SONIC SOLUTIONS Warrant To Purchase Common Stock
EXHIBIT
4.4
SONIC
SOLUTIONS
Warrant
No.: 20__-_____
Number of
Shares of Common Stock: ___________
Date of
Issuance: ______ __, 20__ (“Issuance Date”)
Sonic
Solutions, a California corporation (the “Company”), certifies that, for
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, __________________, the registered holder hereof or its permitted
assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company,
at the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or
times on or after [ ] days from the date hereof (the “Exercisability Date”), but not
after 5:30 p.m., New York City time, on the Expiration Date (as defined below),
________ (_________) fully paid and nonassessable shares of Common Stock (as
defined below) (the
“Warrant
Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section
15. This Warrant is one of a series of warrants to purchase shares of
Common Stock (collectively, the “Warrants”) issued [pursuant to
that certain Underwriting Agreement, dated __________ (the “Underwriting Agreement”), by
and among the Company and the representatives of the underwriters named therein
(the “Underwriters”)]
pursuant to the Company’s Registration Statement on Form S-3 (No. 333-________)
(the “Registration
Statement”).
1. EXERCISE OF
WARRANT.
(a) Mechanics of
Exercise. Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(e)), this
Warrant may be exercised by the Holder on any day on or after the Exercisability
Date, in whole or in part (but not as to fractional shares), by (i) delivery of
a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the
Holder’s election to exercise this Warrant and (ii) payment to the Company of an
amount equal to the applicable Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in
cash or wire transfer of immediately available funds. The Holder
shall not be required to surrender this Warrant in order to effect an exercise
hereunder, provided that this
Warrant is surrendered to the Company by the second Trading Day following the
date on which the Company has received each of the Exercise Notice and the
Aggregate Exercise Price (the “Exercise Delivery
Documents”). On or before the first Trading Day following the
date on which the Company has received the Exercise Delivery Documents, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent for the Common Stock (the “Transfer
Agent”). The Company shall deliver any objection to the
Exercise Delivery Documents on or before the second Trading Day following the
date on which the Company has received all of the Exercise Delivery
Documents. In the event of any discrepancy or dispute, the records of
the Company shall be controlling and determinative in the absence of manifest
error. On or before the third Trading Day following the date on which
the Company has received all of the Exercise Delivery Documents and after the
Company shall have received this Warrant (the “Share Delivery Date”), the
Company shall, (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program (the “FAST Program”) and so long as
the certificates therefor are not required to bear a legend regarding
restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (Y), if the
Transfer Agent is not participating in the FAST Program or if the certificates
are required to bear a legend regarding restriction on transferability, issue
and dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of
the Exercise Delivery Documents and surrender of this Warrant, the Holder shall
be deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC
account or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then the
Company shall as soon as practicable and in no event later than five Trading
Days after any exercise and at its own expense, issue a new Warrant (in
accordance with Section 8(e)) representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised. The Company shall pay any and all taxes that may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder or an
affiliate thereof. The Holder shall be responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant or
receiving Warrant Shares upon exercise hereof.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $____
per share of Common Stock, subject to adjustment as provided
herein.
(c) Failure to Timely Deliver
Shares. In addition to any other rights available to a Holder,
if the Company fails to deliver to the Holder a certificate representing Warrant
Shares by the third Trading Day after the date on which delivery of such
certificate is required by this Warrant, and if after such third Trading Day the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company
shall, within three Trading Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased less the Exercise Price (the “Buy-In Price”), at which point
the Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay cash
to the Holder in an amount equal to the excess (if any) of the Buy-In Price over
the product of (A) such number of shares of Common Stock, times (B) the Closing
Price on the date of the event giving rise to the Company’s obligation to
deliver such certificate.
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(d) Cashless Exercise.
Notwithstanding
anything contained herein to the contrary, if neither a registration statement
covering the Warrant Shares nor an exemption from registration under
the Securities Act of 1933, as amended, is available either for registration of
the Warrant Shares or for the resale of the Warrant Shares, the Holder may, in
its sole discretion, exercise this Warrant in whole or in part and, in lieu of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless
Exercise”):
Net
Number = (A x B) - (A
x C)
B
For
purposes of the foregoing formula:
|
A=
|
the
total number of shares with respect to which this Warrant is then being
exercised.
|
|
B=
|
the
Weighted Average Price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise
Notice.
|
|
C=
|
the
Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.
|
(e) Limitations on
Exercises. (1) The Company shall not effect the
exercise of this Warrant, and the Holder shall not have the right to exercise
this Warrant, to the extent that after giving effect to such exercise, such
Holder (together with such Holder’s affiliates and any other Persons acting as a
group together) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such
exercise. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “Exchange
Act”), it being acknowledged that the Company is not representing to the
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act, and the Holder is solely responsible for any schedules required to be filed
in accordance therewith.. For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (1) the
Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other
public filing with the Securities and Exchange Commission, as the case may be,
(2) a more recent public announcement by the Company or (3) any other notice by
the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. For any reason at any time, upon the written or
oral request of the Holder, where such request indicates that it is being made
pursuant to this Warrant, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including the Warrants, by the Holder and its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. By written notice to the Company, the
Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided, that (i)
any such increase will not be effective until the 61st day
after such notice is delivered to the Company and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of
Warrants.
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(f) No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share that the Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.
2. ADJUSTMENT OF EXERCISE PRICE
AND NUMBER OF WARRANT SHARES. The Exercise Price and the
number of Warrant Shares shall be adjusted from time to time as
follows:
(a) Adjustment upon Subdivision
or Combination of Shares of Common Stock. If the Company at
any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of Warrant Shares will be proportionately increased. If
the Company at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(a) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(b) Other
Events. If any event occurs of the type contemplated by the
provisions of Section 2(a) but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights,
phantom stock rights or other rights with equity features to the holders of the
Company’s equity securities), then the Company’s Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of Warrant Shares so
as to protect the rights of the Holder; provided, that no
such adjustment pursuant to this Section 2(b) will increase the Exercise Price
or decrease the number of Warrant Shares as otherwise determined pursuant to
this Section 2.
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(c) Notwithstanding
anything to the contrary in this Warrant, in no event shall the Exercise Price
be reduced below the par value of the Company’s Common Stock
3.
RIGHTS UPON
DISTRIBUTION OF ASSETS. If the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case:
(a) any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Weighted
Average Price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in
good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the Weighted Average Price of
the shares of Common Stock on the Trading Day immediately preceding such record
date; and
(b) the
number of Warrant Shares shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of shares of
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided, that in the
event that the Distribution is of shares of Common Stock or common stock of a
company whose common shares are traded on a national securities exchange or a
national automated quotation system (“Other Shares of Common
Stock”), then the Holder may elect to receive a warrant to purchase Other
Shares of Common Stock in lieu of an increase in the number of Warrant Shares,
the terms of which shall be identical to those of this Warrant, except that such
warrant shall be exercisable into the number of shares of Other Shares of Common
Stock that would have been payable to the Holder pursuant to the Distribution
had the Holder exercised this Warrant immediately prior to such record date and
with an aggregate exercise price equal to the product of the amount by which the
exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding paragraph (a) and the number
of Warrant Shares calculated in accordance with the first part of this paragraph
(b).
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4. PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2
above, if at any time prior to the Expiration Date the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of any class of
shares of Common Stock (the “Purchase Rights”), then the
Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if
the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase
Rights.
(b) Fundamental
Transactions. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Warrant referring to the “Company” shall refer instead to the Successor
Entity), and may exercise every right and power of the Company and shall assume
all of the obligations of the Company under this Warrant with the same effect as
if such Successor Entity had been named as the Company herein. Upon
consummation of the Fundamental Transaction, the Successor Entity shall deliver
to the Holder confirmation that there shall be issued upon exercise of this
Warrant at any time after the consummation of the Fundamental Transaction, in
lieu of the shares of the Common Stock (or other securities, cash, assets or
other property purchasable upon the exercise of the Warrant prior to such
Fundamental Transaction), such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription
rights), if any, that the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had this Warrant been exercised
immediately prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Warrant. In addition to and not in
substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will thereafter have
the right to receive upon an exercise of this Warrant within 90 days after the
consummation of the Fundamental Transaction but, in any event, prior to the
Expiration Date, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property) purchasable upon the exercise of the Warrant
prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or
subscription rights) which the Holder would have been entitled to receive upon
the happening of such Fundamental Transaction had the Warrant been exercised
immediately prior to such Fundamental Transaction. Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Required Holders. The provisions of this Section
shall apply similarly and equally to successive Fundamental Transactions and
Corporate Events and shall be applied without regard to any limitations on the
exercise of this Warrant. Without limiting the foregoing, in
connection with a Fundamental Transaction that constitutes a Change of Control,
at the request of the Holder delivered before the 90th day after such
Fundamental Transaction, the Company (or the Successor Entity) shall purchase
this Warrant from the Holder by paying to the Holder, within five Business Days
after such request (or, if later, on the effective date of the Fundamental
Transaction), cash in an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the date of such Fundamental
Transaction.
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5. NONCIRCUMVENTION. The
Company covenants and agrees that the Company will not, by amendment of its
Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, 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 of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant and (iii) shall, so long as any
of the Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common Stock, solely for
the purpose of effecting the exercise of the Warrants, the number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of
the Warrants then outstanding (without regard to any limitations on
exercise).
6. RESERVATION OF WARRANT
SHARES. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of shares of Common Stock which are then issuable and deliverable upon
the exercise of this entire Warrant, free from preemptive or any other
contingent purchase rights of Persons other than the Holder (taking into account
the adjustments and restrictions in Section 2). Such reservation
shall comply with the provisions of Section 1. The Company covenants
that all shares of Common Stock so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such actions as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which
the Common Stock may be listed.
7. WARRANT HOLDER NOT DEEMED A
SHAREHOLDER. Except as otherwise specifically provided herein,
the Holder, solely in such Person’s capacity as a holder of this Warrant, shall
not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person’s capacity
as the Holder of this Warrant, any of the rights of a shareholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a shareholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.
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8. REGISTRATION AND REISSUANCE
OF WARRANTS.
(a) Registration of
Warrant. The Company shall register this Warrant, upon the
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary. The
Company shall also register any transfer, exchange, reissuance or cancellation
of any portion of this Warrant in the Warrant Register.
(b) Transfer of
Warrant. This Warrant may be offered for sale, sold,
transferred or assigned without the consent of the Company, except as may
otherwise be required by applicable securities laws. Subject to
applicable securities laws, if this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Company together with all applicable
transfer taxes, whereupon the Company will forthwith issue and deliver upon the
order of the Holder a new Warrant (in accordance with Section 8(e)), registered
as the Holder may request, representing the right to purchase the number of
Warrant Shares being transferred by the Holder and, if less then the total
number of Warrant Shares then underlying this Warrant is being transferred, a
new Warrant (in accordance with Section 8(e)) to the Holder representing the
right to purchase the number of Warrant Shares not being
transferred.
(c) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company 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, of any
indemnification undertaking by the Holder to the Company in customary form or
the provision of reasonable security by the Holder to the Company and, in the
case of mutilation, upon surrender and cancellation of this Warrant, the Company
shall execute and deliver to the Holder a new Warrant (in accordance with
Section 8(e)) representing the right to purchase the Warrant Shares then
underlying this Warrant.
(d) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company together with all
applicable transfer taxes, for a new Warrant or Warrants (in accordance with
Section 8(e)) representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant Shares as is
designated by the Holder at the time of such surrender; provided, however, that the
Company shall not be required to issue Warrants for fractional shares of Common
Stock hereunder.
(e) Issuance of New
Warrants. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant shall (i) be of
like tenor with this Warrant, (ii) represent, as indicated on the face of such
new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant being issued pursuant to Section 8(b)
or Section 8(c), the Warrant Shares designated by the Holder which, when added
to the number of shares of Common Stock underlying the other new Warrants issued
in connection with such issuance, does not exceed the number of Warrant Shares
then underlying this Warrant), (iii) have an issuance date, as indicated on the
face of such new Warrant which is the same as the Issuance Date and (iv) have
the same rights and conditions as this Warrant.
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9. NOTICES. Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with the information set forth
in the Warrant Register. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including,
in reasonable detail, a description of such action and the reason or reasons
therefore. Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least 10 days prior
to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock, (B)
with respect to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
to holders of shares of Common Stock or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation; provided, that in
each case, such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.
10. AMENDMENT AND
WAIVER. Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Required Holders;
provided, that
no such action may increase the exercise price of any Warrant or decrease the
number of shares or class of stock obtainable upon exercise of any Warrant
without the written consent of the Holder. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Warrants then outstanding.
11. GOVERNING
LAW. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by,
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.
12. CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted
by the Company and the [Holder] [Underwriters] and shall not be construed
against any person as the drafter hereof. The headings of this
Warrant are for convenience of reference and shall not form part of, or affect
the interpretation of, this Warrant.
13. DISPUTE
RESOLUTION. In the case of a dispute as to the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within two Trading Days of receipt of the Exercise Notice giving rise
to such dispute, as the case may be, to the Holder. If the Holder and
the Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within five Trading Days of such disputed
determination or arithmetic calculation being submitted to the Holder, then the
Company shall, within two Trading Days submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company’s independent,
outside accountant. The Company shall cause the investment bank or
the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
10 Trading Days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error. The expenses of the investment bank and
accountant will be borne by the Company unless the investment bank or accountant
determines that the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares by the Holder was incorrect, in which case the
expenses of the investment bank and accountant will be borne by the
Holder.
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14. REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available
under this Warrant [and the Underwriting Agreement], at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the right of the Holder to pursue actual damages for
any failure by the Company to comply with the terms of this
Warrant. The Company acknowledges that a breach by it of its
obligations hereunder may cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company
therefore agrees that, in the event of any such breach or threatened breach, the
holder of this Warrant shall be entitled, in addition to all other available
remedies, to seek an injunction restraining any
breach. Notwithstanding the foregoing, the absence of an effective
registration statement relating to the issuance of Warrant Shares upon exercise
of the Warrant shall not provide the Holder with the right to net-settle this
Warrant in cash. Furthermore, the absence of an effective
registration statement or applicable exemption from registration does not
alleviate the Company’s obligation to deliver the Warrant Shares upon exercise
of this Warrant.
15. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms
shall have the following meanings:
(a) “Black Scholes Value” means the
value of this Warrant based on the Black and Scholes Option Pricing Model
obtained from the “OV” function on Bloomberg determined as of the end of day
immediately following the public announcement of the applicable Fundamental
Transaction and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of this Warrant as
of such date of request and (ii) an expected volatility equal to the 30 day
volatility of the Common Stock obtained from the HVT function on Bloomberg for
the period ending as of the end of the day immediately preceding the public
announcement of the applicable Fundamental Transaction.
(b) “Bloomberg” means Bloomberg
Financial Markets.
(c) “Change of Control” means any
Fundamental Transaction following which the holders of the Company’s voting
power immediately prior to such Fundamental Transaction do not, immediately
thereafter, hold, directly or indirectly, voting power of the surviving or
successor entity or entities sufficient to elect a majority of the members of
the board of directors (or their equivalent if other than a corporation) of such
entity or entities.
(d) “Common Stock” means (i) the
Company’s shares of Common Stock, no par value, and (ii) any share capital into
which such Common Stock shall have been changed or any share capital resulting
from a reclassification of such Common Stock.
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(e) “Convertible Securities” means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock.
(f) “Eligible Market” means the
Principal Market, The New York Stock Exchange, Inc., the NYSE Amex LLC, The
Nasdaq Stock Market, or the OTC Bulletin Board®.
(g) “Expiration Date” means the [ ]
anniversary of the Issuance Date or, if such date falls on a day other than a
Trading Day or on which trading does not take place on the Principal Market (a
“Holiday”), the next
date that is not a Holiday.
(h) “Fundamental Transaction” means
that the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into another Person, (ii) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another Person, (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of either the outstanding shares of Common Stock
(not including any shares of Common Stock held by the Person or Persons making
or party to, or associated or affiliated with the Persons making or party to,
such purchase, tender or exchange offer), (iv) consummate a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reorganize, recapitalize or
reclassify its Common Stock or (vi) any “person” or “group” (as these terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Common Stock.
(i) “Options” means any rights,
warrants or options to subscribe for or purchase shares of Common Stock or
Convertible Securities.
(j) “Parent Entity” of a Person
means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an
Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the
date of consummation of the Fundamental Transaction.
(k) “Person” means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity and a government or any
department or agency thereof.
(l) “Principal Market” means the
Nasdaq Global Select Market.
(m) “Required Holders” means the
holders of the Warrants representing at least a majority of shares of Common
Stock underlying the Warrants then outstanding.
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(n) “Successor Entity” means the
Person (or, if so elected by the Required Holders, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or, if so
elected by the Required Holders, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(o) “Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if the Principal
Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is
then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York City time).
(p) “Weighted Average Price” means,
for any security as of any date, the dollar volume-weighted average price for
such security on the Principal Market during the period beginning at 9:30:01
a.m., New York City time, and ending at 4:00:00 p.m., New York City time, as
reported by Bloomberg through its “Volume at Price” function or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York City time,
and ending at 4:00:00 p.m., New York City time, as reported by Bloomberg, or, if
no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by Pink Sheets LLC. If the Weighted
Average Price cannot be calculated for such security on such date on any of the
foregoing bases, the Weighted Average Price of such security on such date shall
be the fair market value as mutually determined by the Company and the Required
Holders. If the Company and the Required Holders are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to Section 13 with the term “Weighted Average Price” being substituted
for the term “Exercise Price.” All such determinations shall be
appropriately adjusted for any share dividend, share split or other similar
transaction during such period.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
Company has caused this Warrant to Purchase Common Stock to be duly executed as
of the Issuance Date set out above.
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SONIC
SOLUTIONS
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By:
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Name:
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Title:
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
SONIC
SOLUTIONS
The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock (“Warrant Shares”) of Sonic
Solutions., a California corporation (the “Company”), evidenced by the
attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Exercise. The
Holder intends to pay the sum of $___________________ to the Company in
accordance with the terms of the Warrant in connection with the exercise of the
Warrant for ________ Warrant Shares.
2. Delivery of Warrant
Shares. The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.
3. Representations and
Warranties. By its delivery of this Exercise Notice, the
undersigned represents and warrants to the Company that in giving effect to the
exercise evidenced hereby the Holder will not beneficially own in excess of the
number of shares of Common Stock (determined in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended) permitted to be owned under
Section 1(e) of this Warrant to which this notice relates.
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Date:
_______________ __, ______
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Name
of Registered Holder
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By:
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Name:
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Title:
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ACKNOWLEDGMENT
The Company hereby acknowledges this
Exercise Notice.
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SONIC
SOLUTIONS
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By:
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Name:
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Title:
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