EXHIBIT 10.3
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE (COLLECTIVELY, THE "ACTS"). NEITHER
THIS WARRANT NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT HERETO UNDER ALL OF THE APPLICABLE ACTS, OR AN OPINION OF COUNSEL
SATISFACTORY TO ▇▇▇▇▇▇, INC. TO THE EFFECT THAT SUCH REGISTRATIONS ARE NOT
REQUIRED.
WARRANT
to Purchase Common Stock of
▇▇▇▇▇▇, INC.
Expiring on November 5, 2009
THIS IS TO CERTIFY THAT, for value received, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC., a
Texas corporation, or permitted assigns, is entitled to purchase from ▇▇▇▇▇▇,
INC., a Delaware corporation (the "Company"), at the place where the Warrant
Office designated pursuant to Section 2.1 is located, at a purchase price per
share of $5.21 (as adjusted pursuant to the terms of this Warrant, the "Exercise
Price"), 60,000 shares of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock, $0.01 par value, of the Company (the "
Common Stock"), and is entitled also to exercise the other appurtenant rights,
powers and privileges hereinafter set forth. The number of shares of the Common
Stock purchasable hereunder and the Exercise Price are subject to adjustment in
accordance with Article III hereof. This Warrant shall expire at 5:00 p.m.,
E.S.T., on November , 2009.
Certain Terms used in this Warrant are defined in Article IV.
ARTICLE I
Exercise of Warrant
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1.1 METHOD OF EXERCISE. This Warrant may be exercised as a whole or in part
from time to time; provided, however, that the minimum number of Warrant Shares
that may be purchased on a single exercise shall be 10,000. To exercise this
Warrant, the holder hereof or permitted assignees of all rights of the
registered owner hereof shall deliver to the Company, at the Warrant Office
designated in Section 2.1, (a) a written notice in the form of the Subscription
Notice attached as an exhibit hereto, stating therein the election of such
holder or such permitted assignees of the holder to exercise this Warrant in the
manner provided in the Subscription Notice, (b) payment in full of the Exercise
Price (in the manner described below) for all Warrant Shares purchased
hereunder, and (c) this Warrant. Subject to compliance with Section 3.1(a)(vi),
this Warrant shall be deemed to be exercised on the date of receipt by
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theCompany of the Subscription Notice, accompanied by payment for the Warrant
Shares and surrender of this Warrant, as aforesaid, and such date is referred to
herein as the "Exercise Date". Upon such exercise (subject as aforesaid), the
Company shall issue and deliver to such holder a certificate for the full number
of the Warrant Shares purchased by such holder hereunder, against the receipt by
the Company of the total Exercise Price payable hereunder for all the Warrant
Shares so purchased, (a) in cash or by certified or cashier's check or (b) by a
net exercise pursuant to Section 1.2 hereof. The Person in whose name the
certificate(s) for Common Stock is to be issued shall be deemed to have become a
holder of record of such Common Stock on the Exercise Date.
1.2 NET EXERCISE. Notwithstanding any provisions herein to the contrary, if
the Common Stock is registered under the Securities Exchange Act of 1934, as
amended, and the Current Market Value of one share of Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant by payment of cash, the holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the Warrant Office
together with the properly endorsed Subscription Notice in which event the
Company shall issue the holder a number of shares of Common Stock computed as
follows:
X = Y(A-B)
------
A
Where: X = the number of shares of Common Stock to be issued to the holder.
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised,
the portion of the Warrant being canceled (at the date of such
calculation)
A = the Current Market Value of one share of Common Stock (at the
date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
If the Warrant is exercised pursuant to this Section 1.2, in connection with a
public offering of the Common Stock, the Current Market Value per share shall be
the per share offering price to the public.
1.3 FRACTIONAL SHARES. In lieu of any fractional shares of Common Stock
which would otherwise be issuable upon exercise of this Warrant, the Company
shall issue a certificate for the next higher number of whole shares of Common
Stock for any fraction of a share which is one-half or greater. No shares will
be issued for less than one-half a share.
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ARTICLE II
Warrant Office; Transfer
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2.1 WARRANT OFFICE. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and may subsequently be such other office of the Company
or of any transfer agent of the Common Stock in the continental United States as
to which written notice has previously been given to the holder of this Warrant.
The Company shall maintain, at the Warrant Office, a register for the Warrant,
in which the Company shall record the name and address of the person in whose
name this Warrant has been issued, as well as the name and address of each
permitted assignee of the rights of the registered owner hereof.
2.2 OWNERSHIP OF WARRANT. The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article II.
2.3 TRANSFER OF WARRANTS. The Company agrees to maintain at the Warrant
Office books for the registration and transfer of this Warrant. The Company,
from time to time, shall register the transfer of this Warrant in such books
upon surrender of this Warrant at the Warrant Office properly endorsed or
accompanied by appropriate instruments of transfer and written instructions for
transfer satisfactory to the Company. Upon any such transfer, a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company. The registered holder of this Warrant shall pay all taxes and
all other expenses and charges payable in connection with the transfer of
Warrants pursuant to this Section 2.3.
2.4 REGISTRATION RIGHTS. The Warrant Shares shall be considered Registrable
Securities for purposes of Section 3(b) of the Registration Rights Agreement
between the Company and the Purchasers dated as of the date hereof (the
"Registration Rights Agreement"). The registered holder of this Warrant shall be
entitled to all of the rights and benefits of a Holder provided under the
Registration Rights Agreement with respect to a Piggyback Registration (as
defined therein). The terms of the Registration Rights Agreement insofar as they
relate to a Piggyback Registration are hereby incorporated by reference for all
purposes and shall be considered a part of this Agreement as if they had been
fully set forth herein.
2.5 ACKNOWLEDGMENT OF RIGHTS. The Company will, at the time of the exercise
of this Warrant in accordance with the terms hereof, upon the request of the
registered holder hereof, acknowledge in writing its continuing obligation to
afford to such holder any rights (including without limitation, any right to
registration of the Warrant Shares) to which such holder shall continue to be
entitled after such exercise in accordance with the provisions of this Warrant,
provided that if the holder of this Warrant shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.
2.6 EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all expenses,
taxes (other than transfer taxes) and other charges payable in connection with
the preparation, issuance and delivery of Warrants and related Warrant Shares
hereunder.
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2.7 COMPLIANCE WITH SECURITIES LAWS. The holder hereof understands and
agrees that the following restrictions and limitations shall be applicable to
all Warrant Shares and resales or other transfers of such Shares pursuant to the
Securities Act:
(a) The holder hereof agrees that the Warrant Shares shall not be sold
or otherwise transferred unless the Warrant Shares are registered under the
Securities Act and state securities laws or are exempt therefrom.
(b) A legend in substantially the following form has been or will be
placed on the certificate(s) evidencing the Warrant Shares:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 or any state securities
act. The shares have been acquired for investment and may not be sold,
transferred, pledged or hypothecated unless (i) they shall have been
registered under the Securities Act of 1933 and any applicable state
securities act, or (ii) the corporation shall have been furnished with
an opinion of counsel, satisfactory to counsel for the corporation
that registration is not required under any of such acts."
(c) Stop transfer instructions have been or will be imposed with
respect to the Warrant Shares so as to restrict resale or other transfer
thereof, subject to this Section 2.7.
ARTICLE III
Anti-Dilution Provisions
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3.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price shall be subject to adjustment from time to time as hereinafter in this
Article III provided. Upon each adjustment of the Exercise Price, except
pursuant to 3.1(a)(i), (ii), (vi), and (vii), the registered holder of the
Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of the Common Stock
(calculated to the nearest whole share pursuant to Section 1.2) obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares of the Common Stock purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
(a) EXERCISE PRICE ADJUSTMENTS. The Exercise Price shall be subject to
adjustment from time to time as follows:
(i) ISSUANCES OF COMMON STOCK. If at any time during the term of
this Warrant, the Company shall issue any Common Stock other than Excluded Stock
(as hereinafter defined) without consideration or for a consideration per share
less than the Exercise Price applicable immediately prior to such issuance, the
Exercise Price in effect immediately prior to each such issuance shall
immediately (except as provided below) be reduced to the price at which such
Common Stock is issued.
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For the purpose of any adjustment of the Exercise Price pursuant to this
clause (i) of this Section 3.1(a), the following provisions shall be applicable:
(A) CASH. In the case of the issuance of Common Stock for cash,
the amount of the consideration received by the Company shall be
deemed to be the amount of the gross cash proceeds received by the
Company for such Common Stock before deducting therefrom any
reasonable discounts, commissions, taxes or other expenses allowed,
paid or incurred by the Company for any underwriting or otherwise in
connection with the issuance and sale thereof.
(B) CONSIDERATION OTHER THAN CASH. In the case of the issuance of
Common Stock (otherwise than upon the conversion of shares of capital
stock or other securities of the Company) for a consideration in whole
or in part other than cash, including securities acquired in exchange
therefor (other than securities by their terms so exchangeable), the
consideration other than cash shall be deemed to be the fair value
thereof as determined by the Board of Directors in good faith,
irrespective of any accounting treatment; PROVIDED, HOWEVER, that such
fair value as determined by the Board of Directors shall not exceed
the aggregate Current Market Price of the shares of Common Stock being
issued as of the date the Board of Directors authorizes the issuance
of such shares.
(ii) OPTIONS AND CONVERTIBLE SECURITIES, ETC. In case, at any time,
the Company shall issue any (i) options, warrants or other rights to purchase or
acquire Common Stock other than Excluded Stock (whether or not at the time
exercisable), (ii) securities by their terms convertible into or exchangeable
for Common Stock (whether or not at the time so convertible or exercisable) or
(iii) options, warrants or rights to purchase such convertible or exchangeable
securities (whether or not at the time exercisable), the Exercise Price in
effect immediately prior to each such issuance shall immediately (except as
provided below) be reduced to the price determined in accordance with Section
3.1(a)(i) and the following:
(1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other rights to
purchase or acquire Common Stock shall be deemed to have been issued
at the time such options, warrants or rights were issued and for a
consideration equal to the consideration (determined in the manner
provided in subclauses (A) and (B) above), if any, received by the
Company upon the issuance of such options, warrants or rights plus the
minimum purchase price provided in such options, warrants or rights
for the Common Stock covered thereby;
(2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such convertible
or exchangeable securities, or upon the exercise of options, warrants
or other rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or exchange
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thereof, shall be deemed to have been issued at the time such
securities were issued or such options, warrants or rights were issued
and for a consideration equal to the consideration, if any, received
by the Company for any such securities and related options, warrants
or rights (excluding any cash received on account of accrued interest
or accrued dividends), plus the additional consideration, if any, to
be received by the Company upon the conversion or exchange of such
securities and the exercise of any related options, warrants or rights
(the consideration in each case to be determined in the manner
provided in subclauses (A) and (B) above);
(3) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights or
conversion or of exchange for such convertible or exchangeable
securities or any change in the consideration to be received by the
Company upon such exercise, conversion or exchange, including, but not
limited to, a change resulting from the antidilution provisions
thereof, the Exercise Price as then in effect shall forthwith be
readjusted to such Exercise Price as would have been obtained had an
adjustment been made upon the issuance of such options, warrants or
rights not exercised prior to such change, or securities not converted
or exchanged prior to such change, on the basis of such change;
(4) on the expiration or cancellation of any such options,
warrants or rights, or the termination of the right to convert or
exchange such convertible or exchangeable securities, if the Exercise
Price shall have been adjusted upon the issuance thereof, the Exercise
Price shall forthwith be readjusted to such Exercise Price as would
have been obtained had an adjustment been made upon the issuance of
such options, warrants, rights or securities on the basis of the
issuance of only the number of shares of Common Stock actually issued
upon the exercise of such options, warrants or rights, or upon the
conversion or exchange of such securities; and
(5) if the Exercise Price shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of the Exercise Price
shall be made for the actual issuance of Common Stock upon the
exercise, conversion or exchange thereof;
PROVIDED, HOWEVER, that no increase in the initial Exercise Price shall be
made pursuant to this Section 3.1(a)(ii) except as provided in Section
3.1(a)(i).
(iii) EXCLUDED STOCK. "Excluded Stock" shall mean only those shares of
Common Stock issued or reserved for issuance by the Company (A) upon conversion
of the Notes, (B) pursuant to the anti-dilution provisions or rights with
respect to any other securities of the Company convertible into, exchangeable
for, or giving the holder thereof the option or right to purchase, shares of
Common Stock, (C) upon exercise of any options or warrants outstanding on
November 1, 2004, (D) in connection with any bona fide, third party merger,
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consolidation or acquisition of assets or securities approved by the Company's
Board of Directors, (E) upon exercise of the Warrant issued to the Placement
Agent on or about the date of issuance of the Notes, (F) shares of Common Stock
and/or options, warrants or other Common Stock purchase rights, and the Common
Stock issued pursuant to such options, warrants or other rights (as adjusted for
any stock dividends, combinations, splits, recapitalizations) after the First
Closing Date (as defined in the Note Agreement) to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary
pursuant to the Company's and its predecessor's stock incentive plans or other
arrangements that are approved by the Company's Board of Directors or (G)
pursuant to a stock dividend, subdivision, or split-up covered by clause (iii)
of this Section 3.1(a); provided, that the number of share of Common Stock
issuable pursuant to clause (F) shall not exceed in the aggregate 15% of the
shares of Common Stock issued and outstanding at any date.
(iv) STOCK DIVIDENDS. In case the Company shall, at any time after the
First Closing Date, pay or make an extraordinary dividend or other distribution
payable in shares of Common Stock on any class of capital stock of the Company,
the Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced (calculated to the nearest cent)
by multiplying such Conversion Price by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum of
such number of shares and the total number of shares constituting such dividend
or other distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
The Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(v) RIGHTS OFFERING. In case the Company shall, at any time after the
First Closing Date, issue rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price per share of the Common Stock on
the date fixed for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price in effect at the opening of business on
the day following the date fixed for such determination shall be reduced
(calculated to the nearest cent) by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such reduction to become
effective immediately after the opening of business on the day following the
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date fixed for such determination; PROVIDED, HOWEVER, that if such rights or
warrants are only exercisable upon the occurrence of certain triggering events,
then the Conversion Price will not be adjusted until such triggering events
occur. For the purposes of this Section 3.1(a)(v), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company will not issue any rights or warrants in
respect of shares of Common Stock held in the treasury of the Company. If any
such rights or warrants shall expire without having been exercised, the
Conversion Price shall thereupon be readjusted to eliminate the amount of its
adjustment due to their issuance.
(vi) STOCK SPLITS, Etc. In case outstanding shares of Common Stock
shall, at any time after the First Closing Date, be subdivided into a greater
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced (calculated to the nearest cent),
and, conversely, in case outstanding shares of Common Stock shall each be
combined (calculated to the nearest cent) into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(vii) DISTRIBUTIONS. In case the Company shall, at any time after the
First Closing Date, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its Indebtedness or assets or shares of capital stock
other than Common Stock (excluding any dividend or distribution paid in cash out
of the retained earnings of the Company or any dividend or distribution referred
above), the Conversion Price shall be adjusted (calculated to the nearest cent)
so that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value of the portion of the assets or evidences of Indebtedness so
distributed applicable to one share of Common Stock and the denominator shall be
such Current Market Price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
(viii) RECLASSIFICATIONS. The reclassification of Common Stock into
securities other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 3.1(e) applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such determination" within
the meaning of Section 3.1(a)(vii), and (ii) a subdivision or combination, as
the case may be, of the number of shares of Common Stock outstanding immediately
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prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of Section 3.1(a)(vi).
(ix) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All calculations
under this Section 3.1(a) and under Section 3.1(b) shall be made to the nearest
cent or to the nearest whole share (as provided in Section 1.2) share, as the
case may be. Any provision of this Section 3.1 to the contrary notwithstanding,
no adjustment in the Exercise Price shall be made if the amount of such
adjustment would be less than one percent, but any such amount shall be carried
forward and an adjustment with respect thereto shall be made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate one percent or more.
(x) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK UPON CERTAIN
ADJUSTMENTS. In any case in which the provisions of this Section 3.1(a) shall
require that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event
issuing to the holder of this Warrant after such record date and before the
occurrence of such event the additional shares of Common Stock or other property
issuable or deliverable upon exercise by reason of the adjustment required by
such event over and above the shares of Common Stock or other property issuable
or deliverable upon such exercise before giving effect to such adjustment;
provided, however, that the Company upon request shall deliver to such holder a
due ▇▇▇▇ or other appropriate instrument evidencing such holder's right to
receive such additional shares or other property, and such cash, upon the
occurrence of the event requiring such adjustment.
(b) CURRENT MARKET PRICE. The Current Market Price shall mean, as of any
date, 10% of the sum of the average, for each of the 10 consecutive Trading Days
immediately prior to such date, of either: (i) the high and low sales prices of
the Common Stock on such Trading Day as reported on the composite tape for the
principal national securities exchange on which the Common Stock may then be
listed, or (ii) if the Common Stock shall not be so listed on any such Trading
Day, the high and low sales prices of Common Stock in the over-the-counter
market as reported by the Nasdaq National Market tier of the Nasdaq Stock
Market, or (iii) if the Common Shares shall not be included in the Nasdaq
National Market tier on any such Trading Day, the representative bid and asked
prices at the end of such Trading Day in such market as reported by the Nasdaq
Smallcap Market tier of the Nasdaq Stock Market or (iv) if there be no such
representative prices reported by the Nasdaq Smallcap Market, the lowest bid and
highest asked prices at the end of such Trading Day in the over-the-counter
market as reported by the OTC Bulletin Board Service or National Quotation
Bureau, Inc., or any successor organization. For purposes of determining Current
Market Price, the term "Trading Day" shall mean a day on which an amount greater
than zero can be calculated with respect to the Common Stock under any one or
more of the foregoing categories (i), (ii), (iii) and (iv), and the "end"
thereof, for the purposes of categories (iii) and (iv), shall mean the exact
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time at which trading shall end on the New York Stock Exchange. If the Current
Market Price cannot be determined under any of the foregoing methods, Current
Market Price shall mean the fair value per share of Common Stock on such date
determined by the Board of Directors in good faith, irrespective of any
accounting treatment.
(c) STATEMENT REGARDING ADJUSTMENTS. Whenever the Exercise Price shall be
adjusted as provided in Section 3.1(a), and upon each change in the number of
shares of the Common Stock issuable upon exercise of this Warrant, the Company
shall forthwith file, at the office of any transfer agent for this Warrant and
at the principal office of the Company, a statement showing in detail the facts
requiring such adjustment and the Exercise Price and new number of shares
issuable that shall be in effect after such adjustment, and the Company shall
also cause a copy of such statement to be given to the holder of this Warrant.
Each such statement shall be signed by the Company's chief financial or
accounting officer. Where appropriate, such copy may be given in advance and may
be included as part of a notice required to be mailed under the provisions of
Section 3.1(d).
(d) NOTICE TO HOLDERS. In the event the Company shall propose to take any
action of the type described in clause (iv), (v), or (vi) of Section 3.1(a), the
Company shall give notice to the holder of this Warrant, in the manner set forth
in Section 6.6, which notice shall specify the record date, if any, with respect
to any such action and the approximate date on which such action is to take
place. Such notice shall also set forth such facts with respect thereto as shall
be reasonably necessary to indicate the effect of such action (to the extent
such effect may be known at the date of such notice) on the Exercise Price and
the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such notice
shall be given at least 15 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.
(d) TREASURY STOCK. For the purposes of this Section 3.1, the sale or other
disposition of any Common Stock of the Company theretofore held in its treasury
shall be deemed to be an issuance thereof.
(e) PROVISIONS IN CASE OF CONSOLIDATION, MERGER, OR SALE OF ASSETS. In case
of any consolidation of the Company with, or merger of the Company into, any
other Person, any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any sale
or transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver a supplement to this
Warrant providing that the holder of this Warrant shall have the right
thereafter, during the period that this Warrant is exercisable, to exercise this
Warrant for the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares (including fractional shares) of Common Stock of the Company
into which this Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplement to this Warrant shall
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provide for adjustments which, for events subsequent to the effective date of
the event which triggers the requirement of such supplement to this Warrant,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 3.1 The above provisions of this Section 3.1(e) shall
similarly apply to successive consolidations, mergers, sales or transfers.
3.2 COSTS. The registered holder of this Warrant shall pay all documentary,
stamp, transfer or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock of the Company upon exercise of this Warrant;
provided further, and not in limitation of the foregoing, that the Company shall
not be required to pay any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate for such shares. The
holder of this Warrant shall reimburse the Company for any such taxes assessed
against the Company.
3.3 RESERVATIONS OF SHARES. The Company shall reserve at all times so long
as this Warrant remains outstanding, free from preemptive rights, out of its
treasury Common Stock or its authorized but unissued shares of Common Stock, or
both, solely for the purpose of effecting the exercise of this Warrant,
sufficient shares of Common Stock to provide for the exercise hereof.
3.4 VALID ISSUANCE. All shares of Common Stock which may be issued upon
exercise of this Warrant will upon issuance by the Company be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof attributable to any act or omission by the
Company, and the Company shall take no action which will cause a contrary result
(including without limitation, any action which would cause the Exercise Price
to be less than the par value, if any, of the Common Stock).
ARTICLE IV
Terms Defined
-------------
As used in this Warrant, unless the context otherwise requires, the
following terms have the respective meanings set forth below or in the Section
indicated:
BOARD OF DIRECTORS -- the Board of Directors of the Company.
COMMON STOCK -- the Company's authorized Common Stock, $.01 par value per
share.
COMPANY - ▇▇▇▇▇▇, Inc., a Delaware corporation, and any other
corporation assuming or required to assume the obligations undertaken in
connection with this Warrant.
CURRENT MARKET PRICE -- Section 3.1(b).
OUTSTANDING -- when used with reference to Common Stock at any date, all
issued shares of Common Stock (including, but without duplication, shares deemed
issued pursuant to Article III) at such date, except shares then held in the
treasury of the Company.
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NASDAQ -- Section 3.1(b).
PERSON -- any individual, corporation, partnership, trust, organization,
association or other entity or individual.
SECURITIES ACT -- the Securities Act of 1933 and the rules and regulations
thereunder, all as the same shall be in effect at the time.
TRADING DAY -- Section 3.1(b).
WARRANT -- this Warrant and any successor or replacement Warrant delivered
in accordance with Section 2.3 or 6.8.
WARRANT OFFICE -- Section 2.1.
WARRANT SHARES -- shall mean the shares of Common Stock purchased or
purchasable by the registered holder of this Warrant or the permitted assignees
of such holder upon exercise thereof pursuant to Article I hereof.
ARTICLE V
Covenant of the Company
-----------------------
The Company covenants and agrees that this Warrant shall be binding upon
any corporation succeeding to the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets.
ARTICLE VI
Miscellaneous
6.1 ENTIRE AGREEMENT. This Warrant contains the entire agreement between
the holder hereof and the Company with respect to the shares which it can
purchase upon exercise hereof and the related transactions and supersedes all
prior arrangements or understanding with respect thereto.
6.2 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
6.3 WAIVER AND AMENDMENT. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant must be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
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6.4 ILLEGALITY. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
6.5 COPY OF WARRANT. A copy of this Warrant shall be filed among the
records of the Company.
6.6 NOTICE. Any notice or other document required or permitted to be given
or delivered to the holder hereof shall be delivered at, or sent by certified or
registered mail to such holder at, the last address shown on the books of the
Company maintained at the Warrant Office for the registration of this Warrant or
at any more recent address of which the holder hereof shall have notified the
Company in writing. Any notice or other document required or permitted to be
given or delivered to the Company, other than such notice or documents required
to be delivered to the Warrant Office, shall be delivered at, or sent by
certified or registered mail to, the office of the Company at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or any other address
within the continental United States of America as shall have been furnished by
the Company to the holder of this Warrant.
6.7 LIMITATION OF LIABILITY; NOT STOCKHOLDERS. No provision of this Warrant
shall be construed as conferring upon the holder hereof the right to vote,
consent, receive dividends or receive notices other than as herein expressly
provided in respect of meetings of stockholders for the election of directors of
the Company or any other matter whatsoever as a stockholder of the Company. No
provision hereof, in the absence of affirmative action by the holder hereof to
purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of such holder
for the purchase price of any shares of Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
6.8 EXCHANGE, LOSS, DESTRUCTION, ETC. OF WARRANT. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Warrant, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation upon surrender
and cancellation of this Warrant, the Company will make and deliver a new
Warrant of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant; PROVIDED, HOWEVER, that the original recipient of this Warrant shall
not be required to provide any such bond of indemnity and may in lieu thereof
provide his agreement of indemnity. Any Warrant issued under the provisions of
this Section 6.8 in lieu of any Warrant alleged to be lost, destroyed or stolen,
or in lieu of any mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company. This Warrant shall be promptly canceled
by the Company upon the surrender hereof in connection with any exchange or
replacement. The registered holder of this Warrant shall pay all taxes
(including securities transfer taxes) and all other expenses and charges payable
in connection with the preparation, execution and delivery of Warrants pursuant
to this Section 6.8.
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6.9 HEADINGS. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name.
Dated: November 5, 2004
▇▇▇▇▇▇, Inc.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
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SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to exercise
purchase rights represented by said Warrant for, and to purchase thereunder
_______________________________ shares of the Common Stock covered by said
Warrant and herewith makes payment in full therefor pursuant to Section 1.1 of
such Warrant, and requests (a) that certificates for such shares (and any
securities or other property issuable upon such exercise) be issued in the name
of, and delivered to,_________________, __________________ and (b) if such
shares shall not include all of the shares issuable as provided in said Warrant,
that a new Warrant of like tenor and date for the balance of the shares issuable
thereunder be delivered to the undersigned.
Dated: , 20
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ASSIGNMENT
For value received, _______________________, hereby sells, assigns and transfers
unto the within Warrant, together with all right, title and interest therein and
does hereby irrevocably constitute and appoint ______________________ attorney,
to transfer said Warrant on the books of the Company, with full power of
substitution.
Dated: , 20
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