AMENDMENT NO 1 TO SECURITY AND LOAN AGREEMENT
AND ADDENDUM, EXHIBIT "A," THERETO
This Amendment No. 1 dated as of March 31, 1997 ("Amendment") amends that
certain Security and Loan Agreement dated June 17, 1996 by and between Imperial
Bank ("Bank") and Xscribe Corporation ("Borrower") and the Addendum, Exhibit
"A," (the "Addendum") thereto, of even date as previously amended. (collectively
herein the Security and Loan Agreement and the Addendum are referred to as the
"Agreement") as follows:
1. The name of Borrower shall be changed from Xscribe Corporation to
Photomatrix, Inc. in the Agreement and any documents executed by Borrower
relating thereto.
2 The advance rate on the accounts receivable line of credit as reflected in
Section 1. of the Security and Loan Agreement is amended from 80.000% of
Eligible Accounts to 70.000% of Eligible Accounts.
3. Section 6 e. of the Addendum is deleted in its entirety and. the following
substituted therefor:
" Accounts with respect to international transactions unless insured by
an insurance company acceptable to Bank or covered by letters of credit
issued or confirmed by a bank acceptable to Bank. However. Banks may deem,
at its sole discretion, international accounts eligible on a. case by case
basis."
4. Section 7. of the Addendum is deleted in its entirety and the following
substituted therefor:
" All financial covenants and financial information referenced herein
shall be interpreted and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with previous years.
Compliance with financial covenants shall be calculated and monitored on a
monthly basis."
5. Section 8.a. of the Addendum is delete in its entirety and the following
substituted therefor"
" Have and maintain a minimum tangible net worth (meaning the excess of
all assets, over its liabilities, less subordinated debt) of not less than
$3,050,000 from 3/31/97 through 4/29/97 and $2,800,000 at 4/30/97 and
thereafter."
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6. Section 8.b. of the Addendum is deleted in its entirety and the following
substituted therefor.
" Have and maintain a ratio of total liabilities to tangible net worth
of not greater than 1.10 to 1.00 at 3/31/97 and thereafter."
7. Section 8 c. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain working capital of $2,000,000 from 3/31/97 through
4/29/97 and $1,750,000 at 4/30/97 and thereafter. Working capital is
defined as current assets minus current liabilities."
8. Section 8.d. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain a current ratio of 1.70 to 1 00 at 3/31/97 and
thereafter. Current ratio is defined as current assets divided by current
liabilities."
9. Section 10.a of the Addendum is deleted in its entirety and the following
substituted therefor:
" The rate of interest applicable to the Line of Credit Loan Account
shall be 2.50% pa year in excess of the rate of interest which Bank has
announced as its prime lending rate ("Prime Rate") which shall vary
concurrently with any change m such Prime Rate. A non utilization fee of
one percent (1.00%) shall be charged on the average daily unused portion of
the line, payable quarterly in arrears."
10. In consideration of the Bank executing this Amendment, that Borrower agrees
that the strike price on the existing warrant for the purchase of 75,000 shares
of Photomatrix, Inc common stock is reset to the lesser of $.50 per share or
current market price. This reset is effective immediately and will be documented
in entirety with a modified warrant agreement, which Borrower agrees to execute.
11. Except as provided above, the Agreement remains unchanged and the parties
hereby confirm that the Agreement as herein amended is in full force and effect.
Signatures continued on next page.
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PHOTOMATRIX, INC.
"Borrow
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President and Chief Executive Officer
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IMPERIAL BANK
"Bank"
By: /s/
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Title: /s/Vice President
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IMPERIAL BANK
Member FDIC
CONTINUING GUARANTEE
ORIGINATING OFFICE: San Diego Regional Office
Name of Office: San Diego Regional Office
Street Address: ▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇, ▇▇▇ Code: ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned (hereinafter referred to as "Guarantor") hereby requests and
authorizes IMPERIAL BANK (hereinafter referred to as the "Bank") to extend
credit to PHOTOMATRIX, INC.
a Corporation
(DESIGNATE TYPE OF ENTITY)
(hereinafter referred to as "Debtor"), and in consideration of the granting of
such credit by the Bank to Debtor, Guarantor agrees as follows:
1. The words "indebtedness" and "credit" are used herein in their most
comprehensive sense and include any and all advances, debts, obligations and
liabilities, including interest thereon, of Debtor heretofore, now or hereafter
made, incurred or created, with or without notice to Guarantor, whether
voluntary or involuntary and however arising, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, whether
assumed by Debtor's successors, heirs or assigns by operation of law or
otherwise, and whether Debtor is liable individually or jointly with others, and
whether recovery upon any such indebtedness or credit is or hereafter becomes
barred by any statute of limitations or is or hereafter becomes otherwise
unenforceable.
2. Credit may be granted from time to time at the request of Debtor and
without further authorization from or notice to Guarantor, even though Debtor's
financial condition may have deteriorated since the date hereof. If Debtor is a
corporation or a partnership, the Bank need not inquire into the power of Debtor
or the authority of its officers, directors, partners or agents acting or
purporting to act in its behalf. Each credit heretofore or hereafter granted to
Debtor shall be considered to have been granted at the special instance and
request of Guarantor and in consideration of and in reliance upon this
guarantee.
3. Guarantor hereby unconditionally guarantees and promises to pay the Bank or
its order any and all indebtedness of Debtor to the Bank and to perform any and
all obligations of Debtor under the terms of any agreement or instrument
evidencing, securing or executed in connection with any such indebtedness
("Credit Documents"). The liability of Guarantor shall not at any time exceed
the sum of the amount set forth below, plus the interest thereon in accordance
with the Credit Documents and the costs, attorneys' fees and other expenses
provided for in Paragraph 15 hereof. If no amount is set forth below, the
liability of the Guarantor hereunder shall be unlimited. The Bank may permit
Debtor's indebtedness to exceed any maximum liability without impairing the
obligations of Guarantor hereunder. No payments made by or on behalf of
Guarantor to the Bank shall reduce any such maximum liability unless written
notice to that effect is received by the Bank at or prior to the time such
payment is made. If Guarantor has executed more than one guarantee of the
indebtedness of Debtor to the Bank, the guarantees shall be cumulative.
4. Either before or after revocation hereof and in such manner, upon such
terms and at such times as it considers best and with or without notice to
Guarantor, the Bank may alter, compromise, accelerate, extend or change the time
or manner for the payment of any indebtedness hereby guaranteed, increase or
reduce the rate of interest thereon, release or add any one or more guarantors
or endorsers, accept additional or substituted security therefor, or release or
subordinate any security therefor. No exercise or nonexercise by the Bank of any
right hereby given it, no dealing by the Bank with Debtor or any other person,
and no change, impairment or suspension of any right or remedy of the Bank shall
in any way affect any of the obligations of Guarantor hereunder or any security
furnished by Guarantor or give Guarantor any recourse against the Bank.
5. In addition to all liens upon and rights of offset given to the Bank by law
against any property of Debtor or of Guarantor, Guarantor hereby grants a
security interest in all property of Guarantor now or hereafter in the
possession of or on deposit with the Bank, whether held in a general or special
account or for safekeeping or otherwise. Each such security interest may be
exercised without demand upon or notice to Guarantor, shall continue in full
force unless specifically waived or released by the Bank in writing and shall
not be considered waived by any conduct of the Bank or by any failure of the
Bank to exercise any right of offset or to enforce any such security interest or
by any neglect or delay in so doing.
Page 1 of 4
6. Guarantor waives and agrees not to assert or take advantage of (a) any right
to require the Bank to proceed against the Debtor or any other person, firm or
corporation or to proceed against or exhaust any security held by it at any time
or to pursue any other remedy in its power; (b) the defense of the statute of
limitations in any action hereunder or for the collection of any indebtedness or
the performance of any obligation guaranteed hereby; (c) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of, or
revocation hereof by, any other or others or the failure of the Bank to file or
enforce a claim against the estate (either in administration, bankruptcy, or
other proceeding) of any other or others; (d) demand, protest and notice of any
kind including, without limiting the generality of the foregoing, notice of the
existence, creation or incurring of new or additional indebtedness or of any
action or non-action on the part of the Debtor, the Bank, any endorser, creditor
of Debtor or Guarantor under this or any other instrument, or any other person
whomsoever, in connection with any obligation or evidence of indebtedness hereby
guaranteed; (e) any defense based upon an election of remedies by the Bank,
including without limitation, an election to proceed by nonjudicial rather than
judicial foreclosure, which election destroys or otherwise impairs subrogation
rights of Guarantor or the right of Guarantor to proceed against Debtor for
reimbursement, or both, including, without limitation, the impairment of
subrogation rights arising by virtue of California Civil Code 580(b) and 580(d);
(f) any defense or right based upon the fair value deficiency protections and
provisions of California Civil Code 580(a) and California Civil Procedure Code
726; and (g) any defense or right based upon the acceptance by the Bank or an
affiliate of the Bank of a deed in lieu of foreclosure, without extinguishing
the indebtedness, even if such acceptance destroys, alters or otherwise impairs
subrogation rights of Guarantor or the right of Guarantor to proceed against
Debtor for reimbursement, or both.
7. Guarantor, by execution hereof, represents to the Bank that the
relationship between Guarantor and Debtor is such that Guarantor has access to
all relevant facts and information concerning the indebtedness and Debtor and
that the Bank can rely upon Guarantor having such access. Guarantor waives and
agrees not to assert any duty on the part of the Bank to disclose to Guarantor
any facts that the Bank may now or hereafter know about Debtor, regardless of
whether the Bank has reason to believe that any such facts materially increase
the risk beyond that which Guarantor intends to assume, or has reason to believe
that such facts are unknown to Guarantor, or has a reasonable opportunity to
communicate such facts to Guarantor. Guarantor is fully responsible for being
and keeping informed of the financial condition of Debtor and all circumstances
bearing on the risk of non-payment of the indebtedness guaranteed hereby.
8. Until all indebtedness of Debtor to the Bank has been paid in full, even
though such indebtedness is in excess of the liability of Guarantor, Guarantor
shall have no right of subrogation and waives any right to enforce any remedy
which the Bank now has or may hereafter have against Debtor and any benefit of
and any right to participate in any security now or hereafter held by the Bank.
9. Except as otherwise provided in this paragraph, all existing or future
indebtedness of Debtor to Guarantor and, if Debtor is a partnership, any right
to withdraw any capital of Guarantor invested in Debtor, is hereby subordinated
to all indebtedness hereby guaranteed and, without the prior written consent of
the Sank, shall not be paid or withdrawn in whole or in part nor will Guarantor
accept any payment of or on account of any such indebtedness or as a withdrawal
of capital while this guarantee is in effect. At the Bank's request, Debtor
shall pay to the Bank all or any part of subordinated indebtedness and any
capital which Guarantor is entitled to withdraw. Each payment by Debtor to
Guarantor in violation of this paragraph shall be received in trust for the Bank
and shall be paid to the Bank immediately on account of the indebtedness of
Debtor to the Bank. No such payment shall reduce or affect in any manner
Guarantor's liability under any of the provisions of this guarantee. Guarantor
reserves the right to receive from Debtor payment of any salary for personal
services at the same monthly rate as that at which Guarantor has been paid
during the preceding twelve months, it being expressly understood that such
amount shall not be subordinated to the indebtedness guaranteed hereby.
10. Guarantor will file all claims against Debtor in any bankruptcy or other
proceeding in which the filing of claims is required by law upon any
indebtedness of Debtor to Guarantor and shall concurrently assign to the Bank
all of the Guarantor's rights thereunder. If Guarantor does not file any such
claim, the Bank, as Guarantor's attorney-in-fact, is hereby authorized to do so
in Guarantor's name or, in the Bank's discretion, to assign the claim and to
cause proof of claim to be filed in the name of the Bank's nominee. In all such
cases, whether in administration, bankruptcy or otherwise, the person or persons
authorized to pay such claims shall pay to the Bank the full amount thereof and,
to the full extent necessary for the purpose, Guarantor hereby assigns to the
Bank all of the Guarantor's rights to any and all such payments or distributions
to which Guarantor would otherwise be entitled. If the amount so paid is greater
than the guaranteed indebtedness then outstanding, the Bank will pay the amount
of the excess to the person entitled thereto.
11. With or without notice to Guarantor, the Bank, in its sole discretion and
at any time and from time to time either before or after delivery of any notice
of revocation hereunder and in such manner and upon such terms as it considers
fit, may (a) apply any or all payments or recoveries from Debtor, from Guarantor
or from any other guarantor under this or any other instrument or realized from
any security, in such manner and order or priority as the Bank elects, to any
indebtedness of Debtor to the Bank, whether or not such indebtedness is
guaranteed hereby or is otherwise secured or is due at the time of such
application; and (b) refund to Debtor any payment received by the Bank upon any
indebtedness hereby guaranteed and payment of the amount refunded shall be fully
guaranteed hereby. Any recovery realized from any other guarantor under this or
any other instrument shall be first credited upon that portion of the
indebtedness of Debtor to the Bank which exceeds Guarantor's maximum liability,
if any, hereunder.
12. The amount of Guarantor's liability and all rights, powers and remedies of
the Bank hereunder and under the Credit Documents and any other agreement now or
at any time hereafter in force between the Bank and Guarantor shall be
cumulative and not alternative, and such rights, powers and remedies shall be in
addition to all rights, powers and remedies given to the Bank by law.
13. Guarantor's obligations hereunder are independent of the obligations of
Debtor and, in the event of any default hereunder, a separate action or actions
may be brought and prosecuted against Guarantor whether action is brought
against Debtor or whether Debtor is joined in any such action or actions. The
Bank may maintain successive actions for other defaults. The Bank's rights
hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations hereby guaranteed have been paid and
fully performed.
Page 2 of 4
14. This is a continuing guarantee and Guarantor agrees that it shall remain
in full force until and unless Guarantor delivers to the Bank written notice
that it has been revoked as to credit granted subsequent to the effective time
of revocation as herein provided. delivery of such notice shall be effective by
personal service upon an officer of the Bank at the originating office of the
Bank designated on the first page hereof or by mailing such notice by certified
or registered mail, return receipt requested, postage prepaid and addressed to
the Sank at the originating office designated on the first page hereof.
Regardless of how notice of revocation is given, it shall not be effective until
twelve o'clock noon Pacific Standard or Daylight Savings Time, as the case may
be, on the next succeeding Bank business day following the day such notice is
delivered, but delivery of such notice shall not affect any of Guarantor's
obligations hereunder with respect to credit granted prior to the effective date
of such revocation, nor shall it affect any of the obligations of any other
guarantor for the credit granted to Debtor hereunder. If the originating office
of the Bank designated above is not in existence at the time notice of
revocation is desired to be given, then such notice may be given in the manner
above provided by delivering the same to IMPERIAL BANK OFFICE at ▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
15. Guarantor agrees to pay to the Bank without demand reasonable attorneys'
fees and all costs and other expenses which the Bank expends or incurs in
collecting or compromising any indebtedness of the Debtor, in protecting the
Bank's security under the Credit Documents or in enforcing this guarantee
against Guarantor or any other guarantor of any indebtedness hereby guaranteed
whether or not suit is filed, including, without limitation, attorney's fees,
costs and other such expenses incurred in any bankruptcy proceeding. Guarantor
warrants and represents that it is fully authorized by law to execute this
guarantee.
16. This guarantee shall benefit the Bank, its successors and assigns,
including the assignees of any indebtedness hereby guaranteed, and binds
Guarantor's successors and assigns. This guarantee is assignable by the Bank
with respect to all or any portion of the indebtedness and obligations
guaranteed hereunder, and, when so assigned, Guarantor shall be liable to the
assignees under this guarantee without in any manner affecting Guarantor's
liability hereunder with respect to any indebtedness or obligations retained by
the Bank. No delegation or assignment of this guarantee by any Guarantor shall
be of any force or effect or release Guarantor from any obligation hereunder.
17. No provision of this guarantee or right of the Bank hereunder can be
waived, nor can any Guarantor be released from his/her obligations hereunder,
except by a writing duly executed by an authorized officer of the Bank. Should
any one or more provisions of this guarantee be determined to be illegal or
unenforceable, all other provisions nevertheless shall be governed by and
construed in accordance with the laws of California, and Guarantor agrees to
submit to the jurisdiction of the Courts of California.
18. If more than one guarantor signs this guarantee, the obligation of all
such guarantors shall be joint and several. When the context and construction so
require, all words used in the singular shall be deemed to have been used in the
plural and the masculine shall include the feminine and neuter. Any married
person who signs this guarantee agrees that recourse may be had against separate
property for all obligations under this guarantee.
19. Except as provided in any other written agreement now or at any time
hereafter in force between the Bank and Guarantor this guarantee shall
constitute the entire agreement of Guarantor with the Bank with respect to the
subject matter hereof and no representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon the Bank unless
expressed herein. Any notice to Guarantor shall be considered to have been duly
given when delivered personally or forty-eight hours after being mailed, postage
prepaid, to the address(es) set forth below or to such other address(es) as
Guarantor may from time to time designate by giving notice in the same manner of
notice to the Bank set forth in Paragraph 14 hereof.
20. Each of the undersigned Guarantors hereby acknowledges the receipt of a true
copy of this guarantee.
21. / / This guarantee is secured by a deed of trust dated N/A , ,
to Imperial Bancorp, as Trustee.
22. / / I/We hereby amend the Trust Agreement to the extent necessary, if any,
to allow the Trust to guarantee the debt of any person(s).
23. Notwithstanding anything herein to the contrary , the maximum liability of
the guarantor shall not exceed its net worth under generally accepted
accounting principals from time to time.
GUARANTEE AMOUNT $ 750, 000. 00
Executed by or on behalf of Guarantor(s) on April 28 , 97
Signature of Guarantor(s)
PHOTOMATRIX IMAGING CORPORATION
BY /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, Pres/CEO/CHMN
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Address
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(COMPLETE IF GUARANTOR IS A CORPORATION)
RESOLUTION AUTHORIZING CONTINUING GUARANTEE,
ENDORSEMENT AND GUARANTEE OF NOTE OR NOTES
AND HYPOTHECATION OF ASSETS
PHOTOMATRIX, INC.
WHEREAS,
hereinafter referred to as "Debtor", has requested IMPERIAL BANK, hereinafter
referred to as "Bank", to grant credit to Debtor.
WHEREAS, the corporation hereinafter named expects to derive benefit from such
financial accommodation by Bank,
1. NOW, BE IT RESOLVED, that any 1 of the following named officers
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(SPECIFY NUMBER)
▇▇▇▇▇ ▇▇▇▇▇ the President/CEO/CHMN
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▇▇▇ ▇. ▇▇▇▇▇▇▇ the CEO/Secretary
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the
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the
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for and on behalf of PHOTOMATRIX IMAGING CORPORATION
(NAME OF CORPORATION)
be and they hereby are authorized and directed for and in the name of this
corporation and as its act and deed to do and perform any one or more of the
following:
A. Execute a continuing guarantee in favor of Bank for any and all assets
of this corporation.
B. Endorse and/or guarantee a note or notes in favor of Bank whereunder
Debtor is Maker and Bank is Payee including renewals and extensions thereof.
▇. ▇▇▇▇▇ to Bank a security interest in and to any and all assets of this
corporation: (1) as security for any obligation which this corporation may incur
under subparagraphs A and/or B above; or (2) as security for indebtedness of
Debtor to Bank to the extent of the value of the security interest so granted
without personal liability on the part of this corporation to Bank.
2. RESOLVED FURTHER, that Bank may rely on the authority conferred herein
until Bank receives notice in writing that the authority contained in this
resolution has been revoked or the authority of the persons or officers named
above has been revoked.
3. RESOLVED FURTHER, that the liability of this corporation to Bank hereunder
shall not exceed the total sum of
**SEVEN HUNDRED FIFTY THOUSAND DOLLARS AND ZERO CENTS** DOLLARS ($ 750,000.00).
4. RESOLVED FURTHER, that any guarantees or other documents in like amount and
terms as those stated above heretofore executed by said officers in the name of
this corporation are hereby ratified and approved, and the secretary or
assistant secretary is authorized and directed to attach copies of such
documents to the minutes of the corporation.
I, the undersigned ▇▇▇ ▇. ▇▇▇▇▇▇▇ , hereby certify that I am the
duly elected, qualified and acting secretary of the above
referenced corporation, duly organized and existing under the laws of the State
of California ; that the Board of Directors of said corporation duly
and regularly adopted the resolution of which the foregoing is a full, true and
correct copy.
I further certify that said resolution is now in full force and effect, that
it has not been revoked, suspended, or amended in any way, and that the specimen
signatures appearing below are the signatures of the officers authorized to sign
for this corporation by virtue of said resolution.
I further certify that shareholder consent IS NOT required in the
(IS OR IS NOT)
event of hypothecation of all or substantially all of the assets of said
corporation.
EXECUTED ON
AUTHORIZED SIGNATURES:
Signature: /s/▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
Signature: /s/▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇.▇▇▇▇▇▇▇
Signature:
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Signature:
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(SEAL)
Confirmed By:
/s/▇▇▇▇▇ ▇▇▇▇▇
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(PRESIDENT)
▇▇▇▇▇ ▇▇▇▇▇
/s/▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇ (SECRETARY)
Page 4 of 4
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Company: PHOTOMATRIX, INC (formerly XSCRIBE CORPORATION), a California
corporation
Number of Shares: 75,000
Class of Stock: Common
Initial Exercise Price: $.50 or the market value on the date of execution
hereof, whichever is less, per share
Issue Date: April 9, 1997
Expiration Date: April 9, 2002 (subject to Article 4.1)
THIS WARRANT CERTIFIES THAT, in consideration of an extension of credit to
Corporation and for other good and valuable consideration, IMPERIAL BANCORP as
parent of IMPERIAL BANK, or transferee or assignee ("Holder") is entitled to
purchase the number of fully paid and nonassessable shares of the class of
securities (the "Shares") of PHOTOMATRIX, INC. (the "Company") at the initial
exercise price per Share (the "Warrant Price") all as set forth above and as
adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 METHOD OF EXERCISE. Holder may exercise this Warrant by delivering
this Warrant and a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company payment for the aggregate Warrant Price for the Shares
being purchased.
1.2 CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares minus the aggregate Warrant Price of such Shares by
(b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.3.
1.3 FAIR MARKET VALUE. If the Shares are traded regularly in a public
market, the fair market value of the Shares shall be the closing price of the
Shares reported for the
business day immediately before Holder delivers its Notice of Exercise to the
Company. If the Shares are not regularly traded in a public market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment. The foregoing notwithstanding, if Holder advises the Board
of Directors in writing that Holder disagrees with such determination, then the
Company and Holder shall promptly agree upon a reputable investment banking firm
to undertake such valuation. If the valuation of such investment banking firm is
greater than that determined by the Board of Directors, then all fees and
expenses of such investment banking firm shall be paid by the Company. In all
other circumstances, such fees and expenses shall be paid by Holder.
1.4 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 REPURCHASE ON SALE, MERGER, OR CONSOLIDATION OF THE COMPANY.
1.6.1. "ACQUISITION". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets (including intellectual property) of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.6.2. ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly. The Company shall use reasonable efforts to cause the surviving
corporation to assume the obligations of this Warrant.
1.6.3. NONASSUMPTION. If upon the closing of any Acquisition the
2
successor entity does not assume the obligations of his Warrant and Holder has
not otherwise exercised this Warrant in full, then the unexercised portion of
this Warrant shall be deemed to have been automatically converted pursuant to
Section 1.2 and thereafter Holder shall participate in the acquisition on the
same terms as other holders of the same class of securities of the Company.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities,
subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 ADJUSTMENTS FOR DILUTING ISSUANCES. The Warrant Price and the number
of Shares issuable upon exercise of this Warrant shall be subject to adjustment,
from time to time, in the manner set forth on Exhibit A, if attached, in the
event of Diluting Issuances (as defined on Exhibit A).
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its Articles of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying
3
out all the provisions of this Article 2 and in taking all such action as may be
necessary or appropriate to protect Holder's rights under this Article against
impairment. If the Company takes any action affecting the Shares other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
2.6 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this
Warrant is not greater than (i) the price per share at which the Shares were
last issued in an arms-length transaction in which at least $50,000 of the
Shares were sold and (ii) the fair market value of the Shares as of the date of
this Warrant.
(b) All Shares which may be issued upon the exercise of the purchase
right represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (a) at least 20 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of
4
common stock will be entitled thereto) or for determining rights to vote, if
any, in respect of the matters referred to in (c) and (d) above; (2) in the case
of the matters referred to in (c) and (d) above at least 20 days prior written
notice of the date when the same will take place (and specifying the date on
which the holders of common stock will be entitled to exchange their common
stock for securities or other property deliverable upon the occurrence of such
event); and (3) in the case of the matter referred to in (e) above, the same
notice as is given to the holders of such registration rights.
3.3 INFORMATION RIGHTS. So long as the Holder holds this Warrant ad/or any
of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all communiques to the shareholders of the Company, (b)
within ninety (90) days after the end of each fiscal year of the Company, the
annual audited financial statements of the Company certified by independent
public accountants of recognized standing and (c) within forty-five (45) days
after the end of each of the first three quarters of each fiscal year, the
Company's quarterly, unaudited financial statements.
3.4 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Company
agrees that the Shares shall be subject to the registration rights set forth on
Exhibit C, if attached.
ARTICLE 4. MISCELLANEOUS.
4.1 TERM. This Warrant is exercisable, in whole or in part, at any time
and from time to time on or before the Expiration Date set forth above..
4.2 LEGENDS. This Warrant and the Shares shall be imprinted with a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise this Warrant may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the
5
availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail,
the selling broker represents that it has complied with Rule 144(f), and the
Company is provided with a copy of Holder's notice of proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of Section 4.2, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant by giving the Company notice of the portion of the Warrant being
transferred setting forth the name, address and taxpayer identification number
of the transferee and surrendering this Warrant to the Company for reissuance to
the transferee(s) (and Holder, if applicable). Unless the Company is filing
financial information with the SEC pursuant to the Securities Exchange Act of
1934, the Company shall have the right to refuse to transfer any portion of this
Warrant to any person who directly competes with the Company.
4.5 NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
4.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
PHOTOMATRIX, INC.
"COMPANY"
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
(Print)
Title: Chairman, President
6
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
(Print)
Title: Chief Financial Officer, Secretary,
7
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase shares of the
Common Stock of Photomatrix, Inc, pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This conversion
is exercised with respect to of the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
----------------------------------------
(Name)
----------------------------------------
----------------------------------------
(Address)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
-----------------------------------
By
--------------------------------
(Signature)
-----------------------
(Date)
8
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear
This is to advise you that the Warrant issued to you described below will
expire on _______ , 19__.
Issuer: Xscribe Corporation
Issue Date: APRIL 9, 1997
Class of Security Issuable: Common
Exercise Price Per Share:
Number of Shares Issuable:
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
PHOTOMATRIX, INC.
By
--------------------------------
Its
-------------------------------
9
EXHIBIT A
REGISTRATION RIGHTS
The Shares shall be deemed "registrable securities" or otherwise entitled
to "piggy back" registration rights in accordance with the terms of any
agreement between the Company and any of its investors (the "Agreement")
The Company agrees that no amendments will be made to the Agreement which
would have an adverse impact on Holder's registration thereunder without the
consent of Holder.
If no Agreement exists, then the Company and the Holder shall enter into a
form of Registration Rights Agreement which shall be no less favorable than any
such agreement subsequently entered into between the Company and any investors
and in no event providing less than piggy back registration rights.
10
OLD WARRANT AGREEMENT
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Company: XSCRIBE CORPORATlON, a California corporation
Number of Shares: 75,000
Class of Stock: Common
Initial Exercise Price: $1.00 per share
Issue Date: August 10 1995
Expiration Date: August 2000, (subject to Article 4.1)
THIS WARRANT CERTIFIES THAT, in consideration of an extension of credit to
Corporation and for other good and valuable consideration, IMPERIAL BANCORP
("Holder") is entitled to purchase the number of fully paid and nonassessable
shares of the class of securities (the "Shares") of Xscribe Corporation (the
"Company") at the initial exercise price per Share (the "Warrant Price") all as
set forth above and as adjusted pursuant to Article 2 of this Warrant, subject
to the provisions and upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 METHOD OF EXERCISE. Holder may exercise this Warrant by delivering
this Warrant and a duly executed Notice of Exercise in substantially the form
attached as Appendix 1 to the principal office of the Company. Unless Holder is
exercising the conversion right set forth in Section 1.2, Holder shall also
deliver to the Company payment for the aggregate Warrant Price for the Shares
being purchased,.
1.2 CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares minus the aggregate Warrant Price of such Shares by
(b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.3.
1.3 FAIR MARKET VALUE. If the Shares are traded regularly in a public
market, the fair market value of the Shares shall be the closing price of the
Shares reported for the business day immediately before Holder delivers its
Notice of Exercise to the
Company. If the Shares are not regularly traded in a public market, the Board of
Directors of the Company shall determine fair market value in its reasonable
good faith judgment. The foregoing notwithstanding, if Holder advises the Board
of Directors in writing that Holder disagrees with such determination, then the
Company and Holder shall promptly agree upon a reputable investment banking firm
to undertake such valuation. If the valuation of such investment banking firm is
greater than that determined by the Board of Directors, then all fees and
expenses of such investment banking firm shall be paid by the Company. In all
other circumstances, such fees and expenses shall be paid by Holder.
1.4 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 REPURCHASE ON SALE, MERGER. OR CONSOLIDATION OF THE COMPANY.
1.6.1. "ACQUISITION". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets (including intellectual property) of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.
1.6.2. ASSUMPTION OF WARRANT. If upon the closing of any Acquisition
the successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly. The Company shall use reasonable efforts to cause the surviving
corporation to assume the obligations of this Warrant.
1.6.3. NONASSUMPTION. If upon the closing of any Acquisition the
successor entity does not assume the obligations of his Warrant and Holder has
not otherwise exercised this Warrant in full, then the unexercised portion of
this Warrant shall be deemed to have been automatically converted pursuant to
Section 1.2 and thereafter Holder shall participate in the acquisition on the
same terms as other holders of the same class of securities of the Company.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock payable in common stock, or other securities,
subdivides the outstanding common stock into a greater amount of common stock,
then upon exercise of this Warrant, for each Share acquired, Holder shall
receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as
of the date the dividend or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 NO IMPAIRMENT. The Company shall not, by amendment of its Articles of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out all the provisions of this Article 2 and in
taking all such action as may be necessary or appropriate to protect Holder's
rights under this Article against impairment. If the Company takes any action
affecting the Shares other than as described above that adversely affects
Holder's rights under this Warrant, the Warrant Price shall be adjusted downward
and the number of Shares issuable upon exercise of this Warrant shall be
adjusted upward in such a manner that the aggregate Warrant Price of this
Warrant is unchanged.
2.5 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written
request, furnish Holder a certificate setting forth the Warrant Price in effect
upon the date thereof and the series of adjustments leading to such Warrant
Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this
Warrant is not greater than the fair market value of the Shares as of the date
of this Warrant.
(b) All Shares which may be issued upon the exercise of the purchase
right represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (a) at least 20 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of common stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of common
stock will be entitled to exchange their common stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 INFORMATION RIGHTS. So long as the Holder holds this Warrant an/or any
of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all communiques to the shareholders of the Company, (b)
within ninety (90) days after the end of each fiscal year of the Company, the
annual audited financial statements of the Company certified by independent
public accountants of recognized standing and (c) within forty-five (45) days
after the end of each of the first three quarters of each fiscal year, the
Company's quarterly, unaudited financial statements.
3.4 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Company
agrees that the Shares shall be subject to the registration rights set forth on
Exhibit A attached.
ARTICLE 4. MISCELLANEOUS.
4.1 TERM. This Warrant is exercisable, in whole or in part, at any time
and from time to time on or before the Expiration Date set forth above.
4.2 LEGENDS. This Warrant and the Shares shall be imprinted with a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise this Warrant may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holder's notice of
proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of Section 4.2, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant by giving the Company notice of the portion of the Warrant being
transferred setting forth the name, address and taxpayer identification number
of the transferee and surrendering this Warrant to the Company for reissuance to
the transferee(s) (and Holder, if applicable).
4.5 NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
4.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
XSCRIBE CORPORATION
"COMPANY"
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
(Print)
Title: Chairman of the Board, President,
or Vice President
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
(Print)
Title: Chief Financial Officer, Secretary,
Assistant Treasurer or Assistant
Secretary
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase shares of the
Common Stock of Xscribe Corporation pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price of such shares in
full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in the Warrant. This conversion is exercised with
respect to of the Shares covered by the Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
------------------------------
(Name)
------------------------------
------------------------------
(Address)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
IMPERIAL BANCORP
By
-----------------------------------
(Signature)
-----------------
(Date)
EXHIBIT A
REGISTRATION RIGHTS
The Shares shall be deemed "registrable securities" or otherwise entitled
to "piggy back" registration rights in accordance with the terms of any
agreement between the Company and any of its investors (the "Agreement").
The Company agrees that no amendments will be made to the Agreement which
would have an adverse impact on Holder's registration rights thereunder without
the consent of Holder.
If no Agreement continues to exist, then the Company and the Holder shall
enter into a form of Registration Rights Agreement which shall be no less
favorable than any such agreement subsequently entered into between the Company
and any investors and in no event providing less than piggy back registration
rights.
IMPERIAL BANK
Executive Offices - Century Boulevard at the San Diego Freeway - ▇.▇. ▇▇▇ ▇▇▇▇▇
- ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - (310) 417-5600
July 12, 1996
Xscribe Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Warrant Dated August 10, 1995 For 75,000 Shares
At 1.00 Per Share
Gentlemen:
This letter will serve as Imperial Bank's notice that we will be transferring
the above referenced warrant to its parent, Imperial Bancorp. This transfer is
to the parent of the Bank, an Affiliate, and is for purposes of facilitating
compliance with banking laws, and not with a view to distribution of the warrant
or the underlying securities. Please acknowledge receipt of this notice, reissue
the enclosed warrant in the name of Imperial Bancorp and so reflect Imperial
Bancorp as the holder of the warrant on your record.
For purposes of the warrant, the only authorized representatives of Imperial
Bancorp who can exercise or otherwise deal with the warrant are any two of the
following:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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If you have any questions concerning this matter, please contact the
undersigned.
Sincerely,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President & Controller
KCA/sd
enclosure
ACKNOWLEDGED: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: CEO
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Date: OCTOBER 7, 1996
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