Holder such rights
referred to in this Section 2.4; provided, however, that if such Holder shall
fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such Holder all such rights.
2.5. Limitation on Regulated Holder's Exercise. Notwithstanding
anything in this Warrant to the contrary, the Holder of this Warrant, if subject
to the Bank Holding Company Act or any provision of the ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Act, may
exercise this Warrant only if the Notice of Exercise is accompanied by an
Opinion of Counsel of such Holder to the effect that, as of the date of delivery
of such opinion, no federal or state regulatory clearances are required for such
Holder to exercise this Warrant or, in the event any such federal or state
regulatory clearances are required prior to the exercise of this Warrant, to the
effect that all such clearances have been obtained or, if not then obtained,
that no statute or regulation or regulatory policy or guidelines known to such
counsel would by their terms preclude the obtaining of such clearances or make
it unlikely that such
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clearances would be obtained or make it likely that such clearances would, if
obtained, contain material conditions adverse to such Holder. In the event that
federal or state regulatory clearances are required prior to the exercise of
this Warrant by the Holder hereof, the Company shall reasonably cooperate with
such Holder in providing such information to any regulatory agency as such
agency may reasonably require. In the event any such regulatory clearance is
withheld or denied, such Holder may continue to hold this Warrant until its
expiration or may sell or otherwise transfer this Warrant in accordance with the
terms hereof.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 8 hereof, each
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together with a written
assignment of this Warrant in the form of ▇▇▇▇▇ ▇ hereto duly executed by the
Holder or its agent or attorney. Upon such surrender and delivery, the Company
shall, subject to Section 8, execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned and this Warrant shall
promptly be canceled. A Warrant, if properly assigned in compliance with
Section 8, may be exercised by the new Holder for the purchase of shares of
Common Stock without having a new Warrant issued.
3.2. Division and Combination. Subject to compliance with the
applicable provisions of this Warrant, this Warrant may be divided or combined
with other Warrants upon presentation hereof at the Designated Office, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with the applicable provisions of this Warrant as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.
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3.3. Expenses. The Company shall prepare, issue and deliver at its
own expense any new Warrant or Warrants required to be issued under this Section
3.
3.4. Maintenance of Books. The Company agrees to maintain, at the
Designated Office, books for the registration and transfer of the Warrants.
4. ANTIDILUTION PROVISIONS
The number of shares of Common Stock for which this Warrant is
exercisable and the Exercise Price shall be subject to adjustment from time to
time as set forth in this Section 4.
4.1. Stock Dividends, Subdivisions and Combinations. If at any time
the Company shall:
(i) take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend payable in, or other distribution
of, additional shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a larger
number of shares of such Common Stock, or
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares of such Common Stock,
then the Exercise Price shall be adjusted to equal the product of the Exercise
Price in effect immediately prior to such event multiplied by a fraction the
numerator of which is equal to the number of shares of Common Stock Outstanding
immediately prior to the adjustment and the denominator of which is equal to
the number of shares of Common Stock Outstanding immediately after such
adjustment.
4.2. Issuance of Additional Shares of Common Stock.
(a) If at any time the Company shall issue or sell any shares of Common Stock
in a Subsequent Issuance for a consideration per share that is less than the
Exercise Price in effect immediately prior to such issuance or sale, then,
forthwith upon such issuance or sale, the Exercise Price shall be reduced to a
price calculated by dividing (1) an amount equal to the sum of (x) the
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number of shares of Common Stock Outstanding immediately prior to such
Subsequent Issuance multiplied by the then existing Exercise Price, plus (y) the
aggregate consideration (determined in accordance with the provisions of Section
4.6 hereof), if any, received by the Company in connection with such Subsequent
Issuance, by (2) the total number of shares of Common Stock Outstanding
immediately after such Subsequent Issuance.
(b) The provisions of this Section 4.2 shall not apply to (i) any
issuance of Common Stock for which an adjustment is provided for under Section
4.1 or (ii) any issuance or sale of Common Stock pursuant to the exercise of any
Stock Purchase Rights or Convertible Securities to the extent that an adjustment
shall have been previously made hereunder in connection with the issuance of
such Stock Purchase Rights or Convertible Securities pursuant to the provisions
of Section 4.3 hereof.
4.3. Issuances of Stock Purchase Rights and Convertible Securities.
(a) In the event that the Company shall at any time issue, sell or grant any
Stock Purchase Rights to any Person in a Subsequent Issuance, then, for the
purpose of Section 4.2 above, the Company shall be deemed to have issued at that
time a number of shares of Common Stock equal to the maximum number of shares of
Common Stock (without giving effect to any antidilution provisions in such Stock
Purchase Rights) that are or may become issuable upon exercise of such Stock
Purchase Rights (or upon exercise of any Convertible Securities issuable upon
exercise of such Stock Purchase Rights) for a consideration per share equal to
(i) the aggregate consideration per share (determined in accordance with the
provisions of Section 4.6 hereof) received by the Company in connection with the
issuance, sale or grant of such Stock Purchase Rights plus (ii) the minimum
amount of such consideration per share receivable by the Company in connection
with the exercise of such Stock Purchase Rights (and the exercise of any
Convertible Securities issuable upon exercise of such Stock Purchase Rights).
(b) In the event that the Company shall at any time issue or sell any
Convertible Securities to any Person in a Subsequent Issuance, then, for the
purposes of Section 4.2 above, the Company shall be deemed to have issued at
that time a number of shares of Common Stock equal to the maximum number of
shares of Common Stock that are or may become issuable upon the exercise of the
conversion or exchange rights associated with such
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Convertible Securities for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of Section
4.6 hereof) received by the Company in connection with the issuance or sale of
such Convertible Securities plus (ii) the minimum amount of such consideration
per share receivable by the Company in connection with the exercise of such
conversion or exchange rights.
(c) If, at any time after any adjustment of the Exercise Price shall
have been made hereunder as the result of any issuance, sale or grant of any
Stock Purchase Rights or Convertible Securities, the maximum number of shares
issuable upon exercise of such Stock Purchase Rights or of the rights of
conversion or exchange associated with such Convertible Securities shall
increase, or the minimum amount of consideration per share receivable in
connection with such exercise shall decrease, whether by operation of any
antidilution rights pertaining to such Stock Purchase Rights or Convertible
Securities, by agreement of the parties or otherwise, the Exercise Price then in
effect shall first be readjusted to eliminate the effects of the original
issuance, sale or grant of such Stock Purchase Rights or Convertible Securities
on such Exercise Price and then readjusted as if such Stock Purchase Rights or
Convertible Securities had been issued on the effective date of such increase in
number of shares or decrease in consideration, but only if the effect of such
two-step readjustment is to reduce the Exercise Price below the Exercise Price
in effect immediately prior to such increase or decrease.
(d) If, at any time after any adjustment of the Exercise Price shall
have been made hereunder as the result of any issuance, sale or grant of any
Stock Purchase Rights or Convertible Securities, any of such Stock Purchase
Rights or the rights of conversion or exchange associated with such Convertible
Securities shall expire by their terms or any of such Stock Purchase Rights or
Convertible Securities shall be repurchased by the Company or a Subsidiary
thereof for a consideration per underlying share of Common Stock not exceeding
the amount of such consideration received by the Company in connection with the
issuance, sale or grant of such Stock Purchase Rights or Convertible Securities,
the Exercise Price then in effect shall forthwith be increased to the Exercise
Price that would have been in effect if such expiring Stock Purchase Rights or
rights of conversion or exchange or such repurchased Stock Purchase Rights
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or Convertible Securities had never been issued. Similarly, if at any time
after any such adjustment of the Exercise Price shall have been made pursuant to
Section 4.2 (i) any additional consideration is received or becomes receivable
by the Company in connection with the issuance or exercise of such Stock
Purchase Rights or Convertible Securities or (ii) there is a reduction in the
conversion ratio applicable to such Convertible Securities so that fewer shares
of Common Stock will be issuable upon the conversion or exchange thereof or
there is a decrease in the number of shares of Common Stock issuable upon
exercise of such Stock Purchase Rights, the Exercise Price then in effect shall
be forthwith readjusted to the Exercise Price that would have been in effect had
such changes taken place at the time that such Stock Purchase Rights or
Convertible Securities were initially issued, granted or sold. In no event
shall any readjustment under this Section 4.3(d) affect the validity of any
shares of Warrant Stock issued upon any exercise of this Warrant prior to such
readjustment, nor shall any such readjustment have the effect of increasing the
Exercise Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been issued.
4.4. Adjustment of Number of Shares Purchasable. Upon any adjustment
of the Exercise Price as provided in Section 4.1, 4.2 or 4.3 hereof, the Holder
hereof shall thereafter be entitled to purchase upon the exercise of this
Warrant, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock (calculated to the nearest 1/100th of a share) obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock issuable on the exercise hereof
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.
4.5. Reorganization, Reclassification, Merger, Con solidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is any change whatsoever in, or distribution with respect to, the Outstanding
Common Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or
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disposition of assets, (i) shares of common stock of the successor or acquiring
corporation or of the Company (if it is the surviving corporation) or (ii) any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property") are to be received by or distributed to the holders of Common Stock
of the Company who are holders immediately prior to such transaction, then the
Holder of this Warrant shall have the right thereafter to receive, upon exercise
of this Warrant, the number of shares of common stock of the successor or
acquiring corporation or of the Company, if it is the surviving corporation, and
Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In such event, the aggregate Exercise Price
otherwise payable for the shares of Common Stock issuable upon exercise of this
Warrant shall be allocated among the shares of common stock and Other Property
receivable as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets in proportion to the respective fair
market values of such shares of common stock and Other Property as determined in
good faith by the Board of Directors of the Company. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be reasonably deemed appropriate (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of any shares of the common stock of such successor or acquiring
corporation for which this Warrant thus becomes exercisable, which modifications
shall be as equivalent as practicable to the adjustments provided for in this
Section 4. For purposes of this Section 4.5, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class that
is not preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities that are
convertible into or exchangeable for any such
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stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock. The foregoing provisions of this Section 4.5 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
4.6. Determination of Consideration. For purposes of Sections 4.2,
4.3 and 4.4 hereof, the consideration received and/or receivable by the Company
in connection with the issuance, sale, grant or exercise of additional shares of
Common Stock, Stock Purchase Rights or Convertible Securities, irrespective of
the accounting treatment of such consideration, shall be valued as follows:
(1) Cash Payment. In the case of cash, the net amount received by the
Company after deduction of any accrued interest or dividends, expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Company.
(2) Securities or Other Property. In the case of securities or other
property, the fair market value thereof as of the date immediately
preceding such issuance, sale, grant or exercise as determined in good
faith by the Board of Directors of the Company.
(3) Allocation Related to Common Stock. In the event shares of Common
Stock are issued or sold together with other securities or other assets of
the Company for a consideration which covers both, the consideration
received (computed as provided in (1) and (2) above) shall be allocable to
such shares of Common Stock as determined in good faith by the Board of
Directors of the Company.
(4) Allocation Related to Stock Purchase Rights and Convertible
Securities. In case any Stock Purchase Rights or Convertible Securities
shall be issued or sold together with other securities or other assets of
the Company, together comprising one integral transaction in which no
specific consideration is allocated to the Stock Purchase Rights or
Convertible Securities, the consideration allocable to such Stock
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Purchase Rights or Convertible Securities shall be determined in good faith
by the Board of Directors of the Company.
(5) Dividends in Securities. In case the Company shall declare a
dividend or make any other distribution upon any stock of the Company
payable in either case in Common Stock or Convertible Securities, such
Common Stock or Convertible Securities, as the case may be, issuable in
payment of such dividend or distribution shall be deemed to have been
issued or sold without consideration.
(6) Merger, Consolidation or Sale of Assets. In case any shares of
Common Stock, Stock Purchase Rights or Convertible Securities shall be
issued in connection with any merger or consolidation in which the Company
is the surviving corporation, the amount of consideration therefor shall be
deemed to be the fair value on the date of issuance of such security of
such portion of the assets and business of the non-surviving corporation
attributable to such Common Stock, Stock Purchase Rights or Convertible
Securities, as is determined in good faith by the Company's Board of
Directors.
(7) Challenge to Good Faith Determination. Whenever the Board of
Directors of the Company shall be required to make a determination in good
faith of the fair value of any item under this Section 4, such
determination may be challenged in good faith by the Majority Warrant
Holders, and any dispute shall be resolved by an investment banking or
appraisal firm of recognized national standing selected by the Company and
reasonably acceptable to the Majority Warrant Holders and whose decision
shall be binding on the Company and all holders of Warrants. The fees and
expenses of such firm shall be paid by the party or parties whose position
is not chosen by such firm.
4.7. Other Dilutive Events. In case any event shall occur as to
which the other provisions of this Section 4 are not strictly applicable but as
to which the failure to make any adjustment would not fairly protect the
purchase rights repre-
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sented by this Warrant in accordance with the essential intent and principles
hereof (including, without limitation, the issuance of securities other than
Common Stock which have the right to participate in distributions to the holders
of Common Stock, the granting of "phantom stock" rights or "stock appreciation
rights" or the repurchase of outstanding shares of Common Stock, Convertible
Securities or Stock Purchase Rights for a purchase price exceeding the fair
market value thereof), then, in each such case, the Majority Warrant Holders may
select an independent investment banking firm of nationally recognized standing
and reasonably acceptable to the Company to make a determination as to the
adjustment, if any, required to be made on a basis consistent with the essential
intent and principles established herein as a result of such event in order to
preserve the purchase rights represented by the Warrants. If the investment
bank selected by the Majority Warrant Holders is not reasonably acceptable to
the Company, and the Company and the Majority Warrant Holders cannot agree on a
mutually acceptable investment bank, then the Company and the Majority Warrant
Holders shall each choose one such investment bank and the respective chosen
firms shall jointly select a third investment bank, which shall make the
determination. The Company shall pay the costs and fees of each such investment
bank (including any such investment bank selected by the Majority Warrant
Holders), and the decision of the investment bank making such determination
shall be final and binding on the Company and all affected holders of Warrants
or Warrant Stock. Promptly after receipt of the opinion of such investment bank
as to any such required adjustments, the Company shall take any actions
necessary to implement same.
4.8. Other Provisions Applicable to Adjustments Under this Section.
The following provisions shall be applicable to the adjustments provided for
pursuant to this Section 4:
(a) When Adjustments To Be Made. The adjustments required by this
Section 4 shall be made whenever and as often as any specified event
requiring such an adjustment shall occur. For the purpose of any such
adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.
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(b) Record Date. In case the Company shall take a record of the
holders of the Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock,
Convertible Securities or Stock Purchase Rights or (ii) to subscribe for or
purchase Common Stock, Convertible Securities or Stock Purchase Rights,
then all references in this Section 4 to the date of the issuance or sale
of such shares of Common Stock, Convertible Securities or Stock Purchase
Rights shall be deemed to be references to such record date.
(c) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into account
to the nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution to which the provisions of Section 4.1
would apply, but shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment shall be required
by reason of the taking of such record and any such adjustment previously
made in respect thereof shall be rescinded and annulled.
(e) Maximum Exercise Price. Except as provided in Section 4.1 above,
at no time shall the Exercise Price per share of Common Stock exceed the
amount set forth in the first paragraph of the preamble of this Warrant.
(f) Certain Limitations. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction that, by
reason of any adjustment under Section 4.1, 4.2 or 4.3 above, would cause
the Exercise Price to be less than the par value of the Common Stock, if
any, unless the Company first reduces the par value of the Common Stock to
be less than the Exercise Price that would result from such transaction.
(g) Notice of Adjustments. Whenever the number of shares of Common
Stock for which this Warrant is
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exercisable or the Exercise Price shall be adjusted pursuant to this
Section 4, the Company shall forthwith prepare a certificate to be executed
by the President or chief financial officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment and the method by
which such adjustment was calculated, specifying the number of shares of
Common Stock for which this Warrant is exercisable and (if such adjustment
was made pursuant to Section 4.5) describing the number and kind of any
other shares of stock or Other Property for which this Warrant is
exercisable, and any related change in the Exercise Price, after giving
effect to such adjustment or change. The Company shall promptly cause a
signed copy of such certificate to be delivered to each Holder in
accordance with Section 15.2. The Company shall keep at its principal
office or at the Designated Office, if different, copies of all such
certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective
transferee of a Warrant designated by a Holder thereof.
(h) Independent Application. Except as otherwise provided herein, all
subsections of this Section 4 are intended to operate independently of one
another (but without duplication). If an event occurs that requires the
application of more than one subsection, all applicable subsections shall
be given independent effect without duplication.
5. NO IMPAIRMENT
The Company shall not by any action, including, without limitation,
amending its charter documents or through any reorganization, reclassification,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other similar voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or reasonably appropriate to
protect the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company shall take all such action as may be
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necessary or reasonably appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant, free and clear of all Liens, and shall use all
commercially reasonably efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK
From and after the Original Issue Date, the Company shall at all times
reserve and keep available for issuance upon the exercise of the Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Common Stock issuable pursuant to the terms hereof, when issued upon
exercise of this Warrant with payment therefor in accordance with the terms
hereof, shall be duly and validly issued and fully paid and nonassessable, not
subject to preemptive rights and shall be free and clear of all Liens.
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS
7.1. Notices of Corporate Actions. In the event of: (a) any capital
reorganization of the Company, any reclassification or recapitalization of the
capital stock of the Company or any consolidation or merger involving the
Company and any other Person or any transfer or other disposition of all or
substantially all the assets of the Company to another Person or (b) any
amendment of the Certificate of Incorporation of the Company, the Company shall
mail to each Holder of a Warrant in accordance with the provisions of Section
14.2 hereof a notice specifying the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer or disposition is to take place, the time, if any such time is to be
fixed, as of which the holders of record of Common Stock shall be entitled to
exchange their shares of Common Stock for the securities or Other Property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer or disposition,
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and a description in reasonable detail of the transaction. Such notice shall be
mailed to the extent practicable at least thirty, but not more than ninety, days
prior to the date therein specified; provided, that, in no event shall the
Company be required to give the Holders notice of material non-public
information prior to the time such information is made available to the holders
of its Common Stock. In the event that the Company at any time sends any other
notice to the holders of its Common Stock, it shall concurrently send a copy of
such notice to each Holder of a Warrant.
7.2 Closing of Transfer Books. The Company shall not at any time,
except upon dissolution, liquidation or winding up of the Company, close its
stock transfer books or Warrant transfer books so as to result in preventing or
delaying the exercise or transfer of any Warrant.
8. TRANSFER RESTRICTIONS
The Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 8.
8.1. Restrictions on Transfers. Neither this Warrant nor any shares
of Restricted Common Stock issued upon the exercise hereof shall be Transferred
other than pursuant to an effective registration statement under the Securities
Act or an exemption from the registration provisions thereof. No Transfer of
this Warrant or any such shares of Restricted Stock, other than pursuant to such
an effective registration statement, shall be valid or effective unless (a) the
holder of the securities proposed to be transferred shall have delivered to the
Company either a no-action letter from the Commission or an Opinion of Counsel
to the effect that such proposed Transfer is exempt from the registration
requirements of the Securities Act or (b) such Transfer is being made pursuant
to Rule 144 or Rule 144A under the Securities Act and such holder shall have
delivered to the Company a certificate setting forth the basis for applying such
Rule to the proposed Transfer. Each certificate, if any, evidencing such shares
of Restricted Common Stock issued upon any such Transfer, other than in a public
offering pursuant to an effective registration statement, shall bear the
restrictive legend set forth in
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Section 8.2(a), and each Warrant issued upon such Transfer shall bear the
restrictive legend set forth in Section 8.2(b), unless the Holder delivers to
the Company an Opinion of Counsel to the effect that such legend is not required
for the purposes of compliance with the Securities Act. Holders of the Warrants
or the Restricted Common Stock, as the case may be, shall not be entitled to
Transfer such Warrants or such Restricted Common Stock except in accordance with
this Section 8.1.
8.2. Restrictive Legends. (a) Except as otherwise provided in this
Section 8, each certificate for Warrant Stock initially issued upon the exercise
of this Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
two legends in substantially the following forms:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS
(A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (B) THE HOLDER OF THE SECURITIES
PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO THE COMPANY AN
OPINION OF COUNSEL EXPERIENCED IN SECURITIES MATTERS AND
REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH
PROPOSED TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT OR (C) SUCH TRANSFER IS PURSUANT TO RULE 144 OR RULE 144A
UNDER THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE
COMPANY A CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH
RULE TO THE PROPOSED TRANSFER."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE
BENEFIT OF AND ARE SUBJECT TO CERTAIN OBLIGATIONS SET FORTH IN THE
WARRANT PURSUANT TO THE EXERCISE OF WHICH SUCH SHARES WERE ISSUED.
A COPY OF SUCH WARRANT IS AVAILABLE AT THE EXECUTIVE OFFICES OF
THE COMPANY."
(b) Except as otherwise provided in this Section 8, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
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"NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF
THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW. NO TRANSFER OF THE WARRANTS REPRESENTED BY
THIS CERTIFICATE OR OF THE STOCK ISSUABLE UPON EXERCISE THEREOF
SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
(B) THE HOLDER OF THE SECURITIES PROPOSED TO BE TRANSFERRED SHALL
HAVE DELIVERED TO THE COMPANY EITHER A NO-ACTION LETTER FROM THE
SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL
EXPERIENCED IN SECURITIES MATTERS AND REASONABLY ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT OR (C) SUCH TRANSFER IS
PURSUANT TO RULE 144 OR RULE 144A UNDER THE ACT AND SUCH HOLDER
SHALL HAVE DELIVERED TO THE COMPANY A CERTIFICATE SETTING FORTH
THE BASIS FOR APPLYING SUCH RULE TO THE PROPOSED TRANSFER."
8.3. Termination of Securities Law Restrictions. Not withstanding
the foregoing provisions of this Section 8, the restrictions imposed by Section
8.1(b) upon the transferability of the Warrants and the Restricted Common Stock
and the legend requirements of Section 8.2 shall terminate as to any particular
Warrant or shares of Restricted Common Stock when the Company shall have
received from the Holder thereof an Opinion of Counsel to the effect that such
legend is not required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by Sections 8.1(b) and 8.2 shall terminate as
to this Warrant, as hereinabove provided, the Holder hereof shall be entitled to
receive from the Company, at the expense of the Company, a new Warrant bearing
the following legend in place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED
IN SECTIONS 8.1(b) AND 8.2 HEREOF TERMINATED ON ______________, 19__, AND
ARE OF NO FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed
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thereon. Wherever the restrictions imposed by this Section shall terminate as
to any share of Restricted Common Stock, as hereinabove provided, the Holder
thereof shall be entitled to receive from the Company, at the Company's expense,
a new certificate representing such Common Stock not bearing the restrictive
legend set forth in Section 8.2(a).
9. REGISTRATION RIGHTS
9.1. Certain Definitions. For the purposes of this Section 9:
(a) The Holders of Warrants and the Series A Warrants and the holders
of Warrant Stock (as defined in Section 9.1(b)) are collectively referred
to as "WS Holders".
(b) "Warrant Stock" shall deemed to include (i) the shares of Common
Stock issued, issuable or both (as the context may require) upon the
exercise of Warrants and the Series A Warrants until such time as such
shares of Common Stock have either been (a) Transferred in a public
offering pursuant to a registration statement filed under the Securities
Act or (b) Transferred in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof with all transfer restrictions and restrictive legends with respect
to such Common Stock being removed in connection with such transaction,(ii)
any other securities issued as (or issuable upon the conversion or exercise
of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange by the Company generally
for, or in replacement by the Company generally of, any shares of Warrant
Stock and (iii) any securities issued in exchange for any such Warrant
Stock in any merger or reorganization of the Company, but in the cases of
clauses (ii) and (iii) only so long as such securities have not been
registered and Transferred pursuant to the Securities Act or Transferred in
a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect to such
securities are removed in connection with such Transfer.
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(c) Each ▇▇ ▇▇▇▇▇▇ shall be deemed to "hold", as of any specified
date, the aggregate of (i) the number of shares of Warrant Stock held by
such ▇▇ ▇▇▇▇▇▇ as of such date plus (ii) the number of shares of Warrant
Stock issuable upon exercise of any Warrants and Series A Warrants held by
such ▇▇ ▇▇▇▇▇▇ as of such date.
(d) The total number of shares of Warrant Stock deemed "outstanding"
as of a specified date will be equal to (i) the total number of shares of
Warrant Stock Outstanding as of such date plus (ii) the number of shares of
Warrant Stock issuable upon exercise of all outstanding Warrants and Series
A Warrants as of such date.
(e) "Registrable Securities" shall mean any Warrants, any Series A
Warrants and/or any shares of Warrant Stock.
9.2. Demand Registration. (a) In the event the Company receives at
any time after August 31, 1997 a written request from one or more WS Holders
holding in the aggregate at least seventy-six percent of the number of shares of
Warrant Stock then outstanding (the "Demanding Holders") that the Company file a
registration statement under the Securities Act for the sale or other
disposition of at least a majority of the Registrable Securities (a "Demand
Registration"), the Company shall promptly give written notice of such request
to each other ▇▇ ▇▇▇▇▇▇ and each such ▇▇ ▇▇▇▇▇▇ may elect, by giving written
notice of such election to the Company within ten (10) Business Days after
receipt of the Company's notice, to have some or all of the Registrable
Securities held by it included in such registration. At the option of the
Demanding Holders, such request may specify that the requested registration will
be for an offering on a delayed or continual basis pursuant to Rule 415 under
the Securities Act (a "Shelf Registration").
(b) Following receipt of such a request for a Demand Registration,
the Company shall:
(1) File the requested registration statement with the
Commission as promptly as practicable, and shall use all commercially
reasonable efforts to have the registration declared effective under the
Securities Act as soon as reasonably practicable, in each instance giving
due
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regard to the need to prepare and file current financial statements,
conduct due diligence and complete other actions that are reasonably
necessary to effect a registered public offering; and
(2) Use all commercially reasonable efforts to keep the such
registration statement Continuously Effective (x) if a Demand Registration,
for up to 90 days or until such earlier date as of which all Registrable
Securities covered by such registration statement shall have been disposed
of in the manner described in the registration statement, and (y) if a
Shelf Registration, for 270 days. Notwithstanding the foregoing, if for any
reason the effectiveness of a Demand Registration is suspended or postponed
as permitted by Subsection (d) below, the foregoing period shall be
extended by the aggregate number of days of such suspension or
postponement.
(c) The Company shall not be required to effect a registration of
Registrable Securities pursuant to a Demand Registration on more than one
occasion. For purposes of this Subsection (c), registration shall not be deemed
to have been effected (i) unless a registration statement with respect thereto
has become effective, (ii) if after such registration statement has become
effective, such registration or the related offer, sale or distribution of
Registrable Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to the Selling Holders and such
interference is not thereafter eliminated or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection with
such registration are not satisfied or waived, other than by reason of a failure
on the part of the Selling Holders. If the Company shall have complied with its
obligations under this Section 9, a right to demand a registration pursuant to
this Section 9.2 shall be deemed to have been satisfied (i) if a Demand
Registration other than a Shelf Registration, upon the earlier of (x) the date
as of which all of the Registrable Securities included therein shall have been
disposed of pursuant to the registration statement and (y) the date as of which
such Demand Registration shall have been Continuously Effective for a period of
90 days, and (ii) if a Shelf Registration, upon the effective date of a Shelf
Registration, provided no stop order or similar order, or
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proceedings for such an order, is thereafter entered or initiated.
(d) The Company shall be entitled to postpone for up to 90 days the
filing of any Demand Registration statement otherwise required to be prepared
and filed pursuant to this Section 9.2 or suspend any such Demand Registration
for up to 90 days, if the Board of Directors of the Company determines, in its
good faith reasonable judgment that such registration and the Transfer of
Warrant Stock contemplated thereby would materially interfere with, or require
premature disclosure of, any financing, acquisition or reorganization involving
the Company or any of its wholly owned subsidiaries and the Company promptly
gives the Demanding Holders notice of such determination; provided, however,
that the Company shall not have postponed pursuant to this Subsection (d) the
filing of any other Demand Registration statement otherwise required to be
prepared and filed pursuant to this Section 9.2, or suspended any such Demand
Registration, during the 12 month period ended on the date of the relevant
request pursuant to Subsection (a) above and provided further, that the
Expiration Date shall be extended by the period of any such postponement or
suspension.
(e) A registration pursuant to this Section 9.2 shall be on such
appropriate registration form of the Commission available to the Company as
shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders and (ii) permit the disposition of the Warrant Stock in
accordance with the intended method or methods of disposition specified in the
request made pursuant to Subsection (a) above. If any registration pursuant to
this Section 9.2 involves an underwritten offering (whether on a "firm", "best
efforts" or "all reasonable efforts" basis or otherwise), or an agented
offering, the Majority Selling Holders shall have the right to select the
underwriter or underwriters and manager or managers to administer such
underwritten offering or the placement agent or agents for such agented offering
from among the entities listed in Schedule B hereto (or any successors of any
such entities), it being understood that the Majority Selling Holders shall use
commercially reasonable efforts to select one or more of the first three listed
entities subject to arriving at reasonably acceptable terms and conditions for
the offering.
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(f) The Company may elect to include shares of Common Stock to be sold
for its account in any such Demand Registration (including a Shelf
Registration); provided, however, if the managing underwriter shall advise the
Demanding Holders in writing (with a copy to the Company) that, in its opinion,
the number of shares of Common Stock requested to be included in such Demand
Registration would adversely affect such offering or the price to be realized
therefor, or the timing thereof, then the number of shares proposed to be
included in such Demand Registration by the Company shall be reduced, to such
number that the Demanding Holders are advised can be sold without such effect in
such Demand Registration.
9.3. Piggyback Registration. (a) If at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders of the Company other than the WS Holders) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form S-1, S-2 or S-3 (or any replacement or successor forms),
the Company shall promptly give each ▇▇ ▇▇▇▇▇▇ written notice of such
registration (a "Piggyback Registration"). Upon the written request of each ▇▇
▇▇▇▇▇▇ given within 20 days following the date of such notice, the Company shall
cause to be included in such registration statement and use its best efforts to
be registered under the Securities Act all the Registrable Securities that each
such ▇▇ ▇▇▇▇▇▇ shall have requested to be registered. The Company shall have
the absolute right to withdraw or cease to prepare or file any registration
statement for any offering referred to in this Section 9.3 without any
obligation or liability to any ▇▇ ▇▇▇▇▇▇.
(b) If the managing underwriter shall advise the Company in writing
(with a copy to each Selling Holder) that, in its opinion, the amount of
Registrable Securities requested to be included in such registration would
materially adversely affect such offering, or the timing thereof, then the
Company will include in such registration, to the extent of the amount and class
which the Company is so advised can be sold without such material adverse effect
in such offering: first, all securities proposed to be sold by the Company for
its own account; and second, the Warrant Stock requested to be included in such
registration by WS Holders and all other securities requested to be included in
such registration by Persons other than the Company and WS Holders, the
securities covered by this clause
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second to be included pro rata based on the estimated gross proceeds from the
sale thereof.
(c) Each ▇▇ ▇▇▇▇▇▇ shall be entitled to have its Registrable
Securities included in an unlimited number of Piggyback Registrations pursuant
to this Section 9.3.
9.4. Registration Procedures. Whenever required under Section 9.2 or
Section 9.3 hereof to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as practicable:
(a) Prepare and file with the Commission a registration statement
with respect to such Warrant Stock and use the Company's best efforts to
cause such registration statement to become effective; provided, however,
that before filing a registration statement or prospectus or any amendments
or supplements thereto, including documents incorporated by reference after
the initial filing of the registration statement and prior to effectiveness
thereof, the Company shall furnish to one firm of counsel for the Selling
Holders (selected by Majority Selling Holders) copies of all such documents
in the form substantially as proposed to be filed with the Commission at
least four Business Days prior to filing for review and comment by such
counsel, which opportunity to comment shall include an absolute right to
control or contest disclosure if the applicable Selling Holder reasonably
believes that it may be subject to controlling person liability under
applicable securities laws with respect thereto.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act and rules thereunder with respect
to the disposition of all securities covered by such registration
statement. If the registration is for an underwritten offering, the
Company shall amend the registration
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statement or supplement the prospectus whenever required by the terms
of the underwriting agreement entered into pursuant to Section 9.4(e).
Subject to Rule 415 under the Securities Act, if the registration statement
is a Shelf Registration, the Company shall amend the registration statement
or supplement the prospectus so that it will remain current and in
compliance with the requirements of the Securities Act for 270 days or
after its effective date, and if during such period any event or
development occurs as a result of which the registration statement or
prospectus contains a misstatement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, the Company shall promptly notify each
Selling Holder, amend the registration statement or supplement the
prospectus so that each will thereafter comply with the Securities Act and
furnish to each Selling Holder of Registrable Securities such amended or
supplemented prospectus, which each such Holder shall thereafter use in the
Transfer of Warrant Stock covered by such registration statement. Pending
such amendment or supplement each such Selling Holder shall cease making
offers or Transfers of Registerable Securities pursuant to the prior
prospectus. In the event that any Registrable Securities included in a
registration statement subject to, or required by, this Warrant remain
unsold at the end of the period during which the Company is obligated to
use its best efforts to maintain the effectiveness of such registration
statement, the Company may file a post- effective amendment to the
registration statement for the purpose of removing such Registrable
Securities from registered status.
(c) Furnish to each Selling Holder of Registrable Securities, without
charge, such number of copies of the registration statement, any
pre-effective or post-effective amendment thereto, the prospectus,
including each preliminary prospectus and any amendments or supplements
thereto, in each case in conformity with the requirements of the Securities
Act and the rules thereunder, and such other related documents as any such
Selling Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by such Selling Holder.
(d) Use all commercially reasonable efforts (i) to register and
qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such states or jurisdictions as shall
be reasonably requested by the managing underwriter (as applicable, or if
inapplicable, the Majority Selling
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Holders), and (ii) to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of the
offer and transfer of any of the Registrable Securities in any
jurisdiction, at the earliest possible moment; provided, however, that the
Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service
of process in any such states or jurisdictions.
(e) In the event of any underwritten or agented offering, enter into
and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company
shall also cooperate with the Majority Selling Holders and the managing
underwriter for such offering in the marketing of the Warrant Stock,
including making available the Company's officers, accountants, counsel,
premises, books and records for such purpose, but the Company shall not be
required to incur any material out-of-pocket expense pursuant to this
sentence.
(f) Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith (and take
all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(g) Make generally available to the Company's security holders copies
of all periodic reports, proxy statements, and other information referred
to in Section 9.9(a) and an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than 90 days following the end
of the 12-month period beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of each
registration statement filed pursuant to this Section 9.
(h) Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and underwriter
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(but not more than one firm of counsel to such Selling Holders), all
financial and other information as shall be reasonably requested by them,
and provide the Selling Holder, any underwriter participating in such
offering and the representatives of such Selling Holder and underwriter the
opportunity to discuss the business affairs of the Company with its
principal executives and independent public accountants who have certified
the audited financial statements included in such registration statement,
in each case all as necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided, however, that
information that the Company determines, in good faith, to be confidential
and which the Company advises such Person in writing, is confidential shall
not be disclosed unless such Person signs a confidentiality agreement
reasonably satisfactory to the Company or the related Selling Holder of
Registrable Securities agrees to be responsible for such Person's breach of
confidentiality on terms reasonably satisfactory to the Company.
(i) Use the Company's best efforts to obtain a so-called "comfort
letter" from its independent public accountants, and legal opinions of
counsel to the Company, in customary form and covering such matters of the
type customarily covered by such letters, and in a form that shall be
reasonably satisfactory to the Majority Selling Holders. The Company shall
furnish to each Selling Holder a signed counterpart of any such comfort
letter or legal opinion. Delivery of any such opinion or comfort letter
shall be subject to the recipient furnishing such written representations
or acknowledgments as are customarily provided by selling shareholders who
receive such comfort letters or opinions.
(j) Provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from
and after a date not later than the effective date of such registration
statement.
(k) Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement (i) if the Common Stock is then
listed on a securities exchange or included for quotation in a
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recognized trading market, to continue to be so listed or included for a
reasonable period of time after the offering, and (ii) to be registered
with or approved by such other United States or state governmental agencies
or authorities as may be necessary by virtue of the business and operations
of the Company to enable the Selling Holders of Registrable Securities to
consummate the disposition of such Registrable Securities.
(l) Use the Company's reasonable efforts to provide a CUSIP number
for the Common Stock prior to the effective date of the first registration
statement including Registrable Securities.
(m) Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included
in each such registration.
9.5. Selling Holders' Obligations. (a) It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 9 with respect to the Registrable Securities of any Selling Holder that
such Selling Holder shall:
(i) Furnish to the Company such information regarding such Selling
Holder, the number of Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and to
cooperate with the Company in preparing such registration; and
(ii) Agree to sell their Registrable Securities to the underwriters
at the same price and on substantially the same terms and conditions as the
Company or the other Persons on whose behalf the registration statement was
being filed have agreed to sell their securities, and to execute the
underwriting agreement agreed to by the Majority Selling Holders (in the
case of a registration under Section 9.2) or the Company and the Majority
Selling Holders (in the case of a registration under Section 9.3).
(b) Each Selling Holder shall notify the Company of any sales of such
Selling Holder's shares registered for sale pursuant to this Section 9;
provided, however, it is
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understood that any failure so to notify the Company shall not be deemed a
default hereunder or to subject any Selling Holder to any claim for damages
or expenses whatsoever.
9.6. Expenses of Registration. Expenses incurred in connection with
registrations under this Section 9 shall be allocated and paid as follows:
(a) With respect to each Demand Registration (including any Shelf
Registration), the Company shall bear and pay all reasonable expenses
incurred in connection with any registration, filing, or qualification of
Registrable Securities with respect to such Demand Registration for each
Selling Holder, including all registration, filing and NASD fees, all fees
and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for the Company,
and of the Company's independent public accountants, including the expenses
of "cold comfort" letters required by or incident to such performance and
compliance, and the reasonable fees and disbursements of one firm of
counsel for the Selling Holders of Registrable Securities (the
"Registration Expenses"), but excluding underwriting discounts and
commissions relating to Registrable Securities (which shall be paid on a
pro rata basis by the Selling Holders) provided, however, that the Company
shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 9.2 if the registration is
subsequently withdrawn at the request of the Majority Selling Holders (in
which case all Selling Holders shall bear such expense), unless WS Holders
whose Registrable Securities constitutes a majority of the Registrable
Securities then outstanding agree that such withdrawn registration shall
constitute the exercise of their one demand registration under Section 9.2
hereof. The counsel for the Selling Holders shall be selected by Demanding
Holders owning a majority of the Registrable Securities owned by Demanding
Holders to be included in a Demand Registration and, in the case of a
Piggyback Registration, by Selling Holders owning a majority of the
Registrable Securities to be included in such registration; provided that
in the case of a Piggyback Registration, the Selling Holders shall use one
firm of counsel to represent all such holders and shall endeavor in
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good faith, with any other holders of securities to be included in such
registration, to select one firm of counsel to represent all such selling
securities holders.
(b) The Company shall bear and pay all Registration Expenses incurred
in connection with any Piggyback Registrations pursuant to Section 9.3 for
each Selling Holder, but excluding underwriting discounts and commissions
relating to Registrable Securities (which shall be paid on a pro rata
basis by the Selling Holders of Registrable Securities).
(c) Any failure of the Company to pay any Registration Expenses as
required by this Section 9.6 shall not relieve the Company of its
obligations under this Section 9.
9.7. Indemnification; Contribution. If any Registrable Securities
are included in a registration statement under this Section 9:
(a) To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and
each officer, director, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may become subject
under the Securities Act, the Exchange Act or other federal or state laws,
insofar as such losses, claims, damages, liabilities and expenses arise out
of or are based upon any of the following statements, omissions or
violations pursuant to a final non-appealable order (collectively a
"Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, or any
amendments or supplements thereto;
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(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading; or
(iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any applicable state securities law;
provided, however, that the indemnification required by this Section 9.7(a)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or expense if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or expense to the extent that it is determined by a court
of competent jurisdiction by a final non-appealable order to have solely
arisen out of or be based upon a Violation which occurred in reliance upon
and in conformity with written information furnished to the Company by the
indemnified party expressly for use in connection with such registration;
provided, further, that the indemnity agreement contained in this Section
9.7(a) shall not apply to any underwriter to the extent that any such loss
is based on or arises out of an untrue statement or alleged untrue
statement of a material fact, or an omission or alleged omission to state a
material fact, contained in or omitted from any preliminary prospectus if
the final prospectus shall correct such untrue statement or alleged untrue
statement, or such omission or alleged omission, and a copy of the final
prospectus has not been sent or given to such person at or prior to the
confirmation of sale to such person if such underwriter was under an
obligation to deliver such final prospectus and failed to do so. The
Company shall also indemnify underwriters, selling brokers, dealer managers
and similar securities industry professionals participating in the
distribution, their officers, directors, agents and employees and each
person who controls such persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Selling Holders.
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(b) To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Company, each of its directors, each
of its officers and employees, each Person, if any, who controls the
Company within the meaning of the Securities Act, any other Selling Holder,
any controlling Person of any such other Selling Holder and each officer,
director, partner, and employee of such other Selling Holder and such
controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may otherwise
become subject under the Securities Act, the Exchange Act or other federal
or state laws, insofar as such losses, claims, damages, liabilities and
expenses are determined by a court of competent jurisdiction by a final
non-appealable order to have solely arisen out of or be based upon a
Violation that occurred in reliance upon and in conformity with written
information furnished by such Selling Holder expressly for use in
connection with such registration; provided, however, that (x) the
indemnification required by this Section 9.7(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or expense if
settlement is effected without the consent of the relevant Selling Holder
of Registrable Securities, which consent shall not be unreasonably
withheld, and (y) in no event shall the amount of any indemnity under this
Section 9.7(b) exceed the net proceeds from the applicable offering
received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under this Section
9.7 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified
party may make a claim under this Section 9.7, such indemnified party shall
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that
an indemnified party shall have the
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right to retain its own counsel, with the fees and disbursements and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time following the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under
this Section 9.7 but shall not relieve the indemnifying party of any
liability that it may have to any indemnified party otherwise than pursuant
to this Section 9.7. Any reasonable fees and expenses incurred by the
indemnified party (including any fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) shall
be paid to the indemnified party, as incurred, within thirty (30) days of
written notice thereof to the indemnifying party (regardless of whether it
is ultimately determined that an indemnified party is not entitled to
indemnification hereunder). Any such indemnified party shall have the
right to employ separate counsel in any such action, claim or proceeding
and to participate in the defense thereof, but the fees and expenses of
such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action,
claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to those
available to the indemnifying party and that the assertion of such defenses
would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such
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action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection
with any one such action, claim or proceeding or separate but substantially
similar or related actions, claims or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm of
attorneys (together with appropriate local counsel) at any time for all
such indemnified parties, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such
action, claim or proceeding, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel or
counsels). No indemnifying party shall be liable to an indemnified party
for any settlement of any action, proceeding or claim without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification required by this Section 9.7 from the
indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
in this Section 9.7:
(i) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified
parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been
committed by, or relates to information supplied by, such indemnifying
party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such
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Violation. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
Section 9.7(a) and Section 9.7(b), any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.7(d) were
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
to in Section 9.7(d)(i) above. 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.
(e) If indemnification is available under this Section 9.7, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in this Section 9.7 without regard to the relative fault of
such indemnifying party or indemnified party or any other equitable
consideration referred to in Section 9.7(d) above.
(f) The indemnification required by this Section 9.7 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred. In the event that it shall be
subsequently determined that the recipient of any such periodic payment
shall not be entitled to indemnification hereunder, such recipient promptly
shall repay such payments, together with interest thereon at the Agreed
Rate from the date of original receipt to the date of repayment.
(g) The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 9.7 shall survive the completion
of any offering of Registrable Securities pursuant to a registration
statement under this Section 9, and otherwise.
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9.8. Holdback. Each ▇▇ ▇▇▇▇▇▇ entitled pursuant to this Section 9 to
have Registrable Securities included in a registration statement prepared
pursuant to this Section 9, if so requested by the managing underwriter in
connection with an offering of any Registrable Securities, shall not effect any
public sale or distribution of shares of Common Stock, Convertible Securities or
Stock Purchase Rights (excluding any sale pursuant to Rule 144 or Rule 144A
under the Securities Act and any sale as part of such underwritten or agented
registration), during the 5-day period prior to, and during the 45-day period
beginning on, the date such registration statement is declared effective under
the Securities Act by the Commission, provided that such ▇▇ ▇▇▇▇▇▇ is timely
notified of such effective date in writing by the Company or such managing
underwriter.
9.9. Additional Covenants of the Company. The Company hereby agrees
and covenants as follows:
(a) The Company shall file as and when applicable, on a timely basis,
all reports required to be filed by it under the Exchange Act. If the
Company is not required to file reports pursuant to the Exchange Act, upon
the request of any ▇▇ ▇▇▇▇▇▇, the Company shall make publicly available the
information specified in subparagraph (c)(2) of Rule 144 of the Securities
Act, and take such further action as may be reasonably required from time
to time and as may be within the reasonable control of the Company, to
enable the WS Holders to Transfer Warrants or Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar
rule or regulation hereafter adopted by the Commission. In addition,
promptly upon the request of any ▇▇ ▇▇▇▇▇▇, the Company shall provide such
▇▇ ▇▇▇▇▇▇ with such publicly available financial statements, reports and
other information as may be required to permit such ▇▇ ▇▇▇▇▇▇ to Transfer
shares of Registrable Securities to Qualified Institutional Investors
pursuant to Rule 144A of the Securities Act.
(b) The Company shall not, and shall not permit its majority owned
subsidiaries to, effect any public sale or distribution of any shares of
Common Stock, Convertible Securities or Stock Purchase Rights during the 5
Business Days prior to, and during the 90-day period beginning on,
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the commencement of a public distribution of Registrable Securities
pursuant to any registration statement prepared pursuant to this Section 9
(other than by the Company pursuant to such registration if the
registration is pursuant to Section 9.3 or by the Company pursuant to any
dividend reinvestment plan offered by it to its stockholders). The Company
shall not effect any registration of its securities (other than on Form
S-4, Form S-8, or any successor forms to such forms or pursuant to such
other registration rights agreements as may be approved in writing by the
Majority Selling Holders) or effect any public or private sale or
distribution of any of its securities, including a sale pursuant to
Regulation D under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities from the date of a
request for a Demand Registration pursuant to Section 9.2 until 90 days
following the effective date of such Demand Registration statement, unless
the Company shall have previously notified in writing all Selling Holders
of the Company's desire to do so, and the Majority Selling Holders or the
managing underwriter, if any, shall have consented thereto in writing.
(c) Any agreement entered into on or after August 31, 1997 pursuant
to which the Company or any of its majority owned subsidiaries issues or
agrees to issue any Common Stock (including, without limitation, any
employee stock option, stock purchase agreement, merger agreement or other
agreement) shall contain a provision whereby any holder receiving such
Common Stock who will hold more than one percent (1%) of the amount of such
Common Stock then outstanding shall agree not to effect any public sale or
distribution of any such Common Stock during the periods described in the
second sentence of Section 9.9(b), in each case including a sale pursuant
to Rule 144 under the Securities Act (unless such Person is prevented by
applicable statute or regulation from entering into such an agreement).
(d) Subject to Section 13, the Company shall not, directly or
indirectly, (x) enter into any merger, consolidation or reorganization in
which the Company shall not be the surviving corporation or (y) Transfer or
agree to Transfer all or substantially all the Company's assets,
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unless prior to such merger, consolidation, reorganization or asset
Transfer, the surviving corporation or the Transferee, respectively, shall
have agreed in writing to assume the obligations of the Company under this
Agreement, and for that purpose references hereunder to "Registrable
Securities" shall be deemed to include the securities which the WS Holders
would be entitled to receive in exchange for Registrable Securities
pursuant to any such merger, consolidation or reorganization.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it
being understood that the written indemnification agreement of or affidavit of
loss of The First National Bank of Chicago shall be a sufficient indemnity) and,
in case of mutilation, upon surrender and cancellation hereof, the Company will
execute and deliver in lieu hereof a new Warrant of like tenor to such Holder;
provided, however, in the case of mutilation, no indemnity shall be required if
this Warrant in identifiable form is surrendered to the Company for
cancellation.
11. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency, which may be the principal executive offices of
the Company (the "Designated Office"), where the Warrants may be presented for
exercise, registration of transfer, division or combination as provided in this
Warrant. Such Designated Office shall initially be the office of the Company at
Cedar Rapids, Iowa. The Company may from time to time change the Designated
Office to another office of the Company or its agent within the United States by
notice given to all registered holders of Warrants at least ten Business Days
prior to the effective date of such change.
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12. FINANCIAL AND BUSINESS INFORMATION
Until the Expiration Date, the Company shall deliver to each Holder of
Warrants or of Warrant Stock one copy of each of the following items:
(i) promptly after filing thereof, copies of all regular and periodic
reports, proxy statements (other than preliminary) and registration
statements (other than registration statements on Forms S-3 (relating to
debt securities) and S-8) which the Company may file with the Securities
and Exchange Commission or any governmental agency substituted therefor.
(ii) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available by
the Company to the holders of any class of its securities generally or by
any Subsidiary of the Company to the holders of any class of its securities
generally; and
(iii) with reasonable promptness, such other public information
relating to the Company and its Subsidiaries as the Holder may, from time
to time, reasonably request.
13. REPURCHASE BY THE COMPANY OF WARRANTS
The Company shall have the right (the "Call"), upon written notice
(the "Call Notice") to the Holders of all outstanding Warrants given at any time
on or after the date of the occurrence of the Triggering Event and before August
31, 1997, to repurchase on the date specified in the notice from each Holder of
a Warrant all of such Warrant for an amount equal to the result (rounded to the
nearest cent) obtained by multiplying One Dollar ($1.00) by a fraction, the
numerator of which shall be the aggregate number of shares for which this
Warrant may be exercised and the denominator of which shall be the aggregate
number of shares for which all outstanding Series B Warrants may be exercised,
and in all events not more than One Dollar ($1.00) for all Series B Warrants.
On the date of any repurchase of this Warrant pursuant to this Section 13, the
Holder shall assign to the Company such Warrant without any representation or
warranty (except as to title and the absence of Liens), by the surrender
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of this Warrant at the Designated Office against payment of the repurchase price
therefor.
14. MISCELLANEOUS
14.1. Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Company or the Holder shall
operate as a waiver of such right or otherwise prejudice the rights, powers or
remedies of such Person.
14.2. Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or communication hereunder to be made pursuant
to the provisions of this Warrant shall be sufficiently given or made if in
writing and either delivered in person with receipt acknowledged or sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) if to any Holder of this Warrant or of Warrant Stock issued upon
the exercise hereof, at its last known address appearing on the books of
the Company maintained for such purpose;
(b) if to the Company, at its Designated Office;
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or three Business Days after the same
shall have been deposited in the United States mail, or one Business Day after
the same shall have been delivered to Federal Express or another overnight
courier service.
14.3. Indemnification. If the Company fails to make, when due, any
payments provided for in this Warrant, the Company shall pay to the Holder
hereof (a) interest at the Agreed Rate on any amounts due and owing to such
Holder from the date due until the date of payment and (b) such further amounts
as shall be sufficient to cover any costs and expenses including, but not
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limited to, reasonable attorneys' fees and expenses incurred by such ▇▇▇▇▇▇ in
collecting any amounts due hereunder. The Company shall indemnify, save and
hold harmless the Holder hereof and the Holders of any Warrant Stock issued upon
the exercise hereof from and against any and all liability, loss, cost, damage,
reasonable attorneys' and accountants' fees and expenses, court costs and all
other out-of-pocket expenses incurred in connection with or arising from a
Company Default. This indemnification provision shall be in addition to the
rights of such Holder or Holders to bring an action against the Company for
breach of contract based on such Company Default.
14.4. Limitation of Liability. No provision hereof, in the absence
of affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of such Holder to pay the Exercise Price for any Warrant
Stock other than pursuant to an exercise of this Warrant or any liability as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
14.5. Remedies. Each Holder of Warrants and/or War rant Stock, in
addition to being entitled to exercise its rights granted by law, including
recovery of damages, shall be entitled to specific performance of its rights
provided under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Warrant and hereby agrees, in an action for specific
performance, to waive the defense that a remedy at law would be adequate.
14.6. Successors and Assigns. Subject to the provi sions of Sections
3.1, 8.1 and 8.2, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the
permitted successors and assigns of the Holder hereof. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time of
this Warrant and, in the case of Section 9, all Holders of shares of Warrant
Stock issued upon the exercise hereof (including transferees), and shall be
enforceable by any such Holder.
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14.7. Amendment. This Warrant and all other Warrants may be modified
or amended or the provisions hereof waived with the written consent of the
Company and the Majority Warrant Holders, provided that no such Warrant may be
modified or amended to reduce the number of shares of Common Stock for which
such Warrant is exercisable or to increase the price at which such shares may be
purchased upon exercise of such Warrant (before giving effect to any adjustment
as provided therein) without the written consent of the Holder thereof.
14.8. Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
14.9. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
14.10. GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO THE VALIDITY OF THIS
WARRANT, THE ISSUANCE OF WARRANT STOCK UPON EXERCISE HEREOF AND THE RIGHTS AND
DUTIES OF THE COMPANY WITH RESPECT TO REGISTRATION OF TRANSFER, WHICH SHALL BE
GOVERNED BY THE LAWS OF DELAWARE. THE COMPANY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, SHALL HAVE, EXCEPT AS
SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS
WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED,
THAT IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
NORAND CORPORATION
By:_________________________
Name:
Title:
[SEAL]
Attest:
By:___________________________
Name:
Title:
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ANNEX A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of ______ shares Common Stock of Norand
Corporation and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_________________ whose address is
___________________________________________________ and, if such shares of
Common Stock shall not include all of the shares of Common Stock issuable as
provided in this Warrant, that a new Warrant of like tenor and date for the
balance of the shares of Common Stock issuable hereunder be delivered to the
undersigned.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.
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ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint ________ _____________
attorney-in-fact to register such transfer onto the books of Norand Corporation
maintained for the purpose, with full power of substitution in the premises.
Dated:___________________ Print Name:___________________
Signature:____________________
Witness:______________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the within Warrant in every particular,
without alteration or enlargement or any change whatsoever.