Exhibit 10.22
THIS WARRANT EVIDENCED HEREBY AND THE SHARES OF STOCK ISSUABLE UPON
THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED IN VIOLATION OF SUCH ACT AND LAWS, THE RULES AND REGULATIONS
THEREUNDER OR THE PROVISIONS OF THIS WARRANT.
WARRANT
To Purchase Shares of
Common Stock of
Delphi Information Systems, Inc.
August 20, 1999
This certifies that for good and valuable consideration, receipt of
which is hereby acknowledged, Hewlett-Packard Company, a Delaware corporation
(the "Warrantholder"), is entitled to subscribe for and purchase from the
Company, on the terms set forth herein, shares of Common Stock as follows:
a) During the period (i) commencing August 20, 1999 and ending
August 19, 2000, shares equal to 4.9% for the number of shares
of Common Stock outstanding on the date set forth in
paragraph (c) below, at an exercise price equal to $15.00 per
share, and (ii) commencing August 20, 2000 and ending August
19, 2001, shares equal to 4.5% of the number of shares of
Common Stock outstanding on the date set forth in paragraph
(c) below, at an exercise price equal to $20.00 per share.
b) If the Warrantholder has not exercised its right to purchase
any of the shares under subparagraph (i) of paragraph (a)
above, then, during the period commencing August 20, 2000 and
ending August 19, 2001, shares equal to 4.9% of the number of
shares of the Common Stock outstanding on the date set forth
in paragraph (c) below, at an exercise price equal to $20.00
per share (in addition to the number of shares which the
Warrantholder has the right to purchase under subparagraph
(ii) of paragraph (a) above).
c) The number of outstanding shares of Common Stock shall be as
stated in the Company's most recent filing on Form 10-K or
10-Q, adjusted ratably for any stock split, stock dividend,
reverse stock split or any other recapitalization effecting
the Common Stock, after the date for which the number of shares
of the Common Stock are reported in such Form 10-K or 10-Q.
The number of shares of Common Stock which the Warrantholder
has a right to purchase and the purchase price at which such
shares may be purchased may be adjusted from time to time as
described in this Warrant. Within 10 days of the filing of
the Company's Form 10-K or 10-Q, the Company shall provide
the Warrantholder with an updated Calculation Form in the
form attached hereto, which
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shall state the number of shares of Common Stock purchasable
pursuant to this Warrant. At the date hereof, the number of
shares of Common Stock purchased or purchasable pursuant to
this Warrant are as stated in the attached Calculation Form.
1. DEFINITIONS. For the purposes of this Warrant, the following
terms shall have following meanings:
"COMMISSION" shall mean the Securities and Exchange
Commission, or any other federal agency then administering the
Securities Act.
"COMPANY" shall mean Delphi Information Systems, Inc., a
Delaware corporation, and any corporation which shall succeed to, or
assume, the obligations of such corporation hereunder.
"COMMON STOCK" shall mean the shares of Common Stock of the
Company, $0.10 par value.
"EXPIRATION DATE" shall mean August 19, 2001.
"OTHER SECURITIES" shall mean any stock (other than Common
Stock) or other securities of the Company which the Warrantholder at
any time shall be entitled to receive, or shall have received, upon
the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued
in exchange for or in replacement of Common Stock or Other Securities.
"PURCHASE PRICE" shall mean the price at which the
Warrantholder may purchase a share of Common Stock as provided in
paragraphs (a) and (b) above and as adjusted from time to time
pursuant to paragraph 6 below.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder,
as in effect at the time.
"SUBSCRIPTION FORM" shall mean the subscription forms
attached hereto.
"TRANSFER" shall mean any sale, assignment, pledge, or other
disposition of any Warrants and/or Warrant Shares, or of any
interest in either thereof, which would constitute a sale thereof
within the meaning of Section 2(3) of the Securities Act.
"WARRANT SHARES" shall mean the shares of Common Stock
purchased or purchasable by the Warrantholder upon the exercise of
the Warrants pursuant to Section 2 hereof.
"WARRANTHOLDER" shall mean the holder or holders of the
Warrants or any related Warrant Shares.
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"WARRANTS" shall mean that certain Warrant issued to the
Warrantholder on August 20, 1999 and any warrant(s) issued upon the
transfer or exchange thereof.
All terms used in this Warrant which are not defined in Section 1
hereof have the meanings respectively set forth elsewhere in this Warrant.
2. EXERCISE OF WARRANT, ISSUANCE OF CERTIFICATE AND PAYMENT FOR
WARRANT SHARES.
(a) Subject to Section 5 hereof, the rights represented by this
Warrant may be exercised at any time after the date of this Warrant and prior
to the Expiration Date, by the Warrantholder, in whole or in part (but not as
to any fractional share of Common Stock), by: (a) delivery to the Company of
a completed Full or Partial Subscription Form in the form attached hereto,
(b) surrender to the Company of this Warrant properly endorsed and signature
guaranteed, and (c) delivery to the Company of a certified or cashier's check
made payable to the Company in an amount equal to the aggregate Purchase
Price of the shares of Common Stock being purchased, at its principal office,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such
other office or agency of the Company as the Company may designate by notice
in writing to the holder hereof). The Company agrees and acknowledges that
the shares of Common Stock so purchased shall be deemed to be issued to the
holder hereof as the record owner of such shares as of the close of business
on the date on which this Warrant, properly endorsed, and the Full or Partial
Subscription Form shall have been surrendered and payment made for such
shares as aforesaid. Upon receipt thereof, the Company shall, as promptly as
practicable, and in any event within fifteen (15) days thereafter, execute or
cause to be executed and deliver to the Warrantholder a certificate or
certificates representing the aggregate number of shares of Common Stock
specified in such Subscription Form. Each stock certificate so delivered
shall be in such denomination as may be requested by the Warrantholder and
shall be registered in the name of the Warrantholder or such other name as
shall be designated by the Warrantholder. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of such
stock certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights of such holder to purchase the remaining shares of
Common Stock covered by this Warrant. The Company shall pay all expenses,
taxes, and other charges payable in connection with the preparation,
execution, and delivery of stock certificates pursuant to this Section 2,
except that, in case any such stock certificate or certificates shall be
registered in a name or names other than the name of the Warrantholder, funds
sufficient to pay all stock transfer taxes which shall be payable upon the
execution and delivery of such stock certificate or certificates shall be
paid by the Warrantholder to the Company at the time of delivering this
Warrant to the Company as mentioned above.
(b) Notwithstanding any provisions herein to the contrary, if the
fair market value of one share of the Common Stock is greater than the
Purchase Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Warrantholder may elect to receive
shares equal to the value (as determined below) of this Warrant (or any
portion thereof being exercised) by surrender of this Warrant at the principal
office of the Company, together with the properly endorsed
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Notice of Exercise and notice of such election, in which event the Company
shall issue to the Warrantholder a number of shares of Common Stock computed
using the following formula:
X = Y(A-B)/A
Where X = the number of shares of Common Stock
to be issued to the Warrantholder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only
a portion of the Warrant is being
exercised, the portion of the Warrant
being exercised (at the date of such
calculation)
A = the fair market value of one share of
Common Stock (at the date of such
calculation)
B = Purchase Price (as adjusted at the date
of such calculation)
For purposes of the above calculation, the fair market value of one
share of Common Stock shall be the average of the closing prices quoted on the
NASDAQ Small Cap Market or such other market or exchange where the Common Stock
may be traded for the 5-day period ending on the trading day immediately
prior to the date of exercise of this Warrant.
3. OWNERSHIP OF THIS WARRANT. The Company may deem and treat
the registered Warrantholder as the holder and owner hereof (notwithstanding
any notations of ownership or writing made hereon by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for transfer as provided herein
and then only if such transfer meets the requirements of Section 5.
4. EXCHANGE, TRANSFER, AND REPLACEMENT. Subject to Section 5
hereof, this Warrant is exchangeable upon the surrender hereof by the
Warrantholder to the Company at its office or agency described in Section 2
hereof for new Warrants of like tenor and date representing in the aggregate
the right to purchase the number of shares purchasable hereunder, each of
such new Warrants to represent the right to purchase such number of shares
(not to exceed the aggregate total number purchasable hereunder) as shall be
designated by the Warrantholder at the time of such surrender. Subject to
Section 5 hereof, this Warrant and all rights hereunder are transferable, in
whole or in part, upon the books of the Company by the Warrantholder in
person or by duly authorized attorney, and a new Warrant of the same tenor
and date as this Warrant, but registered in the name of the transferee, shall
be executed and delivered by the Company upon surrender of this Warrant, duly
endorsed, at such office or agency of the Company. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and, in the case of loss, theft,
or destruction, of indemnity or security reasonably satisfactory to it, and
upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new
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Warrant of like tenor, in lieu of this Warrant. This Warrant shall be promptly
canceled by the Company upon the surrender hereof in connection with any
exchange, transfer, or replacement. The Company shall pay all expenses, taxes
(other than stock transfer taxes), and other charges payable in connection
with the preparation, execution, and delivery of Warrants pursuant to this
Section 4.
5. RESTRICTIONS ON TRANSFER AND EXERCISE. Subject to the
conditions specified in this Section 5 with respect to compliance with the
provisions of the Securities Act, this Warrant shall be freely transferable by
the Holder. The holder of this Warrant agrees that such holder will not
transfer this Warrant or the related Warrant Shares (a) prior to delivery to
the Company of an opinion of counsel selected by the Warrantholder and
reasonably satisfactory to the Company, stating that such transfer is exempt
from registration under the Securities Act, or (b) until registration of such
Warrants and/or Warrant Shares under the Securities Act has become effective
and continues to be effective at the time of such transfer. An appropriate
legend may be endorsed on the Warrants and the certificates of the Warrant
Shares evidencing these restrictions. Notwithstanding any provision
contained in this Warrant to the contrary, the Warrantholder shall not be
entitled to exercise this Warrant to the extent that such exercise would
cause the Company or the Warrantholder to violate the Securities Act or
applicable state securities laws. This Warrant shall not be transferable to
any person or entity (other than an affiliate of the Warrantholder), which is
engaged in the business of insurance-related e-commerce or agency management
software, without the prior written consent of the Company.
6. ANTIDILUTION PROVISIONS. The rights granted hereunder are
subject to the following:
(a) STOCK SPLITS AND REVERSE SPLITS. In case at any
time the Company shall subdivide its outstanding shares of Common
Stock into a greater number of shares, the Purchase Price in effect
immediately prior to such subdivision shall be proportionately
reduced and the number of Warrant Shares purchasable pursuant to this
Warrant immediately prior to such subdivision shall be
proportionately increased, and conversely, in case at any time the
Company shall combine its outstanding shares of Common Stock into a
smaller number of shares, the Purchase Price in effect immediately
prior to such combination shall be proportionately increased and the
number of Warrant Shares purchasable upon the exercise of this
Warrant immediately prior to such combination shall be
proportionately reduced. Except as provided in this paragraph (a), no
adjustment in the Purchase Price and no change in the number of
Warrant Shares so purchasable shall be made pursuant to this Section
6 as a result of or by reason of any such subdivision or combination.
(b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION
MERGER, OR SALE. If any capital reorganization or reclassification or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation, shall be
effected in such a way that holders of shares of Common Stock shall be
entitled to receive Common Stock, Other Securities or assets with
respect to or in exchange for shares of Common Stock, then, as a
condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby
the Warrantholder shall thereafter have
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the right to purchase and receive upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common
Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the Warrants such shares of Common Stock, Other
Securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore purchasable and
receivable upon the exercise of the Warrants had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interests of the Warrantholder so that the provisions of the
Warrants (including, without limitation, provisions for adjustment of
the Purchase Price and the number of shares purchasable upon the
exercise of the Warrants) shall thereafter be applicable, as nearly as
may be, in relation to any shares of Common Stock, Other Securities or
assets thereafter deliverable upon the exercise of the Warrants. No such
reorganization or reclassification or merger shall be effected until and
unless the person resulting from such reorganization, reclassification
or merger (if not the Company), or such successor person, shall
expressly assume, by supplemental agreement reasonably satisfactory in
form to the then Majority Holders (as defined below) and executed and
delivered to the Warrantholder, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to
be performed and observed by the Company. "Majority Holders" as of any
date, shall mean the holders of this Warrant (or replacement warrants
issued pursuant hereto) who together have rights to exercise such
warrants for a majority of the Warrant Shares. The Company shall use
reasonable efforts to provide written notice to the Warrantholder
reasonably in advance of the closing of any such reorganization or
reclassification. Notwithstanding the foregoing, in the event that, as a
result of any action described in this paragraph (b), the Company's
stockholders immediately prior to such transaction own less than 50% of
the voting securities of the surviving corporation in any such
reorganization or reclassification, then the number of shares issuable
upon exercise of this Warrant shall cease to be based on the percentage
of the outstanding shares of the Company as set forth in the most recent
Form 10-K or 10-Q of the Company prior to the closing of such
transaction, and rather will be based on the percentage of the shares of
the Company that are outstanding immediately prior to the closing of
such transaction.
(c) ADJUSTMENTS FOR DIVIDENDS IN STOCK OR OTHER SECURITIES OR
PROPERTY. If while this Warrant, or any portion herefor, remains
outstanding and unexpired the holders of the Common Stock of the Company
shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to
receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right
to acquire, in addition to the number of shares of Common Stock
receivable upon exercise of this Warrant, and without payment of any
additional consideration therefor, the amount of such other or
additional stock or other securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had
it been the holder of record of Common Stock receivable upon exercise of
this Warrant on the date hereof and
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had thereafter, during the period from the date hereof to and including
the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving
effect to all adjustments called for during such period by the
provisions of this Section 6.
(d) LIMITATION OF ADJUSTMENT. Notwithstanding paragraphs (a), (b)
and (c), in the event of any capital event or series of capital events
that otherwise would require an increase or change in the kind of
securities or property issuable upon exercise of this Warrant or a
decrease in the Purchase Price, no adjustment shall be made unless and
until such increase or decrease, respectively, exceeds 1%; provided,
however, that any adjustments which by reason of this Section 6(d) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment.
7. SPECIAL AGREEMENTS FOR THE COMPANY.
(a) WILL RESERVE SHARES. The Company will reserve and set apart
and have at all times the number of shares of authorized but unissued
Common Stock deliverable upon the exercise of the Warrants, and it will
have at all times any other rights or privileges provided for herein
sufficient to enable it at any time to fulfill all of its obligations
hereunder.
(b) WILL AVOID CERTAIN ACTIONS. The Company will not, by
amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, issue or sale
of securities or otherwise, avoid or take any action which would have
the effect of avoiding the observance or performance hereunder by the
Company, but will at all times in good faith assist in carrying out of
all the provisions of the Warrants and in taking all such actions as may
be necessary or appropriate in order to protect the rights of the
Warrantholder against dilution or other impairment.
8. INTENTIONALLY OMITTED.
9. NO RIGHTS AS SHAREHOLDERS, LIMITATION OF LIABILITY. This Warrant
shall not entitle any holder hereof to any of the rights of a stockholder of
the Company. No provisions hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to
any liability of such holder for Purchase Price or as a stockholder of the
Company whether such liability is asserted by the Company or by creditors of
the Company.
10. REGISTRATION RIGHTS. Warrantholders shall have the right to
request registration of their Warrant Shares pursuant to Sections 10(a) and
10(b).
(a) REQUIRED REGISTRATION. After receipt of a written request
from the holders of Warrants and/or Warrant Shares representing at least
an aggregate of 33-1/3% of the total of (i) all Warrant Shares then
subject to purchase upon exercise of all Warrants and (ii) all
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Warrant Shares then outstanding, requesting that the Company effect the
registration of Warrant Shares issuable upon the exercise of such
holders' Warrants or of any of such holders' Warrant Shares under the
Securities Act and specifying the intended method or methods of
disposition thereof, the Company shall (i) promptly notify all holders
of Warrants and Warrant Shares in writing of the receipt of such request
and each such holder may elect (by written notice sent to the Company
within ten business days from the date of such holder's receipt of the
aforementioned Company's notice) to have its shares of Warrant Shares
included in such registration thereof; and (ii) as expeditiously as is
possible, use its best efforts to effect the registration under the
Securities Act of all Warrant Shares which the Company has been so
requested to register by such holders for sale, all to the extent
required to permit the disposition (in accordance with the intended
method or methods thereof, as aforesaid) of the Warrant Shares so
registered; PROVIDED, HOWEVER, that the Company shall not be required to
effect more than three registrations of any Warrant Shares pursuant to
this Section 10(a). Notwithstanding the other provisions of this Section
10(a), (i) the Company shall not be required to use its best efforts to
register any Warrant Shares pursuant to this Section 10(a) within a one
hundred and eighty (180) day period after the effective date of any
other registration statement of the Company effected under this Section
10(a) and (ii) the Company may defer the obligation to file any
registration statement under this Section 10(a) for up to one hundred
and twenty (120) days upon delivery to the requesting Warrantholders of
a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would
be seriously detrimental to the Company and its stockholder, or for any
transaction contemplated by the Company, for such registration statement
to be effected at such time (provided, however, that such right to
delay may be exercised by the Company no more than twice in any
twelve-month period). In the event that any registration pursuant to
this Section 10(a) is to be underwritten, the Company shall have the
right to select the underwriters, with the consent of the Warrantholders
holding a majority of the Warrant Shares to be included in such
registration (which consent shall not be unreasonably withheld).
(b) INCIDENTAL REGISTRATION. If the Company at any time proposes
to file on its behalf and/or on behalf of any of its security holders
("the demanding security holders") a registration statement under the
Securities Act on any form (other than a registration statement on Form
S-4 or S-8 or any successor form for securities to be offered in a
transaction of the type referred to in Rule 145 under the Securities Act
or to employees of the Company pursuant to any employee benefit plan,
respectively) for the general registration of securities to be sold for
cash with respect to its Common Stock, it will give written notice to
all holders of Warrants or Warrant Shares at least fifteen (15) days
before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of
disposition of the securities proposed to be registered by the Company.
The notice shall offer to include in such filing the aggregate number of
shares of Warrant Shares as such holders may request. Nothing herein
shall preclude the Company from discontinuing the registration of its
securities being effected on its behalf at any time prior to the
effective date of the registration relating thereto.
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Each holder of any such Warrants or any such Warrant Shares desiring to
have Warrant Shares registered under this Section 10(b) shall advise the
Company in writing within 30 days after the date of receipt of such
offer from the Company, setting forth the amount of such Warrants Shares
for which registration is requested. The Company shall thereupon include
in such filing the number of Warrant Shares for which registration is so
requested, subject to the next sentence, and shall use its best efforts
to effect registration under the Securities Act of such Warrants and
shares. If the managing underwriter of a proposed public offering shall
advise the Company in writing that, in its opinion, the distribution of
the shares of Common Stock into which the Warrants are exercisable and
the Warrant Shares requested to be included in the registration
concurrently with the securities being registered by the Company or such
demanding security holder would adversely affect the distribution of
such securities by the Company or such demanding security holder, then
all demanding security holders' (other than any selling security holder
who requested such registration and the Company (unless such
Registration Statement was filed at the request of a demanding security
holder)) shall reduce the amount of securities each intended to
distribute through such offering on a pro rata basis. Except as
otherwise provided in Section 10(d), all expenses of such registration
shall be borne by the Company. The holders of Warrant Shares shall have
no right to select or approve, or participate in the selection or
approval of, the underwriters in connection with any offering pursuant
to a registration pursuant to this Section 10(b).
(c) REGISTRATION PROCEDURES. If the Company is required by the
provisions of this Section 10 to effect the registration of any of its
securities under the Securities Act, the Company will, as expeditiously
as possible:
(i) promptly prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to
such securities and use its best efforts to cause such registration
statement to become and remain effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all securities
covered by such registration statement whenever the seller or sellers of
such securities shall desire to sell or otherwise dispose of such
securities;
(iii) furnish to any selling security holders such number of copies
of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other documents, as such selling security holders may
reasonably request;
(iv) use its best efforts to register or qualify the securities
covered by such registration statement under such other securities or
blue sky laws of such jurisdictions within the United States as each
holder of such securities shall request, and do such other
9
reasonable acts and things as may be required of it to enable such
holder to consummate the disposition in such jurisdiction of the
securities covered by such Registration Statement (provided, however,
that the Company shall not be obligated, in connection therewith, to
qualify to do business or to file a general consent to service of
process in any such jurisdictions);
(v) use its best efforts to furnish, at the request of any
underwriter, (1) a copy of an opinion, dated such date, of the
independent counsel representing the Company for the purposes of such
registration in containing customary opinions, conditions,
qualifications an assumptions; and (2) a letter from the independent
certified public accountants of the Company, addressed to the
underwriters and containing customary terms, conditions and
qualifications, stating that they are independent certified public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other financial
data of the Company included in the Registration Statement or the
prospectus, or any amendment or supplement thereto, comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act.
(vi) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of such registrable securities;
(vii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission; and
(i) give the holders of Warrant and their underwriters, if any,
and their respective counsel and accountants the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment thereof and supplement thereto, and give each of them such
access to its books and records and facilities, and such opportunities
to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial
statements, as shall be necessary, in the opinion of such holders, such
underwriters (or their counsel), such counsel or such accountants (or
their counsel), to conduct a reasonable investigation within the meaning
of the Securities Act.
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 10 in respect of the securities
which are to be registered at the request of any holder of Warrants or
Warrant Shares that such holder shall furnish to the Company such
information regarding the securities held by such holder and the
intended method of disposition thereof as the Company shall reasonably
request and as shall be required in connection with the action taken by
the Company.
(d) EXPENSES; LIMITATIONS ON REGISTRATION. All expenses incurred
in complying with Section 10, including, without limitation, all
registration and filing fees (including all expenses incident to filing
with the NASD, printing expenses, fees and disbursements of
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counsel and auditors for the Company,the reasonable fees and expenses of
one counsel for the selling security holders (selected by those holding
a majority of the Warrant Shares being registered), expenses of any
special audits incident to or required by any such registration and
expenses of complying with the securities or blue sky laws of any
jurisdictions, shall be paid by the Company, except that the Company
shall not be liable for any fees, discounts or commissions to any
underwriter or any fees or disbursements of counsel for any underwriter
in respect of the securities sold by such holder of Warrant Shares.
(e) INDEMNIFICATION.
(i) In the event of any registration of any of the Warrant Shares
under the Securities Act pursuant to this Section 10, the Company shall
indemnify and hold harmless the holder of such Warrant Shares, such
holder's directors and officers, and each other person (including each
underwriter) who participated in the offering of such Warrant Shares and
each other person, if any, who controls such holder or such
participating person within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which
such holder or any such director or officer or participating person or
controlling person may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement under which
such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse such
holder or such director, officer or participating person or controlling
person for any legal or any other expenses reasonably incurred by such
holder or such director, officer or participating person or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any alleged
untrue statement or alleged omission made in such registration
statement, preliminary prospectus, prospectus or amendment or supplement
in reliance upon and in conformity with written information furnished to
the Company by such holder specifically for use therein. Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or such director, officer or
participating Person or controlling Person, and shall survive the
transfer of such securities by such holder.
(ii) Each holder of any Warrant Shares, by acceptance thereof,
agrees to indemnify and hold harmless the Company, its directors and
officers and each other Person, if any, who controls the Company within
the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which the Company or any such director
or officer or any such Person may become subject under the Securities Act
or any other statute or at common law, insofar as such losses, claims,
damages or liabilities (or
11
actions in respect thereof) arise out of or are based upon information
in writing provided to the Company by such holder of such Warrants and
Warrant Shares contained, on the effective date thereof, in any
registration statement under which securities were registered under the
Securities Act at the request of such holder, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement
thereto; PROVIDED, HOWEVER, that such Holder's obligation under this
Section to indemnify and hold harmless the Company shall in no event
exceed the proceeds received by such person from the proceeds of shares
of Common Stock sold pursuant to such Registration Statements.
(iii) If the indemnification provided for in this Section from the
indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred
to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or related to information
supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party under this Section as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution
pursuant to this Section were determined by pro rata allocation or by
any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent representation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(iv) Each party entitled to indemnification under this paragraph 10
(the "INDEMNIFIED PARTY") shall give notice to the party required to
provide indemnification (the "INDEMNIFYING PARTY") promptly after such
Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at
such party's expense; PROVIDED, HOWEVER, that an Indemnified Party
(together with all other Indemnified Parties which may be represented
without conflict by one counsel) shall have the right to retain one
12
separate counsel, with the fees and expenses to be paid by the
Indemnifying Party, if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential differing interests between such Indemnified Party
and any other party represented by such counsel in such proceeding. The
failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section
2, unless the failure to give such notice is materially prejudicial to
an Indemnifying Party's ability to defend such action. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except
with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to
such claims or litigation.
11. COVENANTS RELATING TO RULE 144. The Company will file reports in
compliance with the Securities Exchange Act of 1934, as amended, and comply
with all rules and regulations of the Commission applicable to the use of
Rule 144.
12. GOVERNING LAW. This Warrant shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware, without
regard to conflicts of laws principles.
13. MISCELLANEOUS
(a) This Warrant and any provision hereof may be changed, waived,
discharged, or terminated only by an instrument in writing signed
by the party (or any predecessor in interest thereof) against which
enforcement of the same is sought; provided, however that the terms
of the Warrants (other than the Purchase Price and the number of
shares issuable hereunder) may be amended with the consent of the
Holders of outstanding Warrants which would be exercisable to
purchase a majority of the Warrant Shares outstanding and issuable
upon the exercise of all then outstanding Warrant Shares. The
headings in this Warrant are for purposes of reference only and
shall not affect the meaning or construction of any of the
provisions hereof.
(b) All notices, requests, consents and other communications
hereunder shall be in writing, shall be sent by confirmed facsimile
or mailed by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid,
and shall be deemed given when so sent in the case of facsimile
transmission, or when so received in the case of mail or courier,
and addressed as follows:
if to the Company, to:
Delphi Information Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Law Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Chief Financial Officer of the
Company at the same address, and
if to the Warrantholder, to:
Hewlett-Packard Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop 20 BQ
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
a duly authorized officer and to be dated as of the 20th day of August, 1999.
DELPHI INFORMATION SYSTEMS, INC.
By: [ILLEGIBLE]
______________________________
Its: Vice President
_____________________________
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FULL SUBSCRIPTION FORM
To Be Executed By the Registered Warrantholder if It/
She/He Desires to Exercise in Full the Within Warrant
The undersigned hereby (A) exercises the right to purchase the
___________ shares of Common Stock covered by the within Warrant at the date
of this subscription and herewith makes payment of the sum of
$____________________ representing the Purchase Price of $___________________
per share in effect at that date or (B) elects to exercise this Warrant for
the purchase of _______________ shares of Common Stock, pursuant to the
provisions of Paragraph 2(b) of the attached Warrant. Certificates for such
shares shall be issued in the name of and delivered to the undersigned,
unless otherwise specified by written instructions, signed by the undersigned
and accompanying this subscription.
Dated: ______________________________
Signature: ______________________
Address:
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PARTIAL SUBSCRIPTION FORM
To Be Executed by the Registered Warrantholder if It/
She/He Desires to Exercise in Part Only the Within Warrant
The undersigned hereby (A) exercises the right to purchase
______________ shares of the total shares of Common Stock covered by the
within Warrant at the date of this subscription and herewith makes payment of
the sum of $__________________ representing the Purchase Price of
$____________ per share in effect at this date or (B) elects to exercise this
Warrant for the purchase of _______________ shares of Common Stock, pursuant
to the provisions of Paragraph 2(b) of the attached Warrant.
Certificates for such shares and a new Warrant of like tenor and date for
the balance of the shares not subscribed for (if any) shall be issued in the
name of and delivered to the undersigned, unless otherwise specified by
written instructions, signed by the undersigned and accompanying this
subscription.
[The following paragraph need be completed only if the Purchase Price and
number of shares of Common Stock specified in the within Warrant have been
adjusted pursuant to Section 6.]
The shares hereby subscribed for constitute _______________ shares of
Common Stock (to the nearest whole share) resulting from adjustment of
_______________ shares of the total of ________________ shares of Common
Stock covered by the within Warrant, as such shares were constituted at the
date of the Warrant.
Dated: ______________________________
Signature: ____________________________
Address:
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CALCULATION FORM
1. As of _____________, 1999 (which is the last day of the Company's most
recent fiscal quarter) (the "Calculation Date"), the number of the
Company's outstanding shares of Common Stock was ___________________,
as reported on the Company's Form [10-K/10-Q] for the fiscal
[year/quarter] ended ____________, ____.
2. As of the Calculation Date, the Warrantholder may purchase, pursuant to
the Warrant, [4.9%] of the outstanding shares of the Common Stock
which, as of the Calculation Date, is equal to _____________ shares and
such shares may be purchased during the period commencing August __,
1999 and ending August __, 2000, at an exercise price equal to [$15.00]
per share.
3. As of the Calculation Date, the Warrantholder may purchase, pursuant to
the Warrant, [4.5%] of the outstanding shares of the Common Stock
which, as of the Calculation Date, is equal to _________________ shares,
and such shares may be purchased during the period commencing August __,
2000 and ending August __, 2001, at an exercise price equal to [$20.00]
per share.
4. As of the Calculation Date, the Warrantholder, to the extent it has not
exercised its right to purchase any of the shares under paragraph 2
above, may purchase, pursuant to the Warrant, in addition to the
number of shares the Warrantholder may purchase under paragraph 2
above, [4.9%] of the outstanding shares of the Common Stock, which, as
of the Calculation Date, is equal to _____ shares, as such shares may
be purchased during the period commencing August __, 2000 and ending
August __, 2001 at an exercise price equal to [$20.00] per share.
DELPHI INFORMATION SYSTEMS, INC.
Signature: ________________________________
Date: ______________________________________
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