Exhibit 10.23
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS WARRANT HAS BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF SUCH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR A
VALID EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS, TOGETHER WITH AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
DVI, Inc.
Warrant To Purchase Common Stock
Warrant No.: DH-1 Number of Shares: 100,000
Date of Issuance: August ___, 2001
DVI, Inc., a Delaware corporation (the "Company"), hereby certifies that,
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for Ten United States Dollars ($10) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Deephaven/JE
▇▇▇▇▇▇▇ I, LLC, a Minnesota limited liability company, the registered holder
hereof or its permitted assigns (the "Holder"), is entitled, subject to the
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terms and conditions set forth below, to purchase from the Company upon
surrender of this Warrant, at any time or times on or after the date hereof
until 11:59 P.M. Eastern Time on the Expiration Date (as defined herein),
100,000 fully paid nonassessable shares of Common Stock (as defined herein) of
the Company (the "Warrant Shares") at the Warrant Exercise Price (as defined
--------------
herein).
Section 1. Definitions.
(a) Securities Purchase Agreement. This Warrant has been issued
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pursuant to the terms of that certain Securities Purchase Agreement dated as of
June 29, 2001, by and between the Company and Deephaven/JE ▇▇▇▇▇▇▇ I, LLC, a
Minnesota limited liability company (as amended, restated, modified or
supplemented from time to time and in effect, the "Securities Purchase
-------------------
Agreement").
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(b) Definitions. The following words and terms as used in this
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Warrant shall have the following meanings:
(i) "Approved Stock Plan" shall mean any employee benefit plan
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of the Company which has been approved by the Board of Directors of the
Company, pursuant to which any equity or other securities of the Company
may be issued to any employee, officer, director or consultant for services
provided to the Company.
(ii) "Bloomberg" shall mean Bloomberg Financial Markets.
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(iii) "Business Day" shall mean any day of the week except for
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Saturday, Sunday or any other day on which commercial banks in the City of
Chicago, Illinois or the Commonwealth of Pennsylvania are authorized or
required by law or executive order to remain closed.
(iv) "Common Stock" means (i) shares of the Company's common
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stock, par value $.005 per share, as constituted on the date hereof, and
(ii) any stock into which such Common Stock shall have been converted or
exchanged or any stock resulting from a reclassification of such Common
Stock.
(v) "Exchangeable Securities" means any evidences of
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indebtedness, shares of stock or other securities which are directly or
indirectly exchangeable into or exchangeable for, with or without payment
of additional consideration, shares of Common Stock (including, without
limitation, the Note) either immediately or upon the arrival of a specified
date or happening of a specified event.
(vi) "Expiration Date" means August ___, 2006; provided, if any
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such date falls on a day other than a Business Day, the next Business Day.
(vii) "Note" means the 9.5% Asset-Backed Exchangeable Term Note
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issued pursuant to the Securities Purchase Agreement.
(viii) "Person" means a natural person, a partnership, a
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corporation, a limited liability company, an association or a joint stock
company, a trust, a joint venture, an unincorporated organization or a
governmental agency or any department, or agency or political subdivision
thereof.
(ix) "Principal Market" means the New York Stock Exchange or
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other national exchange or trading market on which the Common Stock is
listed or included for trading.
(x) "Securities Act" means the Securities Act of 1933, as
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amended and the rules and regulations promulgated thereunder.
(xi) "Stock Purchase Rights" shall mean any warrants, options
---------------------
or other rights to subscribe for, purchase or otherwise acquire any shares
of Common Stock or any Exchangeable Securities, either immediately or upon
the arrival of a specified date or happening of a specified extent.
(xii) "Warrant" means this Warrant, all warrants issued in
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exchange, transfer or replacement of any thereof and any other warrant to
purchase Common Stock issued or to be issued to the Holder under the Note
or otherwise.
(xiii) "Warrant Exercise Price" means $21.00, subject to
----------------------
adjustment as provided in Section 3.
2
Capitalized terms used herein that are not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement.
Section 2. Exercise of Warrant.
(a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the Holder, in whole or in part, at any time on any Business Day
prior to 11:59 P.M. eastern time on the Expiration Date by (i) delivery,
together with this Warrant or an indemnification undertaking in accordance with
Section 8 hereof, of a written notice to the Company, in the form of the
subscription notice attached as Exhibit A hereto (the "Exercise Notice"), of the
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Holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased and (ii) payment to the Company of an
amount equal to the Warrant Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the "Aggregate Exercise
------------------
Price") in cash or by check payable to the order of the Company or by wire
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transfer to an account designated by the Company for such purpose. In the event
of any exercise of the rights represented by this Warrant in compliance with
this Section 2(a) a certificate or certificates for the Warrant Shares so
purchased, in such denominations as may be requested by the Holder and
registered in the name of, or as directed by, the Holder, shall be delivered at
the Company's expense to, or as directed by, the Holder as soon as practicable,
and in no event later than three Business Days, after the Company's receipt of
the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an
indemnification undertaking in accordance with Section 8 hereof). Upon delivery
of the Exercise Notice, Aggregate Exercise Price and this Warrant (or an
indemnification undertaking in accordance with Section 8 hereof), the Holder or
its designate shall be deemed for all 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 of delivery of the certificates evidencing
such Warrant Shares.
(b) Dispute of Warrant Exercise Price. In the case of a dispute as
---------------------------------
to the determination of the Warrant Exercise Price or the arithmetic calculation
of the Warrant Shares, the Company shall promptly issue to the Holder the number
of Warrant Shares that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the Holder via facsimile within one
Business Day of receipt of the Exercise Notice. If the Holder and the Company
are unable to agree upon the determination of the Warrant Exercise Price or
arithmetic calculation of the Warrant Shares within three Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall within two Business Days submit via facsimile (i) the
disputed determination of the Warrant Exercise Price, to an independent,
reputable investment banking firm or (ii) the disputed arithmetic calculation of
the Warrant Shares to its independent, outside accountant. The Company shall use
all commercially reasonable efforts to require the investment banking firm 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
48 hours from the time it receives the disputed determinations or calculations.
Such investment banking firm's or accountant's determination or calculation, as
the case may be, shall be deemed conclusive absent manifest error. The Company
shall pay the fees and expenses of such investment banking firm or accountant.
(c) Partial Exercise. Unless the rights represented by this Warrant
----------------
shall have expired or shall have been fully exercised, the Company shall, as
soon as practicable and in no
3
event later than five Business Days after any exercise in part of this Warrant
and at its own expense, issue a new Warrant identical in all respects to this
Warrant, except it shall represent rights 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.
(d) Minimum Number of Warrant Shares. The minimum number of shares
--------------------------------
of Common Stock for which this Warrant may be exercised shall be 1,000 shares,
unless the aggregate number of shares for which this Warrant may be exercised is
less than 1,000, in which event, this Warrant may be exercised with respect to
the full amount of such aggregate number.
(e) No Fractional Shares. No fractional shares of Common Stock are
--------------------
to be issued upon the exercise of this Warrant, but rather the number of shares
of Common Stock issued upon exercise of this Warrant shall be rounded (up if
greater or equal to .5 of a share or otherwise down to the nearest whole
number).
(f) Failure to Issue Warrant Shares. If the Company shall fail for
-------------------------------
any reason or for no reason to issue (subject to extension in accordance with
Section 2(b) for a good faith dispute made in accordance with Section 2(b)), to
the Holder or its designee (i) within five Business Days after the Company's
receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant
(or an indemnification undertaking in accordance with Section 8 hereof), a
certificate for the number of shares of Common Stock to which the Holder or its
designee is entitled upon the Holder's exercise of this Warrant or (ii) if this
Warrant is being exercised for less than all of the number of shares of Common
Stock covered by this Warrant, within ten Business Days after the Company's
receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant
(or an indemnification undertaking with respect to this Warrant in the case of
its loss, theft or destruction), a new Warrant for the number of shares of
Common Stock to which the Holder is entitled pursuant to Section 2(c) hereof, in
addition to any other remedies under this Warrant or the Securities Purchase
Agreement or otherwise available to the Holder, including any indemnification
under Article VIII of the Securities Purchase Agreement, the Company shall pay
as additional damages in cash to the Holder or its designee on each day after
the fifth Business Day such issuance is not timely effected and/or after the
tenth Business Day such new Warrant is not delivered, as the case may be, an
amount equal to 0.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder or its designee on a timely basis and to
which the Holder or its designee is entitled and/or, the number of shares
represented by the portion of this Warrant which is not being converted, as the
case may be, and (B) the average of the three highest daily trading prices of
the Common Stock (as reported by Bloomberg) for the 15 consecutive trading days
immediately preceding the last possible date which the Company could have issued
such Common Stock or new Warrant, as the case may be, to the Holder or its
designee without violating this Section 2.
Section 3. Anti-Dilution Adjustment.
The Warrant Exercise Price shall be subject to adjustment from time to time
as hereinafter provided in this Section 3:
4
(a) Issuance of Additional Common Stock. If and whenever the Company
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shall issue or sell any shares of its Common Stock for a consideration per share
less than the Warrant Exercise Price in effect immediately prior to the time of
such issuance or sale, then, upon such issuance or sale the Warrant Exercise
Price shall be adjusted to that price equal to the fraction (i) the numerator of
which shall be equal to (A) (x) the Warrant Exercise Price in effect immediately
prior to such event multiplied by (y) the total number of outstanding shares of
Common Stock immediately prior to such event plus (B) the consideration received
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by the Company upon such issuance or sale, and (ii) the denominator of which
shall be the total number of outstanding shares of Common Stock immediately
after such event, treating as outstanding all shares of Common Stock issuable
upon exchanges of Exchangeable Securities (including any held by the Holder) and
exercises of Stock Purchase Rights (including any Warrants held by the Holder)
provided that, no adjustment shall be made with respect to the issuance of
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shares of Common Stock issued (1) upon exchange or conversion of Exchangeable
Securities outstanding on the date hereof, (2) in connection with the Common
Stock or Exchangeable Securities issued under an Approved Stock Plan, (3) issued
pursuant to the exercise of Exchange Rights granted under the Note or Warrant
Shares issued upon the exercise of other Warrants; or (4) as consideration in
connection with arms length transactions involving the acquisition of other
companies in the specialty finance industry.
(b) Stock Dividends, Subdivisions and Combinations. If and whenever
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the Company subsequent to the date hereof:
(i) declares a dividend upon, or makes any distribution in
respect of, any of its capital stock, payable in shares of Common Stock,
Exchangeable Securities or Stock Purchase Rights,
(ii) subdivides its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
then the Warrant Exercise Price shall be adjusted to that price determined by
multiplying the Warrant Exercise Price in effect immediately prior to such event
by a fraction (A) the numerator of which shall be the total number of
outstanding shares of Common Stock immediately prior to such event, and (B) the
denominator of which shall be the total number of outstanding shares of Common
Stock immediately after such event, treating as outstanding all shares of Common
Stock issuable upon exchanges of Exchangeable Securities (including the Note
held by the Holder) and exercises of Stock Purchase Rights (including any
Warrants held by the Holder).
(c) Issuance of Exchangeable Securities or Stock Purchase Rights. If
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and whenever the Company shall issue or sell any Exchangeable Securities or
Stock Purchase Rights (other than the granting of Stock Purchase Rights to
officers, employees, directors and consultants of the Company pursuant to the
Approved Stock Plans under which a consideration per share for which shares of
Common Stock may at any time thereafter be issuable upon exercise thereof (or,
in the case of Stock Purchase Rights exercisable for the purchase of
Exchangeable Securities, upon the subsequent exchange of such Exchangeable
Securities) shall
5
be less than the Warrant Exercise Price in effect immediately prior to the time
of such issuance or sale, then upon such issuance or sale, the Warrant Exercise
Price shall be adjusted as provided in Section 3(a) on the basis that the
maximum number of shares of Common Stock ever issuable upon exercise of such
Exchangeable Securities or Stock Purchase Rights (or upon exchange of such
Exchangeable Securities following such exercise) shall be deemed to have been
issued as of the date of the determination of the Warrant Exercise Price,
provided that, no adjustment shall be made with respect to the issuance of
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shares of Common Stock issued upon (1) upon exchange or conversion of
Exchangeable Securities outstanding on the date hereof, (2) in connection with
the exercise of Exchangeable Securities granted under Approved Stock Plan, (3)
issued pursuant to the exercise of Exchange Rights granted under the Note or
Warrant Shares issued upon the exercise of other Warrants; or (4) as
consideration in connection with arms length transactions involving the
acquisition of other companies in the specialty finance industry.
(d) Readjustment of Warrant Exercise Price. Upon (i) each change
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in the purchase price payable for any Stock Purchase Rights or Exchangeable
Securities referred to in Section 3(c), (ii) each change in the consideration,
if any, payable upon exercise of such Stock Purchase Rights or upon the exchange
or exchange of such Exchangeable Securities, (iii) each change in the number of
shares of Common Stock issuable upon the exercise of such Stock Purchase Rights
or the rate at which such Exchangeable Securities are exchangeable into or
exchangeable for shares of Common Stock, or (iv) the expiration of any Stock
Purchase Rights not exercised or of any right to convert or exchange under any
Exchangeable Securities not exercised, the Warrant Exercise Price in effect at
the time of such event shall forthwith be readjusted to the Warrant Exercise
Price which would have been in effect at such time had such Stock Purchase
Rights or Exchangeable Securities not been issued or sold.
(e) Reorganization, Reclassification or Recapitalization of the
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Company. In the event that the Company effects (i) any reorganization or
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reclassification or recapitalization of the capital stock of the Company (other
than in the cases referred to in Section 3(b)), (ii) any consolidation or merger
of the Company with or into another Person, (iii) the sale, transfer or other
disposition of the property, assets or business of the Company as an entirety or
substantially as an entirety or (iv) any other transaction or event as a result
of which the holders of Common Stock become entitled to receive any shares of
stock or other securities and/or property (including, without limitation, cash,
but excluding any cash dividend that is paid out of the earnings or surplus of
the Company legally available therefor) with respect to or in exchange for the
Common Stock, there shall thereafter be deliverable upon the exercise of this
Warrant or any portion thereof (in lieu of or in addition to the Common Stock
theretofore deliverable, as appropriate) the highest number of shares of stock
or other securities and/or the greatest amount of property (including, without
limitation, cash) to which the Holder of the number of shares of Common Stock
which would otherwise have been deliverable upon the exercise of this Warrant or
any portion thereof at the time would have been entitled upon such transaction
or event.
(f) Maximum Warrant Exercise Price. At no time shall the Warrant
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Exercise Price exceed the initial Warrant Exercise Price set forth in Section
1(b) hereof, except as a result of an adjustment thereto pursuant to this
Section 3.
(g) Waiver. In the event that the Holder consents in writing to
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limit, or waive in its entirety, any anti-dilution adjustment to which it would
otherwise be entitled hereunder, the
6
Company shall not be required to make any adjustment whatsoever with respect to
this Warrant or any other Warrant in excess of such limit or at all, as the
terms of such consent may dictate.
(h) Notice of Adjustments to Warrant Exercise Price. As promptly as
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practicable after the occurrence of any event requiring any adjustment under
this section 3 to the Warrant Exercise Price (or to the number or kind of
securities or other property deliverable upon the exercise of this Warrant), the
Company shall, at its expense, mail to the Holder a certificate of an officer of
the Company setting forth in reasonable detail the events requiring the
adjustment and the method by which such adjustment was calculated and specifying
the adjusted Warrant Exercise Price and the number of shares of Common Stock
issuable upon exercise of this Warrant after giving effect to such adjustment.
(i) Anti-Dilution Provisions in Other Securities. If the Company
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issues any Stock Purchase Rights or Exchangeable Securities or other securities
containing provisions protecting the holder or holders thereof against dilution
in any manner more favorable to the holder or holders thereof than those set
forth in this Warrant, such provisions (or any more favorable portion thereof)
shall be deemed to be incorporated herein as if fully set forth in this Warrant
and, to the extent inconsistent with any provision of this Warrant, shall be
deemed to be substituted therefor.
Section 4. Taxes.
The Company shall pay any and all taxes, excluding income taxes, which may
be payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.
Section 5. Warrant Holder Not Deemed a Stockholder.
Except as otherwise specifically provided herein, no Holder, as such, of
this Warrant shall be entitled to vote or receive dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the Holder hereof, as such, any of the
rights of a stockholder 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, liquidation or subscription
rights, or otherwise, prior to the issuance to the Holder of this Warrant of the
Warrant Shares which he or she 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 stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the Holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.
Section 6. Ownership.
The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
Holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the Person in whose name this Warrant has been issued,
as well as the name and address of each transferee. The Company
7
may treat the person in whose name any Warrant is registered on the register as
the owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, but in all events recognizing any transfers made in accordance with
the terms of this Warrant.
Section 7. Purchase Rights; Reorganization, Reclassification, Consolidation,
Merger or Sale.
(a) In addition to any adjustments pursuant to Section 3 above, if at
any time the Company grants, issues or sells any Options, Exchangeable
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock generally (the
"Purchase Rights"), then the Holder of this Warrant will be entitled to acquire,
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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
taking into account any limitations or restrictions on the exercisability 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 Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights.
(b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction which is effected in such a way that
holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as "Organic Change." Prior to
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the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing such assets or the successor resulting from such Organic Change (in
each case, the "Acquiring Entity") written agreement (in form and substance
----------------
satisfactory to the Holder of this Warrant) to deliver to the Holder, in
exchange for such Warrant, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant
and satisfactory to the Holder (including, an adjusted warrant exercise price
equal to the value for the Common Stock reflected by the terms of such
consolidation, merger or sale, and exercisable for a corresponding number of
shares of Common Stock acquirable and receivable upon exercise of the Warrant,
if the value so reflected is less than the Warrant Exercise Price in effect
immediately prior to such consolidation, merger or sale). Prior to the
consummation of any other Organic Change, the Company shall make appropriate
provision (in form and substance satisfactory to the Holder of this Warrant) to
insure that the Holder will thereafter have the right to acquire and receive in
lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of the
Holder's Warrant, such shares of stock, securities or assets that would have
been issued or payable in such Organic Change with respect to or in exchange
for the number of shares of Common Stock which would have been acquirable and
receivable upon the exercise of this Warrant as of the date of such Organic
Change (without taking into account any limitations or restrictions on the
exerciseability of this Warrant).
8
Section 8. Lost, Stolen, Mutilated or Destroyed Warrant.
If this Warrant is lost, stolen, mutilated or destroyed, the Company shall,
on receipt of an indemnification undertaking, reasonably satisfactory to the
Company and upon reimbursement to the Company of all reasonable expenses
incidental thereto and upon surrender of this Warrant, if mutilated, issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen,
mutilated or destroyed.
Section 9. Notices.
Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Warrant must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party and followed by an overnight delivery service); or (iii) one
Business Day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the Company:
DVI, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇ Chance
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
9
If to the Buyer:
Deephaven/JE ▇▇▇▇▇▇▇ I, LLC
c/o JE ▇▇▇▇▇▇▇, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to:
Schwartz, Cooper, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chartered
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by prior written notice given
to each other party at least five Business Days prior to the effective date of
such change.
Section 10. Amendment and Waiver.
The provisions of this Warrant may only be amended upon a written
instrument executed by the Company and the Holder.
Section 11. Descriptive Headings; Governing Law.
The descriptive headings of the several Sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. All questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by the internal laws of the State
of Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Delaware. The Company hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. The Company hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to the
Company and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
THE COMPANY HEREBY
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IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR
ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
Section 12. Successors and Assigns.
This Warrant shall be binding upon and inure to the benefit of the parties
and their respective successors and assigns, including any purchasers of this
Warrant. The Company shall not assign this Warrant or any rights or obligations
hereunder without the prior written consent of the Holder, including by merger,
consolidation or reorganization, except pursuant to a Special Event (as defined
in Section 2(c)(ii) of the Note) consolidation or reorganization with respect to
which the Company has satisfied its obligations under Section 2 of the Note and
Section 7(b). The Holder may not assign any of its rights under this Warrant
without the prior written consent of the Company, which consent shall not be
unreasonably withheld; provided, however, that the Holder may assign all or any
part of its rights hereunder to any financial institution having assets of at
least $10 billion and the Holder may assign all or any part of its rights
hereunder to any Affiliate of the Holder. "Affiliate" means any Person which,
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directly or indirectly, controls or is controlled by or is under common control
with the Holder.
Section 13. Limitation on Number of Warrant Shares.
The Company shall not be obligated to issue more than 19.99% of its total
outstanding shares of Common Stock upon exercise of this Warrant and/or the
Exchange Rights granted pursuant to the Note, except that such limitation shall
not apply in the event that the Company obtains the approval of its stockholders
as required by the Principal Market for issuances of Common Stock in excess of
such percentage. Upon the Holder's request, the Company shall seek approval of
its stockholders at its next annual meeting of stockholders for the issuance of
20% or more of its Common Stock upon the actual issuance of Warrant Shares, the
issuance of Common Stock issued in connection with the exercise of Exchange
Rights granted pursuant to the Note or the Redemption Warrants. In the event
the Company is prohibited from issuing Warrant Shares as a result of the
operation of this Section 1313, upon the Holder sending an Exercise Notice, the
Company shall pay the Holder the difference between (a) the last reported sale
price of the Common Stock (as reported by Bloomberg) and (b) the Warrant
Exercise Price as of the date of the applicable Exercise Notice, multiplied by
the number of Warrant Shares that the Company is prohibited from issuing to the
Holder pursuant to this Section 13.
Section 14. Limitation on Beneficial Ownership.
When required under the listing requirements of the Principal Market, the
Company shall not effect any exercise of this Warrant to the extent that after
giving effect to such exercise such Person (together with such Person's
affiliates) would beneficially own in excess of 9.99% of the outstanding shares
of the Common Stock following such exercise. For purposes of this Section 14,
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. Each Exercise Notice shall
constitute a representation by the Holder that, after giving effect to such
Exercise Notice, the Holder will not beneficially own a number of shares of
Common Stock in excess of 9.99% of the outstanding shares of Common
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Stock as reflected in the Company's most recent Form 10-Q or Form 10-K, as the
case may be, or more recent public press release by the Company or other notice
by the Company to the Holder setting forth the number of shares of Common Stock
outstanding, but after giving effect to such exercise of this Warrant by the
Holder since the date as of which such number of outstanding shares of Common
Stock was disclosed. Notwithstanding the foregoing, upon an Event of Default or
the occurrence of a Special Event, the Holder shall have the right to exercise
this Warrant in its sole discretion and at such time or times as it deems
appropriate.
Notwithstanding the foregoing, in an Event of Default or the occurrence of
a Special Event under the Note, as such terms are defined therein, the holder of
this Warrant shall have the right to exercise this Warrant and to convert all or
any portion of this Warrant into Common Stock, in its sole discretion and at
such time or times as it deems appropriate.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and delivered as of the date first written above.
DVI, Inc.
By:__________________________
[Name]
[Title]
EXHIBIT A TO WARRANT
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SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
DVI, Inc.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of DVI, Inc.,
a Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
1. Payment of Warrant Exercise Price. The Holder shall pay the sum of
$___________________ to the Company in accordance with the terms of the Warrant.
2. Delivery of Warrant Shares. The Company shall deliver to __________
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
Name of Registered Holder
By: ______________________
Name:
Title: